- Big banks are now matching or exceeding fintechs when it comes to small businesses' satisfaction with their card payment processors, according to J.D. Power’s U.S. Merchant Services Satisfaction study, released Thursday.
- Among merchant service providers (MSP), Bank of America ranked No. 1, JPMorgan Chase's Chase Merchant Services came in second and Square, the digital payment system owned by Block, was a close third.
- 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," 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 their payment processing, J.D. Power noted. The study's findings indicate businesses are more satisfied this year than they were last year with the cost and speed of these services.
In the MSP arena, big banks are fighting back against fintechs that have gained momentum: 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 in the release.
Overall, MSPs scored a 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.
The overall rise was led by a 33-point increase in merchants' satisfaction with the cost of service, and a 32-point increase their rating for service interactions. 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.
Another key factor bolstering satisfaction levels: Business owners are receiving payments faster. About 34% told J.D. Power the typical amount of time between transaction and seeing funds in their merchant accounts was shorter than expected; that’s up 10 percentage points from 2021. 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 MSP took in response to the challenges presented by the COVID-19 pandemic, including offering discounts on products or services, updating fraud controls or enabling faster funding turnaround times. These efforts drove a 71-point jump in satisfaction with cost of service, J.D. Power said.
The J.D. Power study, conducted in September and October 2021, was based on responses from 4,406 small business customers of MSPs.