Capital One Merchant Services Review: Is it a Good Fit for SMBs?

Capital One Merchant Services Review: Is it a Good Fit for SMBs?

Capital One Merchant Services provides merchant accounts for businesses. Its website boasts speedy debit and credit card processing and allows merchants to accept Visa, American Express, and MasterCard.

Capital One Merchant Services offers features that small business owners may not ordinarily have access to. These include fraud mitigation tools, trending payment technologies, and customer data insights, among others. 

But, beyond the bells and whistles, does Capital One Merchant Services truly stack up against the competition?

Let’s review Capital One Merchant Services to discover if it offers small business owners a competitive value proposition.

Capital One Merchant Services Through WorldPay

Capital One is a major bank that’s based in the U.S. The bank was founded in 1994 and has a pretty good reputation, considering the scale of its offerings. However, Capital One Merchant Services doesn’t really sell services from Capital One Bank. That’s because Capital One provides merchant services through WorldPay, which is a giant international direct payment processing company.

Capital One is technically just a reseller of WorldPay Merchant Services. Merchants will deal with WorldPay more often than Capital One when customer service or payment issues arise. This means we have to take a look at WorldPay as well as Capital One to understand their offerings.

What Does Capital One Merchant Services Do?

Capital One Merchant Services sells WorldPay Merchant Services at the price-points WorldPay sets. However, WorldPay gives resellers (in this case, Capital One) some flexibility over contract lengths and prices. This means there’s room for negotiation when it comes to individual contracts for SMBs. Most merchants report getting lower prices by going through a reseller than negotiating directly with WorldPay sales reps.

Capital One Merchant Service Sales and Marketing

Capital One doesn’t do a ton of outside-the-box marketing for its Merchant Services program. Instead, Capital One focuses on advertising to customers with existing personal Capital One accounts. Satisfied customers can sign up for Capital One Merchant Services as an extension of their existing account. As we now know, however, those that do this are often subjected to a very different payment processing experience.

Capital One also doesn’t hire independent sales reps to hawk its Merchant Services. This may not be a good thing, however, since WorldPay sales reps have a less-than-stellar reputation. (For more on WorldPay’s sales practices, see the “Capital One Merchant Services Reviews” section below.)

Credit Card Processing Fees, Products and Services

Hate to say it, but the cost-per-transaction on purchases with Capital One’s Merchant Services program isn’t competitive. WorldPay charges 2.90% plus $0.30 for swiped transactions. And WorldPay charges 3.30% and $0.30 for keyed-in (card not present) transactions. This means the more transactions and revenue a business processes, the more Capital One makes.

Compare this to Payment Depot’s Basic Membership fee of $49 a month plus $0.15 per transaction and interchange. (The average interchange rate is 1.81% for credit card payments and 0.3% for debit card transactions.) Payment Depot offers wholesale rates on credit card processing, making it easier for small businesses to make and keep profits. Use Payment Depot’s simple Rate Calculator to see if they could help you save on credit card processing.

Through WorldPay, Capital One offers a three-year service contract with a significant termination fee. The early termination fee fluctuates depending on the details of each individual account, but can it reach up to $495.

That’s a significant hit for any small business owner

WorldPay also charges above average rates for a monthly PCI Compliance Fee and reportedly charges an annual “IRS Reporting Fee.” And retailers have to pay to lease card processing equipment each month.

Pros and Cons of Capital One Merchant Services 

Need to make an at-a-glance comparison of Capital One versus other Merchant Services providers? Here’s a quick list of the pros and cons of Capital One Merchant Services.

Pros

  • Potentially lower rates on WorldPay through Capital One Merchant Services
  • Phone and email support
  • Truthful sales tactics
  • Realistic price quotes
  • Data security tools included
  • Accepts swipe, EMV, contactless, phone order, email invoicing, PayPal® and other payment methods
  • Built-in reporting
  • Accept mobile reader payments, as well as payments from smart terminals and hosted web pages

Cons

  • Expensive prices on each transaction
  • No unique contract terms
  • Lengthy three-year contract
  • Higher than average contract termination fee

Capital One Merchant Services is a decent option for SMB retailers that process very few, low price point transactions. However, the costs add up quickly for any company with substantial revenue.

CapitalOne Merchant Services Reviews

Capital One Merchant Services doesn’t have a Better Business Bureau rating. It doesn’t even have its own profile. Neither does WorldPay, for that matter. Merchants on review sites such as Trust Pilot and Consumer Affairs have a lot to say, both good and bad, about Capital One Bank. 

Most review sites, on average, rate Capital One Bank as a whole between 3 to 4 stars. However, none of the review sites I was able to locate featured Capital One Merchant Services as its own entity. This makes it really hard to get a read on the discourse surrounding the brand.

WorldPay Merchant Services may not have BBB profile, but there are a lot of reviews that feature merchant experiences with the company. WorldPay has more than 400 complaints on consumer review sites. However, whether this is simply due to the size of the company or actually reflects upon its offerings remains to be seen.

The most prominent complaint about WorldPay Merchant Services regards withholding funds from retailers. However, unforeseen charges come in a close second. The big caveat here is that none of the negative reviews about WorldPay discuss Capital One Merchant Services.

Is Capital One Merchant Services Good for SMBs?

The short answer? It depends on how many transactions a business processes and on the size of those transactions. Most companies that process more than $1,000 a month would benefit from a wholesale approach to payment processing. Capital One Merchant Services doesn’t offer this, so retailers wind up paying more for payment processing with each dollar they make.

Wholesale payment processors charge no fees on top of the credit card company’s rates––Visa, MasterCard, American Express, etc. So, retailers only pay for a flat monthly fee and can put their increased profits back into their business. With a wholesale credit card processor like Payment Depot, the more you make, the more you keep! That’s why Payment Depot is the highest-rated national credit card processor on the market.

Click here to learn how Payment Depot can saves retailers like you $400+ a month on credit card processing.

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