What to Know Before Getting Started
Starting a New Business?
Selecting a credit card processor is often more complicated than most people expect. How much should you be paying in fees? Should you lease or buy equipment? Should you be locked into a service agreement for anything length of time? These considerations and several others are imporant to understand before signing up with any merchant account provider. Mistakes are easily made and can be very costly to your business. Along with seeing our top choices for payment services below, be sure to checkout this post to avoid common traps in the merchant services industry.
Considerations For Current Business Owners
Changing merchant accounts can be an expensive, complicated, and time consuming process. Are you really going to save as much as promised? Do you need to buy to new equipment or sign new lease agreements? Will there be other less accountable costs such as those associated with employee retraining? Before selecting one of our choices below, you may want to consider renegotiating your fees with your current payment processing vendors using the help of a contingency-compensated consultant. It can result in a dramatic decrease in costs without the pains of switching. In some cases business owner have also obtained substantial refunds of prior overcharges along with saving thousands in future processing costs. See this post to learn more about this little-known alternative to changing merchant account provider.
Watch Out for These Credit Card Processors
The easiest way to save money on credit card processing is to find the best merchant accounts, but there are also plenty of good reasons to keep tabs on the worst merchant account providers. The credit card processing industry is full of scam companies that seemingly pop up out of nowhere. These processors are willing to say or do anything to make a quick buck at the expense of small business owners. Bad processors are notorious for duping desperate sales agents into working on a commission-only basis and then training those agents to deceive merchants into signing long-term, expensive contracts with outdated equipment and poor customer support. To make matters worse, these ripoff companies appear, disappear, and rebrand too often for any one merchant to keep them all straight.
Our Rating Criteria
To help you steer clear of bad deals, we’ve put together the following list of the worst merchant accounts on CPO. These companies have all received “F” or “D” ratings in their CPO reviews due to a combination of some or all of the following factors:
- Deceptive sales tactics
- Undisclosed rates and fees
- Expensive monthly, annual, and early termination fees
- Non-cancellable or long-term contracts and leases
- Numerous public complaints from current and former merchants
- Numerous public complaints from current and former employees
- Reports of poor customer support
- Public interactions with merchants or with CPO that do not reflect favorably on the company
- A poor rating with the Better Business Bureau
- Proven or suspected affiliations with other ill-reputed companies
You can learn more about how we determine our ratings in our CPO Rating Criteria.
Is Your Provider On This List?
The available evidence indicates that you are likely to receive an unsatisfactory outcome with these companies. If you’ve been contacted by a company on this list, we strongly recommend that you conduct some research on the company’s reputation within the industry and consider other options before signing a contract. If you’ve already signed up with one of these providers, we recommend renegotiating your contract as soon as possible. It may end up saving you hundreds or even thousands of dollars in the long run.
Our unbiased articles are supported in part by helping you find highly reviewed merchant accounts. You can learn more here.
Why These Merchant Account Providers
Northern Leasing Systems
Currently settling a second lawsuit filed by the New York State Attorney General in just the past five years, Northern Leasing Systems (northernleasing.com) is a credit card processing equipment lease provider rather than a full-service merchant account provider. Despite its narrow focus on equipment, the company is responsible for hundreds of merchant complaints due to its standard practice of selling four-year, non-cancellable equipment leases.
Northern Leasing typically allows any sales agent with any merchant account provider to sell its equipment leases as an addendum to their standard merchant account contracts. In fact, many of the companies on this list are known to provide equipment leases through Northern Leasing. This causes some confusion among merchants who don’t realize that they’re signing a contract with two separate entities, and that confusion often turns to rage once merchants learn that Northern Leasing’s leases run for four years (one year longer than the standard multiyear merchant account contract), cannot be cancelled without paying the full sum of the four-year term, and will almost always end up charging merchants an amount that is several times larger than the actual purchase price of the equipment. Details of the NY Attorney General’s settlement can be seen here.
Lease Finance Group
Along with MBF Leasing and Golden Eagle Leasing, Lease Finance Group (signaturebankonline.com/leasing/) is a subsidiary of Northern Leasing Systems that engages in precisely the same style of equipment leasing as its parent company. Lease Finance Group is the second-most active brand used by Northern Leasing and has been cited in far more merchant complaints than its other affiliated subsidiaries.
