Review
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In-Depth Analysis
Pros
- Competitive pricing
- No long-term contract
- Excellent customer support
Cons
- Less number of reviews online
Overview
Host Merchant Services (HMS) is a credit card processing company incorporated in Delaware that provides merchant services to various industries, including for-profit and non-profit companies. Their pricing model is exclusively interchange-plus, which is a much more transparent and cost-effective solution for merchants as a merchant services pricing mode. The company has a strong reputation for providing excellent customer service, corroborated by their almost nonexistent complaints on consumer review sites like BBB.
HMS is an ideal provider for high-risk businesses, including those that process foreign currency or operate in industries with a traditionally high chargeback or fraud rates. The company also offers various other services, such as payment processing, POS systems, and business cash advances.
HMS processes all major debit and credit cards for most business types and offers a wide range of services, including EMV card readers, POS solutions from Clover, Vital POS, and SwipeSimple, mobile solutions, access to payment gateways and virtual terminals, e-commerce solutions, cash discounts, EBT processing, gift and loyalty programs, and cash advances.
With bank sponsorship from Wells Fargo Bank, HMS is a registered Independent Sales Organization (ISO) with Visa USA and MasterCard International. HMS has two offices, one in Newark, Delaware, and the other in Naples, Florida.
The founder and CEO of Host Merchant Services, Lou Honick, is a serial entrepreneur with extensive web hosting industry experience, having previously owned and operated HostMySite.com before founding HMS in 2009.
The payment processing industry can be complicated, with many large companies making it challenging for merchants to understand their rates and associated fees. HMS stands out by offering personalized service and transparency. Their team cares about customer service and takes the time to explain the process to ensure that merchants understand every item on their statement and that it matches what was promised during the sales process.
If a merchant has a question or problem, they can count on a live person at HMS to assist them and make it right 24/7/365. This level of service may seem simple, but many payment processing companies fail to provide it. Below we evaluate all that Host Merchant Services has to offer.
HMS History and Founder
Lou Honick, as the CEO of Host Merchant Services, has grown the company into a leading provider of credit card and payment processing services for small and medium-sized businesses over the past decade and a half. Before there was Host Merchant Services, there was a different HMS; HostMySite.com Lou began his career in the hosting industry by creating HostMySite.com in 1997, a company he grew from a two-person operation to an industry leader with over 100,000 customers and 240 team members by the time it was acquired by Wachovia Capital, a private equity firm, in June 2008.
According to a 2016 report by Harvard Business Review, the top ten most empathetic companies saw a financial value increase of more than double that of the bottom ten companies. Additionally, companies that cultivate emotional connections with their customers experience sales growth that surpasses their competitors by 85%. This is precisely the message Lou preached and put to practice in founding all his companies, which he also summarized in a presentation back in 2005 titled “High Quality Customer Service.”
Payment processing has lately emerged as an industry that is starting to focus on the customer, offering transparency on rates and terms and conditions of agreements, making customer services available around the clock, and shunning long-term, noncancelable and punitive contracts. However, that has only transpired over the past few years and only after the more tech-enabled entrants began offering financial technology services, given that the industry was ripe for disruption after decades of bungling the customer experience.
After a brief retirement and foray into real estate investing, Lou returned with a new startup in 2009 to revolutionize payment processing by bringing the same customer-centric fervor to the industry that he had heavily focused on when running HostMySite.com.
At Host Merchant Services, Lou focuses on creating value for companies by improving their cost savings and customer service through his partnership program, which aims to deliver significant ancillary revenue and increased customer loyalty.
What Is HMS Best At?
HMS’s website now features an extensive Testimonials page showcasing positive feedback from nearly four dozen merchants nationwide. Unlike most testimonials, these reviews offer detailed discussions of particular features that merchants found helpful for their specific use case.
Customers appreciate various aspects of HMS’s services, such as:
Exceptional Customer Service – The company’s customer service team goes above and beyond to resolve any issues that arise.
