Can Vantiv be Trusted with Your Payments?

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This post courtesy of Jon Grayem at Inbound Payments. It was too good not to pass along (with his permission, of course). If you need to reach Jon, his email is grayemj [at] tablecrunch.com.


In June 2011, 5th/3rd bank’s processing department decided to rebrand to Vantiv.  Later, in May of 2014 the company went on to acquire none other than Mercury Payment Systems out of Durango, Colorado (we’ll save our discussions on them for a rainy day). As an industry veteran, it seems the saying, “birds of a feather flock together”, tends to hold true when it comes to the foes of the industry.

Okay, first off, I’m not trying to throw the CEO of Vantiv, Charles Drucker, under the bus. I am, however, pointing out that I am continuously surprised by the greediness behind a giant corporation like Vantiv. For those of you who are unfamiliar with Vantiv, you may have heard of 5th/3rd processing solutions before.

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If you are a business owner reading this, then you can probably agree that the industry has gotten much more transparent over the last 5-10 years. With the introduction of interchange pass-thru pricing, business owners can now take advantage of true-cost processing from the processing networks and then expect to pay a small percentage markup (charged in the form of basis points) as well as a transaction fee.

For example: 

Authorization Fee: $0.05

Discount Rate: 0.15%

With very little effort, seasoned credit card processing representatives can easily explain an interchange pass-thru statement to a business owner and show them how to calculate their effective rate to ensure they can keep their processor honest.

Effective Rate: Amount Debited (Total Fees) / Total Processing Volume

Unfortunately, for the “big bank” processors like Vantiv, that’s not always the case. Just recently, I came across yet another restaurant processing their payments with Vantiv and they were paying over 3% on Visa, MasterCard, and Discover alone.

Aside from overcharging the hard-working merchant, the bigger issue I had with the statement was how they were going about hiding their fees. Feast your eyes on the below screenshot from the merchant statement.

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When I train new people in the payments business, I always tell them dissecting statements is an art, not a science. In this case, there’s no method to Vantiv’s madness.

If you are versed in interchange rates (true cost of accepting each individual card) then you will notice there’s something really odd going on here. It appears that many of the different card types have a different percentage markup over the interchange rates.

Why in the world would a processor do that?

They are purposely not showing the merchant their true cost to accept the different credit and debit cards flowing through their business so they can charge whatever the hell they want.

As for this merchant, they were told they would only be charged $0.04 over interchange. A processor can not withhold sustainable margins a $0.04 flat, therefore, it is apparent that Vantiv has invested a considerable amount of time and money into screwing hard working people out of money.

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The only other platform that I’ve encountered this type of madness with is World Pay. Both of their processing statements are literally designed to hide their fees from the merchant.

These processors are banking on inexperienced payment reps not being able to dissect the credit card statements.

As for the experienced payment reps, I literally had to go through each individual interchange rate to uncover what Vantiv was extending the merchant in surcharges. See below.

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The first thing I always do when I receive a merchant processing statement is calculate their effective rate. In this case, they were paying 3.07%.

If I didn’t calculate their effective rate, it would lead me to believe they were at $0.04 flat. I assume this is precisely what most merchants who process through Vantiv think they are paying.

So, the question remains, “Can Vantiv be Trusted with Your Payments?”

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  • Lance Bell

    The short answer is yes, Vantiv is trustworthy. Our team has been working on and off with Mercury / Vantiv since Matt Taylor and the Katz brothers were writing apps in a closet, circa 2002. I disagree with the original author, in that analyzing a statement is “art”. Rather, it relies on the rather beautiful science of math. When educating a new or current partner, we begin with the concept ‘effective rate’, which was explained well in the article. We break that down further into Interchange, processing costs and ‘other fees’. So while some merchant statements have a deeper Interchange breakout, making them a little easier to read, there are no issues analyzing each cost line of Interchange within a Vantiv statement.

    • Jordan Thaeler

      Yep, Vantiv is free to write a response defending this position. But from what I saw in Jon’s analysis, he wasn’t wrong. I suspect this article could be written of any processor.

  • Paul Mathews

    This article could not be more accurate and true! Merchants have no clue what they are paying with Vantiv as they do this thing called.. drumroll.. “surcharge”. If you are well versed in the interchange world, you can easily pick out the basis points they surcharge on each card type which fluctuates and for those who are not well versed which are most merchants, you get screwed. Another caveat for Vantiv that ALL merchants should be aware of is their lovely gift card program. Hope you don’t try to leave Vantiv once you’ve started using gift, if you do, be prepared to pay 10% of your outstanding liability to receive your gift card file plus $75 per hour for them pulling it. Without this file, you won’t have the ability to convert your gift cards to another processor. Let’s dive a little deeper here, let’s talk about early termination fee’s. The first two words that stick out from their contract is “liquidated damages” which again, ALL merchants should make themselves well aware of when signing ANY contract. Let’s run through a quick scenario; Let’s say a merchant signs a three-year agreement. After six months, the merchant’s average fees are $200. Then the merchant cancels the agreement. The merchant is now responsible for an early termination fee, whichever is the higher of these two numbers: (1) $595 per location, (OR 2) since the merchant has 30 months remaining on the initial contract, and they averaged $200 in fees per month, the early termination fee would be $6,000. What do you think about that… I can go on for days about Vantiv so the short answer is NO, they are not trustworthy.