Win $2500 in Grants For Your Business
Enter by August 1st 2015!

Review of CostCo Merchant Services

999 Lake Drive, Issaquah, WA 98027

DISCLOSURE: Ads, Affiliates and Conflicts Merchant Negotiators accepts advertising via the Google Adsense platform, directly from advertisers, and has common parent ownership interests with other payments related companies leading to potential conflicts of interest. Read our Affiliate / Conflicts / Advertising Disclosure for a more detailed disclosure.


If you're looking at CostCo for merchant services, you should just go directly through Elavon. Besides a few waived fees for CostCo's executive members, there are really no benefits to choosing CostCo over Elavon or a totally different company. Choosing a company who is a reseller only creates more confusion, as there is an unnecessary middleman.

When business owners think of CostCo Merchant Services, they assume they'll be getting great deals on their card processing, just like the wholesale prices on bulk cereal. Unfortunately, this isn't the case. Dig a little deeper and you'll discover that CostCo doesn't even provide credit card processing. They are actually a reseller of another merchant services company called Elavon, who is one of the biggest card processing companies serving about 1.2 million merchants.

Merchants who seek out CostCo's payment processing services can learn this information by visiting the CostCo page for merchant services. That page redirects merchants to Elavon, where Elavon offers special pricing for CostCo members. This redirection provides a little less confusion for the merchant, because now the merchant knows that they're purchasing Elavon services. This fact wasn't so clear in the past.

If you're not a CostCo member, you're probably not interested in this deal. You can simply move on to our Elavon review to learn if Elavon is right for your business. Otherwise, stick around to learn whether or not this deal is worth the price of an annual CostCo membership.

Detailed Review

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


Depending upon the type of business you own, some of the following features may or may not be important to you.

In this case, we'll presume that the features that CostCo once offered are the same as Elavon's features:

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

Back to top

For More Information About This Processor or To Sign Up


Almost every merchant account services company uses either Interchange Plus or Tiered Pricing (to learn the differences read here). Where companies allow us to disclose pricing information, we show the deals that our secret shoppers were able to achieve. When companies offer both Interchange Plus and Tiered Pricing, we try to get a quote on both options.

CostCo uses tiered pricing, which is quoted as a percentage and a flat transaction fee:

  • Terminal: 1.38% plus $0.19 per swiped transaction
  • Mobile: 1.38% plus $0.19 per swiped transaction
  • Online: 1.99% plus $0.25 per transaction

In the fine print Costco states that these prices are for qualified transactions, but we don't know what the qualified tier consists of. It says that rewards cards process at a higher rate, but we don't know exactly how much higher. They also say that "rates and fees may change without notice." and that definitely is not good.

  • If they are like most credit card processors (and they don't disclose enough even in their fine print to find out) this is prime territory for them to jack up your fees through something called "downgraded transactions." You'll find this with a lot of merchants that are trying to use low teaser rates and still charge you high fees. The way it works, is that they show you a low rate for "qualified transactions," but then don't define what a qualified transaction is. In practice, you'll end up with very few "qualified transactions" and a whole lot of mid-qualified or non-qualified transactions which are charged at much higher rates.
  • I want to be clear, that tiered pricing isn't always a rip-off, but when you see no definition of what counts as a "qualified transaction" and you don't even see what the mid-qualified and non-qualified rates are, you can rest assured, they aren't likely to be a good deal.
  • In sum, this pricing is some of the worst we've seen, as it includes "gotcha" tiers and undefined categories of transactions with undefined rates in those tiers. Steer clear.

Back to top

For More Information About This Processor or To Sign Up

Contract Fine Print

In addition to the fine print costs listed below, Costco adds a $4.95 monthly statement fee for non-executive members (waived for executive members). We based most of the costs below on Elavon's rates, as Elavon is the service provider.

Fine Print Fees:
Termination Fee None
Setup / Application Fee $25
PCI Compliance Fee None
PCI Inaction Fee None
Gateway Fee $10
1099-K Fee None
Statement Fee $4.95
Online Reporting Fee None
Monthly Minimum Volume Fee $20
Accept International Pymt Fee Yes, variable
Voice Authorization Fee $.65 minimum per transaction
Monthly Min. Process Fee $25 maximum
Daily Batch Fee None
ACH / Direct Deposit Fee Yes
ACH Charge Fee Yes
ACH Return Fee Yes
FANF Fee Standard
Chargeback Fees Standard

Our Take: The "possible" charges may or may not exist, depending upon your type of business and equipment used, especially to process check transactions. In the case of pricing and fine print fees, a middle man can always make changes and markups, so be aware that what you see at Elavon may not be what you'll see from Costco.

