VARs Speak Out Regarding Dirty Payment Processing Practices
By The Business Solutions Network
In a previous article, I pondered the "dirty" nature of the payment processing industry and received a lot of hate mail for my words. Even though my article was more of me wondering aloud than making definitive statements, some in the processing industry acted like I called their baby ugly.
To be fair, I received way more encouragement for the article -- from both retail VARs and some in the payments space -- and it's the most read article on this blog, so I didn't lose any sleep over the matter.
Yesterday, I began combing through results from our recently-held Best Channel Vendors survey and noticed a trend in the anecdotes readers left regarding payment processing. During the survey, we asked VARs to share stories of their best and worst vendor experiences. By far, the majority of the negative comments we received this year had to do with bad experiences with processing companies.
Here are some random phrases and words taken from our readers:
Confusing to do business with them...
They also sell product direct and tell the customers to call their dealer to get it working, ridiculous.
Deceitful business practices...
They have riddled the market with broken consumer confidences...
Credit card processing sales reps, in their efforts to get a new customer, call our company posing as an employee of our customer asking for confidential information about our customer for their gain.
No apologies to the merchant or any owning of the fault...
Placed mysterious charges onto statements for some of our clients and many have paid the charges not knowing what they were for.
When clients call they are unable to get phone support for hours...
There is a very significant question as to their integrity, openness, visibility and overall honesty...
They are either incompetent or tell outright lies, or both...
These employees and representatives totally mislead prospects in order to get their business...
Filled with people who mislead (lie to) the customers just to get them to sign a contract that locks them into a commitment...
Regularly add new fees to merchant statements for stuff they think up out of thin air...
They keep raising their rates to my clients without ever notifying them...
Bait and switch sales tactics...
No other tech category in our survey was filled with such anecdotes. It's clear that this is a major issue. Unfortunately, the processing companies hold a lot of power. There's good money to be made, so many VARs put up with the shenanigans.
But here's a little (not so) secret: processing companies want to partner with retail and restaurant IT VARs like you. Look at the RSPA RetailNOW floor over the past few years and you'll see the large increase in processing exhibitors. ISVs and VARs are the processors' best avenue for boarding merchants. They want to recruit you. They need you.
For that reason, you have the power to change things. The RSPA, your association, has power to change things. Could the RSPA act as a clearinghouse or offer endorsements for processing companies that uphold reputable practices? Could the RSPA withhold membership and exhibition from those companies who are using shady business practices? Maybe. Maybe not.
I'm sure that's a can of worms that many don't want to open. And, to be fair, I'm not sure it's even a good idea.
It's just sad and kind of amazing that so many people are aware of a major problem and yet nothing is being done to fix it. What are your thoughts?