by Ben Dwyer Two businesses have filed a lawsuit against Colorado-based Mercury Payment Systems, claiming the company adds hidden fees when charging businesses for credit card processing.
If that sounds familiar, it’s because it’s the same thing that Mercury was sued for by Heartland Payment Systems in 2014.
Note: Also in 2014, Mercury Payments was acquired by Vantiv, which has itself since been acquired by Worldpay. The practices that Mercury was allegedly engaged in and sued for may not be the same practices that are currently utilized by Vantiv or Worldpay. We’re leaving this article for historical context, but it may not be relevant to current Mercury customers.
- Archer’s Barbeque v. Mercury Payment Systems
- Heartland Payment Systems v Mercury Payment Systems
- Are these lawsuits accurate?
- Do other processors add hidden fees?
- I’m on an interchange-plus model, so I’m safe, right?
- Avoid Being Overcharged
- I use Mercury Payment Systems. How do I know if I’m paying too much?
Archer’s Barbeque v. Mercury Payment Systems
The lawsuit, filed by Archer’s Barbeque and WokChow Development, claims that Mercury Payment Systems adds fees to a business’s processing bill while disguising them as either interchange or assessment fees that are required.
The case was terminated in 2015 with little information publicly available.
Heartland Payment Systems v. Mercury Payment Systems
In 2014, Heartland Payment Systems sued Mercury Payment Systems for “deceptive pricing.” Heartland claims Mercury utilized deceptive tactics to steal clients. The federal lawsuit accused Mercury Payment Systems of false advertising and unfair competition.
Mercury Payment Systems’ Reply
In response to the Heartland Payment Systems lawsuit, Mercury Payment Systems said that the charges are erroneous and stated that they would fight the lawsuit. Mercury has not made a public comment on the Archer’s Barbeque lawsuit.
Are these lawsuits accurate?
The lawsuit brought by Heartland Payment Systems may have the feel of a fight between bitter competitors, but in our experience with Mercury statements, the arguments have some validity. While we can’t speculate on the legality of Mercury Payment Systems’ practices, we can confirm that we’ve seen misleading and deceptive pricing when reviewing Mercury statements for CardFellow clients.
How Mercury Payment Systems Adds Hidden Fees
In the statements we’ve reviewed (screenshots below) the way that Mercury added fees was to increase the cost of assessments required by the card brands (Visa, Mastercard, and Discover.) That means that Mercury charged a fee that’s part of their true cost, but instead of charging only as much as they had to, they added more money to the fee. Basically, they inflated the true cost.
In the example below, the assessment called MC NABU is an assessment charge from MasterCard. Mercury Payment Systems charged this business $0.0595. However, MasterCard’s charge is $0.0195. Mercury added 4 cents to keep as their profit, but disguised it as a Mastercard assessment charge.
4 cents might not seem like a lot, but these assessment fees are charged for every transaction. That means Mercury Payment Systems charged businesses more than disclosed on every sale.
Note: CardFellow recently reviewed an October 2015 application for processing through Mercury Payment Systems, and the assessment fees listed are correct. Mercury may now be charging assessments at actual cost.
Do other processors add hidden fees?
Unfortunately, opaque and deceptive pricing is still a common practice in the processing industry. Inflating assessments is only one way that processors can charge you more. You can overpay on a number of pricing models and in a variety of ways. Unless you’re a processing expert, it’s easy to miss small fees that add up quickly. The Archer’s Barbeque lawsuit points out that fees are often difficult for businesses to find since they can be tiny amounts that only add up over time, or are easily disguised as legitimate fees.
I’m on an interchange-plus model, so I’m safe, right?
Not necessarily.
You may think that interchange-plus pricing is the ticket to low cost. But Mercury Payment Systems technically offers interchange-plus pricing, illustrating that by itself, interchange-plus it not a silver bullet. Interchange-plus pricing is simply a model that separates interchange and assessments from the processor’s markup. There’s no guarantee that you’re getting the interchange and assessments at the actual cost. In fact, you can get gouged on interchange-plus just as easily as other pricing models if you’re not careful. What you really need is true pass-through pricing, where your processor passes fees to you at cost.
Avoid Being Overcharged
The easiest way to avoid being overcharged is to create a free CardFellow account to find a processor that offers true pass-through pricing and is bound by CardFellow’s legal agreement to keep your rate locked for life.
And just to be sure you’re getting a fair deal, we’ll monitor your account for you to make sure there’s nothing fishy going on. We’ll catch any problems so you can focus on running your business.
I use Mercury Payment Systems. How do I know if I’m paying too much?
If you use Mercury Payment Systems and are worried you might be paying too much for processing, create a free profile at CardFellow to receive instant quotes and then send us your statement. We’re not a processor, so we don’t try to sell you on a particular solution. We’ll check out your costs to see if you’re overpaying, and educate you so that you can make informed choices about what’s best for your business.
Unfortunately our point-of-sale system called Vision Core came with Mercury Payments built-in. We also use Chase Paymentech for our credit card and debit processing. Far cheaper than Mercury Payments.
When signing up with Mercury they promised to match Chases discount rates. It quickly came apparent that they were charging more. We discussed with Mercury payments about the overcharging but they never did match Chase payment rates.
After 5.5 years we decided to cancel Mercury payments. I submitted by cancellation request and received confirmation October 25, 2015. I received a statement in November which was expected and an unexpected statement in December. Called and request they close the account Jan 20, 2016. Mercury emailed an invoice for $440 for account cancellation fee. There was NO cancellation fee in any paperwork from Mercury in 2010. Since 2010 Mercury has changed owners a few times.
We looked my contract three years and three-year renewal automatically without any notice. Apart from the initial paperwork almost 6 years ago I’ve never signed or been contacted for contract renewals.
Thieves.
I was negligent in monitoring my card fees, and only recently noticed that I am now paying much more than I used to. I verified that my interchange plus rates were still correct, and eventually traced it to the upcharged interchange fees as described above. As of April 2017, this shady business practice is still VERY much in effect to the tune of .35 % added to nearly all interchange fees. Considering that my “plus” rate is only 0.06%, I am actually paying 0.41% or nearly SEVEN times my quoted rate. (And no, I cannot find the 0.35% anywhere in my contract other than a vague indication that additional fees may apply to transactions that are not fully qualified.)
I switched from Paymentech due to compatibility with a new POS system and a promise to match my old rates that I thought was being kept, and have probably paid nearly an extra $15,000 in credit card fees since the switchover. I highly recommend Paymentech over Mercury/Vantiv if your POS supports them.
Great info. I see this all the time as well. The problem as stated by another comment: many businesses are forced to change when they start to use a new point of sale system. The business will be attracted to a particular POS to solve issues managing their business, but not give much thought, if any, to processing mandated by the new POS. Mercury Payment Systems positioned themselves years ago with POS dealers and acquired many processing accounts through this model. A while back, Vantiv purchased Mercury Payment Systems. I hear complaints all the time about Vantiv’s customer service, not to mention the overcharging. However, most business just stay because of the investment made in their POS.