We Tried to Buy Clover POS from Bank of America. Here’s What Happened

This post comes from POS Nation. Every now and again we publish good content from others. This is one of those pieces, especially since it’s in line with our earlier article discussing the difficulties banks and payments companies continue to have with selling POS appropriately. POS Nation resells several restaurant and retail POS softwares and can be reached at 877-727-3548.

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Our team gets at least one call per day from customers who want to switch from Clover’s point of sale system. We never understood why there was so much dissatisfaction with Clover — in fact, we like the system and actually offer it to our customers as well. It’s not a bad product, but we realized that most people who were unhappy had purchased the system from their bank.

To solve this mystery, our team decided to play the role of a new business owner looking for a point of sale system. We gave Bank of America Merchant Services a call to ask some questions about the highly-advertised Clover POS system.

We got in touch with a sales rep, and the conversation started out pleasantly. She decided to ask several basic questions about our business to get to know us a little better.

Sales Rep: What kind of business do you have? What kind of products do you sell?

Us: It’s kind of like a beer shop. A high-end craft beer shop, not like a bar. Craft beer and accessories.

Sales Rep: For your business, I would suggest the Clover station. What is the name of your business? When is the business scheduled to open?

While our sales rep was friendly, there was zero inquiry about what was important to our business or the features we cared about. But why would there be? Bank of America primarily sells Clover, picking up Talech recently. There are no other options based on a business’ needs, which is why people in the market for a system should consider who they’re purchasing from.

This conversation may not be unsettling to people who aren’t in the industry, but for us, there were several red flags.

After the short-lived introduction, the sales rep dove right into the cost of the system.

Sales Rep: So as far as the Clover station, let me give you the pricing on that. The total would be $1,320 or we can split that up into three installment payments. The three installment payments would be $466.66.

Us: And what about the software itself? Is there a monthly fee for the software?

Sales Rep: The software is included in the price of the device.

Us: So let’s just say I don’t want any monthly payments. If I pay the $1,320, I own everything free and clear?

Sales Rep: That’s correct.

Really? More on this later…

Us: What are the credit card rates?

Sales Rep: The rate would be 1.79% and the transaction fee is 20 cents.

Us: Another one we’re looking at is Square and they’re at 2.75%.

Sales Rep: So, they’re at about almost one percent more than us. You’re gonna pay a lot more on your transactions.

Again, the sales rep answered all of our questions — but our knowledge of the industry makes a difference here. Let’s start with credit card processing rates. We know there’s a lot of fluff in the costs that people are presented. The average customer can’t see through this and has to trust the sales rep that Bank of America is almost one percentage point less than Square. At best, the sales rep we spoke to truly has no idea how credit card processing rates work. At worst, she was fudging the truth to make the sale. Either way, we know from doing our research — and the math — that her claim is simply wrong.

The graph below presents the effective credit card rates for both Bank of America Merchant Services’ 1.79% plus $0.20 rate and Square’s flat 2.75%. As shown, the average transaction size for the customer greatly impacts the effective rate of Bank of America’s processing. This is especially concerning given the typical Clover customer runs a small business. Unless your average ticket is greater than $20.75, the breakeven point, Square is going to be cheaper.

Lastly, the whole conversation proved to be inaccurate because the quote we received after the call did not match what we spoke about. Sure enough, when we analyzed the quote, down in the fine print was an interesting find:

Monthly Clover service fee of $29.95

And there’s the monthly fee we asked about. Even if it’s not openly added to your quote like ours was, we guarantee there will be additional fees tucked into your credit card processing statements.

Back to the conversation. After the long-winded pricing chat, the call fell apart when we brought up the software and how it compared to another system.

Us: We’re also looking at Square. So, when it comes to software, do you know the pros and cons of both? Help me evaluate the two.

Sales Rep: Well, the main difference that you’re gonna look at is the pricing and the rate that’s associated with the systems. The majority of clients choose Bank of America Merchant Services over Square because you’re gonna pay higher percentages. Also, your funds will be held longer. With Bank of America, we’re an actual bank so we’re able to credit your funds to your account next day.

Let’s pause there. The main difference between Clover and Square is rates and funding timeline? Really? What about the numerous feature differences that make one product better for some customers and worse for others?

Maybe we’re being too critical and possessing knowledge of a competitive software is too much to ask. So, we asked for a Clover software demo.

Sales Rep: We have a department that handles demos, so one of my partners will be doing it for you.

This brings us to our final point. When banks sell point of sale systems, there is a huge disconnect between the frontline sales reps and the software they’re pushing. Our sales rep had very limited knowledge on Clover’s software, and instead, had to defer to talking about the difference in rates in comparison to Square.

When we continued the conversation and inquired about more advanced features, the sales rep had to punt to a demo specialist. And what about onboarding and implementation? Who is going to make the software work for my business the way the sales rep promised it would? An entirely different company. This structure creates a system which allows a sales rep to push software onto a customer, regardless of fit, with zero repercussions. The sales rep cares only about making the sale and not about making a happy customer.

After this experiment, we got a way better understanding of why there’s so much dissatisfaction among Clover customers who purchase a system through their bank. While the right questions were asked to start, there was just not much interest in discussing the specific needs of our business or showing us transparent, accurate pricing.

Banks present themselves as trustworthy — as they should. But this means that people trust banks far too much sometimes, especially when making large purchases such as a point of sale system. While more sophisticated customers can see through these smoke and mirrors, first-time store owners and small business owners — Clover’s exact target customer — too frequently equate a big bank name with unbiased credibility.

If you’re in the market for a point of sale system, it’s best to explore your options rather than put all of your eggs in one basket.