Back to top

For More Information About This Processor or To Sign Up


Verifone VX 520

While your transactions usually take place electronically, the actual device that you use to swipe a customer's card is referred to as "the equipment." This equipment includes hardware and, often, software or apps for that hardware to function properly.

CostCo doesn't offer any equipment for free. They recently started selling equipment instead of leasing, which is good because you can keep your terminal even if you switch companies.


  • Countertop Readers: Two different countertop terminals are offered: Ingenico iCT250 and the Verifone VX 520. They both support all payment types, as well as providing customers a convenient way to pay with chip cards, key fobs, or mobile wallets. The readers are equipped with advanced security for PIN based transactions as well as EMV chip card technology. The small "hand-over design" is good for customer input. There is also an automated download feature, which keeps your payment app up to date.
  • Mobile Readers: CostCo offers two different options for on-the-go processing. One is VirtualMerchant, an app for your mobile device as well as a plug in card reader for swiped transactions. It supports all Apple and Android devices and electronically captures cardholder signatures at the time of sale. You can also accept payments by keying in the payment information through the app alone if you don't want to use the card reader.

CostCo also offers a small portable terminal, the Ingenico iWL250G. It supports on the go processing without needing an internet connection or phone line. It also has optional accessories available to purchase: car charger, spare battery, dock, carrying case, etc.


Instead of downloading software or an app, CostCo offers its users access to their website called "Converge," formerly VirtualMerchant. It allows users to manage transactions in all payment environments (in-store, mail/telephone order, mobile, and e-commerce). It also accepts all payments types including electronic checks and gift cards.

Back to top

For More Information About This Processor or To Sign Up

Countries Served

CostCo Merchant Services can handle payments from and for merchants in the United States, Canada and abroad.

Back to top

Contract Length / Termination

I generally don't like long-term contracts or termination fees in merchant services agreements, because the ability to cancel keeps the credit card processor on its best behavior, including the willingness to make you happy if there's a dispute. Plus, this ability to cancel gives you the ability to move on if you find a better deal.

Elavon offers contracts with no early termination fees, so you can be on a more month-to-month basis. You will just have to take the required steps to cancel your account when you want, or else you'll continue to get billed. There is also an auto-renew after two years, so you should be sure to keep an eye on that complication. CostCo customers should expect no less.

Back to top

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: Elavon, the company that CostCo sells to merchants as their service, is the 4th largest credit card processor in the U.S. They take care of everything, which is great. Cutting out the middleman where ever you can is always a good idea because it gets rid of unnecessary confusion and can possibly save you money.

Account Sales: Elavon's account sales are all conducted with a corporate sales department. Of course, you should make sure you are talking with a good sales rep because that makes a huge difference. If you choose to go through one of Elavon's many resellers, your sales experience might not be great. Most customer complaints are about customer service through resellers such as CostCo, not Elavon directly.

Back to top

For More Information About This Processor or To Sign Up

Customer Service

All customer service and tech support is handled by Elavon.

Back to top

Common Customer Complaints / Our Verdicts

The most common complaints about CostCo's merchant services are hidden fees and bad customer service. Since customer service and tech support comes from Elavon, please read our Elavon review to learn more about their services.

Back to top

For More Information About This Processor or To Sign Up

Who Should / Shouldn't Use this Processor


  • High-Volume Merchants: If you're processing at least $100,000 a month, and can watch your bottom line close enough to make sure your rates aren't increasing without notice, etc. Elavon also offers a variety of processing options, international transactions, and every other bell and whistle, so they can cater to more than one need.
  • Low Chargeback Merchants: It seems like one of the smaller but recurring complaints was about chargebacks. Customers were not happy with how Elavon handled the situation and wanted more support instead of having to handle it completey on their own. If you have a small amount of chargebacks every once in a while, this problem won't really affect you.
  • Internationally Focused Merchants: Elavon's currecy conversion is great for companies who operate around the world. It recognizes most currencies and updates conversion rates frequently.