Lease Finance Group is also named in the New York Attorney General’s lawsuit against Northern Leasing and is known to offer the same long-term, non-cancellable, exorbitantly priced equipment leases as Northern Leasing. It has an “F” rating on CPO and an “F” rating with the BBB.
Main Street Processing
Main Street Processing is a DBA of Datalink Bankcard Services that also sells under the name “Tier 1 Processing.” We first discovered this processor as a result of a large influx of complaints that all described the same unethical slamming tactics. These complaints have come and gone since our initial publication of Main Street Processing’s review, but they all consistently describe telemarketers who pose as the merchant’s current processor.
There is also recent evidence to suggest that Main Street Processing has started doing business as “Wholesale Banc” and “Challas Group.” These companies share personnel with Datalink Bankcard Services and have started to accumulate similar complaints, so they may find themselves on this list sooner rather than later.
Other Merchant Account Options
The providers in this section may not have been researched as thoroughly or may lack a quality that prevented them from being listed above. We have listed them here to provide a broader view of potential merchant account options. Are you a decision maker with your company and believe that you should be listed below? Tell us here.
Although its website is no longer active, ElitePay Global (elitepayglobal.com) ranks as the most unethical and least merchant-friendly provider that CPO has ever reviewed. We have received over 190 merchant complaints about ElitePay Global and its affiliated businesses, and nearly all of these complaints describe aggressive sales tactics, deceptive rate quotes, extremely expensive long-term leases, and unreachable or unhelpful customer service. A significant number of former employees have also contacted CPO to describe a highly unprofessional work environment that actively trains sales representatives to misinform merchants.
These reports alone would be enough to make ElitePay Global one of the lowest-rated providers on CPO, but the company further distinguished itself by filing a trademark infringement lawsuit against CPO in April 2014. It is our firm belief that this lawsuit was filed in an attempt to suppress our critical review of the company. In June 2015, the United States District Court for the Central District of California issued a summary judgment in favor of CPO, denying ElitePay Global’s claim of trademark infringement. CPO may have prevailed in the lawsuit, but we view ElitePay Global’s behavior as a chilling firsthand example of the lengths to which credit card processors will go to prevent independent reviewers from exposing their unethical tactics.
Payment Systems Corporation
Payment Systems Corporation is a seemingly defunct merchant account provider located in Los Angeles, California. Under normal circumstances, we would not place an inactive company on this list, but a merchant has speculated in the comment section of our review that the company may have rebranded under the names Smart Choice Payments, First Choice Payments, and North American Processing Solutions.
At the height of its activity, Payment Systems Corporation received a large number of merchant complaints related to expensive equipment leases through Northern Leasing, deceptive sales tactics, unexpected fees, and long contract terms. In fact, despite Payment System’s Corporation’s inactive website, the company is still showing over 180 complaints and an “F” rating with the Better Business Bureau.
Ladco Global Leasing Solutions is an equipment leasing company that appears to be the preferred equipment leasing partner of Elavon, one of the largest direct credit card processors in the world. Ladco Leasing’s standard equipment lease terms are nearly identical to those offered by Northern Leasing Systems and its subsidiaries: multiyear, non-cancellable, inconsistently disclosed by agents, and far more expensive than the actual purchase price of the equipment.
Ladco’s unclear status as a potential subsidiary or affiliate of Elavon makes it difficult to determine how much of the company’s marketing and customer service is managed by Elavon. Nevertheless, we have located over 200 merchant complaints that express frustration with the company’s ironclad lease terms and excessive cost.
First Data Global Leasing
First Data Global Leasing is the credit card processing equipment leasing branch of First Data, one of the world’s largest direct credit card processors. Like Ladco Leasing and Elavon, First Data Global Leasing is responsible for the vast majority of non-cancellable equipment leases sold to First Data merchants. There are hundreds of merchant complaints that describe insufficient disclosure of lease terms and outrageously high monthly lease fees through First Data Global Leasing.
First Data Global Leasing provides leased equipment both for merchants contracted directly with First Data and for merchants who have signed up with First Data resellers. First Data’s overall brand has a slightly better reputation among merchants than Northern Leasing, but First Data Global Leasing’s contract terms and customer service rate just as poorly as the worst leasing providers on CPO.
