A Comparison of Dharma Merchant Services and Host Merchant Services

Host Merchant Services and Dharma Merchant Services are two of the most popular merchant account providers in the US. Here is a comprehensive analysis and comparison between Dharma Merchant Services vs. Host Merchant Services.

The most effective merchant account providers distinguish themselves by offering competitive and transparent pricing structures, either minimal or no monthly fees, and flexible agreements that are month-to-month with no penalties for cancellation. They also feature excellent customer support, advanced payment acceptance equipment, and robust online payment security technologies. On the other hand, less favorable merchant service providers often impose high and opaque fees, bind business owners with contract terms that include early termination fees, and provide customer service that can be unresponsive and unhelpful.

Below, we compare two prominent merchant account providers in the US: Dharma Merchant Services and Host Merchant Services. Continue reading for a detailed review of their features, advantages, disadvantages, and pricing options to determine which provider best suits your needs.

Overview of Dharma Merchant Services

Dharma Merchant Services is a versatile merchant services provider that utilizes an interchange-plus pricing model designed to lower payment processing fees for businesses with high transaction volumes. The company tailors its services to various sectors, including small enterprises, retail stores, restaurants, healthcare facilities, and the lodging and hospitality industry.

Each account with Dharma Merchant Services is equipped with essential management tools. These include a secure customer database for storing credit card details and comprehensive reporting features that track bank account activities and payment histories. Dharma Merchant Services offers its comprehensive services for a modest monthly fee, without binding clients to long-term contracts or charging early termination fees.

Pros and Cons of Dharma Merchant Services

Overview of Host Merchant Services

Host Merchant Services is a comprehensive provider of merchant solutions catering to diverse business needs, including high-risk and traditional sectors. The company offers a robust suite of services centered around payment processing solutions. Also, it assists businesses in implementing point-of-sale systems and enhancing their online presence through customized websites and customer loyalty programs.

The company notably supports high-risk industries, such as debt collection agencies, e-cigarette vendors, airlines, timeshare companies, gambling and casino operations, and real estate businesses. Additionally, Host Merchant Services extends its expertise to the automotive, retail, restaurant, and hospitality sectors, providing tailored merchant services to meet their unique business demands.

Pros and Cons of Host Merchant Services

Dharma Merchant Services vs. Host Merchant Services: Features

When comparing Dharma Merchant Services and Host Merchant Services, it’s essential to look at the key features each provider offers and how they cater to different types of businesses.

Features of Dharma Merchant Services

• POS Integrations:

Dharma accommodates various POS systems, notably promoting Clover. It also supports systems like Lavu, Shopify POS, and Aloha, though certain systems may require specific payment gateways. This variety allows merchants to select a POS system that aligns with their business requirements, but additional costs for setup or gateways may apply.

• Ecommerce Integrations:

Dharma delivers e-commerce solutions, including integrations with Authorize.Net and NMI. These allow merchants to link with platforms like BigCommerce and Shopify. For nonprofits, Dharma offers a connection to 4aGoodCause, providing tools for fundraising, campaign management, and advanced CRM features. However, some services incur additional fees, which could affect the cost-effectiveness.

• Online Reporting:

The MX Merchant platform at Dharma includes detailed reporting features. Merchants can create and tailor reports on deposits, transactions, and customer data. This feature is available with all Dharma accounts, aiding businesses in monitoring and analyzing their financial information.

• Customer Database:

Dharma provides a customer database feature that securely stores customer details, including payment information and purchase history. This is useful for businesses focusing on repeat customers, enabling personalized services and targeted marketing efforts.

• Surcharging:

Dharma’s MX Merchant platform includes the MX Advantage, which allows surcharging on credit card transactions to help cover processing fees. Businesses must consider state laws on surcharges as they differ and influence the use of this feature.

• Analytics:

Dharma offers the MX Merchant Insights App for a $10 monthly fee. The app grants access to detailed transaction data, including customer demographics. This information helps refine marketing strategies and understand market trends.

