What to Know Before Getting Started
Starting a New Business?
Selecting a credit card processor is often more complicated than most people expect. How much should you be paying in fees? Should you lease or buy equipment? Should you be locked into a service agreement for anything length of time? These considerations and several others are imporant to understand before signing up with any merchant account provider. Mistakes are easily made and can be very costly to your business. Along with seeing our top choices for payment services below, be sure to checkout this post to avoid common traps in the merchant services industry.
Considerations For Current Business Owners
Changing merchant accounts can be an expensive, complicated, and time consuming process. Are you really going to save as much as promised? Do you need to buy to new equipment or sign new lease agreements? Will there be other less accountable costs such as those associated with employee retraining? Before selecting one of our choices below, you may want to consider renegotiating your fees with your current payment processing vendors using the help of a contingency-compensated consultant. It can result in a dramatic decrease in costs without the pains of switching. In some cases business owner have also obtained substantial refunds of prior overcharges along with saving thousands in future processing costs. See this post to learn more about this little-known alternative to changing merchant account provider.
Electronic Benefits Transfer, or EBT, is a system that allows financial aid recipients to buy goods with their federal and state welfare funds. Established following the overhaul of the old physical food stamp system, EBT allows users to swipe magnetic stripe cards at participating retailers in a process that closely resembles PIN debit payments. The cardholder simply swipes the card, enters a secret PIN, and is either authorized or denied the purchase amount. The merchant then receives the payment electronically just like other card transactions.
A common misconception about EBT cards is that they are exclusively used to purchase food at grocery stores. This is only true of Supplemental Nutrition Assistance Program (SNAP) funds, which are intended to help families afford basic food staples. Funds from other government programs like Temporary Assistance for Needy Families (TANF) and state-funded aid can be spent in a manner similar to cash. This means that even if you don’t sell groceries, you may still benefit from accepting EBT payments from customers.
Below is a list of highly rated merchant services providers that offer EBT processing in addition to their own merchant accounts. Although EBT payments are not subject to interchange costs, processors are still permitted to charge a reasonable amount for processing EBT transactions. You should therefore be sure to inquire about all potential costs before adding EBT acceptance for your customers.
Our unbiased articles are supported in part by helping you find highly reviewed merchant accounts. You can learn more here.
Why These Merchant Account Providers
Host Merchant Services
Best EBT Processor
Host Merchant Services is a Newark, Delaware-based merchant account provider that is well-suited for most general business types and some high risk merchants. In addition to EBT acceptance, the company’s products and services include point-of-sale solutions (with specific packages for the restaurant, salon, professional service, and contractor sectors), online marketing tools, an online payment gateway and virtual terminal, mobile credit card processing, gift and loyalty programs, merchant cash advance, and offshore merchant accounts. Host Merchant Services specializes in e-commerce businesses and provides a free website and email address to interested merchants.
Host Merchant Services has received only positive feedback on public forums, with most reviewers singling out the company’s customer service for praise. Host offers interchange-plus pricing with no early termination fees to all of its merchants, meaning that users will enjoy the most transparent pricing model and can cancel service without penalty. The BBB gives Host an “A+” rating, and CPO also gives the company an “A+.”
Based in Woodland Hills, California, PaymentCloud is a merchant account provider that specializes in serving nearly any business with need to accept EBT payments. Along with EBT, the company also provides payment processing services for businesses in a wide array of industries and assigns a dedicated account manager to all its merchant customers for the life of the account.
Custom Pricing Plans
The company has not received any EBT complaints on consumer forums, and it customizes its pricing according to each merchant’s business type and processing history. The BBB does not maintain a profile for PaymentCloud at this time, but CPO gives the company an “A.”
Active since early 2014, Fattmerchant is a merchant account provider leading the industry’s move toward flat-rate, subscription-style pricing. The company’s products and services include EMV-compatible countertop terminals, a virtual terminal, an online payment gateway, an online shopping cart, mobile phone processing, QuickBooks integration, online invoicing, and recurring billing. Fattmerchant is capable of processing EBT payments and offers a comprehensive dashboard for tracking all payments and customers.
Fattmerchant offers multiple pricing plans with different rates. Merchants can select either a plan that charges a flat fee on all transactions or a plan that charges a fixed monthly fee plus a fixed per-transaction dollar amount above interchange. In other words, merchants can choose whether or not they are charged a percentage markup on each transaction. Fattmerchant currently has an “A” rating on CPO and an “A+” rating with the Better Business Bureau.
Founded in 1998, CDG Commerce is a merchant account provider that provides online, mobile, and traditional face-to-face credit card acceptance. The company has offices in Virginia and in California and specializes in e-commerce solutions like online payment gateways and integrated shopping carts. CDG Commerce is also able to provide “future-proof” terminals that can process EBT payments and are designed to remain compatible with new payment technologies as they emerge. The company currently maintains an “A+” rating with both CardPaymentOptions.com and the BBB.
Other Merchant Account Options
The providers in this section may not have been researched as thoroughly or may lack a quality that prevented them from being listed above. We have listed them here to provide a broader view of potential merchant account options. Are you a decision maker with your company and believe that you should be listed below? Tell us here.
Payline Data is a Chicago, Illinois-based merchant account provider that offers retail, mobile, and online payment solutions for a wide range of business types. The company advertises interchange-plus pricing with month-to-month agreements and no termination fees, and it also donates 10% of its processing revenue to charity. Payline Data enables merchants to accept EBT payments through the same credit card terminal that they use for credit and debit card processing. Our review of Payline Data currently gives the company an “A+” rating, while the BBB gives the company an “A.”
Dharma Merchant Services
Headquartered in San Francisco, California, Dharma Merchant Services is a merchant account provider with a very strong reputation across all merchant account review websites. Dharma provides EBT processing through its standard processing equipment and does not lock merchants into long-term equipment leases. The company also promotes interchange-plus pricing with no early termination fees, annual fees, monthly minimum fees, or application fees. Dharma Merchant Services places an emphasis on environmentally friendly business practices and gives 50% of its net profits to non-profit enterprises. Our review of Dharma awards the company an “A+” rating and the Better Business Bureau also gives the company an “A+.”