Competitive Pricing – Interchange-plus pricing is available without the need for special requests, making it very appealing to merchants.
No Long-Term Contracts – HMS avoids locking merchants into long-term payment processing contracts. The company firmly believes that merchant services providers cannot and should not attempt to retain their customers through convoluted legalese or arduous long-term agreements.
In addition to referrals from satisfied customers, HMS gains most of its customers through direct outreach to local brick-and-mortar companies. The company tailors its products and services to each client and explains its fair interchange-plus pricing system to close sales effectively. Furthermore, HMS fosters client loyalty by providing attentive customer service and establishing secondary partnerships. Its reputation speaks to the company’s success in this regard.
Plans & Pricing
| Industry | Payment Processing Rates |
| Retail | Interchange + 0.25% + $0.10 per transaction |
| Restaurant | Interchange + 0.20% + $0.09 per transaction |
| eCommerce | Interchange + 0.35% + $0.10 per transaction |
| Payment Gateways Option | Fee |
| Transaction Express (basic) | $5.00 per month |
| Transaction Express (full-featured) | $10.00 per month |
| Authorize.Net | $9.00 per month + $0.05 per transaction |
| NMI Gateway (basic) | $7.00 per month + $0.06 per transaction |
| NMI Gateway (bundled) | $10.00 per month + $0.08 per transaction |
| Service | Fee |
| Address Verification Service (AVS) | $0.00 |
| Application/Setup Fees | $0.00 |
| Early Termination Fee | $0.00 |
| PIN Debit/EBT Fee | $0.00 |
| Account Fee | $14.99 per month |
| Batch Processing Fee | $0.20 per batch |
| Chargebacks | $15.00 per incident |
| Retrievals | $20.00 per retrieval |
| PCI Compliance Fee | $49 per year |
| Voice Authorization | $0.75 per authorization |
| 1099 Reporting Fee | $24.00 per year |
| Industry | Payment Processing Rates |
|---|---|
|
Retail |
Interchange + 0.25% + $0.10 per transaction |
|
Restaurant |
Interchange + 0.20% + $0.09 per transaction |
HMS Products and Services
Host Merchant Services (HMS) offers a range of products and services to help merchants accept and process payments. Some of the key products and services provided by HMS include:
Payment Processing
- HMS allows merchants to accept credit and debit card payments from customers, including MasterCard, Visa, American Express, and Discover. HMS also offers Automated Clearing House (ACH) processing services, allowing merchants to accept electronic payments directly from customers’ bank accounts.
HMS provides conventional merchant accounts with interchange-plus pricing for brick-and-mortar and online businesses and tailored accounts with customized pricing for various companies, such as high-risk industries, nonprofits (HMS Gives), and merchants with large or small transactions. Electronic Merchant Systems offers high-risk services, while international acquiring partners facilitate offshore accounts through HMS. More information on these options is available under the “Merchants” section on the website. However, it is advisable to contact HMS directly to determine if your business meets the criteria.
HMS has introduced a new program named the “Free Payment Processing” program, which offers a cash discount to customers. This program automatically adds the credit card processing fees to the advertised prices but later provides a discount during checkout for customers who pay with cash or debit cards. Customers prefer cash discounting, unlike adding an unexpected surcharge while paying with a credit card. This program is free for merchants processing $5,000 or more per month, and if the business processes less than that, they can still enroll in the program by paying $20 per month. However, the program is limited to companies that do not require the “tip adjust” function when processing transactions.
Mobile Payment Processing
HMS allows merchants to accept payments on the go, using a smartphone or tablet, offering merchants the option of both SwipeSimple and Vital. Both choices can attach to the merchant’s mobile devices and connect with their respective apps on the go.
Point of Sale (POS) Systems
- HMS offers a range of POS systems, including traditional countertop terminals, mobile POS devices, and integrated POS systems that can be customized to meet the unique needs of each merchant. Host Merchant Service’s Bonsai POS solution could interest retail businesses and restaurants.
