This review is focused on First Data as a credit card processing provider for individual businesses. This distinction is important as First Data, contrary to almost all of the merchant service providers we have reviewed on this website is responsible for all of the transactions themselves. Most of the processors we have reviewed are called ISOs, or Independent Sales Organizations, that resell the service, often from First Data. As a result many of the complaints that are levied against some processors are actually complaints against First Data as the underwriter, and in some cases the opposite is true. For the purposes of this review we will solely be focusing on First Data as the processor.
Should you work with First Data?
For many merchants they look at working with the processing company (First Data) directly as being a cost saving move. It makes sense on why, by working with the actual processor directly you are cutting out the middle man. This would be the equivalent of buying a TV directly from Sony as opposed to visiting a local store – less hands involved in the process and your costs should be lower.
However similar to buying a TV there are reasons you don’t go directly to the manufacturer and continue to buy from local stores. Customer service and who to talk to if you have an issue are items that quickly become big deals if a problem ever arises. The same is true with merchant services, while they are the ones processing most transactions First Data is not singularly focused on handling customer issues, in fact as nearly all of their business is handled by ISOs they allow those ISOs to focus on providing the ancillary services such as customer support.
In addition while you may think that you can receive a better deal in fact in our research we have found that very often their resellers offer better pricing. How is this possible? Similar to our TV analogy it is why wholesalers such as Costco and BJ’s are able to offer such steep discounts, by buying in such large quantities they are able to get better pricing than an individual would, and then pass those savigns on to their customers.
This is why companies such as Merchant Warehouse are able to offer such great pricing as they are in fact First Data’s largest reseller.
So while in theory working directly with a processor should represent cost savings, our advice is that unless you are a big enough company (over $10 million in sales a year) you are likely going to receive better pricing by shopping around between resellers. At which point you are also looking for items like customer service and other benefits that are included from reputable providers.
Note: Before you get started here is a final piece of advice from our co-founder Gerald Evans on the importance of calling a merchant service provider and avoiding the temptation to ask for rates and quotes through email alone. Why You Should Always Call