ProPay Overall Rating
Review Updated: 10/29/2013
Founded in 1997 and based in Lehi, Utah, ProPay (propay.com) is a merchant account provider that shares attributes of both a traditional credit card processor and services like PayPal, Stripe, 2Checkout, and Google Checkout. ProPay was acquired by TSYS in late 2012 and now operates under the ProPay name as “a TSYS Company.”
ProPay’s similarities with a traditional merchant account include the ability to swipe credit cards at the point of sale, which can result in a lower processing fee, as well as the ability to accept payments for other purposes such as e-commerce and mail order/telephone order sales. Unlike a traditional merchant services provider, ProPay does not support the use of desktop credit card terminals like the type used at most retailers. However, like PayPal and 2Checkout, ProPay has an easy signup process and is open to non-traditional merchants such as direct sellers and micro-merchants. Like PayPal, ProPay acts as its own holding account and merchants must manually transfer their money to a linked checking account.
ProPay offers several ways to accept credit card payments, including mobile options. The first,” ProPay Jak,” is a service similar to that of GoPayment, Square, and Pay Anywhere in which merchants can use a card reader with a smartphone to accept credit cards. However, unlike the other three options, ProPay Jak includes a variety of other services which are not offered by its competitors, such as access to a virtual terminal.
The second mobile option that ProPay offers uses a small skimming device called the “ProPay FLASH Card Reader” (formerly known as the MicroSecure Card Reader) which allows merchants to collect credit card data by swiping the card’s magnetic strip and storing it for later charging when the merchant has access to an internet-connected computer. Merchants can also use the ProPay FLASH device to process real-time sales through ProPay’s virtual terminal once the device is connected to the Internet. Lastly, ProPay offers an automated phone system where merchants can call in to process real-time sales.
ProPay Sales & Marketing Tactics | A+
ProPay does not use any deceptive marketing or sales tactics that were apparent to this reviewer. The entire signup process is handled in-house and on the company’s website. Additionally, ProPay’s displayed pricing is transparent and does not hide fees. We are not seeing any merchant complaints at this time that accuse the company of deceptive advertising strategies.
ProPay Costs & Contract Terms | A-
One standout benefit of ProPay is that the company has a month-to-month contract and no cancellation fee. ProPay also has no monthly minimum processing fees, and merchants can eliminate all other monthly fees by keeping their accounts active and opting for electronic statements. We have found some evidence that the company charges an annual fee of $49, although it is unclear whether this fee is charged to all merchants.
Since this review’s initial publication, ProPay has made it difficult to locate the pricing of all of its services on its website; however, the company offers simple processing fees with a single rate that is set by how the card is transacted, either typed-in or swiped through a card reader. For instance, the company’s “Merchant Account” page currently lists a fixed swiped rate of 2.60% and a fixed keyed-in rate of 3.40%, and we have found no merchant complaints indicating that these fees are deceptively quoted. One exception to this rate structure is American Express Cards, in which the rate is the same under both transaction types. Fees and rates also vary based on the account type the merchant chooses with ProPay. Additionally, ProPay can customize rates for high-volume businesses. This page appears to be ProPay’s current pricing for its merchant account option.
ProPay’s rates and fees are competitive with most traditional three-tier merchant account setups, and probably less expensive in many cases. However, ProPay is more expensive versus Interchange Pass-through rate pricing.
ProPay Complaints & Service | A
ProPay has very few complaints for a company of its size. Many of the complaints that it does have appear to be filed by merchants that have a limited understanding of how credit card processing fees are assessed and would experience the same issues with any provider.
The one common theme in the legitimate complaints filed against that company is that ProPay has a tendency to hold funds and freeze accounts if a merchant starts making charges that differ from its normal transaction history, or if the merchant suffers a Chargeback. It some cases, it appears that ProPay will suddenly terminate an account without notice, thereby leaving the merchant without a way to accept credit cards. Understandably, these same merchants complain of receiving poor customer service.
ProPay appears to be very cautious about how much risk it is willing accept from a merchant, so higher risk businesses may want to look elsewhere. It is also wise to avoid chargebacks at all costs if you choose to go with ProPay.
Generally, we do not count complaints regarding fund holding against a providers unless there is a clear pattern of abuse or deception. It is a standard industry practice for providers to hold funds in the event they suspect high risk transactions or fraud. In ProPay’s case, it appears that it is operating within normal guidelines when choosing to hold funds. To learn more about fund holds, see this post: Why Credit Card Processors Hold Funds.
ProPay BBB Report | A- (CPO Adjusted)
As of this update, ProPay is accredited with the Better Business Bureau (BBB) and holds an “A+” rating. The company has 33 reports filed in the last 36 months versus 38 reported as of the last update of this review. Of the 33 complaints, 20 are due to problems with products and services, 11 with billing and collections disputes, and two regarding advertising or sales issues. All complaints were resolved to the merchants’ satisfaction except one. We have adjusted the BBB’s rating for the purposes of our review based on our own rating criteria.
ProPay is a great credit card processing option for small businesses looking to avoid a traditional merchant account or looking for ease-of-use and simple pricing. ProPay’s services are particularly well suited for mobile merchants, e-commerce merchants, service-based businesses, mail/telephone order companies, and single register retailers that have internet access. ProPay does not supply traditional credit card terminals or POS systems, so it may not be the best option for restaurants or busy retailers. High risk merchants and those that have a higher chance of chargebacks may want to look elsewhere because ProPay appears to act swiftly by freezing accounts that it suspects to be a threat for losses.
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