• Account Updater:

Dharma’s MX Account Updater automatically updates stored card details, which benefits businesses with recurring billing. This feature costs $25 monthly and covers up to 150 updates, with extra fees for additional updates.

• Deposit Speed:

Dharma typically ensures deposit within two business days, with next-day funding available for some merchants. While competitive, this may not be the quickest option compared to others offering instant deposits for an extra fee.

Features of Host Merchant Services

• POS Integrations:

Host Merchant Services provides various POS systems suitable for multiple business needs, including Clover, Vital, Bonsai, and SwipeSimple. Systems like Clover and Vital offer comprehensive services such as inventory control, employee monitoring, and customer relationship management.

Bonsai provides a budget-friendly alternative with mobile analytics and online ordering, which is ideal for smaller enterprises or new businesses. SwipeSimple is best for companies needing to process payments on the go, emphasizing simple payment solutions and user-friendly operation. Host Merchant Services assists in choosing the appropriate POS system for your business, ensuring the setup of hardware and software to streamline your sales activities.

• Gift Cards and Loyalty Programs:

Host Merchant Services delivers customizable solutions for gift cards and loyalty programs to help boost repeat business and improve customer loyalty. These programs are adaptable to meet specific business requirements. It is advisable to contact their support team for detailed information on costs, reload options, and customization.

• High-Risk Merchant Accounts:

Host Merchant Services provides specialized merchant accounts for high-risk businesses, offering interchange-plus and cash discount accounts. The interchange-plus option helps reduce costs with lower fees, while the cash discount model transfers transaction fees to the customers, removing processing charges for the merchant. These accounts are well-suited for industries like e-cigarettes, debt collection, and timeshare sales.

• Business Financing:

In partnership with multiple cash advance firms, Host Merchant Services offers up to $500,000 in merchant cash advances, with processing times as short as 48 hours. Businesses should carefully consider the financial commitments associated with these advances.

• Advanced Fraud Prevention:

Security is a critical focus at Host Merchant Services, which employs advanced fraud prevention methods such as tokenization and maintains PCI Level 1 compliance. They collaborate with Trustwave to provide up to $100,000 in data breach insurance for all merchant accounts, helping to secure customer data effectively.

• E-commerce Payment Solutions:

Host Merchant Services facilitates e-commerce transactions by supporting over 100 payment gateways and integrating smoothly with major ecommerce platforms like Shopify, Wix, and WooCommerce. This integration aids in a secure and streamlined checkout process, enhancing customer experience.

• Next Day Funding:

Host Merchant Services’ next-day funding service accelerates the receipt of funds by automating batch settlements. This feature is especially useful for businesses needing quick access to revenue, aiding in efficient account management and faster identification of fraudulent transactions.

Host Merchant Services is better suited for mid-sized (low-risk and high-risk) businesses that require flexible, secure, and scalable solutions, particularly those needing around-the-clock support and advanced POS integrations.​

Dharma Merchant Services vs. Host Merchant Services: Products and Services

Products and Services of Dharma Merchant Services

Dharma Merchant Services provides various tools and services to support small businesses and nonprofits with their payment processing requirements.

1.     MX Merchant

Dharma accounts come with access to MX Merchant, a platform that integrates virtual terminal software, reporting tools, and a customer database. The virtual terminal includes a “Quick Pay” button for fast payment processing once customer credit card details are entered. The platform also offers features for adding notes, managing purchase orders, and securely storing customer credit card information for repeat transactions. It is available on mobile devices through apps for both iOS and Android, allowing for payments to be processed remotely.

2.     Merchant Accounts

Dharma uses Fiserv and TSYS for back-end processing. Despite mixed reviews from small businesses about Fiserv, Dharma negotiates competitive processing rates and favorable contract terms, which can offer better conditions than direct accounts with Fiserv. Dharma handles customer service internally, reducing the need for direct contact with Fiserv by merchants. Dharma does not handle high-risk or international accounts, so such cases are referred to PaymentCloud, which specializes in high-risk processing.

