Case Studies, Credit Card Processing

[Case Study] The Grass Isn’t Greener: Business Owner Returns to CardFellow

by Ben Dwyer

From CardFellow client to former client to current client again, one small business owner found that processing solutions available on the open market couldn’t compare to the solution he had through CardFellow.

Martin, a small business owner in Massachusetts, was concerned about what the EMV chip card liability shift meant for his business. As he looked into it, he was met with lots of conflicting information, and was left thinking he needed to upgrade his processing equipment almost immediately or he’d face high costs or missed sales. “I got nervous it was going to cost me a thousand dollars, that I wasn’t going to have what I needed by October… With a small business like me where it’s 80% cards, it’s important,” Martin explained.

That’s where a sales representative for a processing company saw an opportunity. He could offer Martin a free terminal, and would switch him over to a new processing account that he claimed would save him money.

When the statement from his new credit card processor arrived, Martin looked at it expecting lower credit card processing fees. But that’s not what he got.

Martin’s Story

Martin’s story is not uncommon in the processing world, where businesses switch companies regularly.

The Beginning.
Initially, Martin used CardFellow to find a credit card processor. But the complexities of the industry left him unsure of how competitive his solution through CardFellow really was, and made it easier for a processor to promise the moon.

Back in 2013, Martin found CardFellow’s free processor comparison service and received extremely competitive quotes from leading processors. He didn’t want to spend all day sorting through information about credit card processing. He wanted to be able to accept credit cards and pay as little as possible for processing. In the end, Martin chose a processor through CardFellow, and received certified quote protections, including a lifetime rate lock, no cancellation fee, and more.

But then came EMV chip cards, and with it a chance for unscrupulous processors to make more money off of unsuspecting businesses.

EMV chip cards?
Credit card processing sales reps use any situations they can to sell you on their service being better or cheaper. EMV, already a confusing subject, was a perfect ruse.

“I had no complaints about CardFellow,” Martin explains. “I was happy with it, but I got confused with the chip card changeover.”

The credit card brands set October 2015 as the deadline for businesses to upgrade to EMV chip card accepting terminals, or risk shouldering the costs of fraudulent transactions. While there was no legal requirement to switch and no reason that business’ current processors couldn’t assist them with the transition, some sales reps took to the phones and offered information ranging from misleading to outright lies.

When he started seeing offers of free terminals, Martin asked his processor through CardFellow if they could give a free terminal. Because pricing from processors through CardFellow is so low, the company was not able to do so.

“These other companies, they’re telling me, ‘Yes, we will give you a free terminal,’ and [I didn’t realize] they were going to charge me higher fees on the other end of that. But you know, nothing is free.”

The New Statements Roll In.
Expecting to see lower processing costs, Martin checked the statement from his new processor and found a headache waiting for him.

Right away, Martin noticed that one feature that he liked, automatic batching, was included with the processor he chose through CardFellow, but an additional cost with his new processor. When he called to say he wasn’t charged for that feature with his last processor, the company offered to reduce the cost. Martin was satisfied with that answer, until his next statement came and the higher fee was still there.

“I had to call them up and say why am I still getting charged this, and you know, I don’t want to bother doing that all the time. Chasing down fees. With CardFellow, I know you guys look at it every few months; I appreciate that.”

Like most business owners, Martin doesn’t have time or desire to sift through statements to see if he’s being overcharged and to call his processor about promised discounts that aren’t there. With CardFellow’s free statement audit service, he doesn’t have to and can still be confident that he’s paying as little as possible for processing.

Re-enter CardFellow.
Certified quotes through CardFellow are the most competitive you’ll ever see. Compared to CardFellow, there’s nowhere for your pricing to go but up.

Fortunately, Martin was on the ball and noticed right away that his costs increased when he left CardFellow. By paying attention to his statements, he caught it quickly.

“I started noticing on my monthly statements that I was getting billed for things I didn’t understand, and then it turned out I was paying $45 a month before I even swiped a card, and that was crazy.” Martin also noticed new fees he hadn’t previously paid with his processor through CardFellow.

“And that’s when I called you guys,” Martin says. Laughing, he adds, “I said, ‘I wanna come home! I wanna come back!’”

