Heartland Payment Systems
Last Updated: January 11, 2014
Heartland Payment Systems Overview
Heartland Payment Systems (heartlandpaymentsystems.com) is a very large merchant account provider based out of Princeton, New Jersey. The company was founded in 1997 and appears to be a direct processor, although it may also use the processing networks of a few larger acquirers. According to several reports Heartland ranks as the fifth-largest processor in the United States and processes over $80 billion in credit card transactions annually.
The company made national headlines in 2008 when Heartland’s computer systems were infiltrated by a computer hacker named Albert Gonzalez, who subsequently stole the data of more than 130 million credit cards. While this could have spelled doom for such a prominent company, Heartland responded very quickly to repair the damages and prevent future security breaches. Heartland now regularly updates its security systems and, understandably, takes data security very seriously. Additionally, Heartland seems to have a strongly embedded philosophy of educating merchants about payment processing, even going so far as to dedicating an entire website dubbed the “Merchant Bill of Rights” to fulfilling this purpose.
Heartland also appears to be one of the very few merchant account providers that is actively passing Durbin Amendment savings on to merchants. For those who are unaware, the Durbin Amendment is a flawed bill that forced banks to reduce debit card Interchange fees but did nothing about requiring third-party processors and sales organizations to pass the savings on to the merchant, which most do not. Heartland Payment Systems Inc. is a registered ISO/MSP of Wells Fargo Bank, N.A., Walnut Creek, CA, The Bancorp Bank, Philadelphia, PA, and Heartland Bank, St. Louis, MO. The company’s headquarters are located at 90 Nassau St Fl 2, Princeton, NJ 08542.
Heartland Payment Systems Sales & Marketing Tactics | A-
|Key Points – Sales & Marketing|
|Uses independent resellers?||No|
|Promotes deceptive rate quotes?||No|
|Fails to disclose all terms?||Yes|
Heartland does not use any deceptive advertising or rate quoting practices that are apparent to this reviewer. Additionally, representatives of Heartland have stated that all of the company’s sales staff are internal W2 employees who undergo background checks. Heartland never outsources its products and services to other companies and never uses independent contractors, sub-ISOs, or reseller organizations.
Although the company appears to go to great lengths to fully disclose its contract terms to merchants, the most consistently reported complaint about the company is nondisclosure of its $295 early termination fee (ETF). It appears that Heartland’s standard practice is to provide merchants with two documents at the point of signing. One is a short summary of the pricing and contract length, commonly referred to as a “merchant agreement.” According to merchant complaints, this agreement does not mention the early termination fee (ETF).
The second piece of documentation is a large handbook of user guidelines, often referred to in the industry as a “program guide.” The early termination fee is mentioned somewhere in this larger document. We do not consider this disclosure method to be very transparent, although there seems to be some variation among the company’s agents when it comes to verbally disclosing the ETF. The consistency of reports emerging about nondisclosure of the company’s ETF has prompted us to lower Heartland’s rating to an “A-.”
Heartland Payment Systems Costs & Contract Terms | A-
|Key Points – Costs & Contract Terms|
|Swiped rate:||Variable (Interchange-plus)|
|Keyed-in rate:||Variable (Interchange-plus)|
|PCI compliance fee:||Unknown|
Pricing of Heartland merchant accounts appears to vary based on a variety of factors including business needs, sales volume and the agent setting up the account. The company’s standard contract has a three-year service agreement with a $295 cancellation fee, both of which appear to be negotiable. It also appears that Heartland is willing to waive cancellation fees in numerous circumstances. Heartland’s website claims that the company offers all of its merchants Interchange-plus pricing, which is the most transparent pricing model available. The company does not appear to charge an annual PCI Compliance fee but, based on merchant reports, it may be disguising the fee under another name and charging it on a monthly basis. If you have more information, please leave it in the comment section below.
Heartland Payment Systems Complaints & Service | A
|Key Points – Complaints & Service|
|Live customer support?||Yes|
|Most common complaint:||Sales tactics|
For a processor of Heartland’s size, the company has very few complaints posted in the normal channels and forums, and only a handful of these complaints accuse the company of being a scam or a ripoff. Of the complaints, nearly all of them can be traced back to the agent who set up the account. In fact, the agent appears to be a major factor in determining a merchant’s future satisfaction with Heartland, so merchants are encouraged to work with someone they trust. Aside from complaints about agents, there are a handful of reports from merchants indicating that their fees were suddenly raised without notification. There are also a few complaints of deceptive sales tactics and undisclosed fees in the comment section below this review, but the details behind these complaints are unclear and seem to be isolated incidents in many cases. The company’s customer service department appears to receive generally positive reviews.
Heartland Payment Systems BBB Report | A (CPO Adjusted)
|Key Points – BBB Report|
As of this update, the Better Business Bureau (BBB) is showing that Heartland has been accredited since 2004. The BBB is awarding Heartland an “A+” rating and reporting 20 complaints filed in the last 36 months, a very low complaint count for such a large processor. Of the complaints, nine were due to problems with service, six with billing, and five with advertising and sales. Heartland resolved 17 of the 20 complaints to the merchants’ satisfaction. Since we believe that “A+” ratings should be reserved for providers with zero complaints, we have slightly adjusted the BBB’s rating for the purposes of this review.
Among the largest processors in the United States, Heartland is one of the most positively reviewed and rated providers. Despite the data breach it experienced in 2008, the company has thrived and become an advocate for data security and merchant education. The company could improve its rating in this review by lowering its three-year service agreement to a shorter term, or giving merchants the ability to cancel service any time without a penalty.
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