First Data Corporation (firstdata.com) is a large electronic payment processing company headquartered in Atlanta, Georgia. The company’s main bread and butter is providing back end card processing services to Independent Sales Organizations (ISOs), banks, and other merchant account providers across the world. It has also recently broken into the point-of-sale software market with its Clover POS system. In May 2017, the company purchased CardConnect for $750 million, and in October, it announced an upcoming acquisition of BluePay. Frank Bisignano is the chairman and CEO of First Data.
Unlike most merchant account sales organizations, First Data is a direct processor with Visa and MasterCard. While the company does have a small direct sales force, First Data relies primarily upon partnerships with third party resellers and sub-ISOs to sell its credit card processing services and equipment leases through First Data Global Leasing. Two of these resellers include a couple of the largest banks in the United States, Wells Fargo Merchant Services and Bank of America Merchant Services. These two partnerships along with thousands of others make First Data one of the largest processors in the world (if not the largest). In fact, it is said that roughly 45% of all credit card sales in the U.S. are processed by First Data.
We have recently been made aware of a pending lawsuit filed against First Data by a First Data reseller called Peel Payments. Among other things, this lawsuit alleges that First Data has dramatically increased some of its merchants’ authorization fees from $0.05 per transaction to more than $0.60 per transaction in under two years. Even in the most extreme card-not-present payment environments, authorization fees typically do not exceed $0.30. In light of these allegations, First Data merchants are advised to check their statements for any fee increases.
- Sales & Marketing: First Data hires independent sales agents and has received a high number of complaints about its sales practices.
- Costs & Contract: First Data typically offers a multi-year contract with a variable early termination fee.
- Complaints & Service: First Data has received more than 1,000 public complaints.
- BBB Rating: First Data does not have a rating with the Better Business Bureau and has received 1,016 complaints in the past three years.
- Rates & Fees: How Merchants Got The Best Rates With First Data