iPayment Overview
UPDATE 5/8/2019: iPayment was acquired by Paysafe in June 2018. Visiting iPayment’s website will relocate users to Paysafe’s. For information on the company please review our review of Paysafe.
SUPPLEMENTAL UPDATE 11/2/2015 – iPayment (AKA: Flagship Merchant Services) has repeatedly made hostile attempts to force the removal of this review. These have included intimidation through bullying and threats of litigation under false pretenses as well as an illegitimate DMCA claim filed with our host, which was rejected on the grounds that it was a “guise” to suppress fair use of a trademark. It is our opinion that such actions reveal the depths to which iPayment’s executives will stoop in an attempt to suppress constitutionally protected free speech that is critical of their business practices. We view these actions as not only highly unethical, but as a demonstration of their unwillingness to correct the problems that cause merchant complaints and, instead, a preference for aggressive strong-arm retribution tactics. If you have been a victim of such threats or bullying, please detail your experience in the comment section below.
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 acquired its longtime reseller Leaders Merchant Services in November 2017. iPayment was sponsored by Wells Fargo of Walnut Creek, California, as its Acquiring Bank. O.B. Rawls, IV, is the president and CEO of iPayment following the ouster of Carl Grimstad in September 2016.
About iPayment
iPayment Overview
iPayment, Inc. was a payment processing company that provided merchant account services to small and mid-sized businesses across the United States. The company operated as a portfolio company and was one of the larger ISOs in the payments industry, processing billions of dollars in annual transaction volume. iPayment was eventually absorbed into Fiserv‘s merchant services portfolio.
The company was known for acquiring and managing merchant portfolios through a large network of independent sales organizations and sales agents. iPayment’s operations and merchant accounts are now serviced through Fiserv’s infrastructure.
Merchant Services & Product Offerings
iPayment Products
According to our review, iPayment offered the following products:
Credit and Debit Card Processing: Standard card acceptance through Fiserv (First Data) processing platforms.
POS Systems:Point-of-sale terminal solutions including countertop and wireless terminals.
E-Commerce Solutions:E-commerce payment gateway services.
Mobile Processing:Mobile payment acceptance solutions.
Check Services: Electronic check processing and verification.
Customer Reviews & Sentiment
Significant Complaint Volume
We have located a large number of negative iPayment reviews and complaints online. Common complaints include unexpected fee increases, difficulty canceling accounts, expensive early termination fees, and poor customer service experiences. Many merchants have reported being locked into long-term contracts with unfavorable terms that were not clearly disclosed during the sales process.
The volume and severity of complaints against iPayment is notable and suggests a pattern of practices that negatively impacted a significant number of merchants.
Client Satisfaction Ratings
| Product & Service Complaints | 124 |
|---|---|
| Billing & Collection Complaints | 132 |
| Advertising & Sales Complaints | 8 |
| Guarantee & Warranty Complaints | 0 |
| Delivery Complaints | 7 |
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.
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 271 complaints in the last 36 months. Only 51 of these were resolved to the customer’s satisfaction. Complainants cite billing and collection issues, product and service issues, and advertising and sales issues as the primary problems. These complaints are most likely the result of iPayment’s use of poorly monitored sales agents and the company’s lackluster customer support. There are also 28 negative informal reviews left on the company’s profile alongside four positive reviews. We have adjusted the BBB’s rating to a “D” based on iPayment’s complaint volume and resolution ratio.
Card Processing Rates & Fees
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. These factors combined with the overwhelmingly negative merchant feedback we’ve received have earned iPayment a “C” rating in this section. 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. See the iPayment Program Guide.
Lawsuits & Legal History
iPayment Legal History
iPayment has been the subject of various legal actions and regulatory scrutiny during its operational history. The company faced complaints related to its billing practices, contract terms, and the conduct of its independent sales agents. Merchants with unresolved disputes related to iPayment should be aware that the company’s operations are now managed by Fiserv.
Dissatisfied merchants should consider filing complaints with the Better Business Bureau or the Consumer Financial Protection Bureau (CFPB).
Employee Reviews & Sales Practices
iPayment relies heavily on third-party independent sales organizations (ISOs) and independently contracted agents to bring in new customers. This is a common marketing practice among large processors that 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 of nondisclosure as a result of 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. There are numerous complaints in the comment section of this review and on other consumer protection websites that describe misleading rate quotes, deceptive sales pitches, and sales agents who disappear after signing merchants up for service. For this reason, merchants are encouraged to research any company offering iPayment merchant accounts before applying.
Bottom Line
iPayment’s reputation is suffering from numerous complaints mostly due to its marketing strategy of hiring independent agents and partnering with ISOs. The company can improve its rating by significantly reducing its future complaint count and improving its pricing and contract policies so that merchants cannot be set up in expensive long-term contracts.
iPayment Rating
