When choosing a full-service credit card processing company for your business, you want to look for flexible terms that make it easy to change things up as your business grows. Instead of getting locked in to a traditional three-year processing contract, you want month-to-month terms that allow you to move on if the merchant account provider isn't meeting your needs or you find a better deal somewhere else – without having to pay an expensive penalty or wait months (or years!) for your contract to expire. You also want the option of choosing the pricing model that will save you the most money on your processing fees.
After conducting extensive research and analysis, we recommend Flagship Merchant Services as our pick for the best flexible terms credit card processor for small businesses in 2019. To understand how we selected our best picks, you can find our methodology and a comprehensive list of credit card processing services on our best picks page.
Why Flagship Merchant Services?
Month-to-Month Terms and Choice of Pricing Model
Flagship Merchant Services is our pick for the credit card processor with the best flexible terms because it offers all of its customers month-to-month service with no early termination fee. By offering monthly terms to its merchants, Flagship Merchant Services shows its confidence in the quality of its services and in the value of its pricing.
The service also allows you to choose between tiered or interchange-plus pricing. Industry experts prefer interchange-plus pricing because of its transparency, but businesses that run a high volume of PIN debit transactions may save money with tiered pricing, particularly if the payment processor offers a special rate for this type of transaction.
Flagship has a proven track record in the payment processing industry. It's been in business for more than 15 years and is used by brands such as Subway, Verizon and Avon. It works with businesses of all sizes, including smaller merchants and startups. Its parent company, iPayment, was recently acquired by Paysafe, so you'll see Paysafe branding on your email communications with the company.
As mentioned above, Flagship Merchant Services offers its services on a monthly basis to all customers, and there's no early termination fee. Standard credit card processing contracts have three-year terms that automatically renew for additional two-year terms with only a 30- to 90-day cancellation window, making them difficult to exit. They can also have early cancellation fees, sometimes with liquidated damages clauses, which can be very expensive.
However, if you accept free equipment instead of purchasing it, you'll be subject to a longer contract. For example, if you accept a Clover Mini POS system, you'll be under contract for the standard three-year term. Even though it's hard to turn down a freebie, it's better to purchase the equipment from the provider upfront and keep the month-to-month terms.
Credit card processing rates are based on several factors, such as your type of business, the ways you wish to accept credit cards, your average monthly sales volume and more.
Flagship Merchant Services only posts the qualified debit card rate for its tiered pricing structure on its website as a teaser. It doesn't advertise its full tiered pricing schedule or its interchange-plus plan on its website as the rates it offers you may vary.
Depending on your monthly sales volume, you may be able to negotiate lower processing rates and fees than those we were quoted in our testing – typically, the higher your sales volume, the lower your rate. To get pricing specific to your business, you can contact a Flagship sales representative for a custom quote.
Here's how Flagship Merchant Services’ two pricing structures work.
This is Flagship's default pricing model, and it bundles different types of credit card transactions into three tiers each for debit and credit cards: qualified, mid-qualified and non-qualified. Each tier has a percentage rate and a per-transaction fee.
- Debit cards with PIN authorization: $0.25
- Regular debit cards accepted in person (qualified): 0.35% + $0.19
- Regular credit cards accepted in person (qualified): 1.55% + $0.19
- If you manually key in a credit or debit card, the transaction is downgraded to the mid-qualified tier and costs an extra 0.95%, which means that it would cost 1.3% + $0.19 for debit cards and 2.5% + $0.19 for credit cards
- If your customer pays using rewards, corporate or international cards, the transaction is downgraded to the non-qualified tier and costs an extra 1.95%, which means that it would cost 2.3% + $0.19 for debit cards and 3.5% + $0.19 for credit cards; if you accept a high volume of these types of cards, this is a very costly option
Also known as "wholesale pricing," "true pricing" and "cost-plus," interchange-plus pricing gives small merchants access to the same low rates as big-box, high-volume stores. You may need to specifically request this pricing model, but the sales rep we spoke with volunteered it and explained how it works. Here's Flagship Merchant Services’ interchange-plus rate.
- Interchange plus a markup of 0.30% + $0.10
The rep we spoke with noted that the base interchange rate is typically between 0.65% and 2.65%, and there's also a small assessment fee that the card network charges. This means that if you accept a Visa rewards card for a retail transaction and the interchange fee is 1.65% + $0.10 and the assessment fee is 0.15% + $0.02, you add the markup of 0.3% + $0.10, so your total processing fee would be 2.1% + $0.22.
If your customers prefer paying with rewards cards, this pricing model can be significantly less expensive than tiered pricing.
In addition to swipe fees, Flagship Merchant Services generally charges a few monthly fees:
- Monthly fee for customer support and online reporting: $7.95
- Monthly minimum: $25, which is calculated against the number of transaction rates and fees you pay the company. For example, if you only process enough transactions to generates $20 in processing costs, you would pay the remaining $5 as a fee.
