Electronic Payment Systems Overview
Electronic Payment Systems May Have Overcharged You
If you accepted credit cards through Electronic Payment Systems or any other credit card processing company between 2017 and 2019, recent changes to the law may entitle you to refunds of certain debit card and credit card processing errors and overcharges. See this post to find out if your were among the businesses affected and to learn how you can get your money back.
Electronic Payment Systems Location and Ownership
Founded in 1994 by John Dorsey, Electronic Payment Systems is a midsize merchant account provider based in Englewood, Colorado. In addition to offering credit card processing services, Electronic Payment Systems (EPS) also provides a variety of other business financial services including a self-branded ACH payment plan service called EZ Payment Plan (formerly EPS90). This service allows merchants to offer a 90-day payment plan to customers and appears to be mentioned in many merchant complaints against the company. John Dorsey is the CEO of Electronic Payment Systems, which is a registered ISO/MSP of Esquire Bank.
Electronic Payment Systems Review Table of Contents
- Costs & Contract: Electronic Payment Systems offers a multi-year contract through Esquire Bank with an early termination fee of $295 or more.
- Complaints & Service: Electronic Payment Systems has received more than 100 public complaints.
- BBB Rating: Electronic Payment Systems has an “A-” rating and has received 19 complaints and 10 reviews in the last three years. The company has been accredited by the Better Business Bureau since 2012.
- Sales & Marketing: Electronic Payment Systems appears to hire independent sales agents and has received a moderate-to-high number of complaints about its sales practices.
- Rates & Fees: How Merchants Got The Best Rates With Electronic Payment Systems
Types of Businesses Served
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Electronic Payment Systems Rates, Fees, and Costs
|Swiped Rate||2.99% To 4.99% + $.20|
|Keyed-in Rate||2.99% To 4.99% + $.20|
|Virtual Terminal Rate||2.99% To 4.99% + $.20|
|Payment Gateway Fee||$15 Per Month|
|Wireless Access Fee||$25 Per Month|
|Monthly Minimum Fee||$25 Per Month|
|Annual Fee||$99.50 (Per Terminal)|
|Debit Administration Fee||$10 Per Month|
|Regulatory Fee||$8.95 Per Month|
|Mobile Monthly Fee||$12.95 Per Month|
|Government Compliance Fee||$6.95 Per Month|
|EMV Compliance Fee||$99.50 Per Year|
|Early Termination Fee||$295+|
|PCI Compliance Fee||$99.50 Per Year|
|Equipment Warranty Fee||$9.95 - $14.95 Per Month|
|Equipment Lease Terms||48 Month (locked)|
In our opinion, EPS’s contract includes a costly liquidated damages-style cancellation fee. A one-year service term is less than the average length for the merchant services industry, and EPS’s agents should not feel compelled to hide this fact (see the Sales and Marketing section for more on this). The company’s standard merchant agreement also discloses a multitude of additional fees as well as a high qualified rate beginning at 2.99% with a transaction fee of $0.20. Aside from the normal monthly fees and processing fees that will vary by merchant, EPS also has a $99.50 annual fee for each terminal the merchant uses, a 99.50 annual PCI compliance fee, a 99.50 annual EMV compliance fee, an $.8.95 regulatory fee, a $6.95 government compliance fee, a $25 monthly minimum fee, a mobile payments fee of $12.95 per month, a monthly administration fee of $10, and an additional $10 debit administration fee.
Other EPS Contract Terms
Another version of the company’s terms and conditions outlines a two-year agreement with an annual PCI Compliance fee of $99.50 and an early termination fee of $295 plus Liquidated Damages, so it appears that merchants can encounter various contract terms and fee structures through EPS. None of the company’s contracts we have found would compare favorably to those offered by the industry’s cheapest merchant accounts.
Virtual Terminal and Payment Gateway Pricing
In addition to its storefront payment processing services, EPS also dedicates a portion of its website that advertises its virtual terminal and payment gateway services. However, pricing on either of those services is not disclosed other than the company’s qualified rate of 2.99% plus $0.20. The company’s merchant agreement does disclose a $15 monthly gateway fee and a $25 wireless access fee. Additional rates and fees, including gateway fees, technical support fees, batch fees, and additional transaction rates typically apply to these e-commerce services.
Long-Term Equipment Leases
EPS also appears to lease credit card processing equipment through Northern Leasing Systems and First Data Global Leasing. Merchants have reported extremely high monthly fees for the equipment and that the leases are non-cancellable for 48-month terms. The company also charges a terminal warrant fee of $9.95 for a single unit or $14.95 for multiple units. Business owners are advised to fully understand the terms of any proposed equipment leases before signing any documents and to purchase the equipment outright rather than a lease if they have the funds to do so.
