Banks usurped fintechs in merchant services satisfaction, per J.D. Power

By the numbers: Overall small-business satisfaction jumped 23 points from last year to 859 (on a scale of 1,000), according to J.D. Power’s 2022 US Merchant Services Satisfaction Study, which measured small-business satisfaction with companies that offer services like card processing and point-of-sale (POS) technology.

Here’s what fueled the increase:

• Big banks understood the assignment. Bank of America and Chase Merchant Services ranked first and second, respectively, knocking down last year’s chart-toppers Block and PayPal to third and fourth. Bank of America’s satisfaction grew 45 points from 2021; Chase’s increased 35 points.
• Clearer fees and better customer support. Satisfaction with cost of service (+33 points) and service interactions (+32 points) increased the most. The survey found businesses had a better understanding of processing fees and experienced fewer problems with payment software and hardware.
• Faster payments. Thirty-four percent of small businesses said their merchant accounts were funded faster than expected. This is up 10 percentage points from last year.

How we got here: A stronger focus on digital capabilities may have helped Bank of America and Chase top this year’s satisfaction survey.

• Bank of America is developing a proprietary merchant services platform with digital-first tools: It built out its Business Advantage 360 dashboard, which offers business management tools from third-party solutions like ADP and QuickBooks.
• JPMorgan Chase has also increased its digital efforts. Last year, it began testing features like request for pay and combined WePay (a payment services provider it acquired in 2017) with its Merchant Services unit.

The bigger picture: This year’s rankings are validation for banks increasing their digital capabilities to compete with fintechs. For example, several major banks last year began testing buy now, pay later (BNPL) services—a space dominated by fintechs like Klarna and Afterpay. While fintechs have historically outshined banks in the digital department, banks are ramping up their offerings to keep consumers and merchants tied to their business and attract new ones.

Related content: Check out our analysis from J.D. Power’s 2021 US Merchant Services Satisfaction Study for a more in-depth comparison of results.