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Established in 2000, Leaders Merchant Services is a merchant account provider that serves businesses of most sizes. The company specializes in retail credit card processing and e-commerce merchant accounts, enabling merchants to process “swiped” card-present transactions as well as “keyed” card-not-present transactions. Leaders was acquired by iPayment (now Paysafe Group) in November 2017. Leaders Merchant Services is a First Data (now Fiserv) reseller.
Leaders Merchant Services Point of Sale
Leaders Merchant Services prominently advertises Clover as a POS solution. The Clover family of products serves most common retail needs, including swipers, mobile solutions, terminals, and virtual terminals. Clover hardware can only be used with First Data/Fiserv merchant accounts.
Reputation and Ethical Issues
Leaders Merchant Services Ranks among the poorest scoring credit card processors in the merchant account industry. Its acquisition by PaySafe group does not seem to have repaired many of the issues reported by current and former merchant services clients. We encourage readers to of this article to pay special attention to the “Reviews and Complaints” section below.
Questionable Marketing Tactics
There are numerous “merchant account review” websites that list Leaders Merchant Services, and other Paysafe’s subsidiaries, as industry leading credit card processors and “best” picks. These review websites appear to be owned by, or heavily influenced by, Paysafe or possibly under the control of Paysafe’s Canadian subsidiary, IA Digital Marketing Inc. It appears that Paysafe may also be buying “top ratings” for Leaders Merchant Services on other “pay-to-play review” websites wherein top rankings are sold to the highest bidders, often without disclosure of such activities. Most of these websites appear to saturate the “sponsored” results at the top and bottom of search results pages when researching Paysafe subsidiaries and competitors. The following websites appear to be owned or heavily influenced by Leaders Merchant Services or Paysafe, or offer pay-to-play rankings:
Under the umbrella of Paysafe Group, Leaders Merchant Services is subsidiary along with the following U.S. merchant services brands, most of which have poor reviews:
- Flagship Merchant Services
- Openbucks Corp.
- Paysafe Merchant Services Corp.
- Paysafe Direct LLC
- Paysafecard.com USA Inc.
- Paysafe Payment Processing Solutions LLC
- Paysafe Capital, LLC
- Skrill USA
Leaders Merchant Services Location & Ownership
Leaders is located at 30721 Russell Ranch Rd Ste 200, Westlake Village, CA 91362, and is a registered ISO/MSP of BBVA, an Alabama State Chartered Bank. William Teleau is the Director of Sales Operations of Leaders Merchant Services.
Leaders Merchant Services Review Table of Contents
- Costs & Contract: Offers a three-year contract with an early termination fee of up to $350 and…
- Complaints & Service: Has received more than 250 public complaints regarding…
- BBB Rating: Currently has a “B+” rating with the Better Business Bureau and has received 213 complaints and 45 reviews about…
- Sales & Marketing: Hires independent sales agents and has received a moderate number of complaints about its…
Leaders Merchant Services Pros and Cons
- Approves most industries
- Quick application approvals
- Hidden Fees
- Junk Fees
- Misleading Marketing
- Expensive Rates
- Numerous Client Complaints
- Cancellation Fees
Leaders Merchant Services Reviews and Complaints
Here's What Their Clients Say
Total Online Complaints
Live Customer Support
Most Common Complaint
High Complaint Total
In the time since this review’s original publication in April 2012, it has received over 200 comments, the overwhelming majority of which are complaints about Leaders Merchant Services. In addition, we were able to locate over 100 complaints filed against the company on other consumer protection websites. These complaints have been posted with regularity over the past three years. Common themes expressed by complainants include misrepresentation of rates, nondisclosure of fees, unreachable customer service representatives, unauthorized debiting of accounts, and funds held without notification. Even for a large company, this is a higher-than-average complaint rate.
Leaders Merchant Services Lawsuits
Leaders was the defendant in a major lawsuit that was settled with prejudice against the company in July 2021. According to Pacific Coast Business:
The complaint alleged that Leaders violated California laws against unfair competition and misleading advertising when Leaders’ sales personnel didn’t fully disclose the company’s fees while signing customers up for payment card and electronic payment services. Leaders’ sales presentations were made to customers including small to medium-sized businesses and nonprofits throughout the country.
Under the settlement, Leaders is under a permanent injunction banning future violations of the law and must pay $1 million in civil penalties, $250,000 in cost recovery to the District Attorney’s Office and more than $800,000 in restitution to customers. Leaders did not admit guilt in agreeing to the settlement.
Dissatisfied merchants who wish to pursue a non-litigious course of action against the company should consider reporting it to the relevant supervisory organizations.
