Partnering with a Large Payment Provider Company - Good Idea or Bad Idea?

In today’s digital economy, payment processing is a necessity for businesses of all sizes. Whether it’s accepting credit cards, processing online transactions, or managing point-of-sale systems, companies rely on payment processors to handle billions of dollars in transactions every day. However, while these services are essential, many large payments companies use their market dominance to exploit customers through hidden fees, unfair contract terms, and anti-competitive practices.

Here’s how these major players take advantage of their customers—and what businesses can do to fight back.

1. Hidden and Excessive Fees

One of the most common ways large payment processors take advantage of customers is through hidden or excessive fees. These fees can include:

• Interchange fees: The percentage of each transaction that payment processors charge merchants, which often fluctuates with little transparency.

• PCI compliance fees: Many processors charge a fee to ensure businesses meet security standards—even when compliance is already included in the service.

• Early termination fees: Some companies lock customers into long-term contracts and charge hefty fees if they try to leave before the contract ends.

• Chargeback fees: When a customer disputes a charge, businesses are often hit with a chargeback fee that can be costly and difficult to contest.

Since these fees are often buried in complex contracts, many businesses don’t realize how much they’re truly paying until it’s too late.

2. Locking Businesses Into Unfair Contracts

Many large payment companies use contracts that are deliberately confusing or deceptive. Some common tactics include:

• Long-term agreements with auto-renewals: Many businesses unknowingly sign contracts that automatically renew, making it difficult to switch providers without penalties.

• Volume commitments: Some companies require businesses to process a minimum amount of transactions each month, forcing them to pay penalties if they don’t meet the threshold.

• Bundled services: Large payment processors often bundle unnecessary services into contracts, forcing businesses to pay for features they don’t need or use.

These contract terms make it challenging for businesses to negotiate better rates or switch to a more favorable provider.

3. Poor Customer Service and Support

Despite charging businesses significant fees, many large payments companies offer subpar customer service. Some common complaints include:

• Long wait times for support: Businesses often struggle to reach a live representative when they experience issues with transactions or chargebacks.

• Lack of dedicated account managers: Instead of personalized support, companies are forced to deal with automated systems and generic support teams.

• Delayed payouts: Some processors hold onto business funds for extended periods, citing “security reviews” or “fraud prevention” as justifications.

Without adequate support, businesses can face major disruptions in cash flow and customer service.

4. Anti-Competitive Practices

Large payment processors dominate the market and often engage in practices that limit competition. Some of these tactics include:

• Forcing businesses to use proprietary hardware: Some processors require businesses to use their own terminals and equipment, making it costly to switch providers.

• Restricting integration with alternative payment solutions: Many companies limit compatibility with third-party payment solutions, preventing businesses from accessing more affordable or innovative options.

• Lobbying against regulation: The biggest players in the industry spend millions lobbying against policies that would increase transparency and reduce fees.

These anti-competitive tactics give large processors more control over pricing while limiting businesses’ ability to choose better alternatives.

5. Withholding Funds and Account Freezes

One of the most damaging practices by major payment companies is holding funds without warning. Businesses have reported cases where their accounts were frozen or transactions were withheld for:

• “Suspicious” transactions: Large processors often use automated systems to flag transactions, leading to frozen funds with little explanation.

• Exceeding processing limits: Businesses that suddenly process higher-than-normal transaction volumes may have their payouts delayed.

• Unverified identity checks: Some companies use vague compliance reasons to justify withholding funds for weeks or months.

This practice can be devastating for small businesses, as it disrupts cash flow and creates financial instability.

Final Thoughts

Large payment companies have created a system that prioritizes profits over fairness, leaving many businesses vulnerable to hidden fees, contract traps, and poor service. By understanding these tactics and exploring alternative providers, businesses can take control of their payment processing and ensure they’re not being exploited.

The more businesses demand transparency and fairness, the more the industry will be forced to change for the better.

For all these reasons and more, it is best to do business with a smaller company - one that you have better connection to and report with. At Everest Processing, we build personal connections with our customers and provide expert levels of communication and troubleshooting.

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