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Flagship Merchant Services Review: Best High Volume Credit Card Processor

Flagship Merchant Services Review: Best High Volume Credit Card Processor
Credit: Flagship Merchant Services

After much research and analysis of credit card processors, we recommend Flagship Merchant Services as the best high-volume credit card processor for small business.

We like Flagship Merchant Services because it offers the best pricing for small businesses with a high volume of sales. It has been around for 15 years and is used by brands such as Subway, Verizon and Avon, but is also designed for and easily accessible to smaller merchants and even mom-and-pop shops.

Unlike many credit card processors for small businesses, Flagship doesn't force you into credit card transaction rates that are best for businesses that are only starting out, or one-size-fits-all pricing structures that could end up costing you big bucks in the long run. Instead, Flagship gives small businesses an opportunity to choose the type of pricing that best suits their needs. Rates are based on several factors, such as your type of business, ways you wish to accept credit cards, expected sales and more.

The company offers both tiered pricing and interchange-plus rates, options that may be negotiable with money-saving terms based on your sales volume.

Editor's Note: Looking for information on credit card processors for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need:

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Here's how Flagship's two pricing structures work.

Tiered pricing — Flagship's default pricing model — tiered pricing — bundles different types of credit cards into three tiers: qualified, mid-qualified and non-qualified debit and credit cards. Each tier comes with a fixed cost in addition to other fees and regardless of sales volume. Flagship's tiered pricing starts at 0.38 percent for qualified debit cards and 1.58 percent for credit cards, plus 19 to 21 cents per transaction, and then increases for mid-qualified and non-qualified cards. If you have a high sales volume, this pricing model could end up taking a huge chunk out of your profits, making it a very costly option.

Interchange-plus — Also known as "wholesale pricing," "true pricing" and "cost plus," interchange pricing gives small merchants access to the same low rates as big box, high-volume stores. Flagship's interchange-plus rate is 0.30 percent plus 10 cents per transaction. Not only does this give your business a significant discount over tiered pricing, but it also allows you to negotiate an even better rate — the higher your sales volume, the lower your rate.

Note that Flagship does not advertise interchange-plus pricing or publicize its negotiated rates, as it largely depends on several factors unique to the type of business, its sales numbers and other information.

To find a low, affordable rate for your business, contact a Flagship sales representative for a custom quote.

Other fees. In addition to swipe fees, Flagship generally charges a $7.95 monthly fee and a $7.95 monthly gateway access fee. The company also requires a monthly minimum charge of $25.

The sales rep also disclosed all other applicable fees, such as Payment Card Industry (PCI) compliance (typically $99 per year), whereas other vendors advertised lower rates but surprised us and other customers with hidden fees.

Furthermore, Flagship waives a handful of fees that other vendors charge. Customers receive the following products and services free:

  • Merchant account setup.
  • Authorize.net payment gateway setup.
  • Credit card processing terminal (after rebate).
  • Mobile credit card reader.
  • Shopping-cart setup, sales tracking and reporting for your website or online store.

Flagship is confident it can offer the lowest rates. Currently, the company is offering a $50 American Express gift card if it can't match a quote from a competing vendor. Don't be misled, though — this comparison applies only to the total processing package, not to transaction fees or other individual costs.

Service terms. Unlike most credit card processors, we like that Flagship works on a month-to-month basis, with no cancellation fees. This means the company doesn't require long-term contracts that tie you down for years and then hit you with a hefty early-termination fee if you're unhappy and wish to switch to a different vendor.

Another thing we like about Flagship is that it offers a wide range of ways to accept credit cards for different types of small businesses.

Flagship offers the following merchant services.

  • Credit card reader. If you have a low sales volume and you need just a simple way to accept credit cards, you can get Flagship's VeriFone credit card swiper with a screen and pin pad, so you can easily process credit cards in person.
  • Mobile credit card processing. Accept credit cards on the go with Flagship's mobile credit card reader — a dongle that attaches to smartphones and tablets — and mobile app.
  • iPad POS system. This service gives retailers and restaurants access to an advanced, full-featured POS system using an iPad, credit card reader, printer and cash drawer.
  • Online payments. Flagship's e-commerce service lets you accept credit card payments online via Authorize.net, as well as provide 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.