First American Payment Systems
First American Payment Systems is a Texas-based super ISO of Vantiv that has served as the parent company of some of the lowest-rated ISOs on CPO, including Eliot Management Group, Trans Tech Merchant Group, Summit Merchant Solutions, Apex Merchant Group, Trinity Merchant Group, and Certified Payment Processing. First American Payment Systems and its many resellers are known for their large teams of independent sales agents and multi-year contracts with termination fees of up to $495.
Although these brands have seen lower complaint rates in recent years (which could indicate a slowdown in business), they were at one time the most reliable sources of negative merchant feedback on our website.
iPayment is a very large California-based ISO of First Data that also acts as the parent company of CreditCardProcessing.com and Leaders Merchant Services. iPayment is known to offer a standard contract of three years with an early termination fee between $250 and $350, as well as equipment leases through First Data Global Leasing.
iPayment earns a special notice on this list due to its past attempts to remove its review from CPO, including intimidation through bullying and threats of litigation under false pretenses as well as an illegitimate DMCA claim filed with our host, which was rejected on the grounds that it was a “guise” to suppress fair use of a trademark. iPayment has not engaged in this behavior since 2015, when its conduct was prominently noted at the top of its review.
North American Bancard
North American Bancard is a large, 25-year-old Global Payments reseller based in Troy, Michigan. The company employs a large team of independently contracted sales agents and provides a standard contract of three years with a liquidated damages-style early termination fee.
North American Bancard is the parent company of the mobile point-of-sale solution PayAnywhere, which has steadily received public complaints since its launch in 2010. In May 2017, North American Bancard bought Total Merchant Services.
Leaders Merchant Services
Leaders Merchant Services is a California-based merchant account provider that operates as a fully owned subsidiary of iPayment. Our review of Leaders has been receiving merchant complaints about its tiered pricing quotes and hidden fees since 2012. Despite this, present-day complainants suggest that the company continues to use more or less the exact same sales approach that it always has.
Its contract terms aren’t much more appealing, given that it offers a standard contract of three years with an early termination fee between $250 and $350. Leaders has received a “D” rating according to our rating criteria for years.
Although its operations have been sold to Chyp, Securus Payments earns its spot on this list due to the poor reviews it rapidly accumulated while active and the number of poorly rated providers that it has been linked to, including Chyp, Payprotec, Riverside Payments, and National Paymentech. Securus and its affiliates have primarily received complaints related to pushy, aggressive sales tactics and nondisclosure of rates and equipment leases.
Securus is not an active merchant services company at this time, but its website is still up. As far as we have been able to determine, any merchants who attempt to sign up with Securus going forward will instead by served by Chyp or another subsidiary of Excel Corporation.
Spawned in the wake of Securus’s 2014 acquisition by Excel Corporation, Chyp is a Portland-based merchant account provider that has racked up a solid number of merchant complaints in just a short period of time. This is likely due to the fact that Chyp inherited nearly all of Securus Payments’s operations and staff, which has led to the same types of complaints about aggressive sales tactics and undisclosed fees.
In recent months, we have received some information suggesting that Chyp or some of its former executives have created a new company called Capital Payments. We do not yet have a review of Capital Payments on CPO, but merchants should be aware of this potential DBA.
Merchants' Choice Payment Solutions
Founded in 1989, Merchants’ Choice Payment Solutions is a Texas-based merchant account provider that was acquired by Paysafe Group in August 2017. Merchants’ Choice Payment Solutions has receive a high number of complaints that specifically accuse the company’s sales agents of “slamming,” or posing as a merchant’s current payment processor over the phone. This practice is one of the most unethical sales tactics in the industry.
Merchants’ Choice doesn’t perform better when it comes to contract terms, either, as its standard agreement is a three-year contract with a liquidated damages early termination fee. Although Merchants’ Choice doesn’t appear to have as large of a user base as some of the other processors on this list, the merchant feedback it has received more than justifies its “D” rating.
Merchant Lynx is a reseller of iPayment that is headquartered in Annapolis, Maryland. The company has received complaints that are typical of an iPayment entity, such as nondisclosure of fees, aggressive sales tactics, and expensive contract terms. The company’s contract is a three-year agreement with a termination fee of $495, and it may also come with a long-term equipment lease.
Merchant Lynx has also received a few complaints from merchants who claim that they were unable to reach a single representative of the company for months at a time. This poor customer service track record is a large part of why the company is on this list.
