TROY, Mich.— A new study from J.D. Power has found payment processors have “stepped up their games during the past year with big banks leading the way,” and that has resulted to a significant surge in merchant services satisfaction.
In announcing findings of the J.D. Power 2022 U.S. Merchant Services Satisfaction Study, J.D. Power noted just 19% of consumer payments now involve paper currency, as use of payment cards, electronic payments and mobile payment apps have surged and small businesses have become increasingly reliant on a strong relationship with their merchant services payment processor.
“The past couple of years have been very challenging for most small businesses, but industry-wide efforts to simplify payment processing fee structures, ramp up customer support and speed up payments have had positive effects on merchant services satisfaction,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power, in a statement. “The largest year-over-year satisfaction gains have been driven by the big banks, which have historically trailed fintech payment providers in delivering low-cost, user-friendly merchant services solutions. Now, the big banks are matching or exceeding fintechs in small business satisfaction with merchant services.”
The Key Findings
According to J.D. Power, key findings of the 2022 study include:
- Overall satisfaction surges, led by big banks. “Overall small business satisfaction with merchant services providers is 859 (on a 1,000-point scale), up a significant 23 points from 2021. The top two performers in the study—Bank of America and Chase Merchant Services—have notable gains this year, with Bank of America increasing 45 points and Chase rising 35 points from last year’s study.”
- Simplified fee structures and better customer support drive gains. “This year’s significant increases in overall satisfaction are driven by a 33-point increase in satisfaction with cost of service and a 32-point increase in satisfaction with service interactions,” J.D. Power said. “Small businesses have improved understanding of payment processing fee structures, which have led to increased satisfaction with the ability to manage or control total payment costs. Small businesses also have experienced notably fewer problems with point-of-sale terminal/card reader hardware and software.”
- Show me the money. “Small businesses say they are receiving payments faster. More than one-third (34%) say the typical amount of time from transaction to funding their merchant accounts was faster than expected, up 10 percentage points from a year ago,” J.D. Power said. “Likewise, 65% of small businesses say they’ve received faster funding, so card payments are settled/posted same day or on non-business days, up 14 percentage points from 2021.”
- Provider responses to COVID-19 earn goodwill among small businesses: Nearly three-fourths (73%) of small business customers say they are aware of at least one proactive measure their merchant services provider has taken in response to challenges caused by the pandemic, which has driven a 71-point increase in satisfaction with cost of service. Specific actions taken by providers in response to the pandemic include offering discounted products and services, updated fraud controls and faster funding turnaround times.”
Additional Insights
In addition, J.D. Power said it found Bank of America ranks highest in merchant services satisfaction with a score of 894. Chase Merchant Services (879) ranks second and Square (878) ranks third.
“The overall satisfaction results of North American Bancard, Global Payments, Fiserv and FIS reflect their corporate results, meaning they include the results of various sub-brands (e.g., EPX, Heartland, Clover, Worldpay, and others) that operate under the respective corporate brand names,” J.D. Power said.
Two of the banks in the study—PNC Merchant Services and Wells Fargo Merchant Services—partner with Fiserv to provide merchant services to their small business clients. Fiserv also manages direct, standalone merchant services businesses that are distinct from these bank relationships.”
The 2022 U.S. Merchant Services Satisfaction Study is based on responses from 4,406 small business customers of merchant services providers. The study was fielded in September-October 2021.
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