3.     Payment Processing and Equipment

They sell a selection of EMV-compliant terminals, including models from Fiserv, Verifone, and Ingenico, all compatible with NFC payments such as Apple Pay. Dharma also offers reprogramming of compatible existing terminals at no cost, though they often recommend buying new equipment. The MX Merchant Express app works with the Walker 2 card reader for mobile transactions, which accepts magstripe, EMV, and NFC payments.

4.     POS Systems

Dharma features Fiserv’s Clover POS products, with options ranging from the advanced Clover Station Duo ($1,999) to the portable Clover Flex ($649), and the Clover Station Solo is another robust option ($1,649). For more compact setups, the Clover Mini is available ($899), with a variable monthly fee. Transitioning to these systems requires onboarding with Fiserv, and if you have an existing POS from a previous processor, Dharma can usually reprogram it to work with their supported systems.

5.     Additional Services

With competitive transaction fees, Dharma offers ACH processing through platforms like Authorize.Net or MX Merchant. They also provide online payment links for businesses to incorporate payment buttons on their websites easily. Additionally, MX Merchant features comprehensive reporting tools that help track transactions, deposits, and customer information efficiently.

Products and Services of Host Merchant Services

HMS offers a range of payment processing options suited for diverse business requirements. Here is a summary of their primary services:

1.     Cash Discounting Program

HMS offers a “No-Cost Account” cash discounting program, which allows businesses to pass credit card processing fees to customers by providing a discount for cash payments. This service is free for businesses with monthly transactions over $5,000, while those processing less incur a small fee. It benefits businesses aiming to lower their expenses related to card processing fees.

2.     ACH Processing

HMS provides ACH processing services, which are ideal for businesses that manage direct bank account withdrawals. While their website does not provide extensive details about this service, it is a dependable choice for handling recurring or large-scale transactions.

3.     Merchant Accounts

Host offers basic merchant accounts with interchange-plus pricing, known for its transparency and potential cost savings compared to flat-rate pricing. These accounts serve both eCommerce platforms and physical stores. HMS tailors account for various transaction sizes and offer specific solutions for nonprofit organizations through its “HMS Gives” program. For high-risk sectors, HMS partners with Electronic Merchant Systems to offer specialized pricing and terms.

4.     High-Risk and Offshore Accounts

For high-risk or offshore businesses, HMS works with international partners to deliver customized processing solutions. These accounts feature unique pricing and terms tailored to meet business needs while ensuring regulatory compliance and effective service.

5.     Credit Card Terminals

Host Merchant Services (HMS) provides a variety of credit card terminals suitable for physical retail environments. Their selection features sophisticated ‘smart’ terminals from manufacturers like Dejavoo, Pax, Valor PayTech, Ingenico, and Verifone. These devices are EMV compliant, supporting chip card transactions to enhance security. Additionally, most of these terminals facilitate Near Field Communication (NFC) payments, which are compatible with Apple Pay, Google Pay, and other contactless methods.

HMS offers at least one free EMV terminal for businesses processing over $20,000 monthly. Those with lower sales volumes can obtain terminals at negotiated rates. Approximately 98% of HMS merchants receive free terminal equipment, which appeals particularly to small and medium enterprises.

6.     Mobile Processing

HMS endorses mobile payment solutions like SwipeSimple and Vital card readers, which are attached directly to mobile devices. These readers work with apps that facilitate transaction processing on smartphones or tablets. HMS features the PAX A80 and A920 wireless terminals for a standalone mobile solution.

7.     POS Systems

HMS’s Bonsai POS system is tailored for the hospitality sector, including retail shops and restaurants. They offer hardware from reputable brands such as Vital and Clover, ensuring seamless integration with HMS payment services. This system helps manage sales, inventory, and customer data efficiently.

