Square UP Payment - Big Problems for Serious Businesses

Square is a mobile credit card system that took the wireless merchant service industry by storm with it's free swiper and no monthly fees. The questions is, are they the solution for anyone wanting to accept credit cards? The answer seems to be no.

Risk:

Square is not a bank but rather "money mover". As they don't require any credit check they can't truly asses your risk of going bankrupt. This then translates into longer time frames for deposits, usually several days to as much as several weeks. I have heard of merchants being told  they will have a 30 days freeze on their account due to their dollar amounts being larger
than what Square wanted to handle and other various possibilities.

Rates:

Square's rates may seem low as they have no monthly fees but their rates are much higher
than interchange rates and can be as much as 3.25% for keyed in. Many people have reported
that they have a tough time getting the swiper to work at times (hey it is free) and then have to key in and pay 3.25% which is much higher than the true interchange rate


BBB Report:

Although the BBB reports Square as an A- complaints are gaining to almost 500 complaints.

Customer Service: There is practically none when it comes to Square and it is reported that if you call it will probably  go to voice mail. Many customers complain about the swiper not working often. If you are serious about mobile credit card processing try going with a true mobile credit card processor.

Processor is Sued by Merchant over $28,000

I was not surprised to learn that EVO Merchant Services was sued by a plumbing business:

 GALVESTON – Parker & Pompa Inc. has filed suit against EVO Merchant Services LLC, Discovery Bank, Discover Financial Services and Do It Best Corp. in an effort to recover nearly $30,000 in back credit card payments. Recent court papers filed Oct. 8 in Galveston County Court at Law No. 2 explain that the defendants failed to remit $28,490.97 generated from Discover Card charges from the plaintiff’s customers from Oct. 7, 2008, through April 9, 2009. The suit shows the complainant, doing business as Ideal Plumbing Co., entered into a contract with EVO, doing business as Bank Card Depot Inc., which called on the former to submit information pertaining to Discover Card charges made in Galveston County during the special time period. In turn, according to the agreement, EVO promised to acquire and process the charges. Meanwhile, the plaintiff and Do It Best executed a contract to which the latter agreed to accept the funds released from the proceeds in question and place them in an account attributed to the complainant as well as disburse and forward the subject money to the former. EVO received written statements itemizing the dates and amounts of the aforementioned charges and forwarded the documentation to Discover Bank and Discover Financial Services, which supposedly processed the information and gave the amount in dispute to Do It Best, the suit states. Parker & Pompa alleges it did not get the $28,490.97, insisting the defendants “have failed and refused, and continue to fail and refuse” to pay. Attorney Michael L. Wilson with Rider & Wilson in Galveston is representing the complainant, and Galveston County Court at Law No. 2 Judge Barbara Roberts is presiding over the case. Cause No. 68,458

Evo has many complaints listed against it. I happen to know they have some of the most corrupt practices
when it comes to hidden fees and padding their pockets.

VeriFone Copying Square's User Agreement?

It's really pathetic when an established company like VeriFone attempts to steal it's user agreement almost word-for-word from it's competitor. When VeriFone was notified of this copyright infringement they took quick action to modify it and shaved down their user agreement quite a bit. As per Gigaom:

“When we said that Square made it easy to swipe, we meant credit cards,” said Square spokesperson Aaron Zamost. Sean Kane, a member of law firm Pillsbury’s social media, entertainment and technology team, said a company caught copying another firm’s legal user agreements or terms of service could be sued for copyright infringement. But that is rarely pursued when it comes to terms of service and user agreements. It is still an issue, said Kane, because companies who copy a user agreement or TOS could be accused of fraud if their service actually differs from the user document. That could be a problem now for VeriFone, which now has a slimmed-down user agreement that doesn't address many key points about the service.

The truth about Intuit Go Payment

The bottom line is this:


When things look to good to be true, they usually are.


Here is what an Amazon reviewer stated about Intuit Go Payment:

I got this app as it seemed to have more competitive pricing than Square. For a $12.95 monthly fee I am in the lowest rate program available: 1.7% for swiped transactions, and 2.7% for manually entered. However, I am always charged between 2.7 and 3.7% plus a transaction fee. The reason given is that the cards I am charging are "reward" cards of some type. So I get charged the low fee and at the end of the month every transaction I have ever made has at least 1% added to it. I know many of these card are not reward cards, although the vast majority of cards nowadays are. Customer service has been as pitiful as other processors I have used. 




These are just some of the reasons to use a reliable merchant service provider who will not hide fees and lock you into a contract.

Beware of Bait and Switch Rates!

As mentioned previously, when  looking for a competitive deal on a merchant account, beware! It's good to know that I'm not the only one warning people about the pitfalls of "teaser rates". Like anything in life, "if it's too good to be true, it probably is". If you have learned nothing else from reading this blog it should be this: Never sign a contract! The rate should also not be the only determining factor in which merchant service provider you choose. A merchant account is a very important aspect of your business and if something goes wrong, you want to know you are dealing with a company that can service you well and quickly. It is very unusual to get the deal you are sold and that's because the hidden fees will keep you in the dark. Make sure you do your homework and pick the company you are most comfortable with. This will help you in getting a true
deal on credit card processing.

Merchant Service Providers: What Have They Done for You?

Most credit card processors are good at one thing: deception. This is one of the main reasons I started this blog. I wanted to expose the myth of what businesses think they are getting as opposed to the deal they actually got. As I mentioned previously, most companies really don't know what they are truly paying as the statements you receive seemingly require a forensic accountant to figure out. There is a reason the majority of provides have a 3 yr contract that they may or may not tell you about. They don't want you to know about all those hidden fees and they are hoping if you do figure it out, it will be too late as the contact has you locked in.


All this aside, what are these processors really doing for you other then eating into your bottom line? Prestige Merchant Services is the only merchant service provider that offers a way to expand your business at no cost to you. They offer free SEO (search engine optimization) consultations which can be essential especially for small and medium sized businesses. Perhaps you have a nice website but how easily can you be found online? Are you on the first page of Google for all the major keywords in your industry? These are just some of the questions Prestige can assist their customers in. Need a website? Let Prestige assist in setting one up for you at a very competitive rate. This is truly ground breaking within the industry and you should be sure to contact them for more information.

News: Small businesses are getting ripped off

Fox News has an article and video that discusses how small businesses are getting ripped off bycredit card processors:

"I'm almost embarrassed I fell for their scam," said hair salon owner Magic Munson. 

She was approached by a salesman representing a company called Payment System Corporation who promised the halve her costs for processing credit cards and debit cards. It's a strong pitch to small businesses that are struggling in a bad economy.

But after she signed up, the company couldn't help her hook up several card swipers. She began getting bills even though the machines weren't hooked up.  The salesman was nowhere to be found and the friendly faces pictured in a list of customer service representatives were missing in action.

"If you try to call any of these people, they'll put you on hold. It's a fight to talk with a real person. i was on hold for 20 minutes (once) and after 20 minutes, they just hang up the phone.  She also began getting bills for services that she never used and was denied refunds that were promised.

There are  a 2 things one should take from this article that differ from what the article implies:

1) Never sign a contract! If there is no contractual obligation you will never have an issue going elsewhere, which should make the company you are with bend over backwards to keep you business by servicing you and doing it well. It will also make it less likely that they are hiding fees.

2) If the rates you are being quoted seem to be good to be true...they probably are.

Rates like 1.09% for credit cards are simply impossible as that is below the actual cost.

Be careful out there and only deal with the most reputable company.

Although few companies have  a no contract policy a merchant service provider that advertises as such is Prestige Merchant Services.