Three common merchant services pitfalls—and how financial institutions can avoid them

The payment world moves fast, and for financial institutions (FIs) that want to grow deposits, deepen business relationships and remain competitive, simply offering merchant services isn’t enough. FIs need a merchant program that works, but too often fall into traps that can limit program performance and hurt client satisfaction.

Here are three of the most common pitfalls FIs can face when it comes to their merchant service offerings, and how to avoid them.

Pitfall #1: Outdated or limited technology

The issue
Business owners expect modern, seamless experiences, whether they’re checking sales on their phone or accepting payments curbside. Many FIs, however, are still partnered with legacy systems or vendors that haven’t kept pace with today’s omnichannel demands.

The result?
Merchants look elsewhere. Your institution loses credibility revenue, and long-term business relationships.

How to avoid it
Choose a merchant services partner that prioritizes innovation and integration. Look for solutions that offer:

• Mobile and contactless payments
• Ecommerce and recurring billing support
• Real-time reporting dashboards
• Scalable options for microbusinesses to multi-location franchises

A modern tech stack helps you attract and retain today’s entrepreneurs, without requiring you to build the infrastructure yourself.

Pitfall #2: Lack of internal training and buy-in

The issue
Even the best merchant solution can fall flat if your front-line staff doesn’t understand it—or worse, doesn’t believe in it. When merchant services are treated as an afterthought or an “add on,” adoption will likely suffer.

The result?
Inconsistent messaging, missed sales opportunities and weak client onboarding.

How to avoid it
Empower your team with the right tools and training. Your merchant services partner should provide:

• Onsite or virtual staff training
• Product cheat sheets and sales guides
• Clear referral workflows
• Incentives and regular performance feedback

When your team understands the value of the product, they can confidently position it as part of your core business offering, not just as a bolt-on.

Pitfall #3: Low merchant adoption and engagement

The issue
It’s one thing to offer merchant services, but it’s another to drive real engagement. Without the right rollout strategy, many FIs struggle to see traction or long-term merchant satisfaction.

The result?
Dormant accounts, lost revenue share and low ROI on your investment.

How to avoid it
Adoption starts with alignment. Your merchant services strategy should tie directly into your FI’s business banking goals. Avoid generic programs and work with a partner that can:

• Co-build a go-to-market plan specific to your client base
• Provide co-branded marketing support
• Deliver proactive merchant retention outreach
• Offer regular performance reviews and optimization sessions

Ongoing engagement drives long-term growth—and it starts with a partner who treats your FI like a strategic ally, not just a reseller.

A strong merchant services program can be a growth engine for your FI, but only if it’s set up to succeed. By avoiding these common pitfalls and working with a provider that values partnership, education and modern technology, your institution will be empowered to turn merchant services into a true differentiator.