Wholesale Payments

Wholesale Payments Review

Wholesale Payments is a processing company with offices in Texas, Colorado, New Mexico, and Oklahoma.

Are you a Wholesale Payments representative? Claim this profile

** Note that this company is NOT the same as Wholesale Payments Direct, a Canadian-based merchant services provider. **

Automatic Surcharging Program / Free Credit Card Processing

Wholesale Payments includes a video on its website about its automatic surcharging program, where you can pass the costs of processing to your customers. The company claims that this results in “free” credit card processing, though it should be noted that there are still fees.

The video explains that you would price your goods or services as “cash price” and if customers choose to pay with a credit card, a 3.5% fee will be added when they checkout.

Note that surcharging is prohibited on debit cards and prohibited entirely (credit and debit) in 10 states.

Businesses operating in one of those states would not be able to use the automatic surcharge pricing option. Businesses that can use it may still have charges if a customer uses a debit card. (Debit cards “run as credit” are still considered debit cards and cannot be surcharged.)

The surcharging program also has a $49 monthly fee.

Processing Services

Processing in-person can be done with wired or wireless terminals, depending on your preferences.

Checks

The days of accepting and depositing paper checks are gone. Instead, there’s a more convenient option: electronin check conversion. With a connected check reader, you can accept a paper check and “convert” it into an electronic transaction at the time of sale, deducting the funds automatically from the customer’s account and eliminating trips to the bank. Additionally, Check Guarantee can reduce the risk of bad checks by following simple procedures that limit your liability and transfer it to your processor.

Funds are typically available in 2-3 business days.

Gift Cards

With Wholesale Payments’ gift card program, you can choose from pre-designed or custom cards tailored to your business. Additionally, you can decide if cards will be issued in pre-determined amounts or custom dollar values. Cards are reusable and can be issued and redeemed through your processing equipment.

Reporting is included so that you can track the success of your program.

Cash Advances

Businesses that need access to fast money for business expenses can apply for the merchant cash advance program. Unlike a traditional loan, cash advances don’t have an interest rate or a fixed monthy payment amount. Instead, you’ll essentially “sell” some of your future credit card sales in exchange for money upfront. Then you’ll repay that advance of money through an automatic deduction of a portion of your daily credit card sales.

Equipment Options

For traditional countertop credit card machines, Wholesale Payments offers universal Verifone models, including the popular Vx 520. If you’d prefer a mobile reader for your smartphone or tablet, Wholesale can offer a mobile app and secure card readers so you can take payments on the go.

Rates and Fees

The company does post information about it’s automatic surcharging program, discussed above. As noted, the automatic surcharge program has a $45/month fee, and debit cards may also incur charges.

The good news is that you can still request a quote to review privately, with no sales calls. CardFellow’s quote request tool lets you get quotes from as many processors as you’d like without revealing your contact info. Best of all, it’s completely free. Try it now!

Wholesale Payments Reviews

Wholesale Payments has quite a few customer reviews available online. Unfortunately, many of them are negative, accusing the company of deceptive practices. However, there are positive reviews as well, stating that the company has great customer service. Let’s take a look at what people are saying on popular review sites.

Better Business Bureau

Wholesale Payments has been accredited with the Better Business Bureau since 2007 and currently has an A+ rating. The company has 3 positive reviews, but 6 negative reviews, along with 23 formal complaints lodged with the BBB.

The positive reviews say that the company is great, saves businesses money, and provides good customer service.

The negative reviews claim that salespeople didn’t give accurate information about costs, wouldn’t provide a copy of the contract, and engaged in bait-and-switch tactics. Some reviews state that Wholesale Payments claimed to be the business’ current processor in an attempt to get them to sign a new contract.

The formal complaints allege that Wholesale Payments changed contract terms after signing, that the business was misled about costs and pressured into signing contracts, that the company didn’t provide services as agreed, and that Wholesale forges signatures on applications.

Wholesale Payments responds to the complaints on the BBB’s website, but in most responses does not offer a resolution that the complainant is happy with. In some cases, Wholesale Payments simply shifts the blame to the customer and says that the customer signed a contract.

Google Reviews

Have you used Wholesale Payments? Leave a review!

Board of Governors of the Federal Reserve System

Introduction

Simple Framework for Central Bank Money and Wholesale Payment Systems

Table 1: Simple Framework for Analyzing Central Bank Money and Wholesale Payment Systems

Defining the Status Quo: Existing Wholesale Systems with Central Bank Money

New “Tokenized” Distributed Payments Platform: Technology and Arrangements

From a central bank perspective, these risks can be both to the payment systems themselves and to the reputation of the central bank. To understand scenarios where new central bank money may be essential for a new wholesale payments platform, one must understand the potential for new arrangements to introduce new risks and the ways that such risks need to be sequestered from other central bank transactions.

