Electronic Merchant Systems (emscorporate.com) 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 two entities is a direct processor. Electronic Merchant Systems is a registered ISO/MSP of BMO Harris Bank, Chesapeake Bank, and Merrick Bank with headquarters located at 5005 Rockside Road, Penthouse 100, Independence, Ohio 44131. Dan Neistadt is listed as the company’s CEO.
Sales & Marketing
Key Points - Sales & Marketing
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Electronic Merchant Systems appears to utilize telemarketing and an ISO and 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. 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.
Electronic Merchant Systems Marketing Example
Costs & Contract
Key Points - Costs & Contract
|Early Termination Fee||$595|
|PCI Compliance Fee||$75 Semi-Annually|
|Equipment Lease Terms||Variable|
The standard Electronic Merchant Systems contract (available below) 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.
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. See the Electronic Merchant Systems Application.
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Complaints & Service
Key Points - Complaints & Service
|Total Online Complaints||55+|
|Live Customer Support||Yes|
|Most Common Complaint||Hidden Fees|
We are currently able to locate over 55 Electronic Merchant Systems negative 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 low-to-moderate number of complaints for its size and time in business, the consistency of the issues noted by complainants have lowered its grade severely.
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. 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.
Key Points - BBB
|Product & Service Complaints||68|
|Billing & Collection Complaints||39|
|Advertising & Sales Complaints||8|
|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.
As of this review, the Better Business Bureau is reporting an “A+” rating for Electronic Merchant Systems with 119 complaints filed in the last 36 months. Of the total, 68 are regarding problems with products and services, 39 with billing and collection disputes, eight with advertising and sales issues, and four with delivery problems. The company has successfully resolved 39 of these complaints, while the remaining 80 either were resolved to the dissatisfaction of the merchant or did not receive a final evaluation from the merchant. There are also 19 negative reviews, one positive review, and one neutral review filed with the BBB. 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.”
About 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. Schedule a Consultation with PhillipSchedule a Consultation with Phillip
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