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Federated Payments Review
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Note: The Federated Payments website no longer appears to be operating, despite the domain remaining active. This may indicate that the company is no longer in business. This is corroborated by the company’s Better Business Bureau profile, which states it is out of business. Merchants with any insight into the present state of Federated Payments are encouraged to leave feedback in the comment section of this review.
Recently Acquired by EVO Payments International
Founded in 1999, Federated Payments is a merchant account provider that offers a variety of merchant services. The company is a moderate-sized provider within the industry, having eclipsed 25,000 merchants in 2008. In September 2018, both Federated Payments and its Canadian affiliate (Federated Payments Canada) were acquired by EVO Payments International. It seems likely that the company will be completely absorbed into the EVO brand, as Federated has already laid off over half of its staff. For the time being, however, both Federated brands appear to still be operating independently.
Part of The Federated Group
Federated Payments appears to be the flagship member of The Federated Group, a network of companies that includes Volt Payments, National Debit Card Network, MSI Canada (msicanada.net), Federated Payments Canada (federatedcanada.com), U.S. Bankcard Center (gotousbc.com), and Wholesale Merchant Services Canada (wholesalemerchantservices.ca).
Federated Payments Location and Ownership
Federated Payments is sponsored by Deutsche Bank AG, New York, as its Acquiring Bank and is headquartered at 1 Huntington Quad, Fourth Floor, Center Building, Melville, New York. The company’s founder and president is John Guirguis, and its CEO is Jon Levitt.
- Costs & Contract: Federated Payments offers a three-year contract with an early termination fee of $295.
- Complaints & Service: Federated Payments has received more than 50 public complaints.
- BBB Rating: Federated Payments has no rating and has received 1 complaint in the past 3 years. The company was formerly accredited by the Better Business Bureau since 2016 but is no longer accredited.
- Sales & Marketing: Federated Payments appears to hire independent sales agents and has received a moderate number of complaints about its sales practices.
- Rates & Fees: How Merchants Got The Best Rates With Federated Payments
Federated Payments Customer Reviews
Here's What Their Clients Say
|Total Online Complaints||50+|
|Live Customer Support||Yes|
|Most Common Complaint||Sales Tactics|
High Number of Employee Complaints
Federated Payments has appeared as the subject of roughly 50 complaints on this and other customer protection websites concerning allegations of fraudulent practices, employment issues, or misrepresentation. Many of these Federated Payments complaints appear to have been authored by former or current employees and agents of Federated Payments, who report unethical business practices and meager compensation for their work. Some former and current employees even go so far as to call the company a ripoff and scam operation. This is a troubling trend that would seem to indicate a failure by the company to resolve matters in-house. One such complaint, found here, describes the company as a boiler room operation and reports that “[a]ll of the merchants were so pissed at us that either they hung up or wanted to curse me out.”
Complaints by merchants tend to cite undisclosed fees, unavailable agents, and confusion over the $500 guarantee. Some of these complaints have received rebuttals from the company’s representatives. The company’s website previously listed numerous dedicated support phone lines on its “Contact Us” page, but these contact options appear to fall quite short of the service level offered by top-rated payment processors for customer support.
Federated Payments Online Ratings
Here's How They Rate Online
|Product & Service Complaints||1|
|Billing & Collection Complaints||0|
|Advertising & Sales Complaints||0|
|Guarantee & Warranty Complaints||0|
Nearly Clean Complaint Record
Federated Payments scores no rating with the Better Business Bureau and was formerly accredited since January 2016. It is listed as the BBB as out of business. Within the last 36 months, 1 complaint has been filed against the company. The 1 complaint was due to a problem with a product or service. It was resolved by the company to the satisfaction of the merchant.
No Longer Rated
At the time of our last update, the Federated Payments “About Us” page displayed some of the claims that were contested by the BBB, but the BBB has removed these notices. The company was previously rated with an “A+” and is no longer rated.
Federated Payments Fees, Rates & Costs
A Closer Look at The Contract
|Swiped Rate||1.00% - 4.99%|
|Keyed-in Rate||1.00% - 4.99%|
|Virtual Terminal Rate||1.00% - 4.99%|
|Payment Gateway Fee||Undisclosed|
|Monthly Statement Fee||$5.95|
|Early Termination Fee||$295 - $500|
|PCI Compliance Fee||Unknown|
|Equipment Lease Terms||Variable|
The Federated Payments merchant agreement outlines a three-year contract with automatic renewal for one-year terms and an early termination fee of $295. According to merchant complaints, Federated Payments may also charge a monthly statement fee of $5.95, an annual fee of $99, and a termination fee of up to $500. These figures are about average for the industry.
Virtual Terminal and Payment Gateway Pricing
In addition to its storefront payment processing services, Federated Payments also dedicates a portion of its website to advertising its virtual terminal and payment gateway services through Safepay. However, pricing on either of those services is not disclosed. These services incorporated cardholder authentication programs MasterCard SecureCode and Verified by Visa. Additional rates and fees, including gateway fees, technical support fees, batch fees, and additional transaction rates typically apply to these e-commerce services.
Negotiate Your Contract Terms
Some complaints report a standard contract length of three years, but given the company’s apparent strategy of employing independent sales agents, contract terms are likely to vary from agent to agent. Merchants are advised to keep in mind that a number of contract terms may be subject to alteration at the discretion of the agent and to negotiate accordingly (see: Fee Sweep).
Federated Payments Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Telemarketing and Outside Sales Agents
Federated Payments appears to utilize telemarketing and hiring of independent sales agents to market its services. This “hiring mill” model often produces agents who are trained to sign merchants to the most expensive contracts possible in order to receive a higher commission. In fact, many of the complaints filed publicly against Federated Payments appear to have been written by employees who are dissatisfied with the company’s policies and their compensation. This is an indicator of a less-than-positive corporate culture.
Confusing Price-Matching Guarantee
In addition, the company’s website formerly promoted a $500 price-matching guarantee that promised to give a merchant $500 if they could find a competitor who offers lower rates for the same product and contract terms. Judging from the company’s website and several complaints filed online, it seems as if merchants must first sign a contract with Federated Payments, and if they can then find better pricing from a competitor within 30 days, the $500 amount is awarded in the form of Federated Payments waiving their early termination fee. Due to some complaints reporting confusion about how this works, merchants are advised to seek clarification about this guarantee before agreeing to it. Confused or not, merchants should always seek an independent statement audit to find and eliminate any hidden contract fees.
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