Federated Payments Review


Founded in 1999, Federated Payments (federatedpayments.com) is a merchant account provider that also offers a variety of merchant services. The company is a moderate-sized provider within the industry, having eclipsed 25,000 merchants in 2008. 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), U.S. Bankcard Center (gotousbc.com), and Wholesale Merchant Services Canada (wholesalemerchantservices.ca). Federated Payments is sponsored by Deutsche Bank AG, New York, as its Acquiring Bank and is headquartered in Melville, New York. The company’s founder and president is John Guirguis, and its CEO is Jon Levitt.

Key Points

  • Sales & Marketing: Federated Payments appears to hire independent sales agents and has received a moderate number of complaints about its sales practices.
  • Costs & Contract: Federated Payments appears to offer a multi-year contract with an early termination fee ranging from $250 to $500.
  • Complaints & Service: Federated Payments has received more than 50 public complaints.
  • BBB Rating: Federated Payments has an “A” rating with the Better Business Bureau and has received five complaints in the past three years.
  • Rates & Fees: How Merchants Got The Best Rates With Federated Payments

Federated Payments Products and Services


  • Retail
  • MOTO
  • E-Commerce
  • Mobile

Sales & Marketing

Key Points - Sales & Marketing

Employs Independent Resellers Yes
Advertises Deceptive Rates No
Discloses All Important Terms No

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.

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.


Costs & Contract

Key Points - Costs & Contract

Swiped Rate Variable
Keyed-in Rate Variable
Early Termination Fee $295-$500
PCI Compliance Fee Unknown
Equipment Lease Terms Variable

According to merchant complaints, Federated Payments appears to offer standard rates and fees, including a monthly statement fee of $5.95, an annual fee of $99, and an early termination fee of $295-$500. These figures are about average for the industry. 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).


Complaints & Service

Key Points - Complaints & Service

Total Online Complaints 50+
Live Customer Support Yes
Most Common Complaint Sales Tactics

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 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. 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 lists numerous dedicated support phone lines on its “Contact Us” page.



Key Points - BBB

Product & Service Complaints 3
Billing & Collection Complaints 2
Advertising & Sales Complaints 0
Guarantee & Warranty Complaints 0
Delivery 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.

Federated Payments scores an “A+” rating with the Better Business Bureau and has been accredited since January 2016. Within the last three years, five complaints have been filed against the company, which is down from 10 as of our last update. Three complaints were related to product or service issues and two had to do with billing and collection. Two complaints were successfully resolved, while the remaining three either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant.

At the time of our previous update, the BBB had posted the following notices on its profile for Federated Payments:

This firm has misrepresented itself as a BBB Accredited Business on its Web site at http://www.federatedpayments.com/. On June 24, 2014, the BBB requested that this firm cease and desist all unauthorized use of the BBB name and logo on its website. THIS FIRM IS NOT CURRENTLY A BBB ACCREDITED BUSINESS with the Better Business Bureau Serving Metropolitan New York, the service area in which it is headquartered.

On July 07, 2014, the Better Business Bureau raised concerns about this firm’s advertisement on http://www.federatedpayments.com/ and requested that this firm substantiate their claims regarding the following:
1.We Guarantee we can beat your current processing rates or we’ll pay you $500!
2. Credit and Debit card processing at the lowest rates guaranteed
3. Inc. Magazine 500/5000 ranked company
4. Top 50 Payment Processors in the U.S. (2 years in a row)
5. The fastest growing Payment Processor in the U.S. (Nilson Report)
As of August 11, 2014, the business has not responded to BBB’s requests for clarification or modification of the aforementioned issues.

As of this update, the Federated Payments “About Us” page still displays some of the claims that were contested by the BBB, but the BBB has removed these notices. In light of the company’s dramatic improvement to its complaint rate, we agree with the BBB’s rating at this time.

Federated Payments Logo

Federated Payments Bottom Line

Federated Payments rates as a typical merchant account provider according to our standards. The company can improve its rating by reducing the number of complaints filed by its own employees, offering more competitive contract terms, and listing those terms more transparently. Merchants are advised to carefully scrutinize the terms of any contract they are given, especially with regard to any advertised $500 guarantee.

Hi, I’m Phillip Parker and I believe that the merchant account industry has been overrun by people who engage in fraud and deception in order to steal from hard working business owners. I created this website to help you avoid the bad players, save money on fees, and get peace of mind with your merchant account. If you would like to help support my work, check out my cost analysis service. I can evaluate your statement and tell you exactly how much you're overpaying for your merchant account. Get more information here.

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18 Reviews Leave Your Review Below

  1. Complete scam. Company claims office in Ottawa. It does not exist. Bullshit lying telemarketer “Mike Waheed” I doubt any of their lies carry any weight.

    1. They are not a scam. We have used them over the past 4 years. They take a ridiculous percentage off of your daily sales to pay back the loan so you the loan you get only helps in the spur of the moment, but they do exist and they are not a scam.

