Credit Card Salespeople Don’t Understand Ecommerce Merchants

This article is my latest installment on deceptive credit card practices that harm ecommerce merchants. I have worked in the credit card processing industry since 1994 and every year I get more disgusted with the tactics used on merchants. I now own a consulting firm that advises merchants on how to lower their processing costs. In that role, I see a myriad of credit-card contracts, prices and conditions. For this article, I’ll discuss my experiences with credit card salespeople.

Many Deceptive Credit Card Practices

To be sure, there are many honest merchant account providers and honest salespeople who work for them. But I have seen dishonest ones, too. For example, I have seen merchants deceived on the actual discount rate they received. I have seen merchants deceived on the “terms and conditions.” I have even seen a “1” in the discount rate on the merchant application mysterious change to a “7” after the merchant had signed the agreement.

I find the tactics and deception currently used are worse than ever because of merchant account providers trying to capitalize on the impact of the Durbin Amendment. In my June article, “Durbin Amendment May Foster Deceptive Credit, Debit Processing Fees,” I wrote about deceptive pricing tactics that would likely occur as a result of the Durbin Amendment. Recall that the Durbin Amendment lowers the interchange rate for debit card transactions. It does not lower the rate that merchants actually pay for those transactions, however. Merchants must, essentially, rely on their merchant account providers to pass the Durbin Amendment “savings” to them.

In my June article, I predicted that many merchant account providers would not pass the savings to their merchant clients, and would, instead, view the Durbin rate reduction as a profit windfall. In my experience, this has definitely occurred.

The Value of Honest, Knowledgeable Salespeople

Despite this, there are many decent and knowledgeable salespeople in the card processing industry.

Merchants frequently ask me which merchant account providers or salespeople I endorse or recommend. My answer is simple: I do not endorse or recommend any merchant account provider or salesperson. In fact, I tell merchants to be cautious of any person or organization that does endorse or recommend in this industry, including trade associations, chambers of commerce, gateway providers, or business groups. I have found that the person or organization providing the endorsement or recommendation is likely being financially compensated behind the scenes for that support.

I do allow specific merchant account providers and salespeople to provide quotes to lower the rates for my merchant clients. But I refuse any compensation from them should my clients choose their processing services. I choose merchant account providers and salespeople based on their ecommerce expertise and candor. All ecommerce merchants should do the same.

Lack of Ecommerce Understanding

I recently had a heated conversation with a salesperson because I would not allow him to provide a quote to one of my ecommerce merchant clients. I assembled a quote for this merchant so she could receive the lowest rates and best terms and conditions. I worked with the merchant to select a few salespeople and merchant account providers to provide the quote. But I would not include this particular salesperson even though I know he is honest and the merchant account provider was trustworthy. The reason: His expertise is with restaurants and brick-and-mortar retail stores, not ecommerce merchants. In fact, many card processing salespeople are neophytes when it comes to the needs and issues of an ecommerce merchants, in my experience. Most card-processing salespeople do not understand a payment gateway or a shopping cart or other specific nuances surrounding ecommerce merchants.

On the other hand, a knowledgeable salesperson can be very helpful to ecommerce merchants. I recently had four merchant account providers bid for processing service with one of my ecommerce clients. The client very wisely chose the merchant account provider that is an expert on ecommerce. She chose that provider even though there were other, lower bidders. Sure enough, the merchant’s order management company subsequently made a mistake that shut down the card processing. Most salespeople would not have a clue what to do and would simply tell the merchant to “call our 800 number.” However, because this salesperson was an ecommerce expert, he contacted the right people at the order management company — and the payment gateway company — and resolved the issue in minutes. The merchant’s card processing resumed without incident.


Most card processing salespeople do not understand the ecommerce industry. Processing cost is very important when choosing a merchant account provider. However, a good and knowledgeable salesperson has a real value that merchants should consider, too.

Phil Hinke
Phil Hinke
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