First Data Review


Overall Rating Breakdown
Sales & Marketing Tactics
Costs & Contract Terms
Complaints & Service
BBB Rating

First Data Overall Rating

C- Credit Card Processor Rating


Jump to: Sales & Marketing | Costs & Contract | Complaints & Service | BBB Complaints

First Data Overview

First Data Logo

First Data Logo

First Data Corporation (firstdata.com) is a large electronic payment processing company headquartered in Atlanta, Georgia. The main bread and butter of this company is providing back end card processing services to Independent Sales Organizations (ISOs), banks and other merchant account providers. As one of the largest payment processors in the industry, First Data’s (FDIS) offerings include merchant account processing services for credit and debit cards, private-label cards, gift cards, payroll, and other prepaid card offerings. The company also offers various other services including fraud protection and authentication solutions, merchant cash advance, and electronic check acceptance services through TeleCheck.

Unlike most merchant account sales organizations, First Data is a direct processor with Visa & MasterCard. While the company does have a small direct sales force, First Data relies primarily upon partnerships with third party resellers and sub-ISOs to sell its credit card processing services. Two of these resellers include a couple of the largest banks in the United States, Wells Fargo Merchant Services and Bank of America Merchant Services. These two partnerships along with thousands of others make First Data one of the largest, if not the largest, processor in the world. In fact, it is said that nearly 3 out of 4 credit card sales in the U.S. are processed by First Data.

First Data Sales & Marketing Tactics | C-

Key Points – Sales & Marketing 
Uses independent resellers? Yes
Promotes deceptive rate quotes? No
Discloses all important terms? No

As stated earlier, First Data primarily markets its services through an army of resellers and partners. The company has its own direct sales offices, but they make up a tiny fraction of First Data’s overall sales force. The company has suffered considerable damage to its reputation due to many of its resellers using misleading sales tactics and deceptive marketing. First Data appears to do a poor job of policing its ISOs and eliminating bad partners.

Aside from its heavy use of resellers, First Data does not appear to use misleading advertising or deceptive marketing through its own sales force; however, there are a considerable amount of complaints that suggest the use of deceptive sales practices among its agents. It appears that many agents fail to mention buried contract commitments, e.g. lease terms for point-of-sale equipment provided by First Data.

First Data Marketing Example

[Related: Get quotes from a provider with “A” rated sales practices]

First Data Costs & Contract Terms | C

Key Points – Costs & Contract Terms
Swiped rate: Variable
Keyed-in rate: Variable
Termination fee: Up to $495
PCI compliance fee: Variable
Equipment lease: 48 mos./non-cancellable

As a direct processor, First Data sets wholesale rates slightly above Interchange and then allows resellers to markup the wholesale costs in order to sell credit card processing services to merchants at a profit. It’s a popular misconception that going directly to First Data, instead of a First Data reseller, will result in lower processing fees. In some cases working directly with First Data may result in rock-bottom rates (see “Fee Sweep” to learn how to negotiate for the best rates), but often the company’s direct sales channel is just as expensive its resellers.

Pricing and fees of a First Data merchant account will vary by reseller, agent, and merchant. First Data allows resellers to choose between selling month-to-month contracts or service agreements ranging from one to five years. Cancellation fees and contract conditions can vary widely by reseller, so merchants are advised to read their contracts carefully. Some merchants also report non-cancellable, multi-year leases for point-of-sale equipment offered by First Data Leasing. Generally speaking, First Data will enforce the contract terms set by a reseller as long as they fit within the company’s sales policies.

Click here to see a copy of the standard First Data program guide
First Data Program Guide

First Data Complaints & Service | D

Key Points – Complaints & Service
Total complaints: 550+
Live customer support? Yes
Most common complaint: Hidden fees

When it comes to customer service, First Data has the ability to service its merchant account customers directly via a 24/7 customer service call center, or resellers can provide their own customer service. First Data also offers customer support options for resellers at an additional cost to the reseller. In a few reviews, merchants have reported confusion regarding identifying the company responsible for servicing their account.