8.     Payment Gateways

The company’s own payment gateway, HMS Pay, supports various functions, including ACH transactions, check imaging, recurring billing, wireless, and batch processing. It’s designed to handle operations across multiple locations, ideal for businesses with several branches. HMS also facilitates integration with external gateways like Authorize.Net and NMI.

9.     Virtual Terminal

For businesses handling mail or telephone orders, HMS Pay has a virtual terminal feature that allows for the manual entry of transactions. This functionality is available through HMS Pay and third-party gateways, offering versatility for remote sales activities.

10.  EBT Processing

HMS offers EBT (Electronic Benefits Transfer) processing for retailers and grocery stores accepting government-issued benefits cards. This service enables these businesses to accommodate a broader range of customers, including those reliant on government assistance.

11.  Web Hosting

HMS includes free basic business email and web hosting with its merchant accounts, with the option to upgrade to more comprehensive features for an additional fee. This allows businesses to expand their online presence as needed.

Dharma Merchant Services vs. Host Merchant Services: Pricing Options

Dharma and Host Merchant Services offer competitive pricing but cater to slightly different segments. Dharma is ideal for businesses that focus strongly on nonprofits and ethical practices.

At the same time, Host Merchant Services is better suited for mid-sized businesses, including those considered high-risk, offering flexibility with no upfront costs for equipment. Its pricing structure’s simplicity and transparency, along with the absence of fees for PCI compliance or early termination, make it an appealing option for businesses seeking straightforward, hassle-free payment processing.

Pricing of Dharma Merchant Services

Dharma Merchant Services provides a pricing model for various business sizes, including special rates for nonprofits and high-volume accounts. Their standard monthly account fee is $20, which is reduced to $15 for qualified nonprofits and high-volume businesses.

• For card-present transactions, the rate is Interchange plus 0.15% and $0.08 per transaction, with volume discounts available.
• Qualified nonprofits benefit from even lower rates at Interchange plus 0.10% and $0.08.
• For card-not-present transactions, the rate is typically Interchange plus 0.20% and $0.11, again with discounts for higher volumes and a reduced rate of Interchange plus 0.10% and $0.11 for nonprofits.

Dharma includes several additional services through MX Merchant at no extra charge for gateway fees. However, they charge $10 monthly for recurring billing and $20 for B2B processing services. They maintain a transparent fee structure with no annual fees, PCI compliance fees, or monthly minimums. There is a one-time $49 account closure fee if services are terminated.

Pricing of Host Merchant Services

Host Merchant Services offers straightforward pricing with no application or setup fees. They charge a monthly account fee of $14.99. The cost per transaction varies depending on the type of transaction:

• Retail transactions are priced at Interchange plus 0.25% and $0.10,
• Restaurant transactions at Interchange plus 0.20% and $0.09,
• E-commerce transactions at Interchange plus 0.35% and $0.10.

For those requiring this service, there is an optional monthly gateway fee of $5.00. Chargebacks incur a $15 fee. Host Merchant Services does not charge for PCI compliance or early termination, making its pricing structure clear and predictable for businesses of all sizes. It also does not charge for PIN debit and address verification.

You can understand your potential costs by requesting a free quote from Host Merchant Services. This involves completing an online form and discussing the quote with a specialist. If the company cannot match or beat a competitor’s price, it promises a $50 gift card.

Dharma Merchant Services vs. Host Merchant Services: Customer Support Options

Customer Support Options of Dharma Merchant Services

Dharma Merchant Services provides various customer support options, though it does not offer round-the-clock live support like HMS. It has dedicated email support through forms on its website and provides designated local and toll-free numbers for customer service. The support team is available during business hours from Monday to Thursday, 9:00 AM to 4:00 PM, and Fridays from 9:00 AM to 2:00 PM ET. Outside these hours, customers needing assistance can access various online resources, including a comprehensive FAQ section, and submit support tickets online for more specific issues​.

