Bank of America Merchant Services Review

Here’s what you need to know about BofA Merchant Services’ rates and fees, pricing models, reviews, CardFellow’s experience, and more. You can also let other businesses know about your experience by leaving your own Bank of America review.

• History
• What does Bank of America Merchant Services offer?
  • Card Processing
  • Check Processing
  • E-commerce
  • Mobile
  • Payroll Services
• Equipment and software
  • Retail Solution
  • Restaurant Solution
  • Clover Station
• Is it secure?
• Bank of America Credit Card Processing Rates
• Is there a contract?
• Bank of America Merchant Services Reviews
• CardFellow’s Experience
  • Opaque, Costly Pricing
  • What Bundled Surcharging Means
  • Misleading Statements
  • Leases. Predatory, Expensive Leases

History

Bank of America’s Merchant Services was founded in 2009 by Bank of America Corp. and First Data, one of the largest processors in the country. Merchant services are provided by Bank of America and its representative Banc of America Merchant Services, LLC. You may also see the company referred to as BofA or BofA merchant services. Less commonly, you may see BAMS. (Not to be confused with Bank Associates Merchant Services, which also uses that abbreviation.)

What does Bank of America Merchant Services offer?

BofA Merchant Services provides card processing, check processing, e-commerce, mobile, and payroll services.

Card Processing

You can take all major credit credits with Bank of America Merchant Services, including Visa, MasterCard, Discover, American Express, Diners’ Club, and JCB. You can also take most debit cards, including PIN-based, and signature-based versions.

Check Processing

If your customers like to pay with checks, you can accept them. Bank of America offers TeleCheck so you can accept checks electronically with either Verification or Warranty. The Verification solution screens checks to minimize the risk of returned checks. The Warranty solution requires authorization, helping reduce fraud. Electronic checks are more secure and reduce trips to the bank, but if you prefer, you can still take paper checks instead of using the electronic check conversion. The Verification and Warranty solutions are both available with paper checks.

E-commerce

Taking payments online? Bank of America Merchant Services offers the Compass Platform, providing real-time authorization for fast transaction processing.

Bank of America Merchant Services also offers the Global Gateway e4?, a PCI compliant internet payment gateway that can easily integrate with your website. You can also accept phone or mail order payments.

Mobile

If you want to take payments on the go, Bank of America offers Mobile Pay. You can use a Mobile Pay app or an internet Mobile Pay System to enter card information and process transactions. Both options feature advanced security to keep data safe and help protect you against fraud. You can also email receipts directly to your customers.

Payroll Services

If you need payroll services, Bank of America Merchant Services provides Money Network solutions, offering electronic pay disbursement for your employees. Electronic payment is compliant with all 50 states’ payroll requirements, with cards and checks that are widely accepted.

Equipment and software

If you need equipment, Bank of America has several options. For point of sale systems, Bank of America offers a retail solution and a restaurant solution, as well as the Clover POS all-in-one tablet-based system.

Retail Solution

The Retail Solution uses a computer with an Intel processor and is designed to replace a cash register. You can accept almost all payment types, manage inventory, track sales, and more. The Retail Solution features touchscreen technology, installation support, and no monthly maintenance fees.

Restaurant Solution

The Restaurant Solution combines a computer and restaurant-specific software to manage specials, sales, employee timekeeping, and more. The Restaurant Solution features an easy menu setup, installation support, and no monthly maintenance fees.

Clover Station

Bank of America Merchant Services offers the Clover Station as a tablet-based point of sale system. The system includes everything you need, including tablet, receipt printer, cash drawer, cables, and printer paper.

Additionally, Bank of America offers several countertop terminals. Features vary by terminal, but may include integrated check readers, built-in printers, LCD touch screens, encryption, USB ports, integrated PIN pads, and more.

Bank of America leases credit card machines, a practice that CardFellow strongly advises against. Read why we suggest that you don’t lease a credit card machine.

Is it secure?

Bank of America Merchant Services offers several tools to keep your transactions secure. First Data’s TransArmor uses encryption to protect data. Telecheck Check Guarantee helps protect against fraud and funds lost in check transactions. Fraud FlexDetect helps you detect suspicious activity, helpful for card-not-present payments.

Bank of America Credit Card Processing Rates

Bank of America publishes rates based on monthly volume, as follows:

$0.00 - $4,999.99 - 2.50% + $0.20
$5,000.00 - $9,999.99 - 2.30% + $0.20
$10,000.00 - $24,999.99 - 2.05% + $0.20
$25,000.00 and up - 1.89% + $0.20

Rates shown are for swiped transactions. An additional 1.1% rate will apply to non-swiped volume.

Bank of America Merchant Services’ website states that American Express card rates range from 2.30% - 3.50% + $0.00 - $0.15 and vary by merchant. An additional 0.40% rate will apply to certain cards.

Additional rates and fees may apply. Be aware that Bank of America Merchant Services uses several different types of pricing, and what you pay can vary wildly from published rates. See CardFellow’s experience with Bank of America at the bottom of this review for more information.

Is there a contract?

Yup. Bank of America Merchant Services contracts are 3 years and auto-renew every year if not cancelled. Early termination fees up to $500 may apply if you cancel before the end of the 3 year term. Be sure to read any contract carefully before signing up.