First Data has a high volume of complaints, with over 250 in the comment section below and over 300 on Ripoff Report. Most of these complaints report deceptive sales tactics used by some resellers and agents, poor customer service, inability to resolve disputes over billing and service commitments, and omissions of important contract terms prior to account setup. Additionally, several merchants who reported signing up through resellers stated that they were placed into contracts directly with First Data or into equipment leases without proper disclosure of important terms & conditions (for instance, non-cancellable leases for point-of-sale equipment). Customer service to resolve these issues may vary depending on which aspect of the contract requires attention.

[Related: Best Credit Card Processors for Service]

First Data BBB Report | D-

Key Points – BBB Report
Product/service: 471
Billing/collection: 339
Advertising/sales: 135
Guarantee/warranty: 1
Delivery: 2
Other: 1

The Better Business Bureau (BBB) is clearly having difficulty distinguishing between First Data itself, its independent sales channels, and its resellers. There are numerous profiles on the BBB website that are clearly just resellers of First Data, yet the BBB attributes these pages to First Data. On the actual report for First Data’s corporate headquarters, the BBB awards a “D-” rating overall. The low score (down from an “A+” at the time of our last update) is due to the company’s accumulation of 954 complaints in the last three years (up from 810 since our last review) and its response to these complaints. The majority of complaints are due to billing and collection issues, problems with products & services, and advertising & sales issues. Of the complaints, 78% were resolved to the merchants’ satisfaction through the BBB, while one complaint went completely unresolved. This lone unresolved complaint appears to be a major contributing factor to First Data’s lowered score.

Bottom Line

Since First Data primarily acts as a “behind-the-scenes” card processor for most resellers, a merchant can have completely different experiences depending on which reseller was chosen. Working directly with First Data may not be advisable for small merchants since it doesn’t guarantee lower rates and First Data’s direct merchant support is notoriously poor. That being said, First Data does have the ability to offer lower rates than any of its resellers and may be a good fit for high volume businesses.

This review was originally published on 1/3/11 and was last updated on 7/7/2014.

Leave your comments about First Data in the comment section below:


First Data Review

Rated 1.625 Out of 5 Stars
Reviewed by Phillip Parker
Reviewed on 2014-11-21 14:42:16

First Data (firstdata.com) suffers from a considerable amount of negative reviews largely because of how it markets it credit card processing services. Most complaints relate to issues with fees, poor customer service, and non-disclosure of… Learn more in this First Data review.

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About the author

Phillip Parker

Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded CardPaymentOptions.com to help merchants enact positive change in the credit card processing industry.



 
Phillip can help you find an ethical and honest processor that will offer you great rates. Click here to request a free provider consultation.

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334 comments

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  1. Gary Coe

    I joined first Data early last year, 2014 with rates that sounded competitive. However, there were hidden fees that showed up within 30 days which nearly broke me. I am talking an extra thousand or so over the normal rate per month. I switched after about 4 months which meant I had to buy all new POS equipment as well. I just paid their hidden $500 fee for early cancellation and will never deal with this horrible dishonest company again. they are very dishonest and hard.

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  2. Connie Williams

    I have only been with first data for a couple of months. I have a very small business and was hoping that I could generate more revenue if I were able to accept credit cards. I went to Wells Fargo to set up a business account and was talked in to doing a merchant services account and leasing the credit card processing equipment through First Data. In the 2 months that I have had this service I have processed 1 charge for $60 and paid $218 in set up and processing fees. I called Wells Fargo and they want to charge me a $500 cancellation fee as well as First Data is not willing to release me from my lease agreement for the credit card processing equipment that I am willing to return to them in perfect condition. But they are not willing to discuss the cancellation of the lease at all. They said that I signed a non-cancellable lease agreement and that it is not cancellable.
    Their customer service is awful, he was not at all helpful when I talk with them on the phone.

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