When Martin decided he’d made a mistake and wanted to come back to CardFellow, he explains, “I was concerned that maybe there was a termination fee [with the new processor.] It turns out there wasn’t; however, now they wanted me to call them back, to sit down and go over it because they think they can reduce some of the fees. They’re not going to reduce them while I was paying, but now that I’m complaining and leaving they want to reduce them.” He wasn’t having it.

Realizing that his new processor wasn’t going to be the right choice for his business, Martin returned to CardFellow and was happy to find a competitive quote from the same processor he’d had before.

The all-too-common problems.
While Martin’s situation stemmed from the EMV chip card changeover, there are key pitfalls that apply beyond that situation that can ruin your attempts to lower your processing costs. If you know what to watch for, you can avoid those pitfalls.

Martin isn’t the first CardFellow client to be lured away with free terminals or promises of great savings and benefits that never materialize. The takeaway from his situation is that it’s important to consider all aspects of the new solution when comparing. Martin got a ‘free’ terminal, but his monthly costs were much higher, making the new processing service an overall worse deal.

There are a few things you can learn here:

  1. When Martin’s new processor heard he wanted to leave, it was suddenly interested in reducing his costs.

This is an extremely common situation, but also a red flag. If your processor is only interested in lowering your costs to get you to stay, it usually means two things: a) they’ll raise your pricing again once you’ve seen a few months of savings and feel comfortable, and b) you’re not being charged competitively in the first place.

Take Martin’s approach. If your processor can suddenly lower your fees if you’re ready to leave, it’s time to say thanks, but no thanks.

  1. “Free” terminals are rarely free.

Shelling out money for a credit card terminal when someone is offering you one at no charge seems like a silly move, but as Martin can attest, the costs of that “free” terminal are built in somewhere. Whether it’s higher rates, a higher monthly fee, or extra “equipment maintenance” fees, you’re probably paying more than if you bought the terminal outright.

As we explain in an article on our blog, processors that offer truly competitive pricing usually can’t offer free credit card machines. Be wary of free terminal offers, and look for the catch.

  1. Honest sales reps won’t promise huge savings on a competitive statement.

When you already have a competitive processing solution through CardFellow, an honest sales rep will take one look at your statement and realize that they can’t lower your costs further.

Martin experienced that firsthand when one of his regular clients, a processing rep, asked to take a look at his statement. “I told him yeah, you can look, and he says to me, ‘Martin, I can’t touch this.’ Meaning the CardFellow deal.” The rep knew that the pricing Martin received through CardFellow was so competitive that there was essentially nothing to undercut.

If you’re already with a processor you chose through CardFellow and another rep promises you huge savings, be skeptical. (Here’s what happened when one CardFellow client checked in with us to see if he was missing out on savings, as a sales rep claimed: CardFellow Debunks a Misleading Credit Card Processing Quote.)

Martin’s situation says more than we ever could about the value of CardFellow if you’re looking to get and keep the most competitive processing solution. Promised savings will never materialize if there’s nothing to undercut, and worse, your pricing will probably go up. Certified quotes through CardFellow are the most competitive you’ll ever receive. If you’re interested in seeing for yourself, you can sign up here.

Unfortunately, Martin’s situation isn’t unique, and you might find yourself at the same crossroads, deciding if you should try out a new processor or stick with CardFellow. If you have questions or are approached with promises of lower rates, we’re happy to talk things over with you. And if another solution IS a better option for you, we’ll tell you that, too.

Martin’s Warning to Others.
Coming off of this experience, Martin has some words of wisdom to other business owners for how to avoid finding yourself in the same situation: Do your research, and use CardFellow.

“The first thing is don’t jump the gun as soon as someone calls you and scares you. Do your due diligence, do your research.”
Even if you’re not a CardFellow client, our extensive credit card processing blog can help you do your research.

“Obviously I’d recommend CardFellow; I don’t know of any other company that does what you guys do or offers those protections.”

Protections Martin refers to include our lifetime rate lock, pass-through pricing to ensure the most competitive costs, free independent statement monitoring, and more.

“Don’t let someone scare you with ‘it’s gonna cost this much money’ or ‘you have to do this by such and such a date.’ Do your research and see if that’s true or not. It just takes one person to scare the hell out of you, and I get calls from 3 or 4 of these a DAY. Now [because of CardFellow] I can just say, ‘I’m all set.’”

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