- Big banks are now matching or exceeding fintechs when it comes to small businesses' satisfaction with card payment processors, according to J.D. Power’s U.S. Merchant Services Satisfaction study, released Thursday.
- Bank of America ranked No. 1 with 894 points on a 1,000-point scale. JPMorgan Chase's Chase Merchant Services came in second with 879 — narrowly edging out third-place Square, the digital payment system owned by Block, which garnered 878.
- Industrywide efforts "to simplify payment processing fee structures, ramp up customer support and speed up payments have had positive effects on merchant services satisfaction," Paul McAdam, J.D. Power’s senior director of banking and payments intelligence, said in a news release.
Amid the shift to faster, contactless payments — propelled by the COVID-19 pandemic — fewer consumers using cash means small-business owners are more reliant than ever on the company handling the processing of payments, J.D. Power found. Businesses were more satisfied with the cost and speed of these services in 2021 — responses were collected in September and October — than they were for the previous iteration of the survey.
The largest gains in satisfaction among merchants were driven by the big banks, "which have historically trailed fintech payment providers in delivering low-cost, user-friendly merchant services solutions," McAdam said Thursday.
Overall, merchant service providers scored 859 on a 1,000-point scale, a 23-point jump from 2021, J.D. Power said. Bank of America’s score rose 45 points over last year, and Chase Merchant Services’ score increased by 35 points. Square, PayPal, Wells Fargo Merchant Services, Stripe, Elavon, Global Payments, North American Bancard and Shopify rounded out the top 10.
Merchants' satisfaction with the cost of service jumped 33 points. Their rating of service interactions increased by 32. J.D. Power also found small-business owners have a better understanding of payment processing fee structures, and have experienced fewer issues with point-of-sale terminal or card reader hardware and software than in previous years.
Another key factor bolstering satisfaction levels: Business owners are receiving payments faster. About 34% told J.D. Power the typical time between transaction and seeing funds in their merchant accounts was shorter than expected, raising satisfaction by 10 percentage points. Nearly two-thirds said faster funding means card payments are settled on the same day or on non-business days, up 14 percentage points over last year.
Additionally, almost three-quarters of small-business owners were aware of at least one step their service provider took in response to COVID-related challenges. These efforts, including offering discounts on products or services, updating fraud controls or enabling faster funding turnaround times, drove a 71-point jump in satisfaction with cost of service, J.D. Power said.
The study was based on responses from 4,406 small-business customers of merchant service providers.