Heartland Payment Systems is one of the largest payment processors in the U.S., offering a variety of services mainly to restaurants, convenience stores, and healthcare. They also focus on education, providing a variety of programs including a nutrition payment program.
With a name like Heartland Payment Systems, you might think that this company is a small, family-operated business located in the middle of the U.S. On the contrary -- Heartland is the fifth largest payment processor in the United States, and the ninth largest in the world. Additionally, their headquarters is located in New Jersey, but they have offices throughout the states. They deliver credit, debit, prepaid card processing, mobile commerce, e-commerce, marketing solutions, security technology, payroll solutions, micropayment solutions, and related business programs and services to more than 300,000 businesses and educational institutions nationwide.
Heartland focuses on the restaurant industry through Freshtxt, their full-featured reservation/table/guest management system. Heartland also focuses on lodging and hospitality, petroleum and convenience stores, government, healthcare, and other industries that are somewhat high-risk (such as liquor stores and professional services). Unfortunately for U.S. merchants, however, international sales can be a problem. We'll discuss that feature below, as this article is based upon fees, rates, and services to U.S. merchants.
Worth a mention here -- after Heartland suffered a data breach in 2008, Heartland became very focused on security measures. Now, they pave the way for seemingly impenetrable security measures.
Below is a detailed review of Heartland 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.
|Microsoft Dynamics GP||No|
|Windows / Blackberry||No|
|iPhone / iPad||Yes|
|Alternative Transaction Types:|
|Snail Mail Orders||Yes|
|American Express (AMEX)||Yes|
|Add Tips to Bills||Yes|
|eCommerce / Shopping Cart||Yes|
|EMV Chip 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|
|HIPAA Compliance (Healthcare)||Yes|
|Trust Account Debiting (Legal)||No|
|Fleet Cards (Petroleum)||Yes|
|Online Menu Orders (Restaurants)||Yes|
A few of Heartland's Freshtxt services are operable on Blackberry and Windows phones through secondary HTML5 apps. Heartland also participates in the American Express Card Acceptance program for businesses with an annual charge volume of less than $1 million.
* Conducting international sales through Heartland is an issue, as Heartland isn't set up to accept international zip codes that contain letters (and many of them do). Therefore, the chargeback risk is too high for Heartland to deal with, and - although merchants can conduct sales to other countries - Heartland is "hands off" when it comes to dealing with disputes.
Almost Every merchant account services company uses either Interchange Plus or Tiered Pricing (read more about this topic 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.
Heartland doesn't quote prices on their site, and this is an understandable situation considering the businesses that they work with. We do know they offer Interchange Plus pricing to all their merchants. Additionally, they pass through any payment processing interchange reductions or increases that may occur. According to Heartland, "there are no surprises." We were able to find some limited pricing data in some publicly available documents, which paint a picture of a company with below average fees.
There is one catch to their interchange pricing-- if you process less than $50,000 per year (or $4,167 per month), they charge a flat rate of $59 per month on top of interchange fees. While this $59 might cover all the "gotcha" fees that other payment processors charge (and Heartland doesn't - like the PCI Compliance fee), that fee still is a bit steep for most small businesses.
Heartland has very little to hide, other than the complaints we read about the lack of transparency on their early termination fee. There may be a setup fee for POS systems, and other fees will vary depending upon type of business, business size, and type of transaction.
|Fine Print Fees:|
|Setup / Application Fee||Possible|
|PCI Compliance Fee||None|
|PCI Inaction Fee||None|
|Online Reporting Fee||None|
|Monthly Minimum Volume Fee||Varies|
|Accept International Pymt Fee||No|
|Voice Authorization Fee||$.65 per transaction|
|Monthly Min. Process Fee||Yes|
|Daily Batch Fee||None|
|ACH / Direct Deposit Fee||None|
|ACH Charge Fee||None|
|ACH Return Fee||Possible|
|Free Setup Consultation|
|24/7 Free Customer Support|
Heartland does not appear to charge an annual PCI Compliance fee. However, based on merchant reports online, the company may be disguising the fee under another name.
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.
Heartland Payment Systems is headquartered in Princeton, New Jersey. There are also offices nationally in Texas, Colorado, Tennessee, Oklahoma, Oregon, Illinois, Indiana, New York, Arizona, Kentucky, Pennsylvania and Ohio. They prefer to work with U.S.-based businesses that cater to U.S. customers.
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.
Heartland has a standard three-year contract with an early termination fee (ETF) of $295. However, in searching for complaints and compliments about this company, we learned that Heartland may be willing to negotiate both the contract and the ETF. We hope so, considering everything we read showed that Heartland - surprisingly - is not very transparent about that early termination fee.
When I made the service call (noted below), I asked specifically about an early termination fee and the rep was very quick and clear about confirming that $295 fee.
The merchant account services industry is multi-layered. Understanding how those layers fit together can be confusing (Read More in this Article). Good things 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: Heartland Payment Systems Inc. is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, California, and The Bancorp Bank, Philadelphia, Pennsylvania.
Account Sales: Except for that elusive early termination fee, Heartland doesn't appear to use deceptive advertising or rate quoting practices. Heartland's representatives are internal W2 employees who undergo background checks. Heartland never outsources its products or services for sale by resellers or outside agents. This means that merchants have access to sales reps who actually know the product.
Account Service: Heartland offers a great service to merchants through their "Merchant Bill of Rights" website. They also offer educational materials and 24/7 tech support. They also support the Durbin Amendment that places a cap on interchange or transaction fees. While being so merchant-friendly, we still have to wonder about their lack of transparency on their early termination fee.
As part of our review process, we try to test merchant account service companies' claims by placing test calls and working through the customer service process.
3/24/2015; TIME: 1:55 pm EST
Call to Customer Support
When I made that call to Heartland, it was the first time that a processing company's automated answering machine asked me for my zip code. I was then transferred to an Indiana office, where I talked with Roderick. Roderick was very clear about the early termination fee for the three-year contract, and he also was very knowledgeable about the international sales aspect. Even though Roderick seemed to sense that I wasn't a candidate for an immediate sale, he was generous with his answers.
I happened to mention that this was the first time I was asked for my zip code. Roderick then explained the situation with their in-house sales. He stated that they were all trained and situated in various offices throughout the country. He also stated that they knew all the answers to any question a merchant might ask, with no fluctuation in those answers.
Our Take: What we gathered from Roderick is that we have very little wiggle room to negotiate a contract or conditions. However, it sounds as though the support team is consistent, which is great for a mid-sized business (we're not going to recommend this company for small businesses).
We scoured the web to find past and current customer complaints about Heartland's services. Then, we investigated those complaints that seemed legit, and provide our verdict on how well the processor handled the issues.
We found very few complaints consider the size of this company. Most of the complaints centered on that "hidden" early termination fee. Plus, a few other merchants complained about equipment and services. We were slightly amused by the service complaints, because Heartland agents seem to step all over themselves to respond to online complaints. We found a total of 22 complaints within the past three years at BBB. Since this company processes over $80 billion in credit card transactions annually, we'll consider those complaints rare and specific issues that might have developed between the merchant and Heartland.
On the other end of the spectrum, the most common compliment was about Heartland's ease of use. This compliment mainly came from merchants who had dealt previously with some fairly complicated merchant services.
|PCI Compliance Fee||$8.25|
|Online Reporting Fee||$0.00|
|Contract Length||3 Year Contract|
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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.
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