  2. This company also goes by National Debit Card Network, and Wholesale Merchant Services.I have worked in Canada as an outside sales rep, and this is the worst company, and job I have ever had. First, they do not check references when they hire you, and they do not invest a single nickel into their reps. You have to pay for your own business cards, printing, cell phone usage and car expenses. After a 6 hour webinar training, they provide some appointments, but 80% are bad with most appointments being no shows, not qualified, not interested, not aware of the appointment, and only making the appointment to get the telemarketer off their back as they were so pushy. It’s a boiler room, sales mill, and they don’t care, the only thing they are interested in is money. They do not care at all about people, they are anti-social. We are told that the appointments are recorded, but they do not tell the customer this, I had a sales manager advise me to break the law once. You never meet anyone from the company, and they push the reps to never take no for answer, and if you don’t get the account on the first appointment, they take all the information you have provided them on the info sheet after doing a presentation, have a manager from the company follow up, and if they get the sale, you don’t get paid commissions, so they don’t care how many reps they go through, just more money for them. The managers use fowl language, they lie, they control you as if they are paying you a huge salary, and they make your life miserable and stressful working there.

  3. We have been charged for a year and a half when we haven’t been their customer. We canceled with them and they continued to debit our account. They now refuse any type of refund of their monthly fees. They said they never got our cancellation fees and have been charging us a non-compliance fee for not taking their compliance certification online. Why would I do that if I’m not even a customer?

  4. Folks,
    I am so incredibly frustrated! Federated is a huge scam. We are a new small business and for the last 6 months have been charged outrageous hidden feed! They will tell you anything to get you to sign on. I completed my last call, I thought with them Dec 30th to end their service. Just realized they charged me 295.00 to break contract. Never was told!!! I will be spending my day tom dealing with this.
    Whatever you do do not go with this merchant service!
    Harleysville, Pa

  5. I worked for this company as a inside sales rep for 2 weeks and they were the longest 2 weeks of my life. They are a bunch of fast talking con artists. My job was to contact merchants after an outside rep was not able to close a deal and try to close again as a corporate director from the home office who could give the merchant an exceptional rate. Problem was All of the merchants were so pissed at us that either they hung up or wanted to curse me out. The outside reps would not show at their appointments or would lie to the merchants about anything and everything. This is a boiler room operation from the get go. I’ve been in sales a while so I saw the writing on the wall and got out after I got my first check. If I quit before then I knew without a doubt they wouldn’t have paid me. Run and hide from this place. A job like this will kill you.

  6. Throughout the interview and training, I could not find 2 people in the company who gave the same information regarding commissions paid to the agent nor merchant pricing.Everything was very vague, never in writing. I tried it out to seeif after I closed a deal what the payment would be. I requested information and pricing on self generated accounts but did not receive any response, except “SIGN THEM UP” without even a rate. The leads were not accurate and after a day it was very apparent that this was a boiler room operation with very limited legitimacy. Since then I have learnt that if you do make a sale collecting your commission is very difficult. Manager support is almost is very limited. I was told while I was sitting in front of a potential client the quote would come via fax in 15 minutes but waited 1 hour and 20 minutes for a fax that never came. When i called Mike I was told by his assistant that they would not put the quote in writing as the client had a very good rate. I was embarrassed. There are good professional companies out there,but this is clearly not one of them

  7. I have had a very bad experience with Federated Payments. A salesmen came to my dental office and offered to help reduce my credit card fee’s. I told him that if I don’t have to buy any new equipment and don’t have to pay any cancellation fee’s that I would change over from the previous merchant. I also told the salesmen that he and my office manager would have to end the activities of the previous merchant. It wasn’t until I did my taxes and started to look at the fee’s associated with my credit card account that I got a shock. $1300+ for credit card fee’s for the year??? Later I come to find out that the previous two merchants were also charging my account for service’s that they were not rendering. Part of the deal of me switching to Federated Payments was that they would tie up the lose ends with the previous company. They did not. So after calling the previous company and finding out that they received the termination letter but it was not signed (yeah right), I went to my bank and closed the account so that these companies could not keep taking out fee’s. Now I get collection calls from Federated Payments that I owe them an early termination fee. I call them and they say I signed a contract. I thought to myself I never signed any contract. So I tell them to mail it to me. Finally I receive this contract and they highlight in this tiny print about cancellation fee’s. I look at my signature and it is very close to mine but the last 3 to 4 letters of my last name are missing. Also says (No Tittle) under the first signature and the signature has Dr in front of it. I am very suspicious of a misleading document or some other shady aspect with this company. I verbally told the salesmen I didn’t want to buy any equipment nor did I want any cancellation fee’s. When I called to complain to a representative named Bill, all I got was how do I want to settle the account which they claim I owe them $400.
    So to summarize: Federated Payments will tell you whatever you want to hear. They will not “take care of” closing your previous merchant account that they say is a simple matter to close. They will also find someway to get a signature on a contract to legally bind you to a early termination fee. If they would of done what they said they were going to do, I would not be having issue’s with them.

