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In-Depth Analysis
Pros
- Free equipment
- No long-term contract required
- Low cost processing
Cons
- Early termination charges
Overview
National Processing is a merchant payment processor based in Orem, Utah. The company was founded in 2007 by Wayne Hamilton and is focused on providing small and medium-sized businesses merchant accounts, mainly to process ACH payments. National Processing serves many different industries and caters to both low risk and high risk merchants.
As a result, merchants of all risk profiles can set up businesses and accept noncash payments for all the major card networks such as AMEX, Visa, Mastercard, etc., and can also accept online payments, payments via digital wallets, and ACH.
Other than the company’s comprehensive payment processing services, National Processing’s product offerings include point of sale solutions, EMV card readers, mobile payment options, e-commerce solutions, a payment gateway and virtual terminals, third-party software integration, fraud, and chargeback protection.
National Processing charges customers based on the interchange-plus pricing model. The company has a $500 price-match guarantee in place for any merchant that has a monthly transaction volume of more than $10,000.
The contract structure in place for National Processing customers is somewhat contentious. There any many payment processors that bind customers into long-term, two or three-year contracts, and if merchants end their service agreement before that time, they are subject to an early termination fee. National Processing purports not to engage in this practice. Unfortunately, those claims are valid only given certain caveats, which we’ll detail below.
In this article, we look at what kind of product and service offerings are available from National Processing, when the company was founded, and by whom, what the company’s target market is, and the company’s pricing structure. We’ll also look at all the different types of fees National Processing does and does not charge its merchant customers. We’ll explore how merchants feel about National Processing’s service and whether there are any outstanding lawsuits or complaints against the company.
National Processing History and Founder
Wayne Hamilton founded National Processing in 2007. The company focuses on catering to small and mid-sized businesses of all kinds of risk profiles. National Processing lists both Chesapeake Bank and Woodforest National Bank as the company’s acquiring banks. The company is very transparent with its pricing structure and lists the fees applicable by industry on the landing page of National Processing’s website.
Although National Processing does not divulge this information, our research has found that Fiserv is the company’s third-party payment processor. Also, National Processing uses Clover and many other vendors to provide merchants with traditional and mobile point of sale solutions.
What Is National Processing Best At?
What National Process is best is the company’s transparency. National Processing’s website clearly states its pricing structure. Unlike most providers, the company gives detailed information about interchange fees, which gives a breakout of the charges for the payment processor and that of the issuing bank.
National Processing Products and Services
National Processing offers mostly bare-bones merchant account and POS equipment solutions. The company provides these solutions to various businesses and serves its customers well. Below is a breakdown of National Processing’s product offerings.
Merchant Services – the company offers payment processing services to low- and high risk merchants. The company provides the service through a third-party payment processor, Fiserv, while National Processing handles the customer service.
Although most high risk merchants are quoted a price usually higher than rates for low-risk merchants, the company has a comprehensive list of their rates by industry, including some sectors that have traditionally been considered high risk, such as eCommerce, restaurants, and retailers.
Finally, the company offers top-notch ACH proprietary software with which it can seamlessly process ACH transactions. Affordable ACH processing is becoming harder to find as free options are seldom available. National Processing specializes in offering ACH payment processing to merchants.
Point of Sale and Mobile Apps
Point of Sale terminals – For businesses like restaurants that require a more robust processing device, National Processing now offers its own NP POS system. It accepts swiped, dipped, and tapped payments and includes features such as inventory management with stock alerts, team schedules, a loyalty/rewards program, cloud-based reporting, and more. They also offer various Clover POS devices.
Also, National Processing provides POS terminals from brands such as Clover and Dejavoo. These terminals are EMV-enabled and offer numerous other functionalities, such as contactless payments. Prices for the equipment are not listed on their website, but you have the option to purchase the device or get a “free” terminal with specific pricing plans. It’s worth noting that National Processing does not have expensive equipment leasing options. However, in the case of National Processing’s payment process agreement, how merchants procure their POS equipment can have an impact on whether their agreement is a long-term one and carries an early termination fee, which we’ll discuss in further detail below.
Mobile POS – For smaller merchants, businesses that are just starting, or businesses that are primarily on the go, National Processing offers the most common mobile POS available in the industry, SwipeSimple, as well as several solutions from Clover. These mobile POS devices connect to smartphones or tablets via Bluetooth and are compatible with Apple and Android devices. These solutions are EMV-enabled and can also process contactless payments along with traditional swipe transactions.