- The HMS team developed this software specifically focusing on the hospitality industry, aiming to provide a high level of support, customization, and automation at a lower cost than competing upmarket POS systems. Additionally, HMS offers a variety of other POS systems. including Clover, Bonsai, Vital, and SwipeSimple. Below is some information about the company’s most popular POS products;
Clover
HMS has a team of payment systems experts available to assist merchants in selecting the appropriate Clover POS ecosystem based on their specific needs. Whether they own a restaurant, food truck, farmers market stand, retail store, or mobile service business, with a Clover POS, there is a solution!
All of Clover’s POS systems are modern, streamlined, and seamless in design, ensuring that merchants and their customers will be impressed with the efficiency, speed, and sleek appearance of whichever system is chosen. All the systems are designed to simplify daily tasks, expedite transactions, and efficiently manage team members. Of course, when businesses are considering the various systems, there are some considerations to remember:
Is the system used on a large or tight counter space? Will it be used while traveling to events and require a portable system?
Is there a need for a system with a built-in printer or printing capabilities? Do emailed receipts suffice?
Do you want to purchase or lease the system? What does your budget look like?
Do you require additional features, such as a cash register drawer, a barcode scanner, or a mobile tablet? It’s important to keep in mind that not all of this has to be decided immediately. As businesses grow and evolve, these features can be added later to meet changing needs.
Clover offers several models, including the Clover Station POS (Duo and Solo), Clover Mini POS, Clover Flex POS, and Clover Go POS. These POS systems are designed to simplify payment processing, regardless of the size of your business or whether you have a physical storefront or are constantly on the go.
Bonsai
HMS has a team of payment systems experts available to assist merchants in selecting the appropriate Clover POS ecosystem based on their specific needs. Whether they own a restaurant, food truck, farmers market stand, retail store, or mobile service business, with a Clover POS, there is a solution!
Through HMS, merchants can also set up Bonsai Pro Workstation, a powerful touchscreen POS system perfect for restaurants and retail businesses. This POS solution supports EMV, NFC, and magstripe payments for seamless transaction processing.
Designed with speed and efficiency in mind, the Bonsai POS system helps different team members of businesses do their job faster and easier, whether they’re a waitress, store managers, hairdressers, or anything in between. With super-responsive order entry and real-time sales and staffing analytics, Bonsai simplifies all aspects of running your business.
Access inventory, sales numbers, and staffing hours quickly with Bonsai’s real-time analytics and make informed decisions based on the information received.
This solution allows businesses to easily manage their location by incorporating in-person and online sales, online appointment scheduling, and more. Customization options are also available with the Bonsai point of sale system by starting with a complete workstation and adding the necessary components, such as additional stations, printers, barcode scanners, or scales, to meet the business’s needs.
Mobile Point of Sale Systems
HMS offers e-commerce payment gateways, allowing merchants to securely accept payments through their websites, making it easier for merchants to accept online payments.
The company provides Transaction Express, a virtual terminal and integrated in-house gateway that supports various features, including tokenization, encryption of customer data, ACH services for recurring billing, check imaging, wireless processing, batch processing, and multilocation networking.
Additionally, HMS offers the Authorize.Net gateway at a lower monthly price than buying directly from the company. The HMS website provides detailed information about the many other third-party gateways the company supports.
It is interesting to note that Host Merchant Services offers its own in-house payments gateway specifically designed to cater to the needs of the merchants that the company works with, iterated over the years, and with consistent feedback from businesses. The in-house solution is called HMS Pay; some of its features include;
Payment Gateway and Virtual Terminals
- HMS offers up-to-date terminals for brick-and-mortar operations. If merchants process over $20K monthly, they may be eligible for at least one free EMV card terminal upon signup. If you process a lower volume, you can negotiate a favorable deal on terminal purchases through HMS.