  8. I’ve “been on the board” with Federated for about 6 weeks now. Sure, not everything is rosy and peachy but I’ve got no complaints when it comes to this job. They provide me with leads (not as many as I’d been promised but s**t happens) and good training. The sales managers are smart, responsive and helpful. Are they a bit pushy? Sometimes but they have their goals to meet, just like I do as an outside sales rep. Sales is a tough job. At the end of the day, this job is earning me some ok money (which will get better as I improve as a sales rep) and making me a better salesman.

    Any issues that have occurred were more a result of my mistakes than any malpractice by FPS. The mistakes that were made at the “office” were quickly and effectively resolved to my clients satisfaction by the sales support team. No one has asked me to lie, cheat, steal or mislead any clients. The one time I pushed back on an issue and explained my position it was accepted and there was no push back from above.

    I did my homework before taking this job, so I knew what to expect.

  9. In my opinion, this was one of the worst card processer company I have ever delt with. Charging my account with crazy “NON CONTACTUAL Fees. They have debited my accout close to three hundred dollars in AMIN COMPLIANCE FEES. Needless to say I have canceled my account with this company….beware of this company….

  10. I worked for federated as a telemarketer for quite sometime. They are of corruption. Scott Avery encourages us to violate FCC laws. Their new dialer system calls merchants 3 to 4 times daily and we are instructed by scott not write notes that are pertinent to this. He wants us to call excessively until the merchants give in and make an appointment. The management verbally abuses the staff and threatens to fire them if their leads are low for the day. They hire and fire telemarketers daily, even some who have had longevity if you have declined in prodductivity. How are you suppose to produce quality leads when you are calling the same business more than once. They have no regard for these people who are being hounded constantly with a barage of calls. They have no integrity and are untruthful in theIr pitches so they can gain a listening ear and hopefully a sign on. Don’t sign on to their corruption. Don’t seek emplyment with their company. They are greedy ruthless sharks.

  11. I worked for the company for more than a year in Kansas. I did better than most reps but they went through scores of people because they get screwed on the residuals promised. That is eventually why I left and we’re talking thousands of dollars. The area manager doesn’t care how many sales reps come and go because they keep your residual income stream, and that’s just fine with this company. Your contract says you will need to get a New York lawyer, where the firm is located, if want to bring action in the event of commission dispute. Its a fact, Jack.

  12. This company is a big scam. They treat there employees like they are slave have no consideration for anybody that works there and the ones that get screwed in this is the outside sales reps. They think they are going to make a lot money doing this 85k per year because that what it says on careerbuilder not true. They are lucky to make 20k their first year. I hated working for this company it was the worst job I ever had. PLEASE DO NOT WORK FOR THIS COMPANY AT ALL. DO NOT ANSWER THERE CAREERBUILDER AD STAY AWAY.

  13. The company I worked for saved allot of money after switching to Federated. The sales person was a little pushy & over-excited, but the end result was favorable, and everything she said proved to be truthful.

    The one time I had a question/problem, it was addressed and corrected quickly with a sincere apology.

  14. If you are dealing with this company get out now. They will say/do anything to get your money. If you get a call for an appointment just say “no hablo ingles”. They’ll just hang up since they won’t send anyone out who doesn’t speak English. This company is run by a pack of crooks. That $500 guarantee to show you lower rates? You’ll never see it. They’ll just quote you a couple cents under your current cost just to keep from paying up. I won’t even get into they way they treat their employees as well as the quality of people hire. Your best bet is to put an ATM in your business, you get paid for it.

  15. These guys are the worst. They’ve charged us repeatedely for no good reason. They did not cancel our service when we went through the cancellation process, charging us for months without our realizing it. I’m really sorry that a company this bad is even still allowed to do business. Their phone representatives barely ever even know what’s going on. I could call four times with the same question and get four completely different answers. Most recently, they took $300 out of our bank account to pay for an unreturned piece of equipment that was returned 5 years ago. These people are crooks.

  16. We have been using federated payments for more than 8 years. I have found them to be very heavy handed with charging me for anything they could think of, any good reason. As of today, they decided ( and said they sent a letter which i have not received, i just happen to call them) that my business’s do not qualify as something they would run credit cards for, that is a self development course that teaches, compassion, care and kindness. They said they decided this after looking at the web site…humm. The risk manager actually said they do not process courses that deal with butterflies and rainbows….WHAT…that is ok because i am on the way to another processor for sure i would not deal with them ever again. I their risk management people to be over the top, rude and generally treating you like a child not a customer that they value.

  17. I have worked for Federated for the past 6 years as an outside and inside sales representative. I felt compelled to write this review because over the past years, they have been very fair to me. I have earned a significant income due to their upfront commissions and lifetime residuals. They are a very honest company and my sales managers (I have had a few over the years) have been great to work for. They give you a lot of help when you need it. I would recommend Federated Payments to other sales people out there as a place to work and to any merchants looking to accept credit cards or switch from their current processors. Thanks!

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