New Liability/Settlement Asset: Is New Central Bank Money Essential?

Though this example relies on several assumptions that need to be further explored, it highlights the possibility that introducing private-sector products and services to central bank money could affect the risks in existing central bank payment systems. In such a scenario, the option of a new, separate form of central bank money may be considered by some central banks (though it is certainly not the only option).

Conclusion

References

Bank for International Settlements. 2012a. “Glossary.” Bank for International Settlements (BIS).

Bank for International Settlements. 2012b. “Principles for financial market infrastructures.” Bank For International Settlements (BIS) and Technical Committee of the International Organization of Securities Commissions (IOSCO)

Bank for International Settlements. 2023. “Payment Systems and critical service providers- features of selected payment systems.” Bank For International Settlements (BIS),

Bank for International Settlements Innovation Hub and Bank of England. 2023. Project Rosalind.

Berentsen, Aleksander, Fabian Schär (2018). “A Short Introduction to the World of Cryptocurrencies,” Federal Reserve Bank of St. Louis Review, First Quarter 2018, pp.1-16.

“bitcoin-core/secp256k,” Github, 2023.

Board of Governors of the Federal Reserve System, “Money and Payments: The U.S. Dollar in the Age of Digital Transformation (PDF)”, Washington: Board of Governors, January 2022.

Board of Governors of the Federal Reserve System. 2023a. “Fedwire Funds Services.” Washington: Board of Governors of the Federal Reserve System, July 13.

Board of Governors of the Federal Reserve System. 2023b. “Financial Accounting Manual for Federal Reserve Banks,” Washington: Board of Governors of the Federal Reserve System, January.

Board of Governors of the Federal Reserve System. 2023c. Money Stock Measures. Board of Governors of the Federal Reserve System, 2023.

Carapella, Francesca, Edward Dumas, Jacob Gerszten, Nathan Swem, and Larry Wall (2022). “Decentralized Finance (DeFi): Transformative Potential Associated Risks,” Finance and Economics Discussion Series 2022-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2022.057.

Federal Reserve Banks (2021), Operating Circular 1, Account Relationships.

Federal Reserve Banks (2023), Operating Circular 6, Funds Transfers Through the Fedwire Funds.

Federal Reserve Financial Services (2023). Financial Services.

Lee, Alexander (2021). “What is programmable money?,” FEDS Notes. Washington: Board of Governors of the Federal Reserve System, June 23, https://doi.org/10.17016/2380-7172.2915.

Lee, Michael, Antoine Martin, and Benjamin Müller (2022). “What Is Atomic Settlement?,” Federal Reserve Bank of New York Liberty Street Economics, November 7.

Mills, David, Kathy Wang, Brendan Malone, Anjana Ravi, Jeff Marquardt, Clinton Chen, Anton Badev, Timothy Brezinski, Linda Fahy, Kimberley Liao, Vanessa Kargenian, Max Ellithorpe, Wendy Ng, and Maria Baird (2016). “Distributed ledger technology in payments, clearing, and settlement,” Finance and Economics Discussion Series 2016-095. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2016.095.

New York Innovation Center and Monetary Authority of Singapore (2023). Project Cedar Phase II x Ubin+. Federal Reserve Bank of New York.

Panetta, Fabio (2022), “Demystifying wholesale central bank digital currency”, speech at the Symposium on “Payments and Securities Settlement in Europe – today and tomorrow”, September 26.

Shi, Elaine (2020). Foundations of Distributed Consensus and Blockchains. Book manuscript. Available at https://www.distributedconsensus.net, blockchain course (distributedconsensus.net)

2. Other Federal Reserve account holders include the U.S. Treasury and Foreign Central Banks, however the scope of this paper is limited to Depository Institutions. Return to text

3. Depending on the context, parties referring to wCBDC may be referring to a potential new form of money or simply an upgraded version of existing payment infrastructure. By providing a simple framework, this paper seeks to assist in determining whether what is being describe is actually new central bank money. Return to text

5. wCBDC differs from a general-purpose CBDC in terms of access and purpose. General-purpose CBDC would be a digital form of central bank money that is widely available to the general public, including DIs. Return to text

6. Additionally, a new central bank liability would likely have a different risk profile than current liabilities. Return to text

7. For an overview of how the Federal Reserve is approaching CBDC, see Board of Governors of the Federal Reserve System (2022). Return to text

