first data fiserv review 2022

First Data/Fiserv vs. Host Merchant Services

Before First Data’s acquisition by Fiserv, the company was already the largest credit card processor in the world. Fiserv is a full-service financial services technology company that includes First Data Merchant Services (FDMS) in its portfolio of services. This article is not set up to be a review of First Data Merchant Services and Fiserv, however it is meant to offer a direct comparison of the two organizations so that merchants can be briefed on their services based on industry best practices.

While a company like Host Merchant Services may not be as large, this comparison is warranted so that prospective merchants looking for a credit card processor can understand that the size of a company is not what matters most. Instead, the actual telling of an excellent merchant services provider is honesty, trust, and meeting the merchant’s needs. Host Merchant Services, as a premier ISO (Independent Sales Organization) of First Data and Fiserv, can provide the same services and eliminate the drawbacks of working with a larger company.

First Data/Fiserv vs HMS

First Data/Fiserv vs HMS – Service Marketing

First Data has served millions of businesses worldwide, making it the largest credit card processor. The company also has direct partnerships with credit card associations, including Visa, MasterCard, Discover, and American Express. Thus, as a direct processor, the benefits to merchants can be pretty substantial. After all, most credit card processing companies serving merchants do not work with the card associations at the highest level.

Although it has a large customer base and an extensive service platform, Fiserv cannot directly reach every merchant. Therefore, it employs the services of several resellers (agents and ISOs) to market its products for them. Unfortunately, by doing so, First Data could unknowingly engage with ISOs and agents who do not follow best practices. Additionally, First Data has done little to remedy the damage to its reputation by some of these deceptive resellers. However, that is the cost of doing business when you are such a large organization. However, many merchant services agents and ISOs do not often engage in the best practices. First Data has done little to remedy the damage to its reputation caused by these deceptive resellers. 

First Data/Fiserv vs HMS - Service Marketing

First Data could employ a better management strategy to control negative partners so that its merchants can enjoy excellent service, judging by First Data’s online reviews. Perhaps that’s one of the challenges of being such a large company. Although some independent salespeople have generated negative reviews, customers can access the excellent technology and features of the First Data platform through a highly rated ISO such as Host Merchant Services.

Host Merchant Services boasts a merchant support team four times larger than its sales team. They are proud of this tactic, as having a support team that understands every merchant’s needs is essential. Additionally, data from review sites show that Host Merchant Services has a meager rate of complaints and one of the highest resolution rates regarding issues in the industry. This is unlike Fiserv, which sits below average regarding resolutions despite its significant resources and large staff.

First Data/Fiserv vs HMS – Fees

Fiserv is large enough to provide extensive options for merchants. Merchants may choose between interchange-plus, tiered, or flat-rate pricing, depending on which one they feel is best for their business. Several customizable options can make First Data pricing attractive to many companies. 

First Data/Fiserv vs HMS - Fees

However, that also seems a weakness because many merchants have reported online review sites being confused simply by being confronted with such a wide range of options. As such, a merchant evaluating Fiserv may be unsure of the fees they would pay until they see their first statement. In addition to unpredictable and confusing fee structures, First Data Merchant Services has been known to lock customers into overpriced equipment leases, which can be unfavorable to small merchants.

Fiserv charges a wide array of fees to the merchant, which are not optional. Merchants pay fees for monthly service, 1099 reporting, PCI DSS compliance, chargebacks, paper statements, ACH reject fees, and much more. Even though Fiserv’s base fees may appear low, accumulating all these additional small charges results in a significant cost for the merchant. Not to mention other charges for application, account setup, and a monthly fee for managing the account. 

With these terms, it’s unsurprising that many merchants seem to be turning away from industry giants such as First Data to more hands-on companies like Host Merchant Services that offer more affordable pricing structures. For instance, HMS has no application fees or setup fees. It is also upfront about its pricing model, and in many cases, merchants using HMS may qualify for a free equipment program for mobile swipers and standard terminals. It is essential to Host Merchant Services that merchants are comfortable conducting business with them and are aware of the costs and procedures every step of the way.

First Data/Fiserv vs HMS – Contractual Obligations

One of the major challenges Fiserv faces is the sheer number of resellers marketing its products and services. This means there are several Fiserv pricing rates in the market, even though merchants may use the same card processing solution for similar purposes. According to some complaints about Fiserv on online review websites, many of these resellers use deceptive marketing tactics to lock merchants into highly restrictive contracts.

Fiserv does not offer much freedom with its contract terms. Each contract term runs for four years. This term comes with an early termination fee based on a liquidated damages clause. This clause means that the merchant who wishes to terminate their contract early must pay First Data to reimburse them for lost profits, multiplied by the number of months remaining on their contract. If a merchant closes their account early in the term, such as within a year or two, they may spend thousands of dollars to repurchase their freedom. This has led to many Fiserv complaints on review sites, and it is not favorable for large or small merchants.

Some may consider Fiserv’s terms fair, but only for large merchant businesses. It seems clear that Fiserv does not appear attractive to smaller-scale merchants. Therefore, many smaller-scale merchants have been migrating to more affordable companies like Host Merchant Services, which offers more contractual freedom. HMS has a month-to-month contract arrangement instead of the long-term prohibitive contracts that larger credit processing firms like First Data / Fiserv force their customers to sign. Host Merchant Services is proud to be able to offer these services as it boasts about customer retention without forcing their loyalty. Based on quality service and pricing transparency, HMS has grown constantly since 2011.

First Data/Fiserv vs Host Merchant Services – Final Conclusion

In summary, while Fiserv (formerly First Data Merchant Services) may be the largest credit card processing service in the world, it lacks reliability for merchants for service and support, particularly small to medium-sized merchants. Meanwhile, Host Merchant Services is an excellent option for merchants of all sizes, working with them based on affordable rates, contractual freedom, and responsive and hands-on customer service. 

Fiserv is a financial services company, not just a merchant services provider, unlike Host Merchant Services, whose credit card processing solutions are focused directly on merchants. If you are a merchant looking to choose or switch your merchant processing service, you should look beyond the provider’s size and focus on whether they can solve your specific needs.

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