Flagship's credit card readers are NFC-enabled so you can accept mobile payments via Apple Pay and Google Wallet, and are compatible with EMV microchip technology to meet government credit card processing standards. [See Related Story: Credit Card Machines: Answers to Frequently Asked Questions]

Because Flagship offers various ways to accept credit cards, it's a very convenient and time-saving option for businesses with multichannel sales. For instance, you can use the single credit card reader or iPad POS system for your physical store and then combine it with the e-commerce service for your online store, virtual terminal for phone orders and mobile processor for on-the-go sales. And because you're working with a single company for all of your sales channels, all of your funds go into a single merchant account, which streamlines your sales and accounting processes.

To keep your customers' and your business's information safe, Flagship 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 are required to be PCI-compliant, regardless of their sales volume. To ensure that your business is compliant, Flagship requires that you complete and pass an annual PCI compliance self-assessment, after which you'll be issued a compliance certificate.

Flagship also prevents fraud using SSL encryption and CVV2 protection (the three numbers on the back of every debit and credit card). Moreover, Flagship has additional security measures for businesses that use its mobile credit card reader and POS systems, which require an app or software to function. The company told us that, in addition to requiring PCI compliance, it protects sensitive data by implementing strong encryption and by not storing customer information on devices.

No matter which credit card processor you choose, it's important for the vendor to support you, and Flagship aims to be there every step of the way.

In addition to 24/7 phone support, Flagship gives each merchant a dedicated sales rep. As mentioned above, when you first contact Flagship, you'll be connected to a sales rep, who will walk you through your options and discuss any applicable fees. Flagship assigns you the same representative each time you need help or have any problems with the service. The biggest benefit to this is that, each time, you'll speak to someone who already knows you and is familiar with your history as a customer.

In our own experience, we had a pleasant conversation with Flagship's customer support. We called the company using the toll-free number on Flagship's site, and we were able to speak with a sales rep right away. We posed as a small business owner and asked a long list of questions about the company's products and services.

Like many small business owners who are easily overwhelmed by fees, policies and other puzzling aspects of credit card processing, we had a lot to clarify about Flagship's services and terms. Luckily, the sales rep understood our confusion and was very patient when explaining all of the details. The answers were direct, and we didn't feel pressured to sign up during the presale process.

Although we had a positive experience with Flagship's customer service, we know others might not have. One of Flagship's biggest drawbacks is that, after being around for 15 years and serving tens of thousands of customers, the company has had its share of negative reviews. Many of these complaints have to do with hidden fees, long turnaround times to process requests and a general difficulty getting a representative during off-business hours.

To help alleviate this problem, Flagship has been more proactive about improving its customer service in recent years, and has become more transparent 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.

Flagship's biggest strength may also be one of its biggest drawbacks. Because the company offers a wide range of services, it doesn't specialize in a single type of credit card processing. This is disadvantageous to businesses that require a credit card processor specifically designed for their type of establishment. For instance, Flagship's POS system and online payment service lack special features that a dedicated restaurant POS system offers restaurateurs, as well as the e-commerce tools offered by credit card processors that deal primarily with online businesses.

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 wait for approval, equipment and activation before you can actually start using the service.

If you want to start accepting credit cards right away, app-based credit card processors that don't require a merchant account — such as Flint, PayPal and Square — would be a better choice for your business.

We chose Flagship Merchant Services from a pool of the dozens of credit card processors we considered. To read our full methodology and for a more comprehensive list of credit card processors, visit our best picks page here.

Ready to choose a credit card processor? Here's a breakdown of our complete coverage:

Editor's Note: Looking for information on credit card processors for your business? Use the questionnaire below, and our vendor partners will contact you to provide you with the information you need:

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Sara Angeles

Sara is a tech writer with a background in business and marketing. After graduating from UC Irvine, she worked as a copywriter and blogger for nonprofit organizations, tech labs and lifestyle companies. She started freelancing in 2009 and joined Business News Daily in 2013. Follow Sara Angeles on Twitter @sara_angeles.