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Date Established 1997 Location Princeton, NJ
I have to admit, I wasn’t expecting much coming into this review. I had heard about the data breach Heartland Payment Systems faced back in 2008, so I automatically assumed that they were a bad company to work with. I’m happy to admit that I was wrong. Despite what you may have heard, I much prefer to write a positive review than a negative one!
Heartland Payment Systems is headquartered in Princeton, New Jersey, but they have offices all across the U.S. They’ve been in business since 1997, so you can rest assured that they know what they’re doing. They’re also the fifth largest credit card processor in the United States and the ninth largest worldwide, processing about $120 billion in transactions each year from 250,000 merchants. But enough about their corporate profile – let’s get to the important stuff.
The first thing that I want to address is the 2008 data breach. In 2008, a man by the name Albert Gonzalez hacked into the Heartland system and stole the data from some 130 million credit and debit cards. An unfortunate disaster that, to be honest, could have happened to anyone. What impresses me is how Heartland has reacted to that breach. With their recent launch of E3 Secure. I’d be willing to bet that Heartland is probably one of the most secure processors you can work with right now. Avivah Litann, an analyst for Gartner. has even gone as far as saying that Heartland is now paving the way for the industry in terms of data security. That’s pretty high praise.
Heartland also understands that educated merchants make for good clients, so they’ve created the Merchant Bill of Rights website, as well as other truly useful educational materials. I seriously commend their efforts here. They have great testimonials, an active Facebook page and Twitter account, and they offer both interchange-plus pricing and seasonal downtime. I wish they’d disclose some fees on their site, but that’s not a deal breaker for me.
Overall, I believe Heartland is an honest, stable, reliable business offering unique products and services in the industry through a fantastic sales team. While I’d prefer to see an interchange-plus option for low-volume merchants, the $59 per month + interchange plan for merchants processing under $50K per year is not a terrible deal, but is a much higher mark up then I’d like to see.
On the bright side, Heartland provides amazing solutions for the restaurant industry. especially since they recently launched a new wait management system, Freshtxt. It’s chock-full of features including: wait queue, guest alerting via text, analytics, reservation management, SMS marketing, and plenty more. Restaurant owners should be looking into Heartland for sure .
Heartland Payment Systems gets a 4 out of 5 rating from me because they don’t have an effective plan for low-volume merchants. Also, even with their high flat rate, they still include a standard termination fee for all contracts. If they could take care of these issues or at least disclose them on their website, they could easily get into the 4.5 to 5 star range. See the rest of my review for more info.
Products and Services:
Heartland offers a really great list of services. It’s nice to see that they can set businesses up with payroll and billing solutions, giving you less companies to deal with overall – which will hopefully translate to time and money saved. They also have unique offerings for specific industries that I really liked. Offerings include:
- Merchant accounts
- Online reporting
- In-house gateway/virtual terminal. This is nice to see. You won’t have to pay for gateway service to use the virtual terminal.
- Data security. Their state-of-the-art E3 system is seriously impressive.
- Wait management system. Freshtxt looks like an excellent system for restaurants.
- Mobile processing. I’m a sucker for puns and wordplay, so you can imagine my delight in seeing Heartland’s Mobuyle payment system. You’ll need a merchant account through them to use it, and it’s not clear if the card reader comes free or not.
- Marketing solutions. Including loyalty programs and gift cards.
- Mobile payments. Heartland has a partnership with LevelUp .
- Industry-specific programs. They have some pretty cool offerings for restaurants, retail business, educational institutions, hospitality, grocery, parking, and more. Check them out here .
- Payroll solutions
- Billing solutions
- Managed network solutions
Fees and Rates:
I love that Heartland offers interchange-plus pricing as their primary model! They even explain to you what it is. A lot of companies these days will list their markup rate without explaining that it is, in fact, a markup. They lead you to believe that you will only be paying 1% to process, when really that’s what you’ll pay them on top of assessment and interchange fee charged by the credit card companies. Heartland is different. While they don’t quote any rates, they tell you basically what to expect when you do get a quote from them. I really liked this – until I got a sales rep on the phone.
There is a major stipulation when it comes to their interchange-plus pricing. If you do less than $50,000 per year, they will charge you a flat rate of $59 per month on top of interchange fees . I guess you could call this an “interchange-plus plan,” but it’s pretty crappy in comparison to a standard markup rate. Let’s not forget that they’ll charge you $0.05 per transaction over interchange while they’re at it.
50K / 12 = $4167 per month maximum
59 / 4167 = 0.0141 = 1.41% mark up (plus $0.05)
Considering most interchange-plus markup are between 0.15% and 0.35%, a 1.41% markup is awfully high. And remember, this is the best-case scenario. If you are only doing about $2,000 per month, then this doubles .
But, okay. Let’s say that $20 of the $59 is a justifiable account fee and not part of the actual markup. In this case, the math works out as follows:
39 / 4167 = 0.0093 = 0.93% mark up (plus $0.05)
Again, this is way higher than any sane interchange-plus plan.
To be fair, this is similar to the pricing structure offered by Transparent Merchant Services – a pricing structure which, in their case, I tend to approve of. The difference here is that Heartland caps this flat fee pricing at $50K per year, which takes away the opportunity for savings based on high volume you’ll find at Transparent. Noteworthy, however, is the relatively low transaction fee charged by Heartland compared to that charged by Transparent.
The good news is that you won’t have to pay any annual fees, PCI fees or statement fees on top of the $59 plus interchange. Still – not good at all for small businesses who don’t do over $50K in credit transaction per year. For those doing over $50K per year, however, I think Heartland could be a perfect provider. I really like this company. I just don’t like this fee structure for low-volume businesses.
