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First American Payment Systems (first-american.net) is a merchant account provider based in Fort Worth, Texas, that claims to have been in business since 1990. The company markets a wide variety of business financial services including credit card processing, debit card processing, EBT card processing, electronic check services, e-commerce services, gift & loyalty card programs, ACH processing, equipment sales & leasing, ATMs, merchant cash advances, and remote deposit capture.
First American Payment Systems also operates under several other business names and trademarks including FirstAdvantage, FirstFund ACH, Merimac Capital, Secur-Chex, FirstView, and FirstPay.net. It is also suggested in numerous merchant reports that the company is under the same ownership as, or operates, the following merchant services companies: Appstar Financial, Eliot Management Group, Trans Tech Merchant Group, Summit Merchant Solutions, Apex Merchant Group, Trinity Merchant Group, Heritage Payment Solutions, GoEmerchant, Certified Payment Processing, iATS Payments, Govolution, and Velocity Payment System.
First American Payment Systems is a registered ISO/MSP of Fifth Third Bank, Wells Fargo Bank, N.A, and MetaBank. First American Payment Systems was acquired in July 2014 by an investment group led by the Ontario Teachers’ Pension Plan. The founder and CEO of First American Payment Systems is Neil Randel. It is unclear whether Neil Randel is related to Nathan Randel, the principal for Trinity Merchant Group.
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
First American Payment Systems has earned a “D” rating in this section because of its marketing strategy. The company is associated with numerous other poorly rated companies and operates under several other business names. Not only does this cause confusion for merchants, but most companies use such a strategy to spread public complaints across different business names.
Like many processors, First American Payment Systems’ strategy is to partner with ISOs and independently contracted outside sales people. This strategy would normally earn a processor a “C” rating in this section because it is a common strategy that ultimately results in a somewhat high-to-average number of complaints from merchants. The rating for First American Payment Systems drops to a “D” in this section because it appears to supply processing services to some of the poorest rated providers reviewed on CardPaymentOptions.com and may actually be under the same ownership as some of these companies.
First American Payment Systems Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||$120 per year|
|Equipment lease:||48 mos./non-cancellable|
The fees and contract terms for a First American Payment Systems merchant account may vary by agent, sub-ISO, and merchant. With that said, it appears that the standard contract for First American Payment Systems (available below) includes a three-year service agreement, an early termination fee between $300 and $495, and $120+ annual PCI Compliance fee among other monthly fees and processing fees. Additionally, the contract renews for successive one-year terms if not cancelled within a specific time frame before the end of the term. Merchants also report long-term, non-cancellable equipment leases through the company’s leasing affiliate, Merimac Capital. With very little exception, these contract terms appear to be substandard in comparison to the overall industry.
FAPS 2010 copy
|Key Points – Complaints & Service|
|Live customer support?||Yes|
|Most common complaint:||Sales tactics|
First American Payment Systems has a fairly high number of complaints filed on various websites and forums online, and most of these complaints accuse the company of being a scam or ripoff. Many of the complaints tie First American Payment Systems to the poorly rated resellers mentioned earlier in this review. Although an exact number of complaints is difficult to establish, there are at least 150+ separate complaints naming First American Payment Systems and there could be many more.
The majority of the complaints revolve around merchants reporting deceptive sales practices on behalf of independent agents and resellers, hidden and surprise fees, unauthorized debits from accounts, and nondisclosure of the service agreement length and cancellation fee. There are also numerous complaints filed by former employees and agents describing deceptive and misleading hiring practices.
Additionally, numerous merchants complain of predatory equipment lease agreements through Merimac Capital. In these complaints, merchants report being misled into expensive, non-cancellable 48-month leases for cheap equipment.
|Key Points – BBB Report|
As of this update, the Better Business Bureau (BBB) is awarding First American Payment Systems an “A+” rating despite 119 complaints filed within the last 36 months. Of the total, 56 are regarding product and service problems, 44 are under billing and collection disputes, 18 under advertising and sales issues, and one under a delivery issue. The report states that First American Payment Systems has resolved 95 of the complaints but that 24 merchants were not satisfied with the company’s response. There are also three negative reviews posted on the BBB profile for the company. In light of these figures, we have adjusted the company’s rating to a “D” for the purposes of this review. For more information on why we adjust BBB ratings, please see our rating criteria.
First American Payment Systems is a processor that mainly utilizes independent sales agents, other sales organizations, and alternate business names to market its processing services. The company could improve its rating by eliminating its cancellation fee, PCI compliance fee, auto-renewing contract, non-cancellable lease terms, and future merchant complaints regarding its services. As always, merchants are advised to carefully read and understand their merchant account agreements before signing with First American Payment Systems or any other provider.
This review was originally published on 12/14/12 and last updated on 1/1/15.
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