|Sales & Marketing|
|Costs & Contract|
|Complaints & Service|
Wells Fargo Merchant Services (wellsfargo.com/biz/merchant/), a division of Wells Fargo Bank, is one of the top ten largest merchant account providers in the United States and recently grew its merchant portfolio significantly with its acquisition of Wachovia Bank. Although Wells Fargo is an Acquiring Bank based in San Francisco, California, it uses First Data as its processor and has been doing so since 1971. It also uses First Data Global Leasing to supply its credit card processing equipment. Debra Rossi is the head of merchant services at Wells Fargo.
One of the benefits merchants receive when they have both a checking account and merchant account with Wells Fargo is a quicker deposit of funds from their credit card sales. Typically in the credit card processing industry, merchants who have their checking and merchant account through different providers will experience a delay of around 48 hours to receive deposits. Wells Fargo boasts that funds are usually available the next business day. This rapid deposit schedule is an attractive feature for some merchants, but it shouldn’t be the only focus for merchants who are considering the company.
Wells Fargo Products and Services:
- Debit and credit card processing
- Check processing
- Gift card and rewards programs
- Mobile wallet acceptance
- International payment acceptance
- QuickBooks integration
- Online payment gateway
- Virtual terminal
- Credit card processing equipment
- Most types of business of any size, including retail, e-commerce, MOTO, and international
|Key Points – Sales & Marketing|
|Uses independent resellers?||No|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
Wells Fargo primarily markets its merchant services through the use of fully employed outside sales representatives, as opposed to independent contracted agents. Merchant accounts are also promoted and sold through its numerous banking branches, and various other traditional marketing methods. The company does not appear to utilize any intentionally misleading advertising or rate promotions that are apparent at this time. However, merchants have reported uses of deceptive sales tactics such as nondisclosure of important contract conditions and fees by the company’s agents. These complaints appear to be related to the terms of their Wells Fargo contracts and the terms of their First Data Global Leasing equipment leases.
Wells Fargo Merchant Services Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||Unknown|
|Equipment lease:||48 mos./non-cancellable|
Pricing and fees of a Wells Fargo merchant account appear to vary based on a merchant’s business type, processing volume, and the representative setting up the account. Merchants have been reporting that Wells Fargo merchant accounts have been more expensive than prior providers, or that they experienced a large cost reduction when they switched to a new provider.
The standard merchant account agreement through Wells Fargo (available below) includes a 36-month service commitment with an Early Termination Fee (ETF) of either $500 per location (for merchants who have processed under $1,000,000) or $500 per location plus the cost of the merchant’s most expensive month multiplied by six (for merchants who have processed over $1,000,000). Additionally, it appears that merchants are often encouraged to rent processing equipment through First Data Global Leasing, which also includes non-cancellable lease agreements of up to 48 months. It is unclear, as of this review, if Wells Fargo also charges an annual PCI Compliance Fee, which is a common practice in the industry. Overall, these terms are much less competitive than industry averages and have been rated accordingly.
|Key Points – Complaints & Service|
|Live customer support?||Yes|
|Most common complaint:||Hidden costs|
Considering Wells Fargo’s size, the company has relatively few complaints regarding its merchant services division. That being said, there are a few common types of complaints (many of which accuse the company of being a ripoff or a scam) that point to where merchants are most likely to experience problems.
One of the most common complaints we found had to do with merchants reporting that an agent was dishonest or deceptive about terms and conditions of the merchant account agreement or costs of terminals, or that the agent signed them up for additional services they had not requested. A merchant named Brad details a typical negative encounter in the comment section below this review:
Just like many of the people below in this comment section, they offered the 2.2% rate, no fees, no contract, and $50 credit towards the credit card processing machine. The first 3 months went by with Wells Fargo sticking to the agreement.
After the first 3 months, I went 2 months without running a card through the machine, no fees. Then I get a $3,800 job in January, paid for with a credit card, same brand and bank as the others. Having used the card before, I think nothing of the $10.00 interchange fee applied in February with the agreed upon fees. Then comes March, no credit card transactions, yet here pops up a $5.00 interchange fee. I think nothing of it, as it wouldn’t be worth $5.00 of my time to go to the bank to argue the fee, as we all know banks are only open when your at work as well, in addition to thinking I swiped the final payment after the January cutoff. Then comes April, and another $64.17 bank interchange fee, with no credit card swipes in February, March, or April. This high fee warranted a visit to the bank where I signed up for the merchant services.
Upon a unsucessful interaction with the phone rep and manager, I was told the Bank Interchange Fee is set by the credit card companies and then passed on to me. Not only was I not told this when signing up, I also recieved a letter stating changes to my services. Just like many others on here, I also found out I was in a 3 year contract, subject to changes, and could not cancel the service.
Other common complaints reported include sudden and long-term holding of merchants’ funds with no explanation, nondisclosure of the $500 cancellation fee prior to account setup, and nondisclosure of the non-cancellable policies regarding equipment leases.
The score of this section is negatively impacted in larger part by the content of the merchant complaints, rather than the quantity.
|Key Points – BBB Report|
The Better Business Bureau does not have a separate report for Wells Fargo Merchant Services, but there are complaints related to merchant services that have been filed against its general page. The company as a whole has had BBB accreditation since 1981 and holds a “B” rating of this review. A total of 5,530 complaints have been filed with the BBB in the last 36 months, with 4,769 of the reports resolved to the customers’ satisfaction. The remaining 761 complaints have not been resolved to the complainants’ satisfaction despite what the BBB believes was a good-faith effort by Wells Fargo.
We have adjusted the rating to a “C” for the purposes of this review according to our rating criteria.
Wells Fargo Merchant Services Review
Rated out of 5 Stars
Reviewed by Phillip Parker
Reviewed on 2015-01-07
Based on our research, the vast majority of Wells Fargo Merchant Services customers appear to be satisfied with the service they are provided. However, it appears that its processing rates may be on the high side, especially if merchants do not properly negotiate the pricing (see: Fee Sweep). Additionally, the presence of a long service agreement, early termination fee, and non-cancellable equipment lease negatively impact the company’s score. Merchants are strongly encouraged to fully read their service agreements prior to signing any documents.
This review was originally published on 9/10/12 and was last updated on 1/7/15.
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