Contract Length and Early Termination Fee:
With Heartland you can expect, as standard:
- An early termination fee of $275
- A three-year contract
- Auto renewal if you don’t cancel in writing three months before
the contract ends
If you negotiate, you can most likely get the early termination fee waived. If not, you should be able to get the contract term reduced to one year. Make sure to ask for this! If you don’t get the termination fee waived, also be sure to get the auto-renewal clause removed.
Sales and Advertising Transparency:
I love that you don’t have to deal with the usual smoke and mirrors when you deal with Heartland. They don’t have any sales gimmicks, they don’t make any wild claims or promises, and they don’t try to pull the wool over your eyes. While I’ll miss Heartland’s “cost of a burger ” campaign for cost transparency, I still think they’re doing a good job. Overall, Heartland is almost an ideal processor in terms of sales and advertising transparency. I say almost here for a couple of reasons.
First, they don’t disclose any fees on their site, including their early termination fee. If they want to commit to transparency, I’d love to see some of these numbers standardized and disclosed. Furthermore, they don’t offer true interchange-plus pricing if you do under $50,000 per year in processing. They fail to disclose this not-so-little fact on their site.
It’s not very easy to get a sales rep on the phone. All sales go through local agents, so you have to send a request for information through the website. Then someone from corporate will call you back to schedule a meeting with a local sales rep. On one hand, this is really nice. Getting to sit down with an agent has a straightforward appeal. On the other hand, I’d really like to be able to get some information quickly over the phone rather than inviting an agent into my place of business. The service rep I spoke to said she couldn’t really give me any specific information, since it all depends on my discussion with the sales rep. I understand this logic, and I appreciate that she didn’t make any promises that a sales rep might not be able to keep, but it felt a little evasive to me.
The best I could do was make a phone-based appointment with a sales rep within two business days. In today’s fast-paced industry, I feel like this isn’t quite good enough. Then again Heartland was rated the number three business to sell for in 2013 by Selling Power Magazine. marking its fifth consecutive year on the top 50 – so their sales practices must hold up to some scrutiny. I also like the fact that their sales agents are all employees of the company, not just independent contractors. This is fairly rare in this industry, and it’s a really good practice.
Their sales agents are probably well-trained and well-supported. I would just like a better way to get in touch with these agents. In the end, a sales rep did get in touch with me by phone the same day I put in my request, and she didn’t give me any BS. She knew that the $59 per month fee (see the Fees and Rates section above) would be a deal breaker for me (as a low volume merchant), and she told me upfront. So in that way, I think they’re actually doing a good job.
Customer Service and Technical Support:
Heartland is the real deal in terms of customer service. They offer 24/7/365 support in-house, claiming to answer every call in about 5 second with a real person on the line. I put it to the test, and they did a good job for me! I think it only rang once before a friendly representative picked up. Most processors can’t say that.
If you’d like to tell me your experience with Heartland Payment’s customer and technical support systems, please leave a comment. I love hearing from readers, and it really helps me to provide the most accurate reviews possible.
Negative Reviews and Complaints for Heartland:
I’m very happy to say that Heartland doesn’t have nearly the amount of complaints that I’d expect them to have. I actually gasped a little when I saw they have only 22 complaints in the past three years through the BBB. That is exceptionally low for even a small processor, which contributed to their A+ BBB rating. For a business as big as Heartland, it’s almost unheard of! They must do a great job of arbitrating problems in-house and disclosing all contract terms, which is exactly what I like to see. Of the few complaints out there, the most common include:
- Terminal setup issues. I did see a few reviews in our comments section and elsewhere complaining of difficulties with setting up terminals through Heartland. On the other hand, I know for a fact that Heartland has local agents across the country, and will probably go out of their way to help you with your terminal in person.
- Early termination fee. You’ll see this complaint with nearly every processor that has an early termination fee. The problem isn’t so much that the fee exists; the problem is some sales agents “forget” to mention it. I think the vast majority of Heartland reps do, in fact, disclose this fee, which is why they have far fewer complaints about it than most processors. Feel free to see if you can negotiate your way out of it. You might have to pay higher rates if you do, though. Your other option is to choose a processor with a month-to-month agreement .
Positive Reviews and Testimonials:
You’ll find a number of video testimonials on Heartland’s Video Library page, so you know they are legit. You can find even more on their YouTube page. A lot of these come from the restaurant industry.
The web is also chock-full of happy Heartland sales people, all praising the company. I really like to see this! For most big processors, you’ll find as many complaints from sales reps as you will from merchants. I think that a satisfied sales force leads to better business practices overall, so I consider this a big plus.
You can also check out their many endorsements in the restaurant and hospitality industries.
I really do like Heartland Payment Systems. I like their website, I like their services, I like the way they do business overall. They offer some fairly unique practices that set them apart as one of the top processors in the country. For businesses that process over $50K annually and can get set up with a markup rate over interchange, Heartland could be your perfect processor. For those in the restaurant industry, Heartland really has your back with great tailor-made services. For those who process cards sporadically or in low volumes, however, you’ll want to look elsewhere for your payment processing needs.
So for now, I can offer Heartland 4 out of 5 stars. If they could give a reasonable processing solution for those who take in a smaller volume of card transactions, they’d be solidly 4.5 stars in my mind. If they could offer a standard month-to-month option (not by-request), then I’d probably consider giving them a better score. Even some upfront disclosure on their site would go a long way for me. I hope to update this with good news soon.
For those interested in better solutions for low-volume processing, definitely check out our highest-rated processors .