1307 Walt Whitman Road, Melville, NY 11747
If you love being a Wells Fargo banking customer, this is a viable option for credit card processing. However, the rates are higher than average, it requires a long-term contract, you can't conduct international transactions, and the customer service is lackluster. Our recommendation: Look elsewhere.
Wells Fargo's merchant services seem, at first glance, to be overpriced, shady (lack of pricing transparency online), and geared only toward Wells Fargo bank customers. While that latter item is true, we learned through a lengthy phone call with a sales representative that this service may be ideal for the Wells Fargo bank customer merchant who sells to U.S. customers and who wants to grow that business (within the U.S.). Wells Fargo, like any other merchant service provider, would prefer large-ticket and volume businesses, but they have been gearing down to accept the mid-sized merchant as well.
Wells Fargo Bank customers are, for the most part, a happy bunch of folks. But, if you read complaints about Wells Fargo's merchant services, you'll find that those same banking customers have become enemies with Wells Fargo overnight when they begin to use that bank's credit card processing. We suspect - and you'll learn as you read on - that Wells Fargo's issues mainly stem from their relationship with First Data. First Data is their merchant account processor and they also supply all the credit card processing equipment.
We can't say this fact enough - when you become a Wells Fargo merchant services customer, you also sign a contract with First Data and you become a First Data customer as well. Being a Wells Fargo bank customer and a Wells Fargo merchant services customer is like comparing apples and oranges, and I feel that difference is all on First Data's shoulders. You might agree as you read on...
Below is a detailed review of Wells Fargo 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. To learn more about any given feature, just click on it.
Wells Fargo is limited in the number or perks they can offer, because those options are set by their card processor company, First Data. We were glad to hear that the stand-alone terminals could read EMV chip and contactless cards, and that the mobile option will offer that service in October 2015.
| Software Compatibility: | |
|---|---|
| Intuit Quickbooks | Yes |
| Sage 50 | No |
| Microsoft Dynamics GP | No |
| Hardware Compatibility: | |
|---|---|
| Windows / Blackberry | Yes - Blackberry |
| 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 | Yes |
| 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) | Yes |
| Security / Fraud Prevention: | |
| AVS Fraud Protection | Yes |
| PCI DSS Secure Transactions | Yes |
| Industry Specific: | |
| HIPAA Compliance (Healthcare) | xxx |
| Trust Account Debiting (Legal) | Yes |
| Fleet Cards (Petroleum) | Yes |
| Online Menu Orders (Restaurants) | Yes |
| Countries Served: | |
| U.S. | Yes |
| Other Countries | No |
| International | No |
Wells Fargo is sketchy and wordy about all their services online, which led us to believe that a merchant should call this bank before ever thinking about using their services. For instance, Wells Fargo allows U.S. merchants to accept only U.S.-based customers, but there is an exception: "The only exception is for foreign subsidiaries of U.S.-based merchants processing with Wells Fargo Merchant Services. Wells Fargo Merchant Services can support subsidiaries in Canada, Europe, Australia, and Hong Kong."
Ok...fair enough. But, I wanted the full skinny about rates and hardware, so I made the call. You'll see the results under our Customer Service section below and in our answers for hardware, features, and pricing.
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.
Our Experience:
Wells Fargo is, perhaps, the least transparent merchant processing service that we've found online. They offer very little information on prices, fees, or even fine print at their site that could help a merchant understand the financial responsibilities involved in using their services. They do offer a sample invoice, but even that statement is vague in its explanations (If you want to learn how to read an invoice, read our tutorial.
Wells Fargo offers two plans for credit card processing when a merchant opens an account. One is a fixed fee of 2.5% plus $.25 per transaction, no matter the type of card. The other payment option breaks payment processing into two payment options, one for credit cards and the other for debit cards:
Small merchants can find other services that offer better rates without all the fine print mentioned below and with a month-to-month contract that doesn't charge an early termination fee. Larger merchants, similarly, can beat these rates rather easily. Once again, the big (and really only) draw here is that if you're an existing Wells Fargo banking customer, you can have a point of contact at your bank to discuss your credit card processing services. I feel the success of this service really depends upon the merchant's relationship with that bank.