Virtual Terminals and Payments Gateways
Payment Gateway – National Processing supports eCommerce merchants with either Authorize.Net or its own National Processing Gateway. Although there are no fees to get a payment gateway set up, there may be a monthly gateway fee.
Virtual Terminals – The company offers a virtual terminal option through either Authorize.Net or National Processing Gateway. Furthermore, all accounts come with the SwipeSimple virtual terminal for mobile payments.
Tertiary Services Include:
Solutions to various high risk businesses – The high risk industries the company serves include subscription services, merchants with high sales volumes, firearm-related businesses, and tobacco and vaping businesses. It’s important to note that this is not an exhaustive list of the high risk industries the company works with, so we recommend that merchants contact the National Processing sales team to confirm other high risk merchants that the company would work with.
Cash Discount Program – Cash discounting is a program offered by some payment processors in which merchants incentivize customers to pay with cash by offering a discount on the total purchase amount. The idea behind this program is to offset the costs associated with accepting credit or debit card payments. The cash discount is applied as a fee to card transactions and is not applied to cash transactions. This way, merchants can effectively lower their processing costs while still offering their customers the option to pay with cards. National Processing provides a reliable cash discount program that is compliant with card brands and compatible with Clover, SwipeSimple, and Dejavoo devices
Subscription offerings – National Processing offers subscription solutions through the company’s Subscription solution and the Subscription Plus product. They are designed for merchants with high-volume sales and offer membership pricing with the option of additional devices at no cost. National Processing does not mention the processing volume that merchants are required to maintain for these plans. However, the company required the processing volume within the range of $75,000 and $200,0000 for the Subscription plan. The higher tier solution required over $200,000 in monthly processing volume.
Integrations – National Processing offers integration functionality with some of the most commonly used business apps, including:
- QuickBooks
- WooCommerce
- Shopify
National Processing Pricing and Fees
There are clear and upfront public disclosures of National Processing merchant services rates on the company’s website. However, it is essential to not National Processing merchant services to high risk businesses for whom pricing is not always available upfront. Pricing for high risk businesses is determined on a case-by-case basis.
Businesses are classified as high risk due to various factors such as their business nature, industry, and the founder’s risk profile. These companies pose a potential for financial loss or harm to their reputation, making it difficult for merchants to obtain merchant account services. Some examples of high risk businesses include adult entertainment, gambling, gun retail, and cannabis vendors, among others.
Regulators have historically attempted to restrict these businesses by limiting their access to traditional banking and financial services, leading to high interchange rates charged by merchant acquirers willing to work with them. The rate reflects the level of risk the acquirer is taking on by providing services to the high risk merchant.
National Processing offers merchants the interchange-plus pricing models for the company’s service. Interchange-plus pricing is a pricing model for non-cash transaction processing where a processor adds a markup, called the interchange fee, set by card networks such as Visa and Mastercard, to the transaction cost. This model provides transparency, consistency, and cost-effectiveness as the markup is a constant percentage of the transaction amount and per-transaction fee for all transactions. Interchange-plus rates are divided into two categories, card present and card not present, with card not present transactions classified at a higher risk due to the possibility of errors or theft in entering card information.
However, it’s important to remember that National Processing also offers its services to high risk merchants, who are seldom offered an interchange-plus pricing structure. High risk businesses are almost always offered a tiered pricing plan. Tiered pricing is a pricing model employed by some payment processors for processing credit or debit card transactions. It divides processing fees into tiers, each with varying prices based on the type of card, transaction size, and other factors. Transactions that meet specific criteria, such as large transaction amounts or premium credit cards, are put into higher tiers and incur higher fees. Tiered pricing is often criticized for being less transparent as the exact transaction cost is unclear beforehand, making it challenging for merchants to budget and effectively accurately make an apple-to-apple comparison on prices.
