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Everything You Need to Know About Wells Fargo Merchant Services

Rates current as of July 24, 2018

What is Wells Fargo Merchant Services?

Wells Fargo was founded in San Francisco during the gold rush era in 1852, and from there the company expanded to other new Western cities and mining towns. The present-day Wells Fargo logo is the iconic six-horse stagecoach, representing the stagecoach lines that were once integral to the business.
Wells Fargo bank has been offering merchant services since 1971, just as credit card use really began to take off in popularity. Today, it’s one of the largest providers of merchant services in the U.S., allowing its users to process payments of credit cards, debit cards, gift cards, and electronic checks.

The financial institution was rocked by scandal in 2016, after the discovery that Merchant Services employees falsified sales numbers in order to hit sales goals and receive bonuses. As many as 2 million accounts were opened in customers’ names without their knowledge. After the news hit, 5,000 employees were fired and a $190 million settlement was reached.

Wells Fargo Merchant Services highlights

Next-day payments for sales are a main attraction for Wells Fargo Merchant Services. The typical wait period with other processing providers is 48 hours, but when paired with a Wells Fargo checking or savings account, Wells Fargo’s services allow for payments ‘as soon as the next business day’.

Another reason to let Wells Fargo handle your merchant needs is because they offer a $500 rebate, which can be applied to “qualifying switching expenses”.

Wells Fargo does not offer direct processing because they use a third party. From the beginning, Wells Fargo has had a joint venture with First Data, although that is not disclosed on their website. The Wells Fargo site says only “a number of technologies and institutions work together in just a few seconds to approve the transaction and schedule payment to your account.” First Data is the world’s largest issuer processor, serving banks, credit unions, fintech, and small and large businesses.

One drawback to Wells Fargo Merchant Services is their opaque pricing. Their rates and fees are not readily found on their website, directing interested businesses to call for a quote. They use a pricing structure with many variables that can be hard to comprehend, and generally does not favor the business owner. In fact, a class action lawsuit was filed in 2017 by a group of merchants claiming unauthorized fees, disguised fees, and deceptive language in monthly statements.

Other pricing models used by merchant service providers include interchange plus, and the newest type of pricing is membership-based.

Services provided by Wells Fargo Merchant Services

Here is a list of benefits you receive when you choose to use Wells Fargo Merchant Services for your business needs:

  • Processing terminals. Businesses can own or lease a range of equipment models, called Clover. Leasing is an option that typically results in the lessee paying a total amount exponentially higher than the cost of buying the equipment up-front. In 2015, equipment leases for Wells Fargo Merchant Services were non-cancelable for the full term of the lease. A significant percentage of the complaints to the Attorney General’s office are about equipment leasing, leading to a consumer protection bill in Vermont.
  • Virtual shopping choices. Their services work seamlessly with shopping carts like Visa Checkout and on mobile, like Apple Pay, Google Pay and Samsung Pay.
  • Payment gateways. All gateways for online sales, are PCI-compliant, meaning they meet the Payment Card Industry Data Security Standard.
  • Data encryption. Wells Fargo Merchant Services uses a TransArmor solution to secure important customer data. When your business sends credit card information, it is then encrypted, and when the information is sent back, the account number is replaced with a token.
  • Europay, Mastercard, Visa support. It’s important to accept EMV chip credit cards, which have an embedded microchip to increase security, otherwise your business may be responsible for any fraud that occurs.
  • Gift cards. Prepaid gift cards are another option available to businesses, which is a great way to incentivize customers to return and to reward loyal customers.



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Wells Fargo Merchant Services: Fees and rates

Businesses using Wells Fargo Merchant Services pay a service charge called the “Discount Rate.” This is a bit deceptive, as it represents not a discount, but a fee. Service charges vary depending on certain things like the credit cards used by your customers, how quickly transactions are settled and how the merchant account is set up.

A Wells Fargo representative provided the following information, “We offer both standard and custom pricing for our merchant services customers. Generally, our standard pricing is a monthly fee of $9.95, $14.95, or $24.95 per location, based on the type of equipment the merchant uses, plus:

  • 2.6% percent and $0.15 per tap, insert, or swipe
  • 3.4% and $0.15 per keyed-in transaction

Also depending on the type of equipment or the use of a non-Wells Fargo Demand Deposit Account or DDA, there may be other one-time or recurring fees.”

Their Merchant Services Program Guide provides interchange rates, which are paid to the issuing banks and the payment networks. Each category of business, such as gas stations, hotels, and grocery stores has a different set of rates. Here are a few examples of interchange rates for retail businesses:

  • 1.56% plus 0.10 cents per item for credit card charges
  • 1.71% plus 0.10 for a Rewards or Premium card
  • 2.15% plus 0.10 per item for a Premium Plus card
  • 1.10% plus 0.16 per item for a non-regulated consumer debit or prepaid card retail sale
  • 0.05% plus 0.21 and 0.22 per item for regulated consumer debit cards, consumer prepaid cards, or consumer prepaid cards with fraud adjustment

Another factor that can make a massive impact on the rates you end up paying are whether your customers’ charges qualify for the “discount rate” you are quoted when you sign up. Charges that don’t qualify are subject to steeper rates.

There will also be a transaction fee, which is an amount (unspecified until you call for a quote) added to every transaction. It’s a complex system and the exact breakdown of charges will vary from client to client.

The standard commitment for joining Wells Fargo Merchant Services is three years, and there is an early termination fee (ETF) per location. In 2015, the ETF fee was $500 per location for clients with sales volumes of less than $1 million for the preceding 12 months. For clients with over $1 million in sales, it was $500 per location plus six times the highest amount of revenue at any calendar month in the current or prior term.



  • Wider potential customer base. Wells Fargo Merchant Services accepts purchase cards, which allows your business to attract government and corporate customers.
  • Robust security features. Wells Fargo offers tokenization and fraud controls for security. Payments are handled in the cloud which also helps to keep them secure.
  • Extended support. Wells Fargo allows access to a support team 24/7.


  • Fees are not transparent. The costs for businesses to use Wells Fargo Merchant Services are not specified on the website.
  • Two contractors are involved in providing one service. First Data is the processor for Wells Fargo, which can be concerning for a few reasons: you are subject to the rates and fees of both providers, and; Wells Fargo does not offer any merchant service technology or services you can’t get elsewhere (where you might get a better rate).
  • Cancellation fee. Not all companies charge a cancellation fee, but Wells Fargo charges a minimum $500 early termination fee (ETF) if you don’t keep them for the standard 36-month contract (which is much higher if your sales volume is over $1 million). If you lease your equipment and decide to go with another provider, you may also get stuck with leases on equipment.

The bottom line: How Wells Fargo stacks up

It’s probably worth your time to shop around for a better deal with less commitment. If you decide to go with Wells Fargo, do your research, read client reviews, read your contract, and negotiate when possible.


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