The following "gotchas" in the fine print are fairly normal for credit card processors. As we note under Customer Service, however, Wells Fargo is not the processor; therefore, merchants are paying higher fees all around to use Wells Fargo as a middle man to First Data:
| Fine Print Fees: | |
|---|---|
| Termination Fee | $500 |
| Setup / Application Fee | Yes, differs by product |
| PCI Compliance Fee | None |
| PCI Inaction Fee | None |
| Gateway Fee | $19.95/month |
| 1099-K Fee | None |
| Statement Fee | None |
| Online Reporting Fee | Yes |
| Monthly Minimum Volume Fee | $25 |
| Accept International Pymt Fee | Not Applicable |
| Voice Authorization Fee | Possible |
| Monthly Min. Process Fee | Possible |
| Daily Batch Fee | Possible |
| ACH / Direct Deposit Fee | Possible |
| ACH Charge Fee | Possible |
| ACH Return Fee | Possible |
| FANF Fee | None |
| Chargeback Fees | $25 |
| Freebies: | |
|---|---|
| None other than lack of fees above |
Our Take:
Wells Fargo recommends a straight-forward business model for their merchants, including QuickBooks, business phone lines, and - hopefully - a bricks-and-mortar presence. They want to reassure themselves (and your customers if you are a merchant) that you are not a fraud. Those expectations are fairly standard for most credit card processing services, unless you happen to be an Etsy merchant or if you use Square at events and trade shows. Wells Fargo is trying to bend their services to meet small merchant demands. Currently, their prices certainly aren't competitive for small businesses.
Outside the gateway fee, Wells Fargo also charges a $10 monthly fee. That fee can climb to $20 per month if you sell online through a shopping cart. The $25 chargeback fee goes to Wells Fargo's dispute department, which can help you with chargeback disputes. The termination fee is another ballgame altogether.
Finally, the ACH fees and other charges could depend upon what Wells Fargo wants to charge you for those services. We know that they offer QuickBooks integration at a cost and only to their merchant bank customers...so online reporting could be tied into that option. Be sure to ask about these expenses if you dare to venture.
The First Data Wireless Card ReaderWhile 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.
Wells Fargo offers equipment through First Data to handle in-store and mobile sales, meaning they offer terminals and card readers. None of the equipment is free, and they offer leases as well as purchases. We don't recommend leases, because they come with contracts that add further expenses and headaches to your list of concerns. The lease option here adds up to more than double your cost than if you purchase the equipment outright.
Wells Fargo was upfront about the fact that the equipment comes from First Data during our phone call, but we couldn't find that information online. We're vague on the models listed below for that reason, as those models (as well as the pricing structure) could change at any time. Although Wells Fargo sets the prices, they're based on charges set by First Data.
Wells Fargo Merchant Services only services companies in the United States of America.
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 (Note: If you're planning on switching providers, read here, to learn how).
When you sign up with Wells Fargo, you sign a three-year contract. Early termination of that contract amounts to $500. However, the sales rep we spoke with said that money was contingent on several factors. If you had to close up shop, for instance, you may not need to pay that fee or only pay a portion of the fee.
Note that you may not get this service from a credit card processor that could care less about anything but your money. When you sign up for services at Wells Fargo, you become part of the "family" with your business account, your QuickBook services, your merchant account, and your life-long service from the same service rep. Unless, of course, that service rep finds a better job elsewhere.
At the same time, Wells Fargo's partner, First Data, sets the rules.
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: Although Wells Fargo might give the perception that they're acting as your payment processor, they actually use First Data for that service. Wells Fargo is merely the merchant acquirer (aka an "ISO"). When you sign up for merchant services at Wells Fargo, you're also signing up to be a First Data customer.