- HMS provides a comprehensive overview of its current lineup on the company’s Credit Card Machines web page, featuring models from PAX, Ingenico, Verifone, Dejavoo, and other manufacturers. All models support EMV payments; some also support NFC-based payment methods like Apple Pay and Google Pay.
- Although prices are not disclosed, HMS offers to reprogram your existing terminals at no additional cost, and the company is opposed to terminal leases.
With HMS Pay, you can quickly authorize various payment types from a single virtual terminal, including major credit cards, signature debit cards, and e-Checks.
HMS Pay has an electronic invoicing suite, allowing you to collect payments by simply emailing your customers.
HMS Pay has check processing built into the virtual terminal if you prefer to process checks instead of credit cards.
Store all your customer information, including multiple payment methods, in one easy-to-use interface, with all sensitive data tokenized for added security and peace of mind.
Set up subscription-based payments that fit your needs with HMS Pay’s recurring billing and scheduled payment options.
- Easily charge processing or technology fees with HMS Pay’s automated surcharging capability.
Businesses can seamlessly integrate with leading shopping carts, ERPs, CRMs, billing software, and more using HMS Pay.
Reduce chargebacks and false declines with HMS Pay’s support for 3D secure transactions, which protects merchants from “friendly fraud.”
Level 3 payment processing is a specific type of credit card transaction that includes detailed data beyond the basic transaction details (like the amount, date, and merchant name). This additional data includes line-item details such as product codes, quantities, and taxes, which provide more information about the nature of the transaction.
Level 3 data is typically used for business transactions, especially in B2B scenarios where large transactions are common. By providing more detailed information about a transaction, Level 3 processing can help reduce the risk of fraud, improve transaction accuracy, and provide greater transparency and accountability.
It’s important to note that not all merchants or payment processors support Level 3 processing. However, HMS Pay can handle Level 3 Processing, providing higher security when accepting payments.
- HMS Pay is PCI DSS compliant and adheres to the latest industry security standards. Compliance with PCI DSS is essential for any organization that accepts credit card payments, as non-compliance can result in significant financial penalties, as well as damage to a business’s reputation and loss of customer trust.
The PCI DSS specifies a range of security measures that organizations that handle credit card payments must follow to protect sensitive cardholder data. These measures include things like the use of firewalls, encryption of data, regular security testing, and the implementation of secure network and system configurations.
PCI Compliance Protection
HMS has partnered with Trustwave to provide PCI compliance services and includes $100,000 of data breach insurance with all merchant accounts. Although merchants can decline this coverage, we strongly advise against it.
Merchant Working Capital Solutions
Host Merchant Services provides merchant cash advances ranging from $5,000 to $500,000 for businesses that require funding for launch or expansion. Funding can be obtained in as little as 24 hours. However, before taking a merchant cash advance, it is essential to fully understand what it entails, compare options carefully, and consider alternatives.
Nonetheless, suppose a merchant decides to pursue a merchant cash advance. In that case, there are benefits to obtaining it through your payment processor as it simplifies payment without the need for complex external arrangements or switching processors.
Gift Card and Loyalty Program
Utilizing gift and loyalty cards can effectively promote repeat business. Host Merchant Services provides complete solutions for gift cards, loyalty cards, or a combination program. The details regarding the program costs, reloadable cards, and customization options can be easily obtained by contacting the company’s Sales team.
Reporting and Data Analytics
HMS offers reporting and data analytics tools, providing merchants valuable insights into their payment processing operations, including sales trends, customer behavior, and more.
Furthermore, Host Merchant Services (HMS) serves high risk merchants. High-risk merchants are businesses with a greater risk of fraud, chargebacks, or other issues impacting the payment processing industry. This can include companies in sectors such as adult entertainment, travel and timeshare, telemarketing, etc.
HMS recognizes that high risk merchants have unique needs and requirements for payment processing and provides them with the tools and resources they need to process payments safely and securely. The company offers various services designed to help high risk merchants manage their payment processing operations effectively, including custom pricing solutions, specialized fraud prevention tools, and dedicated customer support.
