Electronic Merchant Systems (emscorporate.com) is an Ohio-based merchant account provider that started business in 1987. The company specializes in providing a variety of merchant services to U.S. small businesses, including credit card processing, debit card processing, merchant cash advances, electronic check processing and gift card programs. Electronic Merchant Systems is owned by or appears to also do business as the Francis David Corporation, and it seems that one of these entities is a direct processor. Electronic Payment Systems is a registered ISO/MSP of Chesapeake Bank and Merrick Bank with headquarters located at 5005 Rockside Road, Penthouse 100, Independence, Ohio 44131.
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
Electronic Merchant Systems appears to utilize telemarketing and a sub-ISO and Independent Agent program to advertise its services. These hiring practices tend to receive reports of poor training and a focus on high commissions, and this company is no exception. We are able to locate numerous Electronic Merchant Systems complaints that accuse agents of neglecting to disclose important fees and contract provisions such as service agreement length, cancellation fees, and lease terms. Some merchants also report aggressive or high-pressure sales tactics by agents. There are complaints posted by current and former employees of the company who claim that these practices are allowed (if not encouraged) by the company.
Electronic Merchant Systems Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||$75 semi-annually|
The standard Electronic Merchant Systems contract (available below) is an 18-month agreement with automatic renewal for another 18 months, an early termination fee of $595, a monthly $50 PCI non-compliance fee, a semi-annual “technology upgrade and update” fee of $75, a monthly minimum fee of $25, and tiered pricing. The “technology upgrade and update” fee likely takes the place of a PCI Compliance fee, but it is poorly defined. Overall, these contract terms are very expensive when compared to industry averages.
We have also located a handful of merchant complaints indicating that Electronic Merchant Systems signed them up for expensive equipment leases through Lease Finance Group, a DBA of Northern Leasing. Although it may be that independent sales agents were responsible for this rather than the company itself, any partnership with Northern Leasing should be a red flag for merchants. Northern Leasing and its alternate names have a very poor reputation within the industry.
|Key Points – Complaints & Service|
|Live customer support:||Yes|
|Most common complaint:||Hidden fees|
We are currently able to locate approximately 40 Electronic Merchant Systems negative reviews, many of which outright accuse the company of being a ripoff or a scam. Common complaints among merchants include misrepresentation of rates, expensive contracts and equipment leases, high-pressure sales tactics, poor customer service, high termination fees, and poor treatment of employees. Although the company is technically showing a low-to-moderate number of complaints for its size and time in business, the consistency of the issues noted by complainants have lowered its grade severely.
There are several complaints from merchants stating that Electronic Merchant System hiked their monthly fees without notification just as their contract renewed for another term of anywhere from one to four years. Merchants were forced to continue with the higher fees or cancel and incur a large cancellation penalty. One merchant also reported that he had to pay a $1,500 cancellation penalty for a terminal lease because Electronic Merchant Systems threatened to sue if he didn’t. In another complaint, an Electronic Merchant Systems representative responded publicly and condescendingly to a merchant complaint by accusing the merchant of being a liar. The Electronic Merchant Systems website lists a dedicated phone support number, which clearly does not do an effective job of resolving merchant issues.
|Key Points – BBB Report|
As of this review, the Better Business Bureau (BBB) is reporting a “B-” rating for Electronic Merchant Systems with 89 complaints filed in the last 36 months. Of the total, 54 are regarding problems with products and services, 30 with billing and collection disputes, three with advertising and sales issues, and two with delivery problems. All but five of the complaints have been resolved to the merchant’s satisfaction, though the BBB states that EMS made a good faith effort with the unresolved reports. There are also 10 negative reviews, six positive reviews, and one neutral review filed with the BBB. In our view, the company’s high number of complaints is only partially counterbalanced by its high resolution ratio. We have therefore slightly adjusted the BBB’s rating to a “C.”
Electronic Merchant Systems rates as a substandard merchant services provider according to our rating criteria. The company has a moderate number of complaints outside of the BBB and a high number of complaints with the BBB, but its expensive contract terms are the largest factor lowering its score in this review. Merchants are advised to read their contracts with great care to ensure that they will not be paying excessive or bogus fees.
This review was originally published on 6/20/11 and was last updated on 9/3/14.
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