Does it matter whether your merchant services company is local?
Summary
Not for the rate. Whoever signs you up, the payment still runs through the card networks and the merchant's acquiring bank, and some sellers, SpotOn among them, describe themselves as registered partners of the banks that do that work. Where a local firm can make a difference is installation and setup for a multi-terminal store, and in the contract terms and equipment that come with it.
The bank behind the local rep
In Mastercard's terms, the bank that signs up merchants for card acceptance is the acquirer. The company selling you the service may be a partner of one. SpotOn's footer, for example, says SpotOn Transact, LLC is a Registered Partner/ISO of Merrick Bank in South Jordan, Utah, and Wells Fargo Bank, N.A. in Concord, California.
Some firms take merchants on under their own umbrella as payment facilitators. Mastercard says an acquirer must register a payment facilitator with Mastercard, and it publishes the list of registered ones. It also says it has no opinion on the quality of any service provided by anyone on that list.
Who's who in one setup
Even going straight to a bank can put more than one company on the bill.
- Wells Fargo: merchant services are provided by Wells Fargo Bank, N.A. The terminals are Clover. Wells Fargo is not responsible for Clover software, and Clover bills its own fees directly.
- Chase: merchant services are provided by Paymentech, LLC and/or other subsidiaries of JPMorgan Chase Bank, N.A.
A local rep adds one more name to that list. The parties section of the agreement shows which company receives your chargeback notices and your cancellation letter.
Outside equipment can change the rate
Wells Fargo's pricing page says that if you accept payments with equipment or a gateway you did not get from Wells Fargo, its online or keyed rates may apply to tap, dip, and swipe transactions. At its entry tier that is the difference between 2.60% + $0.15 and 3.50% + $0.15. A rep who brings a terminal from somewhere else may not be able to deliver the bank's posted in-person rate.
When someone on site earns their fee
A dining room with several stations needs installation. SpotOn's POS Essentials plan charges implementation costs on top of the hardware ($750 for a Station 15, $297 for a handheld) and does not publish the amount. Its All-In plan skips the hardware bill but comes with a two-year minimum term and processing minimums.
A shop that takes cards at one counter can skip the visit. Square's contactless and chip reader costs $59 and pairs with a phone or tablet over Bluetooth, and Square Terminal is $299 or $27 a month over 12 months at 15% APR. Square advertises no long-term contracts and free 30-day returns on hardware. Wells Fargo, a bank, also lists no application fees, no monthly minimums, and no early termination fees.
Sources
- mastercard.com/us/en/business/support/merchant-interchange-rates.html
- mastercard.com/us/en/business/support/payment-facilitators.html
- spoton.com/pricing
- wellsfargo.com/biz/merchant
- wellsfargo.com/biz/merchant/payment-processing-pricing
- chase.com/business/payments/merchant-fees
- squareup.com/shop/hardware/us/en
Related on this site
- Who is your contract really with when you sign up through an ISO or a payment facilitator?
- Who is the acquirer in a card payment, and how is it different from the card issuer?
- Is card processing from your own bank cheaper than Square or Stripe?
- What a 'get a quote' button is for
- Every provider we hold, and which publish a rate
Written by Kaz (pen name). Figures are copied from providers' published pricing pages on the dates shown. We have not used these products. Corrections: contact form.