My experience with Instamerchant.com and FirstData.com has been overall quite a disappointment.It's cost me way too much time, and way too much money just to accept payment through credit cards.
Sign Up.With instamerchant and firstdata it's a lengthy process that takes days not minutes. The process included a credit check, and literally pages of forms for me to fill out and fax. If I sign up for PayPal.com or the new SquareUp.com, I'm done with the forms on a webpage in a few minues. Every service I've tried has a verification period to do some test ACH deposits and withdrawals. Those take a couple business days- that's across the board. The aforementioned instamerchant / firstdata combination took close to 30 minutes just for the paperwork and faxing. You need to download various forms, put your personal information on them, then sign and fax them to the proper numbers. Why can't that process be up to date like Google's, PayPal's or Square's??
Contracts. With instamerchant and firstdata there was a 6 month contract. When you sign up, you get hit with a fee, and again when you want to cancel, there's a "cancellation fee" of $30! With Paypal, Google, or Square- no contract! This will be a no-brainer after reading this article.
Fees This is the biggest game-killer of all the reasons not to sign up with Instamerchant / First Data.
The fees for a small business that does a low volume of card transactions are HUGE. The last month (April) Broadview accepted CC payments through Instamerchant / First Data, there were $536.80 of transactions run through this (dis)service, and a total of $110.00 in fees taken from the company's account (before the cancellation fee was charged). $110 is 20.5% of the gross sales. Add a $30 cancellation fee and now the total fees charged becomes 26% of the gross payments! This is outrageous and just plain ridiculous.
Paypal, Google, and SquareUp charge FLAT RATES. If you don't use the service, you don't pay for it!!
Paypal fee percentages do vary from 2.9% down to 1.9% plus 30 cents per transaction. Google Checkout fees also vary from 2.9% down to 1.9% plus 30 cents per transaction. Square Up fee percentage for swiped transactions is a flat 2.75% for a swiped transaction, OR 3.5% plus 15 cents for a manually entered payment. NONE of these services charge "gateway fees"(for the privilege of using the service?), "statement fees" ($9.95 to mail you a statement?? Stamps are only 44 cents right now I think, paper is 3-4 cents per page, ink is another penny or two per page, the computer that generates the statement works for FREE- minus electricity), "customer service fees"( to maintain the call center in India?). this was not a comprehensive list of all the reasons these people can conjure up to take money out of your small business' bank account.
More Fees. Recently another fee has come in to play. The PCI compliance fee- another $20 a month until you sit down for an hour long phone conversation with a company called Security Metrics Inc contracted to FirstData to ensure PCI compliance of all its customers. I repeatedly told the rep I'm canceling the service yet he seemed to ignore that and kept calling. The calls were similar to dunning like a bill collector to complete this unnecessary interview. I think all in all I wasted about an hour and 15 minutes listening to this guy jabber on asking questions about if and how credit card information is stored. After the third call I started just hanging up on the guy, then another day and I received a call from a supervisor. I told the supervisor the same thing- I'm canceling the account. He stated the rep didn't relay that information to him and apologized for the calls. I haven't heard from them since.
The effects of all this time and money wasted on paying unnecessary fees and wasting time on documentation will vary according to what type of business you have. But trust me, it's surely better spent on more constructive activities. I will never again sign up to do business with a payment gateway service that runs under an antiquated model such as this. I regret ever signing up to be gouged like this. And I will never recommend doing business with either firstdata or instamerchant to any friends- or even worst enemies.
Disclaimer- None. I don't work for Paypal, Google, or Square Up. I see they're doing a good thing for small business. And I wish them the best of luck in their business ventures. Two of the three are already wildly successful, and I think the third is on its way to join the others.
No comments:
Post a Comment