  • Small Businesses: If you're processing less than $30,000 a month, you would be better off going with a company that is focused more towards small businesses. Elavon is making an effort to gain more trust from small businesses and maybe they'll get there one day, but for now I would go with a smaller processor.
  • High Chargeback Business: High chargeback volume is never a good thing no matter which processor you go with. Elavon has the ability to terminate your account and still charge you if they suspect fraud. Overall, you're better off going with a company that specializes in handling this sort of risk.
  • Tech People: Elavon's equipment is functional, but not trendy. They don't offer anything that looks cool; even their mobile card readers are bulky and unattractive. So, if you're into the latest advancements in technology, you wont be impressed with Elavon's equipment offerings.
  • Non-Detail Oriented Merchants: Given the lack of transparency on pricing, you're going to need to be a tough negotiator (or use a service like to get good clear pricing with these guys. The underlying service is good, but you're going to have to work to get it and keep it, so as not to get ripped off with hidden fees.

Back to top

For More Information About This Processor or To Sign Up
CostCo Merchant Services
Customer Service
Customer Reviews
1.38% - 1.99%
  • Elavon Reseller
  • Mobile Payment Options
  • Intl. Sales Accepted
Monthly Fees Breakdown
Setup Fee$25.00
Monthly Fee$10.00
PCI Compliance Fee$0.00
Online Reporting Fee$0.00
Batch Fee$0.00
Gateway Fee$10.00
Chargeback Fee$0.00
Termination Fee$0.00
Contract LengthMonth-to-Month
Sign Up Now


DISCLOSURE: Advertising, Affiliate and Conflicts of Interest: Merchant Negotiators accepts advertising via the Google Adsense platform, directly from advertisers, and has common parent ownership interests with other payments related companies leading to conflicts of interest. Read our Affiliate / Conflicts / Advertising Disclosure for a more detailed disclosure.

About the Reviews: These reviews, and for that matter any reviews, are inherently subjective, and should be regarded as our opinion, not as a statement of fact. Selecting a merchant services provider is an important decision, and we urge you to use no single source of information as the basis of that decision.

About the Pricing: This pricing is an estimate based on limited available information. In some cases, the Processors' pricing information was provided directly by the company, in others, we obtained it from public information, through calls to the company, or through past or current clients of the company. Where, despite these efforts, we were unable to obtain any information about certain fees, we used estimates based on similar providers in the industry. While we're working, in some cases, with the company directly to get more accurate pricing, even in those circumstances, we can't guarantee the pricing's accuracy. Complicating all of this, is that for some companies individual salespeople are given authority to modify terms on a deal by deal basis. In any case, if you know of an error, please let us know and we'll fix it.

About the Calculations: With respect to your estimated savings, this is based on a lot of factors and some hard math. The reason we do it, along with the "Actual Gross Rate" calculation is that every Processor prices their product differently (e.g. interchange v. 3 tier v. 4 tier v. flat v. membership, etc.) and some make it intentionally complicated or opaque. Trying to convert their pricing structure to a consistent "Overall Cost of Processing" is the only way you, the merchant, can do an apples to apples pricing comparison and know whether an offer is actually a good deal. Our system isn't perfect but we're trying.

Conclusion: In sum, these rankings, ratings, and scores are inherently subjective, and should be regarded as our opinion and not as a legal statement of fact. Moreover, use these prices and estimates at your own risk, and make sure to verify the pricing you see here in any formal contract you receive. Finally, if you do find something wrong in our pricing, terms, etc., tell us and we'll try to fix it. is now offline.

Thank you to all of our site visitors for a great three years!

Much of our team has transitioned to join Soar Payments, a merchant account provider. If you need a mid or high risk merchant account consider, Soar Payments.

Soar Payments is the #1 industry leader for mid and high risk credit card processing, as reflected by their many satisfied customer reviews. Click here to read real life customer reviews for Soar Payments.

How to apply in 3 easy steps


Apply Online Via The Secure Online Application

Complete the online application process (it takes 5 minutes). Click here to begin.


Get An Instant Quote From The SoarPay Team

You'll instantly receive a quote with Industry Minimum Pricing to DocuSign.


Start Accepting Payments With Your New Merchant Account

Soar Payment's Houston, Texas based Customer Support Team will help you get set up. The setup process is fast and easy.