Credit Card Processor Reviews: Don’t be a Sucker

Before you get gouged by a so-called “five star” processor, be sure you know the motivation of the reviewer, what or whom the review is targeting, and how credit card processing fees actually work.

• What’s the motivation for the reviewer?
• Is the review targeting the appropriate company?
• Pricing and Terms are Set on Per-Business Basis
• What’s the reviewer’s exposure after the fact?
• Must-Know Info About Processor Reviews

What’s the motivation for the reviewer?

The relationship of the reviewer to the company being reviewed is vital in determining whether the information in the review has any merit. The majority of credit card processor reviews are posted by affiliate marketers interested in high commission, not the well being of your business.

Affiliate marketers earn money by referring business to the processors they review. Once a business signs up with a processor, the processor pays the affiliate a commission. Affiliates are far more likely to rank processors in order of the highest commission paid rather than which will provide the best service for your business.

The worst offender of self-serving affiliate reviews is TopTenReviews. TopTenReviews is run by Tech Media Network. Tech Media has turned affiliated marketing into a science, earning more than 10 million dollars annually by posting speculative reviews that mislead small businesses.

A prime example of a processor that buys rankings with affiliate marketers is Merchant Warehouse (now Cayan). Cayan buys its high ranking from various review web sites through high commission and an aggressive affiliate marketing campaign.

The processors with the “best rankings” are often the ones that pay the highest commissions to the greatest number of affiliate marketers. Don’t make the mistake of thinking that a processor is reputable simply because it is listed favorably by review web sites.

Do your homework, and review the reviewer as much as you review the processor it recommends.

Is the review targeting the appropriate company?

Many credit card processing companies source business through a series of independent sales offices (ISOs) and agents, each of which has the ability to set its own pricing under the processor’s corporate name.

Credit card processing reviews always “review” a particular processor, but few, if any, clarify the relationship of the reviewer to the processor. For example, you can find thousands of online reviews about First Data (now Fiserv), but none of the reviews specify if the review is about a relationship with First Data directly, a sales partner (like Sam’s Club credit card processing), an independent agent, or even an agent of an agent of a sales partner.

The sales channel that a business uses is often more important than the processor itself because the sales channel sets pricing and terms, and provides customer service.

In such cases, it’s not a review of the processor that a business should be concerned with. It’s a review of the specific sales channel that matters, which is the specific ISO or agent servicing the account.

For example, a business may obtain service from a processor through an ethical ISO or agent that provides competitive pricing and service. The business will likely give the processor a favorable review, even though the processor has little to do with the pricing and service the business receives.

The opposite of this scenario is often true as well and happens when a business receives unethical services from a crooked agent or ISO through a processor with a good reputation.

For this reason, you simply can’t rely on reviews that don’t specifically disclose whether the information in the review targets a processor directly, sales channels of the processor, or both.

Pricing and Terms are Set on a Per-Business Basis

Credit card processors set pricing and terms on a per-business basis, making the general nature of processor reviews virtually worthless to your specific business. This fact is what makes processor reviews from websites such as TopTenReviews useless, dangerous, and downright misleading.

A processor can offer one business extremely competitive pricing, and then offer another business in the exact same industry very expensive pricing. This happens all the time.

Processors use several different pricing models to pass the cost of interchange fees, assessments and markups to businesses. Under these various pricing models, a processor can quote any combination of rates, fees, and terms it wants.

You cannot judge how competitive a processor’s quote will be for your business through a processor review, because there’s no guarantee you’re getting the same pricing or terms as the reviewer. This is even true of services like Square, a company that at one point advertised a single flat rate, but has since introduced varied pricing depending on the specifics of the business.

Credit card processing fees are complex, and you will get gouged if you don’t learn the ropes before you shop for a processor.

Check out CardFellow’s credit card processing guide.

What’s the reviewer’s exposure after the fact?

Publishers of processor reviews don’t have any incentive to ensure businesses are offered fair and honest pricing by the processors they promote. In fact, reviewers often receive larger commission payments when a processor gouges a business it refers. It’s very easy for a publisher to promote an unethical processor when the publisher doesn’t have to worry about any repercussions after a business is mistreated.

Processor reviews posted by publishers that have no liability and that don’t offer any support or guidance after a processor is chosen should be taken with a large grain of salt.

Must-Know Info about Processor Reviews

To ensure the processor reviews you’re reading are useful, unbiased and accurate, ask the following questions of the publisher:

• Are you paid a commission by the processors you recommend?
  • If so, is commission paid at the same rate by all processors?
• What support do you provide after I choose one of your recommended processors?
  • Do you help me deal with the processor if my rates increase, or if I’m charged hidden fees?
• Do you put any restrictions on the processor you review to ensure I am offered fair, honest pricing and terms, or are processors free to quote me however they choose?
• Do your reviews directly target processors, the sales offices of the processors, the processor’s field agents, or all of the above?