- PCI compliance fee: $5 per month for the Clover TransArmor fee. This is less expensive than average, as a compliance fee typically costs $99 per year. If you neglect to take the PCI self-assessment questionnaire, you're charged a PCI noncompliance fee each month until you take it and establish your compliance.
Some of these fees may be negotiable. There's no application fee, and this service provider waives a handful of fees that other processing companies charge. Customers receive the following products and services free:
- Merchant account setup
- Shopping-cart setup
- American Express setup
Flagship Merchant Services is confident it can offer you the lowest rates. Currently, the company is offering a $50 American Express gift card if it can't match a quote from a competing merchant services provider. Don't be misled, though – this comparison applies only to the total processing package, not to transaction fees or other individual costs.
As with all credit card processing companies, you want to read the contract before signing the application and make sure that you're aware of all possible fees. You also want to opt out of any "Additional Service" clauses in the contract, as these often carry additional fees for services you may not need or want.
Flagship is a full-service processor so you can choose the payment acceptance methods that make sense for your business. For instance, you may need a credit card terminal or point-of-sale (POS) system for your physical store, a payment gateway for your online store, a virtual terminal for phone orders and a mobile card reader for on-the-go sales.
Because you're working with a single company to accept payments across all your sales channels, your funds all go into a single merchant account, which streamlines your sales and accounting processes. Here are the multiple ways you can accept credit cards with Flagship Merchant Services:
- Credit card terminal. If you have a low sales volume and you need a simple way to accept credit cards, you can get a Verifone credit card terminal that has a built-in printer and PIN pad so you can easily process credit cards in person at a checkout counter.
- Mobile card reader. With a mobile credit card reader – a dongle that attaches to Android and Apple smartphones and tablets – and mobile app, you can accept credit cards on the go.
- Point-of-sale system. This service gives retailers and restaurants access to the popular Clover line of full-featured POS systems.
- Payment gateway and shopping cart. Flagship's payment gateway service lets you accept credit card payments online via a shopping cart for your e-commerce website.
- Virtual terminal. Accept credit cards over the phone or by mail order by manually entering payment information into your computer.
Flagship's credit card readers are EMV compliant, so you can accept chip cards and avoid liability if any fraud occurs at your point of sale. They're also NFC-enabled, so you can accept payments made using contactless cards and mobile wallets such as Apple Pay and Google Pay. [See Related Story: Should Small Businesses Require Receipt Signatures?]
To keep your customers' and your business's information safe, Flagship Merchant Services strictly adheres to the debit and credit card industry's PCI Data Security Standard, as required by Visa, MasterCard, Discover, and American Express.
A Flagship sales rep confirmed to us that all merchants using Flagship must establish their PCI compliance, regardless of sales volume. You're required to complete an annual PCI self-assessment, after which you'll be issued a compliance certificate.
In addition to 24/7 phone support, Flagship Merchant Services assigns each merchant a dedicated support agent that they can call or email directly when issues arise. When you first contact the merchant service provider, you'll be connected to a sales representative who asks about your business, walks you through your options, and discusses rates and fees. You'll work with the same account representative each time you need help or have problems with the service. The benefit of this is that each time you call for support, you'll speak to someone who already knows you and is familiar with your history as a customer.
When we called the company as part of our testing, posing as a small business owner looking for processing services, we had a pleasant conversation with one of Flagship's customer support agents. We asked a long list of questions about the company's products and services. The rep we spoke with patiently explained how the pricing structures work and provided price quotes for both tiered and interchange-plus pricing. The answers were direct, and we didn't feel pressured to sign up during the presale process. The rep followed up with us by email after the call with a written quote.
Although we had a positive experience with Flagship's customer service, we know others might not. One of Flagship's biggest drawbacks is that, after being around for 15 years and serving tens of thousands of customers, the company has its share of negative reviews. Many of these complaints have to do with undisclosed PCI fees, long turnaround times to process requests and difficulty contacting a representative after hours.
To help alleviate this problem, Flagship has improved its customer service in recent years and has become more upfront about its fees during the application process. The company also has been more active online, responding to reviews and helping customers who have posted their questions and complaints.
Like many merchant service providers, Flagship doesn't post its rates, fees and contract details online, which is inconvenient for merchants who prefer to find this information on a company's website instead calling a sales representative. It also lacks online resources, such as a knowledgebase and how-to guides, for customers wanting to find answers to their questions online.
Finally, if you want to get started ASAP, Flagship Merchant Services is not the credit card processor for you. Although the company offers same-day setup once your application has been approved, there are several steps you need to take before actually becoming a customer. You'll need to apply for a merchant account, consult with a sales rep, and then wait for approval, equipment, and activation before you can use the service.
If you need to start accepting credit cards immediately, app-based credit card processors that don't require a merchant account – such as PayPal and Square – would be a better choice for your business.
Ready to choose a credit card processing company? Here's a breakdown of our complete coverage: