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  1. #1
    Join Date
    Apr 2004
    Location
    Miami / Kingston
    Posts
    101

    Has anybody done business with Merchant Services Inc?

    I'm having a very shady experience with this company. I just wanted know if anybody else has dealings with them . Their website is msihq.com .. I've been processing with them for a little over 8 months with a reserve which I don't mind. The problem is i'm not getting any straight answers from their risk department regarding the reserve and being told some very cookie cutter answers that has me worried about their validity. I've read about some fairly large dollar amount issues on this forum over the years, never thought I would be writing about one :/

  2. #2
    Join Date
    Mar 2010
    Location
    Florida, USA
    Posts
    186
    Yes, MSI is a reasonably well known player in the industry. Their Acquiring bank is First Natl Bank of Omaha I believe, which is a legit bank. I'm guessing they, not MSI, are the ones calling the reserve shots here. Now, let me be clear that I'm not an advocate for MSI for First Omaha or anybody else here. That said, in my experience in the industry it seems that the types of experiencing you are going through are the result of inappropriate expectations or knowledge on the part of the merchant 90% of the time. Not that this lets either the ISO or the Acquirerer off the hook--to be sure it sounds like somebody did a less-than-adequate job of training you and explaining the ropes. But I'm guessing you'll feel better about it once you understand what is going on. If you'd care to go into a little more detail about what you're unhappy about, I'd be glad to try to explain from an unbiased perspective. Hope this helps.

  3. #3
    Join Date
    Apr 2004
    Location
    Miami / Kingston
    Posts
    101
    i'd love an unbiased perspective to be honest.
    I thought i did my due diligence with MSI so I was shocked when after 7 months of processing almost 600 transactions with 2 chargebacks i've been told to 'call back' every 5 days for 4 weeks.. then eventually'a manager will call you' .. no call.. so I call.. eventually i speak to a 'manager' who cant give me straight answers. I understand the risks involved with having a merchant account.. but its very uncomfortable when the person on the other line first tells me the wrong amount (off by 80%).. then when I correct here she says 'oh.. my bad that sound about right' then I continue to discuss the reserved funds and how it is released and she tells me it takes up to two years if ever.. tells me that i NEED to keep processing or they wont release the funds (I had no intention of not processing but that was a scary statement). The person on the phone babbles so much inaccuracies and generic sentences, much of which have nothing to do with my case like "as i said we cant do anything until you send in the paperwork" I ask what paperwork is she referring to and she laughs and says "oh yea you're right we don't need anything from you"..
    I'm just saying 9 months of processing, 2 charge backs and me being a very excited merchant was ready to turn up sales (i've literally been staggering sales because its really hard to run on a reserve)...
    I am fine with a rolling reserve, if there is a timetable for funds to be released.. but the best i could get was "keep processing and we'll look at it again in 30 days".. Perhaps I just got the wrong person yesterday, but with the type of money involved it would be more comfortable if I got real answers and not being told to keep calling back, or being told b/s with giggling personnel in the background when they slip up.

  4. #4
    Join Date
    Mar 2010
    Location
    Florida, USA
    Posts
    186
    Well, of course there is no way to condone poor incompetent service as you describe. That said, you need to recognize that processors can be thought of in three categories: Grade A who take only the best of the best no-risk merchants, Grade B who take the average Joe merchant, and Grade C who underwrites the most undesirable merchant types that nobody else wants. Grade C merchants are those in certain high risk business categories, those with poor personal credit, high chargeback histories, weak financials, process lots of cards overseas, high tickets etc. The sad truth is, if you fit any of the above categories, then you probably belong with a Class C processor, and unfortunately will be treated accordingly, which is to say not too well. If, on the other hand, you are NOT a C merchant but somehow made the mistake of doing business with a C processor, then you need a new processor ASAP.
    It should also be noted that, if you fit into any of the MO's indicated above, then a mere 2 chargebacks would probably be enough for what you describe to happen

    In order for me to comment intelligently on your specific circumstances, here's what I need to know:
    1.) Where are you located?
    2.) In what countries are your customers located?
    3.) What exactly is your business type?
    4.) How is your credit?
    5.) What kind of volume and average tickets are we talking about?

  5. #5
    Join Date
    Apr 2004
    Location
    Miami / Kingston
    Posts
    101
    Yea thats the thing.. and i think i understand the nature of the business by now.. the business is unique but i'm sure falls into a historically high risk "class c" situation.. we process event tickets ONLY for events we are directly involved with. We also imprint and have signatures of every person who comes to our events. Honestly.. the idea of a reserve is actually ok with me if it 'rolls' .. meaning if there is a schedule of deposits, even a percentage, then fine.. a structured review or consideration.. thats also fine.. but limbo is a dangerous place to be in.

    I'm located in the US.. Miami
    99.5% of my customers are in the US
    Business type: Sale of event tickets for events we are directly assiciated with (not 3rd party reselling)
    Credit isn't the best tbh
    Volume and average tickets.. $45-$75 transactions and about 200 transactions monthly.. These events are an average of 3,000 patrons, but theres no way that bulk of that could be held in reserve so we've staggered the volume while allowing patrons to be familiar with the site.


    As i said.. i'm aware of the dark cloud for event tickets even if its our own events.. msi is supposed to be an established company that I expected to say.. ok 6th months review.. we're going to do this.. or we're going to do that.. not "we cant give you a date, a figure or a percentage.. it could be up to two years, you need to keep processing so we can consider a review in 30 days"... and this is 30 days after i've been calling continually simply requesting information on the process etc.

  6. #6
    Join Date
    Mar 2006
    Location
    Europe
    Posts
    490

    Reserve

    I might have overlooked something or missed something in this thread but the topic is about your rolling reserve and when that will be release correct?

    That should be clearly stated in your contract.

    If you have a 10% rolling reserve for 180 days it should be stated in the contract and as such the release of the reserve should be released by the bank accordingly and according to the contract no matter if you process or if you decide to stop processing with that bank.

    If someone tells you that you need to process or you will not get your reserve back thats an impossible requirement for obvious reason because there would be no end to the rolling reserve.

    Yes you business is seen as high-risk business as there have been a lot of fraud, in the US and Internationally, by merchants selling event tickets and even more so if your credit isn't the best.

    However that have nothing to do with what was agreed on with the bank you are processing with and the reserves they hold. Its not their money. Its yours as long as you are legit and keep yourself within the approved CB levels.
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  7. #7
    Join Date
    Mar 2010
    Location
    Florida, USA
    Posts
    186
    Failsafe is right as far as the contract stipulating the time period for the rolling reserve, be it 180 days or whatever. However, it is important to note that this comes into play ONLY if there are no active risk tickets involved. If there is a sales voucher in 'limbo', then processors can and will freeze funds for as long as necessary until they are satisfied that the sale is valid and will not come back as a chargeback anytime in the future--that's probably written into the merchant agreement as well. This time period can easily exceed the 180 or whatever number of days contracted n the rollover arrangement. The long and short of it: Processors can and will do whatever is necessary to prevent loss and mitigate risk when a merchant demonstrates that they have problems.

  8. #8
    Join Date
    Mar 2006
    Location
    Europe
    Posts
    490

    Rolling Reserve

    If in "limbo" means not delivered as in the date between the actual date of the actual event date have not passed 180 days you might, and I say might, be correct.

    180 days from the last even is not more than fair considering the business model and risk involved.

    Why I say "might" is because we have not actually read the contract so either you are right, or I am right, in regards to the above.

    If it is in the contract then the merchant cant say anything.

    If its not in the contract there is an issue if they still dont want to release the funds after 180 days.

    My "concern" in this matter is that the representatives from the named processor gives the merchant a vague answer to their client on what is applicable and what the contract they have signed actually says.

    You might say "but the merchant can read himself cant he?".

    True, but sometimes there is a legal lingo in there so the merchant gets confused so he asks the processor and they should be able to give a very straight answer.

    Whatever the contract says goes since the merchant agreed to it and signed the contract. Thats pretty clear.

    The processor should easily be able to tell the merchant what applies, what is applicable, and what will be enforced under what scenario(s).

    No processor or bank can hold funds at their own will just because they refer to "there is risk involved and we need to cover our bases".