Account Sales: If you have a Wells Fargo bank account, especially a business account, you probably already know about Wells Fargo's merchant services program. Otherwise, you might be hard pressed to even know about this branch within the bank. They seem to be very low key.
Account Service: Wells Fargo offers customer service via phone, email, and support center for their customers. This support is offered 24/7, which seems to be going above and beyond for a service that offers business only to U.S. customers.
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.
1/5/2015; TIME: 11:45 a.m. EST
Call to Customer Support
I spent an hour on the phone with Mike, a service rep who was polite, friendly, and had answers to all my questions ranging from hardware to pricing and fees. He was very knowledgeable, and he also seemed very upfront with his answers to my questions. I was invited to call back and ask for him at any time, so in effect he was proficient in establishing an initial customer relationship during that call. He wasn't put off by the low income levels I provided, and he also wasn't disturbed that I didn't want the service immediately. After our call I received an immediate email response from Mike, which only served to buoy my confidence about his proficiency.
Our Take:
Granted, this was an initial call, and I have no idea how customer service might react to issues after I become a client. I have a feeling however, that they wouldn't be able to get away from me, as I would also be a business account client at their bank as well as tied into several other services that this bank offers. At the same time, you - the merchant - need to remember that Wells Fargo is not your credit card processor. Wells Fargo relies heavily upon First Data for those services as well as for your equipment. Since First Data doesn't know you from a hole in the ground, you could be subject to suspension or termination for any real or imagined suspicious activity. If you lose your account because First Data doesn't like you, where would you be then? You're so tied into Wells Fargo through this service that you may not find a way out.
We scoured the web to find past and current customer complaints about Wells Fargo's services. Then, we investigated those complaints that seemed legit, and provide our verdict on how well the processor handled the issues.
This complaint was very common.
If you, as a merchant, cannot read nor understand a leasing program contract, then why did you sign it? Do the math: $40 per month for four years (48 months) = $1,920.00. The outright purchase of a terminal is $719.00. Sorry, but we're not blaming Wells Fargo or First Data for this one.
Remember that you are a First Data customer as well as a Wells Fargo customer. If your chargebacks or suspicious charges become red flag material, you can be game for either company to shut you down.
If you ever buy into any credit card processing service, go into that agreement with the knowledge that your account can be suspended or terminated if you fail to respond to chargebacks or even to returns. Now, with this Wells Fargo service, you are subject to two companies that watch you like a hawk. If you remain proactive with issues like chargebacks, Wells Fargo's chargeback team can help you reduce your headaches there. Even though the fee is $25 per chargeback, you're supposedly getting some service for that fee...but only if you are proactive in pursuing it. Be proactive.
That complaint may well ring true, especially if you have issues with Wells Fargo.
Our initial experience with Wells Fargo was stellar, but it was a sales call. We recommend finding a sales rep that you feel comfortable with, because there is a possibility that that sales rep could help you through your entire initial setup stages. This is one of those cases where you, as a merchant, need to be proactive on the front end and create a relationship with Wells Fargo that eventually becomes so solid that they may be willing to go to bat with you against First Data if you feel First Data is being unreasonable (a pipe dream, but nothing is impossible).
This issue is one that can be common across all credit card processing companies, but we didn't see the number of complaints elsewhere that we saw here.
I thought about asking about rising rates when on the phone with the sales representative, but I didn't. Now I wish I had. With that said, again we're looking at Wells Fargo's relationship with First Data. If First Data is raising rates, then Wells Fargo would need to do likewise just to cover their own expenses. Our verdict, truly, is for Wells Fargo to get into the business of credit card processing and leave First Data in their dust.
| Overall | |
|---|---|
| Price | |
| Customer Service | |
| Customer Reviews |
| Setup Fee | $0.00 |
|---|---|
| Monthly Fee | $0.00 |
| PCI Compliance Fee | $0.00 |
| Online Reporting Fee | $0.00 |
| Batch Fee | $0.00 |
| Gateway Fee | $19.95 |
| Chargeback Fee | $25.00 |
| Termination Fee | $500.00 |
| 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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