|Sales & Marketing|
|Costs & Contract|
|Complaints & Service|
iPayment (ipaymentinc.com) is a very large ISO of First Data that claims to provide merchant accounts to approximately 153,000 small businesses nationwide. Founded in 1999, the company is headquartered in Nashville, Tennessee, but maintains its primary operations center in Los Angeles, California. iPayment became a publicly traded company in 2003 but was then purchased by an investment team led by its founder Greg Daily in 2006. It has operated as a private company since 2006.
iPayment also owns the domain name “creditcardprocessing.com,” though it is unclear whether it regards this business as a subsidiary or as a separate enterprise. iPayment is sponsored by Wells Fargo of Walnut Creek, California, as its Acquiring Bank. Carl Grimstad serves as the company’s co-founder and CEO, while Greg Cohen is its president.
iPayment Products and Services:
- Debit and credit card processing
- Gift and loyalty programs
- Electronic check processing
- Merchant cash advance
- Online payment gateway via Authorize.net
- Mobile processing
- POS hardware and software
- Pay-at-pump solutions via Petroleum Card Services
- Gas stations
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
iPayment relies heavily upon third-party independent sales organizations (ISOs) and independently contracted agents to bring in new customers. This is a common marketing practice among large processors and often results in merchant complaints because the sales tactics of the ISOs and agents are very hard to control. It appears that iPayment is suffering from the typical complaints regarding this strategy, which negatively affects its rating in this section.
iPayment does not appear to directly utilize any deceptive marketing or rate quoting tactics in its official materials; however, some of its ISOs and agents appear to be doing so. Merchants are encouraged to research any company offering iPayment merchant accounts before signing up.
iPayment Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||Variable|
Pricing and contract terms of an iPayment merchant account can vary based on several factors including a merchant’s business type, processing volume, and the agent or ISO setting up the account. Under most circumstances it looks like the standard contract (available below) has a service agreement of 36 months with an early termination fee that ranges from $250 to $350. iPayment also appears to sell long-term, non-cancellable equipment leases through First Data Global Leasing. Depending on the ISO or agent, however, the terms of an iPayment merchant account contract are likely to be very negotiable. Be sure to read “Fee Sweep” before engaging any merchant account provider in contract negotiation.
iPayment Program Guide
|Key Points – Complaints & Service|
|Live customer support?||Yes|
|Most common complaint:||Hidden terms|
iPayment has a moderate-to-high number of complaints filed online, many of which can be found in the comment section below. There are two types of complaints that dominate the reports. In the first type, the obvious sources of the merchants’ problems originate with the agents or ISOs that set up the accounts. In these complaints the common theme among merchants are reports of hidden fees, high monthly fees, non-disclosure of the service length agreement/cancellation fees, and high PCI Compliance fees. In the second type, iPayment is the source of the complaints and merchants report receiving poor service and unprofessional customer support. In one recent iPayment complaint, the merchant states, “I was told by this individual there was No Contract I could cancel at anytime! I was also told that the fee would be aproxamatly $7.00 a month. I was told this conversation was recorded as well,” only to later learn that “there was a three year contract and I had to pay an early termination fee.”
Since it is our philosophy that the actual credit card processor is ultimately responsible for the agents and ISOs which represent it, we are awarding iPayment a “D” rating in this section based on these complaints.
|Key Points – BBB Report|
As of this update, the Better Business Bureau is awarding iPayment an “A-” rating, which is surprising given the fact that the BBB report lists 410 complaints in the last 36 months, only 278 of which were resolved to the customer’s satisfaction. Complaints frequently cite billing and collection issues, product and service issues, and advertising and sales issues as the primary problems. These complaints are most likely a product of iPayment’s use of poorly monitored sales agents and the company’s lackluster customer support. There are also seven negative informal reviews left on the company’s profile alongside one positive review. For a better understanding of why we adjust BBB ratings, please see our Rating Criteria.
* Denotes CPO-adjusted BBB score
This review was originally published on 2/2/12 and was last updated on 1/7/15.
Leave your review of iPayment in the comment section below.
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