High Rates, Excessive Fees, and Equipment Leases Result in an “F” Overall
The EPS merchant agreement discloses a multitude of red flags. First and foremost, the company’s qualified rate for transactions begins at 2.99$, which is much higher than what other merchant accounts charge. The excessive amount of seemingly redundant fees is another huge cost for merchants. Lastly, long-term equipment leases add further monthly charges to those already abundant. For these reasons, EPS receives an “F” in this category.Are you happy with your Electronic Payment Systems fees? Tell us about them before your go!
Electronic Payment Systems Complaints & Customer Reviews
|Total Online Complaints||100+|
|Live Customer Support||Yes|
|Most Common Complaint||Hidden Fees|
High Complaint Total
Electronic Payment Systems has a relatively high number of complaints filed online for a processor of its size, some of which can be found in our comment section below. Many of the complaints are in regard to the EZ Payment Plan (formerly EPS90) payment service the company offers, but a large portion also point to credit card processing issues.
Electronic Payment Systems Complaint Contents
Just like this reviewer experienced, numerous merchants report being told that the merchant account agreement is month-to-month only to find out that it is not when they try to cancel. Not only is the merchant account agreement a one-year (or more) auto-renewing term, but it appears that a few merchants were led to believe that their equipment leases would not let them cancel service with EPS. One merchant even reported that he opted in for a “purchase protection plan” that also had a one-year agreement and monthly fee. Aside from this, one of the most common complaints was the nondisclosure of EPS’s $85 annual fee during the account signup process. Several of the reports also complained of poor customer service.
Electronic Payment Systems Response To Criticism
There are several rebuttals by EPS representatives to many of the complaints filed online, and nearly all of them are very unprofessional. Instead of attempting to resolve the complaints, the representatives issued backhanded apologies, attacked the merchants’ intelligence, and blamed them for not reading the fine print of the contract. This pattern has precluded EPS from ranking among the top payment processors for great customer service.
Complaints From Electronic Payment Systems’ Agents
Lastly, there are also a few complaints from former agents mostly indicating that they were misled at some point during their employment with the company. This further confirms the issues that the company appears to be having with its sales tactics.
Electronic Payment Systems Lawsuits
In July 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 FTC stated that EPS and its sub-ISOs opened nearly two dozen merchant accounts under a number of fake business names to spread chargebacks across multiple accounts and avoid triggering Visa and MasterCard’s fraud monitoring systems. In March 2018, the FTC separated EPS from the other defendants, who settled for $1.3 million a few days later. The outcome of the complaint against EPS is still pending.
Electronic Payment Systems Customer Support Options
Electronic Payment Systems has a dedicated customer support phone number that operates 24 hours a day, 7 days a week. Customer service agents offer new customer on-boarding, statement review, and transition services for new customers. Even with this comprehensive telephonic support, Electronic Payment Systems does not rank among the top merchant account providers for customer service.
Electronic Payment Systems BBB Rating Summary
Key Points - BBB
|Product & Service Complaints||8|
|Billing & Collection Complaints||11|
|Advertising & Sales Complaints||0|
|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.
The Better Business Bureau prefaces Electronic Payment System’s profile with the following warning:
Government ActionFederal Trade Commission v. Electronic Payment Solutions of America, Inc.
On March 9, 2018, the Federal Trade Commission filed a first amended complaint for permanent injunction and other equitable relief. In this amended complaint, Electronic Payment Systems, LLC. is separated into its own group of defendants. It is alleged that Electronic Payment Systems engaged in credit card laundering activities, hired a sales agent with a criminal background, approved fraudulent merchant accounts, deliberately concealed high risk telemarketing activity, and knowingly engaged in practices intended to deceive auditors, law enforcement and credit card companies. This matter is pending.On August 7, 2017, the Federal Trade Commission filed a Complaint of Permanent Injunction and Other Equitable Relief against Electronic Payment Systems – an Independent Sales Organization (ISO), sales agents, and their principals of violating the FTC Act and the FTC’s Telemarketing Sales Rule by providing a deceptive operation named Money Now Funding to maintain merchant accounts that allowed it to process almost $6 million through credit card networks by submitting and approving fraudulent applications in the names of more than 40 fictitious Money Now Funding companies. The FTC also claims they evaded the anti-fraud monitoring efforts of the credit card networks.
