Electronic Merchant Systems Overview
Payment Processing for U.S.-Based Merchants
Electronic Merchant Systems is an Ohio-based merchant account provider that first opened in 1987. The company specializes in providing a variety of merchant services to U.S. small businesses. Electronic Merchant Systems is owned by or appears to also do business as the Francis David Corporation, and it seems that one of the 2 entities is a direct processor. In addition to conventional credit and debit processing, Electronic Merchant Systems advertises credit a surcharge program and cryptocurrency processing.
Headquartered in Ohio
Electronic Merchant Systems is a registered ISO/MSP of BMO Harris Bank, Chesapeake Bank, Esquire Bank, and Merrick Bank with headquarters located at 250 W. Huron Rd., Suite 400 Cleveland, OH. Dan Neistadt is listed as the company’s CEO.
Electronic Merchant Systems Review Table of Contents
- Costs & Contract: Electronic Merchant Systems offers an 18-month contract with an early termination fee of $595.
- Complaints & Service: Electronic Merchant Systems has received more than 100 public complaints.
- BBB Rating: Electronic Merchant Systems has an “A+” rating and has received 76 complaints and 93 reviews in the past 3 years. The company has been accredited with the Better Business Bureau since 2017.
- Sales & Marketing: Electronic Merchant Systems hires independent sales agents and has received a moderate number of complaints about its sales practices.
- Rates & Fees: How Merchants Got The Best Rates With Electronic Merchant Systems
Types of Businesses Served
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Electronic Merchant Systems Rates, Fees, and Costs
|Swiped Rate||1.00% - 4.99%|
|Keyed-in Rate||1.00% - 4.99%|
|Monthly Minimum Fee||25%|
|Early Termination Fee||$595|
|PCI Compliance Fee||$75 Semi-Annually|
|PCI Non-Compliance Fee||$50 Per Month|
|Equipment Lease Terms||48 Month (locked)|
Costly Contract Terms
The standard Electronic Merchant Systems contract 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 and are far from competitive with the cheapest merchant accounts available.
Avoid Equipment Leases
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.Are you happy with your Electronic Merchant Systems fees? Tell us about them before your go!
Electronic Merchant Systems Complaints & Customer Reviews
|Total Online Complaints||100+|
|Live Customer Support||Yes|
|Most Common Complaint||Hidden Fees|
Common Complaint Themes
We are currently able to locate over 100 negative Electronic Merchant Systems 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 moderate number of complaints for its size and time in business, the consistency of the issues noted by complainants have lowered its grade severely. Furthermore, the number of negative reviews is far outshined by positive ones. On Google-hosted reviews alone, the ratio of positive to negative complaints is about 750:50.
Serious Cause For Concern
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.
Electronic Merchant Systems Lawsuits
In March 2015, the Consumer Financial Protection Bureau (CFPB) filed a complaint against Global Payments, Electronic Merchant Services, Frontline Processing, and Pathfinder Payment Solutions in connection with a “phantom debt” scheme that allegedly attempted to collect nonexistent debts from consumers. The CFPB’s complaint alleges that these four payment processors facilitated transactions for multiple debt collection companies owned by Marcus Brown and Mohan Bagga. According to the complaint, these debt collection companies used robocalls to target millions of consumers, who they then threatened in order to obtain debt payments that were not actually owed or that didn’t even exist. The CFPB further alleges that Global Payments “ignored numerous red flags of the debt collectors’ illegal conduct, including consumer disputes that described the scheme and communication problems with the debt collectors.” A federal judge dismissed the case in August 2017 due to the CFPB’s failure to adhere to his instructions.
Electronic Merchant Systems Support Options
The Electronic Merchant Systems website lists a dedicated phone support number, which clearly does not do an effective job of resolving merchant issues in-house. Merchants can expect better assistance from a top-rated credit card processor for customer support.
Electronic Merchant Systems BBB Rating Summary
Key Points - BBB
|Product & Service Complaints||46|
|Billing & Collection Complaints||26|
|Advertising & Sales Complaints||4|
|Guarantee & Warranty Complaints||0|
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
Over 75 Complaints
As of this review, the Better Business Bureau is reporting an “A+” rating for Electronic Merchant Systems with 76 complaints filed in the last 36 months. The current complaint total is a respectable decline from the 93 filed against the company just 3 months ago. Of the total, 46 are regarding problems with products and services, 26 with billing and collection disputes, and 4 with advertising and sales issues. The company has successfully resolved 27 of these complaints. The remaining 49 complaints were answered by the company but did not receive a final response from the merchant who left the initial complaint.
What Merchants Say
In addition to those 76 complaints, Electronic Merchant Systems has also received 97 informal reviews. While 74 reviews are positive, the remaining 23 are negative. The most recent negative review reflects multiple issues included a costly early termination fee and held funds:
Where do we begin. Their processing rules and rates are ridiculous. After your account is closed they hold your funds for 210 days. In addition to that they charge you a $500 account closure fee. The customer service is the worst, just to answer basic account questions your transferred to about 3/4 agents depending on the question you have about your account. I just recently got of the phone with one of their reserve agents, (Fitten, Malachi), as Im giving him my account details he was having a conversation and laughing with someone in the background. How professional was this!? I was frustrated, Im calling about a serious matter but He did not see it the same. I will never process with this company again and highly recommend other small business to go elsewhere.
Merchants who find themselves in these situations should research the proper steps to cancel their merchant account without paying a fee and understanding how to make a payment processor release their funds.
An Adjusted Rating
In our view, the company’s high number of complaints does not merit an “A+” rating. We have therefore adjusted the BBB’s rating to a “C.”
Truth In Marketing & Advertising
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Electronic Merchant Systems appears to utilize telemarketing and an ISO/Independent Agent program to advertise its services. These hiring practices tend to generate reports of poor training and a focus on high commissions, and EMS 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.
What Agents Say
As a final note, there are a few comments posted by current and former employees of the company who claim that these practices are allowed (if not encouraged) by the company. Taken as a whole, these factors warrant a “D” rating in our opinion. If you suspect that an EMS representative has snuck hidden fees into your contract, we recommend seeking a third-party statement audit.
Electronic Merchant Systems Marketing Example
About Phillip Parker
Thank you for reading my review. I hope that it has helped you with your research.
Why I'm Qualified to Write About Credit Card Processing and Merchant Account Services
I'm a former credit card processing sales director who left the industry because I didn't like how it takes advantage of small business owners. It feeds like a leech on businesses and thrives by imposing fees that are nearly impossible to comprehend. Seeing a need for change, I left and built this website help business owners better understand the industry, research merchant services providers, and get refunds of excessive merchant account fees. My experience of working "behind the curtain" in the industry, and using that knowledge for good, has resulted in millions of dollars returned to hard-working small business owners as well as enterprise-level companies.
From the time that I starting working in the merchant services industry to when I left to create this website, I've been on the pulse of payments for nearly 15 years. It didn't seem fair to keep this "insider" knowledge to myself. To lift the fog, I've reviewed hundreds of companies, read thousands of user reviews, and learned the pricing tricks of every provider. If you have questions about credit card processing, you can find the answers on this website.