Review of Amegy Merchant Services

Overview

Detailed Review

Below is a detailed review of Amegy Merchant Services offering. The review is broken down into the following categories.

• Features
• Pricing
• Contract Fine Print
• Equipment
• Countries Served
• Contract Length / Termination
• About the Company
• Customer Service
• Common Customer Complaints / Our Verdict
• Who Should / Shouldn't Use this Processor

Features

Depending upon the type of business you own, some of the following features may be very important to you, while others may not matter.

Software Compatibility:
Intuit Quickbooks	Yes
Sage 50	No
Microsoft Dynamics GP	No
Hardware Compatibility:
Windows / Blackberry	No
iPhone / iPad	Yes
Android	Yes

Alternative Transaction Types:
Phone Orders	Yes
Internet Orders	Yes
Wireless Orders	Yes
Mobile Orders	Yes
Snail Mail Orders	Yes
American Express (AMEX)	Yes
Add Tips to Bills	No
eCommerce / Shopping Cart	Yes
International Sales	No
Recurring Payments	Yes
EMV Chip Cards	Yes
Contactless Cards	Yes
Loyalty / Gift Cards	Yes
eChecks / Electronic Checks	Yes
Welfare Benefits (EBT/SNAP/TANF)	No
Security / Fraud Prevention:
AVS Fraud Protection	Yes
PCI DSS Secure Transactions	Yes
Industry Specific:
HIPAA Compliance (Healthcare)	No
Trust Account Debiting (Legal)	No
Fleet Cards (Petroleum)	No
Online Menu Orders (Restaurants)	Yes
Countries Served:
U.S.	Yes
Other Countries	No
International	No

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Pricing

Almost every merchant account services company uses either Interchange Plus or Tiered Pricing (to learn the differences read here).

Amegy Bank uses Interchange Plus pricing, which basically means they take the base rate that Visa, Mastercard, and other cards charge and mark it up a certain percentage every time, no matter what type of card the customer uses. Some merchants prefer this method, because they then know exactly how much they're paying to their credit card processor every time.

In an effort to let you know what type of terms you can expect, we obtained a secret shopper quote from Amegy:

Amegy touts their Interchange Plus pricing of Interchange + 0.4% and their low per transaction charge of $0.12. Frankly, these are pretty attractive numbers, and might initially lead you to believe that Amegy is just trying to offer great pricing to their existing bank customers as a perk. But then you look at the total fees, which tell a different story as shown by our "fine print" explanation below.

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Contract Fine Print

The devil is in the details when it comes to credit card processing companies, so it pays to read the contracts closely. Here's what we found in terms of fees and freebies for Amegy Merchant Services:

Fine Print Fees:
Termination Fee	$250+
Setup / Application Fee	$100
PCI Compliance Fee	$18.80
PCI Inaction Fee	None
Gateway Fee	$10.00
1099-K Fee	None
Statement Fee	None
Online Reporting Fee	$7.00
Monthly Minimum Volume Fee	$25.00
Accept International Pymt Fee	None
Voice Authorization Fee	$2.00 per call
Monthly Min. Process Fee	None
Daily Batch Fee	None
ACH / Direct Deposit Fee	None
ACH Charge Fee	$5.00
ACH Return Fee	$15.00
FANF Fee	Standard
Chargeback Fees	$20.00

Freebies:
No Free Equipment
No Free Online Reporting
Free Customer Service

The freebies are non-existent. You won't get free equipment or free online access. You won't find anything free here.

Our Take on the Fine Print:

If you're considering Amegy Merchant Services, you're probably a pre-existing Amegy banking customer. If so, you might be thinking, "It's a great bank, and they offer Interchange Plus pricing, which this site always touts as very straightforward, so this must be a good deal!"

Not exactly. Amegy does offer Interchange Plus pricing at an attractive price point, which is great; but, they make up for it by gouging you with fine print fees. They have a $100 application fee, they charge a monthly $10.00 gateway fee and an online reporting fee of $7.00 per month (yes, they charge this fee so you can see your statement and transactions online). Add to that all the standard fees that most companies charge such as the PCI Compliance fee, chargeback fees, etc. and you've got a company that can charge you well over what most companies do in terms of fees.

Add to all of that a $25.00 minimum transaction fee, which means that you must generate $25.00 in credit card transaction fees every month (which means a total minimum processing volume of about $1,250 per month to avoid the fee) or you pay the bank instead. In the end, you can end up with a whopper of a "gotcha" bill each month.

As always, we know that merchant account services companies need to make money, and we don't begrudge them for that effort. But we don't like hidden "gotcha" fees. Amegy is certainly a fee-heavy credit card processor.

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Equipment

While your transactions will take place via your merchant electronically, the actual device that you use to swipe a customer's card into is referred to as "the equipment."

Amegy doesn't offer any free equipment, but at least they don't rent it to you. They sell it to you outright. That means more money up front, but at least you get to take the machine with you if you change companies.

