Host Merchant Services Review: Services, Fees, and Transparency

Finding the right merchant services provider for your business can be difficult enough as it is, but it’s doubly so when you own a high-risk business. Host Merchant Services is a provider that works with a wide variety of business types, from low-risk to high-risk, and has an extensive catalog of services that includes payment processing, point-of-sale, and even cash advances.

But finding the right provider is more than just knowing that they can work with you, you also need to learn whether their fee structure makes sense for your business, and what their standing is with the public.

In this review, we’ll take a look at the company’s products and services, their fees and rates, their public perception and legal standing, and their overall transparency.

Host Merchant Services at a Glance

Host Merchant Services is a merchant account provider situated in Newark, Delaware that supports a wide range of businesses. The company was founded by current CEO Lou Honick in 2009, and it has now grown to become one of the top-rated merchant services providers on CPO. In addition, the company accepts several high-risk industries through cooperation with Electronic Merchant Systems (EMS).

HMS only offers interchange-plus pricing and will freely admit if its rate structure is not the best fit for your company. For instance, this pricing might not be the best fit for low-volume mobile payment businesses. 

HMS has nearly no complaints at the BBB or other consumer review sites, which supports its “service first” claim. That, and the fact that there are many favorable testimonies. 

Even if your company is small, you will likely receive outstanding customer service from HMS.

What Does Host Merchant Services Offer?

Host Merchant Services provides a comprehensive range of goods and services for virtually any sort of business. Here’s a quick rundown of its main services:

Products and Services

The list of products and services offered by HMS includes:

• Merchant Accounts: HMS provides regular merchant accounts with interchange-plus pricing for both online and in-person businesses. HMS also creates specialty accounts with tailored pricing for large and small ticket enterprises, nonprofit organizations (HMS Gives), and high-risk firms and industries, the latter of which is done through Electronic Merchant Systems. 
• Credit Card Terminals: HMS can provide you with up-to-date terminals if you have a physical business location. If you process more than $20K per month, you may be eligible for at least one complimentary EMV card terminal when you sign up, and if you execute fewer transactions, you can still save money on terminal purchases through HMS. The website’s Credit Card Machines page provides a comprehensive overview of the current portfolio, which includes models from Pax, Verifone, Vital, Ingenico, and others. All models accept EMV payments, and also accept NFC-based payment systems like Apple Pay and Google Pay. Prices, however, are not given. HMS will even reprogram your current terminals at no extra charge, though the company is adamantly opposed to terminal leasing.
• Payment Gateway and Virtual Terminal: Transaction Express, HMS’s combination virtual terminal and integrated in-house gateway, is a virtual terminal and payment gateway. Transaction Express provides recurring billing, ACH services, wireless and batch processing, check imaging, multilocation networking in addition to tokenization. HMS also resells the Authorize.Net gateway at a reduced monthly cost than if you went via the firm directly. The company’s website details support for numerous different third-party gateways.
• Cash Advance Program: HMS also offers a cash advance program for businesses that need more liquidity, offering from $5,000 to $500,000, with funding available in as little as 24 hours. If you’re looking for a merchant cash advance, there are benefits to acquiring one through your payment processor, as it allows you to pay your bills without having to make any complicated external arrangements or switch processors.
• Point of Sale (POS) Systems: Retailers and restaurants may be interested in Host Merchant Services’ Bonsai POS solution. Bonsai, developed by the experienced crew of HMS, is especially well-suited to the restaurant industry. It was created to compete with more expensive POS systems by providing a high level of support, customization, and automation at a reduced cost. Clover, Vital, and SwipeSimple POS systems are also available. The company has details of all of their systems and features on their POS page.
• Mobile Processing: For mobile POS, HMS recommends Vital and SwipeSimple. Both attach to your mobile device and have accompanying apps that you may use.
• Shopping Cart Integration: HMS can assist you in locating a shopping cart that meets your needs and then provides assistance to ensure it functions properly.
• Partnering/Referral Program: If you are satisfied with HMS’s payment processing and want to sweeten the deal, you can refer your business-owning clients to them. You effectively become a reseller of HMS merchant accounts to your end clients, with HMS handling the application and approval process.
• Gift Cards and Loyalty Cards: HMS can design a system to accept one or both types of cards.
• PCI Compliance and Security:In addition to PCI compliance and data breach insurance, HMS works with Trustwave to provide merchant accounts with $100,000 of protection against data breaches. The option of opting out of this coverage is available to you, but it’s not recommended.

