iPayment Overall Rating
iPayment (ipaymentinc.com) is a very large ISO of First Data that claims to provide merchant accounts to approximately 190,000+ small businesses nationwide. Founded in 2006, the company is headquartered in Nashville, Tennessee, but maintains its main operations center in Los Angeles, California. iPayment is sponsored by Wells Fargo of Walnut Creek, California, as its Acquiring Bank.
Besides processing credit and debit cards, iPayment offers a wide variety of electronic payment processing services including gift and loyalty card programs, fuel services, paper and electronic check processing, merchant cash advances, and ecommerce acceptance methods.
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
iPayment relies heavily upon third-party independent sales organizations (ISOs) and independently contracted agents to bring in new customers. This is a common marketing practice among large processors and often results in merchant complaints because the sales tactics of the ISOs and agents are very hard to control. It appears that iPayment is suffering from the typical complaints regarding this strategy, which negatively affects its rating in this section.
iPayment does not appear to directly utilize any deceptive marketing or rate quoting tactics; however, some of its ISOs and agents appear to be doing so. Merchants are encouraged to research any company offering iPayment merchant accounts before signing up.
iPayment Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||Variable|
Pricing and contract terms of an iPayment merchant account can vary based on several factors including a merchant’s business type, processing volume, and the agent or ISO setting up the account. Under most circumstances it looks like the standard contract (available below) has a service agreement of 36 months with an early termination fee that ranges from $250 to $350. Depending on the ISO or agent, however, the terms of an iPayment merchant account contract are likely to be very negotiable. Be sure to read “Fee Sweep” before engaging any merchant account provider in contract negotiation.
|Key Points – Complaints & Service|
|Live customer support?||Yes|
|Most common complaint:||Hidden fees|
iPayment has a moderate-to-high number of complaints filed online, many of which can be found in the comment section below. There are two types of complaints that dominate the reports. In the first type, the obvious sources of the merchants’ problems originate with the agents or ISOs that set up the accounts. In these complaints the common theme among merchants are reports of hidden fees, high monthly fees, non-disclosure of the service length agreement/cancellation fees, and high PCI Compliance fees. In the second type, iPayment is the source of the complaints and merchants report receiving poor service and unprofessional customer support.
Since it is our philosophy that the actual credit card processor is ultimately responsible for the agents and ISOs which represent it, we are awarding iPayment a “D” rating in this section based on these relationships.
|Key Points – BBB Report|
As of this update, the Better Business Bureau (BBB) is awarding iPayment an “A-” rating, which is surprising given the fact that the BBB report lists 432 complaints in the last 36 months, only 248 of which were resolved to the customer’s satisfaction. Complaints frequently cite billing and collection issues, product and service issues, and advertising and sales issues as the primary problems. These complaints are most likely a product of iPayment’s use of poorly monitored sales agents and the company’s lackluster customer support. For a better understanding of why we adjust BBB ratings, please see our Rating Criteria.
iPayment is suffering from numerous complaints mostly due to its marketing strategy of hiring independent agents and partnering with ISOs. The company can improve its rating by significantly reducing its future complaint count and improving its pricing and contract policies so that merchants cannot be set up in expensive long-term contracts.
This review was originally published on 2/2/12 and was last updated on 7/29/14.
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