8. Board of Governors of the Federal Reserve System (2023c). Return to text

9. For more information, see Federal Reserve Financial Services (2023). Return to text

10. Bank for International Settlements (2012a). Return to text

11. Board of Governors of the Federal Reserve System (2022). Return to text

12. For more information on the Fedwire Funds Service (Fedwire), see Board of Governors of the Federal Reserve System (2023a). Return to text

13. In contrast, retail payment systems are considered to process a large volume of relatively low-value payments. See BIS (2012a). Return to text

14. Institutions eligible for master account access are also eligible to access Federal Reserve payment services and the discount window. Return to text

15. A distributed ledger is a type of database that is replicated across nodes in a network. One specific type of distributed ledger is a blockchain, which adds changes to the database via a series of blocks of transactional data that are chronologically and cryptographically linked to one another. The terms “distributed ledger technology” and “blockchain technology” are often treated as synonyms in the industry even though blockchain is actually a specific type of distributed ledger. Mills et al. (2016) Return to text

18. Board of Governors of the Federal Reserve System (2023b). Return to text

19. Board of Governors of the Federal Reserve System (2023b). Return to text

20. Under Regulation J and Article 4A, a “funds transfer” is a series of transactions that begins with the issuance of a payment order by the originator and ends when a beneficiary’s bank accepts a payment order for the benefit of the beneficiary of the originator’s payment order. UCC § 4A-104(a). Return to text

21. Federal Reserve Banks (2023). Return to text

22. See for example Berentsen and Schär (2018), Shi, Elaine (2020). Additionally, Bitcoin and Ethereum provide different levels of “programmability” functionality. Return to text

23. Asymmetric cryptography is used to enable users to specify recipients and ownership of funds through public keys and addresses while ensuring the spending of funds can only be authorized by a public key’s unique corresponding private key. For example, Bitcoin and Ethereum use secp256k1 elliptic curves to create public / private key pairs. For a more detailed review of the use of cryptography for key pairs in Bitcoin, see bitcoin-core/secp256k1 (2023). Return to text

24. Applied Fintech Research from the Federal Reserve Bank of Boston provides an example of how asymmetric cryptography may be used to provide the benefits of tightly coupling ownership and value, while a single-trusted entity maintains the ledger. This project provides an alternative design based on different trust models than permissionless platforms. (Federal Reserve Bank of Boston 2022). Return to text

25. It is critical to note that trust is placed not only on the actors, but on the technical system as well; this trust does not address questions of fraud (for example, stolen private keys). Return to text

28. Here, the point is that the technology allows for new arrangements. There are currently products in production that use the new technologies in permissioned ways for specific use cases. Return to text

30. Atomic settlement is frequently used to refer to ways in which DLT platforms may settle transactions DvP, PvP, or in a similarly contingent manner (assuming relevant legal framework). A discussion of DvP, PvP, and other exchange-of-value settlements can be found in BIS (2012a) and BIS (2012b). Return to text

31. See, for example, Carapella et al. (2022). Return to text

32. Correspondent relationships do exist. Respondents may settle transactions in the master account of a correspondent. Return to text

33. Take for example the Ethereum platform, which uses an account-based transaction model for its recordkeeping and still allows for transferrable digital assets to transact on its platform. Master accounts for recordkeeping are thus not incompatible with a tokenized platform, and thus a new liability does not technically need to be created. Return to text

34. For a retail experiment example, see BISIH and Bank of England (2023). Return to text

35. If the system were tokenized, we would assume that individual banks would have storage of their private keys to access the tokenized platform. Return to text

36. Swiss Interbank Clearing, an RTGS system, uses both participants deposit accounts at Swiss National Bank and SIC settlement accounts to facilitate payments. However, the use of two accounts is merely operational. Legally, both accounts are considered to be the same and therefore transactions are settled with central bank money. Swiss National Bank (2019). Return to text

37. It could very well be that a segregated reserve account and appropriate liquidity monitor by depository institutions can provide the same mitigants as creating new central bank money. This arrangement does not provide a compelling requirement for establishing a new central bank liability. Return to text

38. See New York Innovation Center (2023) for solution limitations on liquidity risk when leveraging Hashed Time-Lock Contracts to facilitate atomic payments. Return to text

Please cite this note as:

Durfee, Jon, Jesse Leigh Maniff, and Priyanka Slattery (2023). “Examining CBDC and Wholesale Payments,” FEDS Notes. Washington: Board of Governors of the Federal Reserve System, September, 08, 2023, https://doi.org/10.17016/2380-7172.3368.

Disclaimer: FEDS Notes are articles in which Board staff offer their own views and present analysis on a range of topics in economics and finance. These articles are shorter and less technically oriented than FEDS Working Papers and IFDP papers.