    That is what a contract is for. Put what is agree on writing.
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  9. #9
    Join Date
    Apr 2004
    Location
    Miami / Kingston
    Posts
    101
    The reserve agreement to be honest seems to be a bit open ended.. and you're right "the merchant" (me) should have read and questioned. The representative telling/threatening me 'up to two years' and 'you must process in order to be considered' just doesn't seem like the type of company that should be invested in so heavily financially.. Maybe i keep getting the wrong representatives? idk.. An excerpt from the agreement has me worried...
    Merchant and MSI hereby mutually agree that said Merchant shall agree to a reserve in the amount equaling 10% of gross processing for a period of six months. At the end of said six-month period, MSI will then review merchant’s history and determine the necessity of merchant reserve. MSI maintains the right to hold funds 9 months past the life of the merchant agreement.
    as it of course doesn't give much way for 'rolling'. I'm not quite sure of the review of my history as my personal review this morning has me at almost 900 transactions with two chargebacks (of a whopping $94) .. this is knocking on month #9.. really sucks because of the type of opportunities coming our way but holding back 10% indefinitely is not exactly profitable or reassuring.

  10. #10
    Join Date
    Mar 2006
    Location
    Europe
    Posts
    490

    Reserve

    Then its 9 months past when the merchant agreement is terminated/canceled.

    Judging on your business type per say I would say that is fair.

    However if you have a longer history of low charge back, the processor need to make a fair call on the individual case.

    Threatening etc is not something a processor should do if they did that.

    The contract is pretty clear to me.
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  11. #11
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
    Posts
    7,189
    Rolling reserves are usually limited to people who might be on a MATCH / TMF list or high risk.

    Do you have the ability to record the call? And if so, tell the individual that you want to record the call because you have some people that are willing to help you.

    I also called First National Bank of Omaha for you to see what I could do. Of course, they could not give me information, but I did get a phone number: 800-228-2443

    You can all them first, see what you need to do - hopefully they will help you out.

  12. #12
    Join Date
    Apr 2004
    Location
    Miami / Kingston
    Posts
    101
    So I called them.. the conversation boiled down to "the contract you signed says that you agreed to an 'indefinite' reserve' so I ask.."so does that mean I will never see that money" she reply's " That is correct.. you will never see that money" .. I ask "so in essence I should just calculate my merchant fees at 13.5% since that 10% will never be seen.." She reply's "pretty much"...

  13. #13

    MSI fraud

    Quote Originally Posted by kiwami View Post
    I'm having a very shady experience with this company. I just wanted know if anybody else has dealings with them . Their website is msihq.com .. I've been processing with them for a little over 8 months with a reserve which I don't mind. The problem is i'm not getting any straight answers from their risk department regarding the reserve and being told some very cookie cutter answers that has me worried about their validity. I've read about some fairly large dollar amount issues on this forum over the years, never thought I would be writing about one :/
    We have done business with them and they were terrible from day one. We actually just left our bank and had to close our accounts because they kept charginging us even though we cancelled in writing the services. They kept changing the monthly amount so it would continue to be processed. Now the FBI is involved along with the bank. I have heard other horror stories with these guys. Trust me dont use them.

  14. #14
    Join Date
    Apr 2004
    Location
    Miami / Kingston
    Posts
    101
    yeah.. learnt the hard away.. they're holding back a large sum of money that i'm starting to believe i'll never see again.. i hope they get their asses handed to them but i'm sure they'e all lawyered up...

  15. #15
    Join Date
    Oct 2004
    Location
    US
    Posts
    319
    Hi Kiwami

    I'm sorry to hear you are having problems with them. The normal rolling reserve (even on high risk) is 180 days with any US based acquiring bank. This means they roll out the reserves from that day forward per settlement period. The only exception to that is under fraudulent cases of which you were not!
    I suggest you contact the bank directly and not bother trying to reason with the processor anymore ... I'm sure the bank will help you set them straight.

    Good luck and hope this helps
    payment processing made simple -since 1998
    *US, Canadian, EU and Offshore Merchant Accounts
    *High-Risk OR mainstream
    email me anytime or skype: victoria.kozub

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