Credit Card Processor Rating Criteria

CPO Rating Criteria

*Note – Some reviews were written before the following criteria was established.  Those reviews will eventually be updated under the new rating system.

Grading Definitions

Our grades are meant to define the the likelihood that a merchant will have a positive or negative experience with particular provider. No matter the grade we have assigned to a provider, always read your merchant agreement before signing.

A – Very safe. Merchants are highly unlikely to encounter problems caused by the provider.
B – Mostly safe. May have an issue regarding a provision in the contract, or the type/number of complaints filed.
C – Average. Provider may have undesirable contract terms, ethical sales issues, and/or customer service issues.
D – Caution. Provider utilizes unethical contract provisions and marketing strategies, has poorly trained sales forces, and/or severely lacks in service and support quality.
F – Avoid. Highly unethical and/or possible scam.

Rating and Review Philosophy

Our reviews primarily measure merchant satisfaction and provider policies regarding, fees, sales tactics, customer support, and cancellation of service.  We focus on these areas because they have the greatest impact on a merchant’s overall experience with a merchant account provider.  Due to the complex nature of the credit card processing industry, we understand that most providers will have a few complaints even if they operate ethically and have merchant friendly policies.  For this reason, we are most interested in the context of complaints and uncovering any resounding themes in the type of complaints.  Our goal is to help merchants determine the relative safety of entering into business with a particular merchant account provider.

It is our belief that most merchants do not file public complaints when they have a legitimate issue with a provider; therefore, if one merchant takes the time to report a problem, there are probably others who have had the same issue. The more complaints that exist about a particular issue with a provider, the more likely that others are having the same problem. We see this likelihood as a exponential curve wherein as public complaints increase, the factor of others silently experiencing the same problems increases at an ever greater rate.  For example, it is safe to assume that if there is only one complaint filed about a particular issue then it may just be an isolated incident.  If there are 10 complaints about an issue, we believe that it is safe to assume that at least 100 other merchants have had the same problem; however, if there are 100 complaints about an issue, we feel that is it safe assume the possibility that 10,000 other merchants have silently experienced the same problem. This philosophy correlates to the likelihood that a new merchant would experience the same problems that current and past customers have reported. Our calculations are only theoretical but we believe the philosophy to be logically sound.

Review Types

We have have two review types; The first is what we call a “Preliminary Review” which covers basic research of merchant satisfaction and provides factual details about a provider.  This type of review allows us to measure merchant satisfaction for a period of time before we assign a rating. Preliminary Reviews may be unrated, rated or updated into a “Full Review.”

A Full Review covers in greater detail a provider’s policies, marketing tactics, and the level of merchant satisfaction. This type of review is divided into four rated sections that cover the business practices of a provider.  The sections are then graded on a scale from “A+” to “F” based on the evidence collected during the research process. A final “overall” rating is given based on how the provider scored in each of the sections.

Review Sections

Below are the descriptions of each review section.

Sales Tactics & Marketing Strategy

We look closely at how a processor markets its services because many complaints can be traced back to a provider’s sales tactics and marketing strategy. High ratings are earned by companies that utilize well trained, W-2 employed sales forces that have transparent sales processes including full fee and contract provision disclosure prior to setting up accounts.  Low ratings are earned by companies that use misleading sales tactics, deceptive advertising and rate quotes, and rely too heavily on recruiting poorly trained independent sales agents who are intentionally focused on setting up expensive accounts  in exchange for high commissions; a type of provider commonly know within the industry as an “agent hiring mill.”

Fees, Costs & Contract Terms

Since most providers set there own contract terms and pricing, high ratings are earned by processors that offer competitive rate and fees, and short-term service agreements.  The highest ratings are reserved for providers that market month-to-month agreements as a standard policy, have no fees for cancelling, and actively market Interchange-plus rate pricing. Low ratings are earned by processors that intentionally bury important details in fine print, impose high rates and fees, require long-term service agreements and equipment leases, penalize service cancellation with early termination fees, and/or have automatically renewing contracts.

Complaints & Service

Complaint and service quality information is largely gathered and analyzed by researching merchant reviews on various websites and forums. We determine a rating based upon the size of the provider, its time in business, number complaints filed, and the content of the reviews. We also look for themes in the type of reviews to determine if a provider is suffering or excelling in any particular area.  High ratings are reserved for providers that have few to no complaints or a high volume legitimate and verifiable praise. Low ratings are assigned to providers that have numerous complaints, reports indicating unfavorable or unethical business practices, and/or reports of poor customer services and dispute resolution experiences.

Better Business Bureau Rating

We take into account a company’s BBB rating only to help establish a level of credibility, or lack thereof, in a merchant services company. In our opinion (which is shared by many), the BBB rating system is flawed when it comes to the credit card processing industry. For instance, there are numerous examples of providers receiving “A+” ratings despite having hundreds of complaints filed. The BBB often justifies these high ratings by stating that a company has promised to make good faith efforts to resolve complaints. We do not a agree with this policy and believe that high ratings should be reserved for companies that prevent complaints instead of react to them. Evidence has also surfaced that BBB ratings have been manipulated by paying the BBB’s enrollment fees (ABC Investigative Report of the BBB).  Although the BBB claims that it has eliminated its “pay to play” policy, we regularly see “accredited” providers with inflated grades.

The BBB does not look outside of its own system and primarily scores providers based upon how many internal complaints have been filed versus how many have been resolved.  Processors often score an “A+” with the BBB even though they have numerous complaints and dismal ratings elsewhere. It is our belief that when a provider has a high volume of BBB complaints, but a high rating, merchants were unable to get their problems resolved directly with the company itself and so sought outside assistance. This is often an indication that a provider has a poor dispute resolution process and only acts when its BBB rating is at stake. Therefore, a high BBB rating should not be considered as definitive indicaticator of a high quality merchant account provider. Conversely, a low BBB rating is usually a clear signal indicating that a provider has a dysfunctional customer service program.

To combat the problem of artificially inflated BBB ratings, we assign our own “adjusted BBB rating” based on how the section would score under our own criteria. We take into account factors such as complaint volume, type of complaints, resolution ratio, estimated market share, company age, and BBB profile age. The adjusted rating is used in our “Overall Rating” calculation.

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