In terms of equipment, they offer TransFirst-compatible machines. This list of equipment is extensive, but fairly mainstream. You won't find anything too sexy or exciting. But, given the array of offerings, you can find something that works for you no matter your needs. You can expect to pay a little over $300 for a Verifone Vx520 (we got quoted $312). That's about double what you can find elsewhere online, which means they're heavily marking up their equipment as a profit center item.

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Countries Served

Amegy is set up only for U.S. merchants to accept payments only from U.S. customers. That lack of overseas transactions seems short-sighted for a bank based in Texas, since there is so much cross-border business between Texas businesses and businesses in Mexico and Canada.

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Contract Length / Termination

We generally don't like to see long-term contracts or termination fees in merchant services agreements, because the ability to cancel a contract keeps the credit card processor on its best behavior (and more likely to try to make you happy if there's a dispute). The ability for the merchant to cancel gives you, that merchant, the ability to choose a better deal that might come along down the road before your current contract expires.

Amegy, has outsourced their processing to TransFirst, a company that typically tries to lock customers into a multi-year contract with cancellation charges ranging from $250 to $1,000.

Reports are that for Amegy Customers, these fees are highly negotiable. However, you're not likely to get to the "month to month" with "no cancellation charge" contract that we strongly prefer and that a growing number of credit card processors now offer. So, if you're set on using Amegy, push for the shortest term with the lowest cancellation charge you can get, as the longer term agreements typically only benefit the credit card processor.

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About the Company

The merchant account services industry is multi-layered. Understanding how those layers fit together can be confusing (Read More in this Article). A good thing to know, however, is whether or not your company is a direct processor (good if yes) or, if not, then to know who they process with and whether or not that processor is reliable. The second thing to know is whether or not the service or sales staffs are in-house or outsourced. In-house staffs are preferable for you, as these staff members may have more access to sources that can resolve your issues.

Processor:

Amegy Merchant Services has outsourced their credit card processing to TransFirst. This is not an uncommon practice among small or mid-sized banks. TransFirst is a very large processor, so in that sense you're in good shape.

The problem, to me, with Amegy outsourcing their processing is: 1) It isn't obvious to the customer that they've done so, and 2) the reason the customer was going to pick Amegy was because they were comfortable with Amegy and its employees, not because it wanted to deal with TransFirst.

Account Sales:

Account sales are all in-house through the bank unless you have an issue with your merchant service. Then, the bank transfers you to TransFirst to mitigate the issue.

Account Service:

Amegy claims to offer prompt 24/7 customer support from your Relationship Manager or Amegy Merchant Services Support. This is a great service if you have a business that operates outside of the traditional 9-5 week day time frame.

The problem, as discussed elsewhere, is that Amegy has largely outsourced their merchant account services to TransFirst. So when you call your local branch or banker for help, they're likely going to have to refer you out to a specialist, who works normal business hours.

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Customer Service

Common Customer Complaints / Our Verdicts

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Who Should / Shouldn't Use this Processor

WHO ITS GOOD FOR:

• Mid-sized Merchants that are Existing Amegy Customers: If you're doing between $15,000 and $75,000 per month in transactions, are a happy Amegy bank customer and like the idea of having all of your financial products in one place, then Amegy isn't a bad choice. At those levels of transactions, the pricing isn't that bad. Take heed, however, that you're actually dealing with TransFirst, as Amegy has outsourced to them. So when you call your local bank to get help with your merchant account, you're likely to be referred out.

WHO ITS NOT GOOD FOR:

Amegy Merchant Services markets their services as a simple solution for any business that does their banking with Amegy Bank. In our opinion, however, they're not a good choice for most merchants.

• Low Volume Merchants: If you're doing less than about $2,500 per month in transactions, then you're not going to meet Amegy's monthly minimum, at which point you'll be paying them an additional monthly fee of up to $25 per month. There are lots of merchant account providers who would happily take your business without charging you a monthly penalty, why not go with one of them instead?
• Cash Strapped Merchants: When you sign up with Amegy Merchant Services, you're going to be paying a ton of up front fees. The $100 application fee, the monthly minimum fee, the quarterly PCI compliance fee, plus $300-400 to purchase your own terminal are just a start. Because nothing comes free with Amegy, the upfront bill is likely to be in excess of $500 to get started, whereas with many companies its $0, or nearly $0. Thus, if you're cash-strapped, as many new businesses are, you can find better solutions like the ones listed here.
• High Volume Merchants: If you're doing over $75,000 per month in transactions, other companies than Amegy could offer more customized equipment and/or cheaper rates without as many fees.
• Super Detail-Oriented Merchants: If you're the type that likes to know where every penny in your business is going, you'll want online access for your merchant account so you can check balances daily. That online access costs extra with Amegy, whereas the majority of providers offer this service for free.
• Merchants in Specialized Industries: With Amegy, you're only going to be able to accept Visa, MasterCard, Discover, AMEX and JCB. So if you're in an industry where you need to accept unique cards, (e.g. gas or energy cards) then Amegy isn't a good choice. Learn more about specific industries here.

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