High risk merchants need to choose a payment processing company that understands their needs and is equipped to provide the required services and support. By working with HMS, high risk merchants can access the tools and resources they need to process payments quickly, securely, and cost-effectively while protecting their customers’ payment information and reducing the risk of fraud.
Customer Support
From experience and the reviews left by the users of HMS, this merchant service provider supports its customers via:
24/7 Help & Support
24/7 Domestic Customer Service
Support
API and Third Party Integrations Support
Email assistance at [email protected]
Knowledge Base
Online Knowledge Base for Merchant Services Information
HMS Support Explained
HMS lives by its motto of “service first” and offers a top-notch customer journey from day one. All merchants that are new customers of HMS and handed off from the Sales team to the company’s onboarding team, which guides customers through the setup and onboarding process. Furthermore, merchants can access the company’s account management team for ongoing follow-up, which works in unison with the support team. Customer support is available 24/7/365, and the company’s in-house US-based support team personally reviews and follows up on all support conversations.
The company’s website contains a mix of older articles and a recent blog focusing on industry news and topics relevant to card processing merchants. This content is frequently shared on HMS’s Twitter and Facebook pages.
HMS also provides on-site troubleshooting for malfunctioning terminals within approximately 150 miles of its Newark, Delaware, and Naples, Florida offices. This local touch likely contributes to the company’s high customer satisfaction rate, particularly for New England or Florida businesses.
Details Of The Contract Offered and Other Information On HMS Sales Practices
HMS guarantees that its customers will never need to switch again, unlike some who have gone through five or more merchant services companies before finding HMS. The company stands out among merchant services providers for its transparency in publicizing processing rates on its website. The company discloses most information online, although the costs of a few hardware devices are not included. The company’s website layout is user-friendly and contains a wealth of information.
HMS primarily uses an in-house sales team to market and set up accounts but also offers an ISO agent program. However, unlike other vendors in the processing industry, HMS appears to keep a tight rein on its independent agents, and there have been no complaints about the company’s sales practices.
With HMS, there are no long-term contracts or early termination fees. The merchant agreement includes a waiver of any cancellation fees, and the Partnership FAQ guarantees to pay up to $250 in owed early termination fees for referred customers. If a referral client processes over $50,000 monthly, HMS will pay $500 as a referral fee. While this deal may only apply in a referral situation, it doesn’t hurt to ask if you are considering HMS and facing an early termination fee with another provider.
Are There Any Complaints About HMS
Host Merchant Services has been in business for several years, but limited reviews are available to assess customer satisfaction. While this is not necessarily a negative indication, it leaves potential customers with less information to consider. Those who have worked with HMS are encouraged to share their experiences to provide insight for others.
HMS has been accredited by the Better Business Bureau since 2011 and holds an A+ rating. The BBB website has had no complaints against the company in the past three years. Other common review platforms such as Yelp, Ripoff Report, and Google Reviews also do not have any reviews for HMS.
The HMS website has several testimonials with full names and business names praising the company for its excellent support, cost savings, and seamless credit card acceptance process. The company actively promotes interchange-plus pricing and provides information on this pricing structure for those unfamiliar with it. Interchange-plus pricing is available for mobile, e-commerce, and retail merchant accounts. The company does not engage in deceptive advertising.
With such a low number of complaints, there are no apparent patterns of common problems. However, potential customers are advised to carefully review their contract documents before signing up and take advantage of HMS’ excellent customer support if they encounter any issues.
Verdict
Overall, Host Merchant Services is a reliable credit card processing company that offers transparent pricing, exceptional customer service, and a range of services to different businesses, including high risk ones. The founder and CEO, Lou Honick, is a serial entrepreneur with extensive experience in the industry, where he learned the importance of customer centricity for customers.
The company guarantees no long-term contracts or early termination fees, and they have an outstanding support team that ensures a top-notch customer journey. Overall, HMS is an ideal choice for businesses looking for personalized service and transparency in their payment processing.