Bank of America Merchant Services Reviews

It can be hard to get an accurate idea of Bank of America Merchant Services’ reputation because reviews often don’t distinguish between consumer services for Bank of America and the Merchant Services division. Bank of America Merchant Services is not separately accredited with the Better Business Bureau and does not have a profile with the BBB.

There are currently 5 negative reports for Bank of America Merchant Services in Ripoff Report’s directory. Complaints allege hidden fees, high fees, and deceptive sales practices.

CardFellow’s Experience with Bank of America Merchant Services

Bank of America is one of the largest banking institutions in the world, so we have reviewed quite a few statements, applications, and quotes provided by businesses currently using Bank of America’s Merchant Services.

Bank of America follows the same path as many of the large banks. It offers some very competitive pricing, but it also offers some very poor pricing. The majority of what we see from Bank of America is best described as the latter.

It’s important to keep in mind that all processors set pricing and terms on a per-case basis. CardFellow’s experience with Bank of America Merchant Services is indicative of the company’s culture, not necessarily of what it’s capable of offering. In other words, from what we’ve seen, Bank of America is has the ability to offer competitive pricing, but they would rather not unless forced.

Opaque, Costly Pricing

Bank of America often uses a form of pricing that we ban in the CardFellow marketplace due to its opacity and expense. The pricing model used is a generally referred to as a form of bundled surcharging, which means that Bank of America doesn’t allow you to see the real cost of a transaction, or even get enough information to calculate how much of a surcharge Bank of America is charging on transactions. I’ll explain in more detail and provide examples below.

What Bundled Surcharging Means

The type of pricing that Bank of America often uses is referred to as bundled surcharging because of how interchange fees are paid behind the scenes and you’re billed using a base rate plus a series of surcharges based on interchange. The pricing model functions somewhat like tiered pricing, but we use the term bundled in place of tiered because of the sheer number of surcharge categories used and how the surcharge amount is completely concealed.

For example, the Bank of America Merchant Services statement below was provided to CardFellow by a business that later chose a processor through our marketplace and reduced costs by about 45%.

Bundled surcharging begins with a base rate, referred to as a qualified rate. The qualified rate is the lowest possible rate that you’ll pay. In the statement below, the qualified rate is highlighted and set at 0.0179, or 1.79%.

In this statement, Bank of America lists the sales amount that was processed ($13,632.89) and indeed 1.79% of $13,632.89 is $244.03, which is what the business was charged in this line. The qualified rate often looks competitive. It’s supposed to, because it’s a decoy. The processor makes its real money from surcharges imposed in addition to the qualified rate. The image below is a snippet taken from the same statement as above. Only this snippet shows the various surcharges that Bank or America charged on top of the qualified rate.

In this snippet, you’ll notice that Bank of America displays the name of the surcharge category (which is based on the actual interchange category), the number of transactions, and the surcharge fee, which is highlighted. However, unlike what is shown with the qualified rate charge, the sales amount the surcharge is based on is conveniently omitted.

There absolutely no possible way a business can calculate the amount of the surcharge without knowing the sales volume used as a driver for the fee. That is why this form of pricing is completely opaque, expensive, and not remotely in a business’s best interest.

Misleading Statements

Another tactic that we often see employed by Bank of America Merchant Services is the mislabeling of statement charges.

Specifically, Bank of America refers to its own fees as interchange or assessment charges. This is an issue because interchange and assessments are components of cost that are beyond a processor’s control. They’re the same for all processors. Implying that their own fees are the same as or part of interchange and assessments misleads business into thinking that there’s nothing that can be done to lower them, which is not true.

For example, the snippet below is taken from a Bank of America statement provided by another business that later used CardFellow’s service to find a more competitive processor, one that labeled interchange correctly on statements.

As you can see, Bank of America refers to the total of its own surcharges as “TOTAL INTERCHANGE.” This is completely inaccurate. Bank of America uses interchange to determine which transactions it will surcharge and by how much, but the relationship between its surcharges and interchange stop there. A more transparent, accurate label for this fee total would be “BANK OF AMERICA SURCHARGE TOTAL.”

Leases. Expensive, Predatory Leases 

Bank of America Merchant Services is well known to us for pushing equipment leases on unsuspecting businesses. We have several articles here at CardFellow that outline why you should never lease processing equipment. One of our recent articles even outlines how Northern Leasing is currently being sued in federal court for racketeering.

Nevertheless, Bank of America continues to sell equipment leases through its affiliate, First Data Global Leasing.

The snippet below was taken from a Bank of America lease application provided to us by a business that was very happy to have found CardFellow and at our recommendation avoided paying Bank of America $1,581 for a piece of equipment that they could purchase for $300.

As you can see from the snippet, the term of the lease is 48 months at a cost of $32.94 a month. The term of the lease leaves the business paying five times what the machine is worth.

The bottom line is that while Bank of America Merchant Services may have the ability to offer competitive pricing, we rarely see that happen. With expensive and opaque pricing, misleading statements, and the continued use of expensive equipment leases, Bank of America Merchants services is often a costly choice for businesses.

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