In response to these charges, the business provided the following statement:
EPS is a victim of the scam perpetrated by “Money Now Funding” (“MNF”). The FTC previously litigated in another case its claims against MNF and the individuals involved. EPS was not part of that case and strongly disputes and will defend against any and all allegations of the FTC to the extent they assert EPS engaged in misconduct either in connection with MNF or otherwise. The FTC has punished the wrongdoers and is now trying to sue the victims! The wrongdoers (MNF) involved in this matter are a group of individuals who, through deceptive and nefarious methods and practices and unbeknownst to EPS, submitted fictitious merchant applications and fictitious/altered checks to EPS to set up fictitious merchant accounts. EPS, as well as its sponsoring bank (at the time Merrick Bank) and an independent third party processor (at the time TSYS Acquiring), were unknowingly used by the wrongdoers to process fraudulent credit card charges through those fictitious merchant accounts. EPS is the largest single victim of the wrongdoers’ fraudulent scheme, having paid every penny of the chargebacks not paid by the wrongdoers to the tune of more than $1 million to cardholders who were taken advantage of by the wrongdoers
Nearly 20 Complaints
As of this update, Electronic Payment Systems is showing accreditation with the Better Business Bureau since October of 2012. The BBB is reporting an “A-” rating due to 19 complaints filed in the last 36 months. The complaints are broken down into 8 regarding problems with service and 11 regarding billing and collection disputes. 3 complaints have been resolved to the satisfaction of the merchant, while 16 either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant.
What Merchants Say
In addition to 19 complaints, Electronic Payment Systems also has 10 informal reviews.5 of those reviews were positive and 5 were negative. It should be noted that reviews are unverified unlike complaints filed with the BBB. The most recent review describes deceptive sales practices and the enforcement of a long term, non-cancelable equipment lease:
If I could leave a no star I would. This company is a scam at best. I left a processor of 15 years over promises from a sales representative Benjamin Bolin (plus two others Joe and AJ) of lower fees, better service and better processing machines. Al of which were false and out right lies. In the confusion of a busy business day I made a poor decision to switch over not realizing I was signing up for a (48) month equipment lease with Ascentium Capital reguardless of processing being approved for the 48 month period. Long story short, our processing was shut down after 30-40 days over one charge from a regular customer that he forgot the card on file in our system was reported stolen. EPS could no longer get a credit card processor to sign up with us at that point and told me too bad that I should not have ran the card. Now we are trying to get out of a (48) month contract for the machines. What a scam!
Long term equipment leases can result in fees that exceed the price of a terminal if it was purchased outright. These leases are one of many contract terms merchants should look to avoid.
A “C” Performance
The BBB states that the primary factor lowering EPS’s score is the FTC’s complaint against the company. Based on Electronic Payment Systems’s complaint count and the content of the complaints, we are adjusting the company’s rating to a “C” for the purposes of this review.
Truth In Marketing & Advertising
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Inside/Outside Sales Team
We are currently unable to find any misleading or deceptive advertising in EPS’s official materials. However, the company does employ both inside sales agents and independent outside resellers, and evidence was found to suggest the use of misleading sales tactics by both parties. The most common tactic found was nondisclosure of important details of the merchant account agreement, which this reviewer experienced directly.
Our Experience With EPS
Posing as a potential merchant, I spoke with the “National Sales Manager” and was told that the contract was “month-to-month with no cancellation fee.” However, upon reading the merchant account agreement, it states in section 3.05 that it is actually a one-year term that automatically renews for another year unless the merchant cancels within 90 days prior to the expiration. Not only did the sales manager fail to disclose this fact, but he also lied about the actual term.
Actual EPS Contract Terms
EPS may argue that without a cancellation fee its contract is month-to-month, but the merchant account agreement states that it “shall remain in full force and effect relative to all debt purchased under this Agreement.” This vague clause means that the future monthly fees and an annual fee ($85) of the agreement are “debt” and that the merchant must pay them in full if service is cancelled prior to the one-year term. This could be done by one lump sum, or by finishing out the contract and paying the monthly fees over time. Several merchant complaints suggest that the latter is the most common scenario, but the contract allows EPS to automatically withdraw the whole amount. Although this is a clever tactic for avoiding having a defined cancellation fee, it still forces merchants to pay for cancelling the account prior to one year of service and is therefore an early termination penalty.
“D” Rated Sales Tactics
EPS deserves a “D” in this section in light of a large number of merchant complaints and our own experience. If you have experienced misrepresentation at the hands of an EPS sales agent, you can renegotiate your pricing with a third-party statement audit.
Electronic Payment 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.