Below is a breakdown of National Processing’s payment processing prices.
| eCommerce | Retail | Restaurants | Nonprofit | Cash Discount | Subscription | Subscription Plus |
Processing Rate | Interchange+ 0.29% + $0.15 | Interchange+ 0.18% + $0.10 | Interchange+ 0.14% + $0.07 | Interchange+ 0.12% + $0.06 | Interchange+ 0% + $0 | Interchange+ 0.0% + $0.09 | Interchange+ 0.0% + $0.05 |
Fixed monthly fee | $ 9.95 | $ 9.95 | $ 9.95 | $ 9.95 | $ 39.95 | $ 59.00 | $ 199.00 |
Additional Benefits | –Reprogram already existing POS equipment (based on technical specs) | –Reprogram already existing POS equipment (based on technical specs) | –Reprogram already existing POS equipment (based on technical specs) | –Reprogram already existing POS equipment (based on technical specs) | –Reprogram already existing POS equipment (based on technical specs) | –Reprogram already existing POS equipment (based on technical specs) | –Reprogram already existing POS equipment (based on technical specs) |
Separately, National Processing also offers pricing options for ACH and eChecks processing.
|
|
ACH |
eCheck |
|
Processing Rate |
Interchange+ 1.5% + $0.48 |
Interchange+ 1.5% + $0.48 |
|
Fixed fee |
$ 15.00 per month |
$ 15.00 per month |
Just as National Processing does with payment processing rates information, the company is very transparent about all the company’s fees that merchants can expect to pay if using National Processing services. Some of the fees applicable include PCI compliance fees, monthly fees, batch processing fees, gateway fees, AVS fees for, and retrieval and chargeback fees, among others.
Furthermore, there are various fees that the company charges. They are slightly at the low end, given the competition, while others may be higher. For example, National Processing and a monthly fee for PCI compliance of $7.95. The company’s chargeback fee is less than many other payment processors, at $15 per occurrence. The same is the case for retrieval fees, which comes in at five dollars for every retrieval. The company levies a fee for early termination in the amount of$295.
National Processing also charges several fees related to ACH. The setup cost for the services is $25, and a monthly recurring fee of $15. There is a $3.50 charge for every ACH transaction that is returned and a charge of $15 for every ACH transaction that is rejected.
Finally, it’s important to note that high risk merchants have different fees that are applicable to them compared to traditional businesses. High risk businesses are often subject to a rolling reserve requirement, where a percentage of payment volume must be set aside as a reserve by the payment processor. The reserve serves as security against potential losses from fraud or chargebacks, and the percentage can vary based on the level of risk associated with the payment processing. The funds may be held in an escrow account and are meant to protect both the payment processor and merchants from financial losses.
Details Of The Contract Offered and Other Legal Details Of National Processing
In 2019, National Processing was involved in a drawn-out litigation with MiCamp Solutions about the licensing of some of National Processing’s portfolio and money owed to National Processing under certain conditions. The companies sued each other for two years before the case was dismissed, with the outcome for each company unclear.
National Processing’s standard contract includes a $295 early termination fee (ETF), but it can be waived under certain conditions. If the merchant opts for a month-to-month agreement without any free equipment, the merchant will not incur any early termination fees. National Processing will waive the ETF in case of business sale/closure upon receiving proper documentation if they can’t match a competitor’s rate (with written proof). Still, if merchants switch to a competitor without giving National Processing a chance to check the offer, they will be charged the standard ETF.
Are There Any Complaints About National Processing
National Processing has had a profile set up with the Better Business Bureau since 2008. The company is proactive in responding to any inquiries raised on the website. However, less than ten complaints have been launched on the BBB site since the company’s registration with the agency. There have been only three complaints over the last three years and only one in the past year. As a result, Better Business Bureau assigns National Processing an A+ rating.
National Processing provides round-the-clock support via telephone, email, live chat, as well as various social media community management. The feedback from merchants is mostly positive, which is a welcome reprieve since the customer experience is the most common complaint among businesses in the payment processing industry.
Customer Support
24/7 Help & Support
24/7 customer support is available
Phone Support
24/7 Phone Support
Email Support at [email protected]
FAQ
Basic FAQ section on website
Conclusion
National Processing provides payment processing services to small and medium-sized businesses of all risk profiles. The company offers payment processing, including ACH payment processing, point of sale solutions, mobile payment options, and more. The company uses Fiserv as its payment processor and charges customers based on the interchange-plus pricing model. Despite claims of not having any early termination fee or long-term agreements, merchants should review the terms of their agreement carefully. National Processing provides a wide range of products and services, but merchants should check all applicable fees and equipment procurement options to determine if they fit their needs.