Appstar Financial is a merchant account provider headquartered in San Diego, California. Its review on CPO has accumulated complaints at a steady pace since its publication in 2011, and most of these complaints cite hidden fees, constant telemarketing calls, and poor support for the company’s sales employees.
Despite the regular negative feedback posted by merchants, Appstar Financial does not appear to have made any significant alterations to its practices in the years that we have been covering it. The company has accordingly maintained its “D” rating for the past few years.
Pivotal Payments is a very large ISO with significant operations in the U.S. and Canada. The company has amassed hundreds of complaints related to undisclosed fees, poor customer services, billing errors, and high cancellation fees. Many of these problems appear to stem from its vast network of ISOs, sub-ISOs, and independent sales agents.
In the past year or so, Pivotal Payments has taken some steps to improve its reputation among merchants. These efforts have had mixed results in our assessment, but the company has improved its rating to a “C.” It’s possible that Pivotal Payments could be on its way to getting off of this list, but it has quite a history to overcome.
Eliot Management Group
Eliot Management Group is one of the more active resellers of First American Payment Systems, and its reputation mirrors that of its parent company. Merchant complaints describe an employee “hiring mill” that burns through poorly trained sales reps who are motivated to sign merchants up for very expensive contract terms. These terms reportedly include a three-year contract with a $495 termination fee and a possible equipment lease.
Eliot Management Group is not necessarily a worse option than other First American Payment Systems resellers, but it has maintained a consistent complaint rate on CPO for long enough that it is a good representative of that cluster of companies.
Encore Payment Systems
Encore Payment Systems is a Texas-based merchant account provider that also operates as “Prodigy Payment Systems,” “Momentum Payment Systems,” and a Canadian branch called “MOCA Payment Systems.” The company appears to maintain the same hiring mill sales strategy across all of its brands, which has generated a moderate amount of complaints from merchants.
Encore Payment Systems appears to be phasing some of these brands out over time, but merchants should be wary of any new brand names that could pop up.
Electronic Merchant Systems
Electronic Merchant Systems is an Ohio-based merchant account provider that appears to be a subsidiary of the Francis David Corporation. The company has received a moderate amount of complaints from merchants and employees about undisclosed fees and contract terms. It offers a relatively short standard contract of 18 months, but its termination fee is $595 and long-term equipment leases are occasionally involved.
Electronic Merchant Systems was the subject of a 2015 complaint from the Consumer Financial Protection Bureau related to the company’s facilitation of a “phantom debt” scheme. A federal judge ultimately dismissed this case in 2017 due to noncompliance by the CFPB.
Future Payment Technologies
Future Payment Technologies is just one of several names for this poorly rated Texas provider, the others of which include Crescent Processing Company, Park Central Company, Merchant Processing Company, and Talus Payments. These brands are all linked by the same ownership team and upper-level executive staff, and they consistently receive high numbers of complaints from merchants regarding deceptive sales practices, expensive contract terms, and poor customer service.
In 2017, a new ownership group purchased Talus Payments, and this new team has focused on improving Talus Payments’s internal practices and public reputation. The team behind Future Payment Technologies moved on to create Clearwater Payments, which has yet to accumulate the high complaint rate that we have come to expect from them.
Skrill is a peer-to-peer money transfer service intended primarily for international money transfers. The company is an unlikely presence on this list due to the fact that it advertises to individual users rather than to business owners, but it belongs here due to its hundreds of complaints related to fund holds and slow or nonexistent customer support.
It’s likely that some percentage of Skrill users are genuinely in violation of the company’s transaction policies and have rightfully had their payments frozen, but the sheer volume of furious complaints that this company has generated in a short amount of time has prompted us to place it here.
Electronic Payment Systems
Electronic Payment Systems is an Englewood, Colorado-based merchant account provider that is almost 25 years old. The company initially received a poor review on CPO after a sales representative outright lied to us when we called them posing as a merchant. Since then, it has maintained a steady rate of complaints and never truly crawled out of the hole it dug with that initial interaction. EPS offers a one-year contract that would be somewhat competitive for the industry if it did not have an attached liquidated damages termination fee.
In 2017, the FTC filed a complaint against Electronic Payment Systems and several of its sub-ISOs alleging that the company’s employees knowingly laundered payments for a fraud scheme called “Money Now Funding.” The outcome of this complaint is still pending.
Have you had a bad experience with one of these processors? Do you know of any providers that deserve to be on this list? Let us know in the comment section below!