HMS Fees and Rates

HMS uses interchange-plus pricing for all its clients, and guarantees you’ll keep the same rates as long as you work with them. Furthermore, they provide detailed information about both processing rates and account fees on their pricing page.

While the advertised prices apply to firms processing more than $10,000 per month, HMS has no monthly minimums. HMS will tailor a tariff plan for lesser volume accounts, according to its website. For businesses processing under $10,000, they should anticipate to pay 0.50%-0.55% Plus $0.10. The published rates for amounts more than $10,000 serve as a starting point. Higher volume firms will almost probably have more leeway in negotiating the best credit card processing offer.

Processing Fees

All their processing fees are based on interchange pricing plus a “per transaction” fee:

• Retail: 0.25% + $0.10 per transaction
• Restaurants: 0.20% + $0.09 per transaction
• eCommerce: 0.35% + $0.10 per transaction

You’ll notice that restaurant charges are lower than retail ones. This fee variation is related to the food industry’s generally lower risk/higher volume characteristics. Furthermore, HMS is primarily targeting restaurant operators with its bespoke POS system, Bonsai POS.

Payment Gateways

• Authorize.Net costs $9.00/month + $0.05 per transaction.
• Transaction Express costs $5.00 per month with the basic plan, and $10.00 per month with the premium plan.
• NMI Gateway costs $7.00 per month plus $0.06 per transaction with the basic plan, and $10.00 per month plus $0.08 per transaction with the premium plan.

Other Fees

• Application and early termination: Free
• Account fee: $14.99 per month
• 1099 Reporting: $24.00 per year
• Payment Gateway: $5.00 to $10.00 per month
• Batch processing: $0.20 per batch
• PCI Compliance: $49 per year
• Address Verification Service (AVS): Free
• PIN Debit/EBT: Free
• Chargebacks: $15.00 per chargeback
• Retrievals: $20.00

HMS currently offers a cash discount scheme, which it enthusiastically refers to as “Free Payment Processing.” This technique automatically adds credit card processing expenses to your listed prices, but gives consumers who pay with cash or with debit cards a discount at checkout. Consumers prefer cash discounts since they do not incur an unexpected surcharge when paying with a credit card. The software is free for merchants who process $5,000 or more each month. If your company processes less than that amount, you can still join in the program, but it will cost you $20 each month. As an extra restriction, the application is only available to organizations that don’t need the “tip adjustment” function.

Contract Terms

HMS has no long-term commitments or early termination penalties, and they also pledge to pay up to $250 in due early termination costs for referred clients, and $500 if the reference client processes more than $50,000 per month, according to the Partnership FAQ. Although this might be an offer limited to referrals, if you’re considering HMS and are facing an early termination fee from another provider it could be worth asking about it.

Customer Service and Support

“Service first” is the firm’s motto, with service available at regular office hours (Monday-Friday, 8 AM-6 PM EST.), and even after hours. If you need quick help with your account during business hours, a live chat feature is also available. After hours, you may be directed to TSYS tech support or another third-party entity affiliated with your account, but HMS personally reviews and follows up on all exchanges.

Other support literature on the website includes a mix of older publications and a more recent blog focusing on industry news and card processing merchant-related subjects.

HMS also promotes local, on-site assistance for malfunctioning terminals within a 150-mile radius of its offices in Newark (Delaware) and Naples.

