Newtek Merchant Solutions has existed since 1998 and currently serves tens of thousands of merchants with payment processing services and the like. While its services are somewhat popular, the company’s history has been fraught with lawsuits that have seemed to create huge dents in its reputation. This article is not meant to be a review of Newtek Merchant Solutions, rather show a comparison of the services that they offer and what customers are saying about it compared to the services that Host Merchant Services offers. However, regardless of the huge dents that have been put into their reputation, Newtek continues to operate and serve customers around the United States. This is an in-depth look at Newtek Merchant Solutions’ service as well as the company’s history compared to Host Merchant Services. This is to help merchants make informed decisions about the value of partnering with Newtek for payment processing solutions. The purpose of this article is to provide a
helpful comparison to help determine how Newtek Merchant Solutions’ operations are in line with industry best practices.
Newtek Merchant Solutions Brand Information vs HMS
Newtek Merchant Solutions brands itself as the “small business authority.” Also, it is the owner of the domain at sba.com, which is not to be confused with sba.gov, owned by an official US government agency: Small Business Administration. However, many prospective customers assume Newtek Merchant Solutions has affiliations with the US Small Business Administration based on this confusion. The fact remains that it does not.
In addition, Newtek Merchant Solutions reviews show that it seems to maintain dual personalities on its profiles on different business review websites. For instance, on Better Business Bureau, Newtek is known as Newtek Business Services with its headquarters in New York. Yet, it also maintains another profile as Newtek Merchant Solutions with its office in Wisconsin. Indeed, it seems the latter is the payment processing outfit of the larger company. Yet, there is also Newtek Gateway for managing merchant payment gateways. In any case, these varied names might be very confusing for merchants who need to find the service and are inquiring about what their company offers. This is drastically different that Host Merchant Services, who have only operated under a single name for the lifetime of the company’s existence.
Newtek Merchant Solutions markets its products chiefly by deploying sales representatives. However, it seems the company does not monitor its sales representatives properly. If they did, there would not be so many complaints about some of its sales representatives using aggressive tactics by making unrelenting, unwanted sales calls to merchants.
In a world where there are several different companies offering merchant solutions using multiple identities, companies like Host Merchant Services maintain a sole, streamlined identity. This allows for easy information accessibility and helps the company serve merchants better and directly. This also helps decrease confusing when working with prospective clients. HMS has a well-defined ISO partnership with Wells Fargo Bank while remaining an independent entity itself for credit card processing for merchants. This ensures that merchants get access to streamlined card processing solutions direct from the source.
Newtek Merchant Solutions Contract and Fees vs HMS Contracts and Fees
Compared to similar major merchant solutions companies, Newtek’s contract is only two years with the option of automatic one-year renewals subsequently. However, many merchants may find the fees that come with such agreements prohibitive. For instance, merchants tied to a Newtek Merchant Solutions contract must pay monthly and annual fees as well as other variable charges.
Additionally, Newtek Merchant Solutions’ pricing structure does not always make many of these charges obvious upfront. This may confuse prospecting customers. Indeed, the problem of undisclosed fees is part of the commonly cited complaints of Newtek Merchant Solutions based on online reviews.
Another curious complaint Newtek Merchant Solutions customers have is that they experience difficulty closing the merchant account when they want to cancel the contract. It is not clear whether Newtek Merchant Solutions implements a liquidated damages early termination clause. Yet, merchants who wish to end their contracts may be charged termination fees up to $300. For a company that brands itself a “small business authority”, such an arrangement doesn’t seem cost-effective for most small-scale merchants.
On the other hand, the recognition for the true small business authority could be awarded to Host Merchant Services, which continues to set the pace in serving small-scale merchants while it also caters to the needs of larger entities. Notably, new merchants setting up credit card processing with HMS are not required to pay any setup fees or application fees. Additionally, its interchange-plus pricing model is more affordable for most merchants. It is transparent and displayed directly on the website for any and all customer to view. In addition, HMS adopts a month-to-month billing model as against long-term contracts that tend to bind merchants to prohibitive conditions. It should also be mentioned that HMS charges no early cancellation fees.
Newtek Merchant Solutions Complaints vs HMS
Many complaints concerning Newtek Merchant Solutions online are related to undisclosed fees as explained in the previous sections. Also, it seems many merchants do not appreciate receiving incessant calls from Newtek’s numerous sales representatives. Despite these Newtek Merchant Solutions complaints, the company continues to maintain a somewhat respectable rating on different review platforms online.
However, a major knock on the company’s reputation has been its questionable practices which have led to lawsuits and official reprimands. For instance, Newtek Merchant Solutions has been accused in a controversy involving CAPCO investments. The details of the controversy show that Newtek may have benefited from tax credit and benefited in its own business instead of investing in small businesses.
Another issue is that Newtek Merchant Solutions has been officially reprimanded by the FTC (Federal Trade Commission) for processing payments for a company with illegal business practices. In the past years, this company was called Treasure Your Success, and the case is widely referenced as a telemarketing credit card scam. Apparently, Newtek had processed payments for the company without a proper review process. When Treasure Your Success was outed as a major scam, Newtek Merchant Solutions was impacted.
It might seem that maintaining an impeccable complaints record is impossible for most merchants services. However, Host Merchant Services has been able and continues to hold an outstanding record of complaints against its business on multiple review platforms. It has a very low rate of complaints and merchants tend to praise the organization for their openness and transparency. In addition, being a company that prioritizes customer service, HMS has one of the highest complaint resolution rates of various merchant solutions providers across the board.
Newtek Merchant Solutions vs HMS Final Thoughts
For the most part, Newtek Merchant Solutions is reliable for card processing, e-commerce, mobile processing, payroll services, and even business financing, among other services. To facilitate these services, it provides credit card machines and equipment leasing. However, it is impossible to overlook the company’s run-ins with the law over the years. For a financial services firm, the gravity of such controversies may often point to a deeper issue with the company and this is cause of concern for merchants.
On the other hand, Host Merchant Services continues to remain a top tier option, particularly for small business merchants with its truly affordable costs. Additionally, HMS was established with an emphasis on customer service, which the company has continued to uphold. If you are a merchant, regardless of the scale of your business, Host Merchant Services has a solution for various categories of merchants.