If Bank of America handles your credit card processing, go and pull your last three statements before you read any further. We have watched accounts at that bank move from four basis points to over forty, and the businesses paying it were told the new number was simply the market rate.
We had clients with Bank of America sitting at four basis points, which is 0.04 percent. They were moved to over forty basis points. That is more than a tenfold increase, and it was presented as a correction to the market rate.
If one to five basis points is achievable on the open market, forty is not a market rate. It is a price, and prices are set by whoever is doing the setting. That is the whole point. The number moved because someone decided it should move, and nothing about the merchant’s business had changed.
The increase did not arrive in a letter with a headline. It landed across consecutive monthly statements. That is why the instruction at the top of this page matters: compare a statement from before the change to your most recent one, line by line. A change of this size is invisible if you only ever look at the current month.
This part explains a lot of the confusion merchants have about Bank of America credit card processing, and almost nobody is told it.
From 2009 the bank did not process your cards itself. Merchant services ran through Banc of America Merchant Services, a joint venture between Bank of America and First Data, with the bank handling sales and service while First Data ran the actual processing. First Data was later absorbed into Fiserv. That joint venture ended in 2020, and Bank of America built its own merchant services platform.
So a merchant who signed before 2020 has been through a platform change, a change of who actually runs the processing, and in many cases a change in how the statement is laid out. Pricing written under the old arrangement did not always survive intact, and comparing an old statement to a new one is harder because the documents do not look alike. If your statements changed shape at some point and you never worked out why, that is probably why.
We keep a separate standing review of Bank of America Merchant Services covering its legal record, complaint history and sales conduct. This page is about the money.
On a Bank of America credit card processing agreement, as anywhere else, the discount rate is the number on the sales sheet, so it is the number people negotiate and the number they watch. It is also the easiest number to make look good, because it is only one of the places a processor can take margin.
The other two are harder to see and usually larger.
A low discount rate alongside inflated interchange and a stack of monthly charges can easily cost more than a higher discount rate with neither. The only number that settles it is your effective rate: total card costs divided by total card volume, every month. Our guide to credit card processing fees works through how the layers stack up.
A low rate offered alongside a three year term is not a discount. It is the price of your ability to leave.
The pattern we see is consistent. An attractive opening rate, a multi-year term, and exit terms that can run to tens of thousands of dollars. Then the rate moves. At that point the merchant discovers that the thing they negotiated hardest on was never the expensive part of the agreement, and that the expensive part is the clause that makes leaving unaffordable.
Five steps to audit your own Bank of America credit card processing, and none of them need anyone’s permission.
Processors and banks rely on the fact that business owners are busy. I run weAudit and I still spend more time on things that have nothing to do with our actual service than I would like. That is the gap these increases live in. It is not that merchants are careless. It is that nobody has time to audit a document designed to resist being audited.
People ask me which processor I like best. The honest answer is that I hate them all equally. Partly a joke, partly not. Our audits have found businesses overbilled by more than ten million dollars a year, and the ones being overbilled had no idea until somebody read the statement properly.
It depends entirely on what you were quoted and what has happened since. We have seen accounts there at four basis points and accounts there at over forty, on comparable volume. The bank’s name is not what sets the price. Your agreement and how long ago it was reviewed are what set the price.
Bank of America runs its own merchant services platform today. From 2009 until 2020 it did not. Processing ran through Banc of America Merchant Services, a joint venture with First Data, which later became part of Fiserv. Merchants who signed before 2020 have been moved across a platform change since.
Check your agreement, because many allow it. That is the clause worth reading before you sign rather than after. Where a change is permitted, your protection is usually the objection window rather than the rate itself, and that window is often around 90 days from when the charge first appears.
One basis point is one hundredth of one percent, so 40 basis points is 0.40 percent of your card volume. On a million dollars of annual card sales that is four thousand dollars a year for the discount rate alone, against four hundred at four basis points.
Not on the strength of the name, and not before you know your effective rate and your exit cost. Switching is frequently the wrong move, because a renegotiation with the provider you already have carries no conversion risk and no new contract. Work out what you are paying first. The decision is usually obvious once the number is in front of you.
Compare effective rates rather than quoted rates, because quoted rates leave out most of the bill. Two businesses on the same street with the same volume can pay very different amounts, and neither will know it, since processor pricing is individually negotiated and published nowhere.
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