Benefits and Drawbacks of Choosing Host Merchant Services

One of the main draws of HMS is their transparent pricing and lack of contractual obligations, which means you know from the start what you are getting, and you are free to leave if it doesn’t suit you. As far as negatives goes, the only real issue is their pricing structure might not be the best fit for smaller businesses.

Pros

• Customized business solutions

Host Merchant Services will collaborate with you to develop a custom-fit solution for your company that includes an economical point-of-sale system,  free equipment for your company, low rates, and more. HMS strives to find the best solution for your business.

• No contractual obligation

You are not required to enter into a contract with Host Merchant Services. It provides services without demanding a commitment, which is not usually the case for high-risk enterprises. There are also no PCI compliance or closure fees with Host Merchant Services.

• Pricing Transparency

There are no setup, application, or cancellation fees, and all their pricing is clearly visible on their website.

Cons

• Not best suited for low-volume business

The interchange pricing model might not be a good fit for small businesses, especially those with low volume sales.

Host Merchant Services Reviewed by the Public

Let’s take a look at HMS from the perception of its clients, its complaint history, and its legal standing:

Customer care

The company has only two complaints with the Better Business Bureau, and both of the Host Merchant Services reviews on the site laud the company’s customer service experience. The company is consistently lauded for its excellent customer service, transparent pricing, and top-notch services.

Customer service is available 24 hours a day, seven days a week at Host Merchant Services. It is available to you whenever you require support.

Public Perception

The HMS website now contains a comprehensive Testimonials page with favorable feedback from nearly four dozen merchants across the country. Unlike many other testimonials, most of them provide lengthy descriptions of specific qualities that were valuable to the merchants who wrote them. In general, clients appreciate their excellent customer services, their competitive pricing, and the lack of long-term contracts.

Complaints History and Legal Standing

HMS has been a Better Business Bureau recognized member since March 2011, with an A rating and only two complaints in the last three years, and only one within the last twelve months. The company has an overall rating of 4.7 out of 5 stars on TrustPilot, based on 25 reviews.

Furthermore, there doesn’t seem to be any patterns of common concerns because there are so few complaints. The company has only one online complaint concerning its contract conditions, indicating that the majority of its clients are happy with their agreements. Overall, the terms of Host Merchant Services appear to be extraordinarily transparent and highly competitive.

The lack of any sales complaints suggests that Host’s sales representatives are generally straightforward and helpful when signing merchants up for services. This stacks up well against our ranking of the best credit card processors.

Lastly there are no outstanding class-action lawsuits or FTC complaints against Host Merchant Services that we are aware of.

Transparency

On its website, Host Merchant Services actively promotes interchange-plus pricing and gives a summary of this pricing structure for businesses who are unfamiliar with it. In addition to traditional retail merchant accounts, Host offers interchange-plus pricing on mobile and e-commerce merchant accounts. Furthermore, no fraudulent advertising methods appear to be used by the corporation in its official documents.

HMS is one of the few commercial service providers that publishes processing rates on its website.

Except for the pricing of a few hardware items, HMS discloses almost everything on their website. Although HMS primarily markets and establishes customers through its in-house sales force, it also employs independent sales agents and advertises an ISO agent program on its website. Fortunately, no complaints have been filed regarding the company’s sales techniques as a result of this. Unlike most processing vendors, HMS appears to retain a close grip on its independent agents. In this scenario, whether you work with a firm employee or an independent agency should make no difference to you as a prospective merchant.

Final Word

Host Merchant Services stands out as a superb merchant services provider in all categories. They go above and beyond to be transparent about their pricing, showing all their fees on their website and using examples to explain how their interchange pricing works. Their public perception is positively glowing, and they only have a tiny handful of complaints since they started operating, which have been resolved.

If you are looking for a transparent merchant services provider with an excellent track record and a wide variety of services, you can’t go wrong with HMS.