Customer Support Options of Host Merchant Services

Host Merchant Services provides a range of customer support options that cater to the diverse needs of its merchants. They offer 24/7 telephone support, ensuring assistance is available anytime. During regular business hours, a live chat feature is also accessible for immediate online help. Outside of these hours, technical support may be directed to third-party companies, but HMS maintains oversight and follows up on all such interactions to ensure quality and resolution.

Additional support is offered through various channels, including:

• A dedicated support form is available on their website.
• Email support for less urgent inquiries can be reached at [email protected].
• Access to a comprehensive FAQ section that provides quick answers to common questions.

The company’s commitment to providing reliable support is reflected in its positive reviews and the breadth of support options, making it a dependable choice for merchant services.​

Dharma Merchant Services vs. Host Merchant Services: Setup Process and Ease of Use

Dharma Merchant Services

Dharma’s onboarding is smooth, especially for businesses that fit within its service scope. It provides extensive support through its well-regarded customer service team, available during business hours. However, its setup can be more cumbersome for those with complex needs, and it doesn’t cater to high-risk merchants, which could be a limitation for some businesses.

HMS’s ability to handle various merchant types and its superior equipment compatibility make it a more versatile and reliable option for many businesses, especially those with more complex requirements.

Host Merchant Services

Merchant services have improved significantly, highlighted by their straightforward installation process. Modern business owners no longer face lengthy delays when setting up credit card processing systems. Host Merchant Services offers advanced merchant services with simple installation requirements.

The company also maintains a knowledge base filled with helpful information. Host Merchant Services guarantees efficient integration with your existing merchant account, payment gateway, or point of sale terminal, regardless of your current applications.

Conclusion

While Dharma Merchant Services and Host Merchant Services offer valuable solutions, Host Merchant Services provides a broader range of services, particularly for businesses with more complex or high-risk needs. Dharma is an excellent option for small businesses and nonprofits seeking straightforward pricing and ethical practices. Still, its limitations in serving high-risk industries and lack of 24/7 support may be restrictive for some.

Host Merchant Services stands out with its flexibility, transparent pricing, and comprehensive customer support, which are available around the clock. Its ability to cater to high-risk industries and provide free terminal equipment to most merchants further solidifies its position as a robust and versatile choice. Therefore, Host Merchant Services is better suited for businesses looking for reliable, scalable solutions with strong customer service and broad industry support.

Frequently Asked Questions

What are the main differences in pricing models between Dharma Merchant Services and Host Merchant Services?

Both use an interchange-plus pricing model, but Dharma is more transparent, offering rates starting at interchange plus 0.15% plus an additional $0.08 per transaction and monthly fees of $25. Host Merchant Services also uses interchange-plus but focuses more on high-risk businesses and requires direct contact for detailed pricing.

Which provider offers better support for high-risk industries?

Host Merchant Services is better for high-risk industries like debt collection and gambling. Dharma Merchant Services focuses on low-risk sectors, making Host Merchant Services the preferable option for high-risk businesses.

How do the customer support options compare between Dharma and Host Merchant Services?

Dharma offers phone, email, and online support during business hours, while Host Merchant Services provides 24/7 support, making it more suitable for businesses needing immediate assistance anytime.

What are the key features and tools provided by each service, particularly for eCommerce businesses?

Dharma integrates with platforms like Shopify and offers tools like recurring billing and advanced reporting. Host Merchant Services provides over 100 payment gateways and advanced fraud prevention, making it more versatile for online businesses.

Which provider is more suitable for nonprofits, and what advantages do they offer?

Dharma Merchant Services is more suitable for nonprofits, offering reduced rates, fundraising tools, and integrations tailored to nonprofit needs. Host Merchant Services offers services to nonprofits but doesn’t provide the same level of tailored support or special pricing.