Bank of America is ‘Banking’ on Your Lack of Understanding

Bank of America Merchant Account ServicesDespite their ‘All-American’ moniker, Bank of America is not much different than the other banks we’ve researched in our Exposing the Trickery blog series. To launch our investigation, we filled out an online form and waited to be contacting by a merchant account representative.

We waited and waited and waited some more. They never emailed, called, or sent a smoke signal. Nothing at all.

After waiting a couple of weeks, we decided to finally place a call to our local bank last Monday only to find that it was closed for Columbus Day. On a long shot that a corporate merchant account office might be open, we called 800.228.5882 and finally reached someone!

Finally Received an Agreement
Over the phone, we indicated that we would be selling items exclusively through a website, and within a day, we received just what we were looking for – a processing application and agreement with the ‘nitty-gritty’ fees. Similar to Chase Bank, Bank of America offers tiered pricing without hiding it. Thankfully, they don’t try to make it sound like they have one-flat rate like Costco.

Here’s what we soon discovered:

  • $99 set up fee for a gateway in order to process transactions through a website.
  • $17 monthly fee no matter what.
  • $94.75 annual maintenance fee.

Although these fees don’t seem too outrageous on the surface, the worst of it comes in the rates they offered us:

  • 2.12% Qualified Rate + $.25/transaction
  • 3.89% Non-Qualified Rate + $.25/transaction – which is most likely more than 50% of the time.
  • 3.5% American Express + $.15/transaction.

If you plan to accept any type of rewards or corporate cards, plan to pay 3.89%. Do you realize how many people are charging with a credit card that has some type of ‘reward’ tied to it? Airline miles, points, and cash back – all ways that companies are offering rewards these days.

B of A Offers the Worst Option for Small Businesses
3.89% for the majority of your transactions! Can you imagine giving away $3.89 for every $100 charged? OUCH! In reality, it would be better to accept an American Express card. When it comes to credit card processing companies, there’s nothing that hurts small businesses more than tiered pricing. Sure, they’re not hiding it like other providers, but they’re still dipping deeply into your wallet and taking out more than their fair share.

Don’t let them ‘bank’ on your lack of understanding.
Do your homework, and you’ll discover that there is a better option.