Leaders Merchant Services Customer Service Options
The company’s website lists a dedicated phone line and an email form, although it’s unclear whether the phone number goes to customer support or to sales.
We have located a single Leaders Merchant Services customer service number:
- (866) 436-5589 – Toll-Free General Customer Service
Leaders Merchant Services also offers a customer support form on its website.
Leaders Merchant Services BBB Rating and Report
Our Better Business Bureau Profile Assessment
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 most current update, the BBB is showing 80 formal Leaders Merchant Serviecs complaints and 28 negative reviews, and awarding the company and A rating.
Over 200 Previous Complaints
Earlier updates to this Leaders Merchant Services review have listed submissions totaling as high as 213 complaints in the last 36 months. 100 of the complaints were due to a problem with a product or service, 100 were billing or collections issues, 10 were due to advertising or sales problems, and 3 were issues with delivery. Only 26 of these 213 complaints were resolved by the company to the satisfaction of the merchant. The remaining 187 were resolved to the dissatisfaction of the merchant or received no final response.
What Merchants Say
A recent negative review describes dishonest salespeople and excessive fees:
Total rip off on fees! This company is more based on getting fees than developing a working relationship with a business. I was flat out lied to many times about fees. Don’t believe the representatives about anything they say. I set up with no contract for no monthly fees. They started charging monthly fees and said they couldn’t do anything about it. Later, they raised their monthly fees to $41.75 even if no transactions were done. Do yourself a favor and keep looking of a better card reader company. I am sorry they don’t have a rating lower than 1 star.
Canceling a merchant account could result in exorbitant early termination fees. Businesses facing that issue should research how to cancel their accounts without paying a fee.
A “D” Performance
In light of these figures, we are adjusting the BBB’s rating to a “D” for our scoring purposes.
Leaders Merchant Services Fees and Rates
A Closer Look at the Contract
Don't Fall Into An Expensive Trap. See Who The Worst Processors Are.
PCI Compliance Fee
3-years w/ ETF
The standard Leaders Merchant Services contract is a three-year agreement with a yearly PCI compliance fee of $129, a monthly service charge of $7.95, a $40 monthly non-compliance charge, and an early termination fee of either $350 or $250 depending on when a merchant cancels. Some Leaders Merchant Services fees appear to vary—a few merchants report a monthly minimum between $20-$25—but most of these figures are consistent across all complaints. As noted above, merchants also report paying higher rates on their swiped transactions than they were originally quoted. While the company advertises rates as low as 0.15% plus $0.18 for transactions, many merchant complaints reflect those figures as being deceptive and being charged as high as 11%. The company also advertises a multitude of payment processing equipment options, include Clover POS systems. It is not disclosed on their website whether the company sells these terminals or leases them; however, in the 2021 lawsuit against Leaders, it is mentioned that they lease equipment and part of the lawsuit was over undisclosed fees for doing so. It should be noted that most credit card terminals can be purchased for under $500. Non-cancellable, long-term leases mean a merchant can pay thousands for that same equipment making them a contract term to avoid.
Virtual Terminal and Payment Gateway Pricing
In addition to its storefront payment processing services, Leaders Merchant Services also dedicates a portion of its website to advertising its virtual terminal and payment gateway services, provided by Authorize.Net. A typical merchant agreement through Authorize.Net includes a transaction rate of 2.90% plus $0.30, a gateway fee of $25 per month, and a batch fee of $0.15. However, as a reseller of its services, Leaders Merchant Services reserves the right to alter these terms and conditions.
Negotiate for Better Pricing
Because the company relies on an independent team of sales agents, it is likely that some contract terms are negotiable depending on the agent servicing the account. Leaders’ standard pricing is about average for the industry, which prevents it from competing with the cheapest merchant accounts. The company also appears to do a poor job of communicating these terms to its clients, so we assign Leaders a “C” in this section. We also encourage merchants to check out our list of the providers of the best merchant accounts.
Leaders Merchant Services Jobs and Employment
Hiring Standards and Ethical Marketing Assessment
Audit Your Current Statement To Find Its Hidden Fees
Processing statements are intentionally complicated so that they can overcharge you. Get clarity before you switch.
Employs Independent Resellers
Advertises Deceptive Rates
Discloses All Important Terms
Outside/Inside Sales Agents
Leaders Merchant Services appears to utilize both telemarketing and independent sales agents. The company likely also maintains an inside sales staff and engages in traditional advertising, but most merchant complaints describe a telemarketing/independent agent approach. This practice seems to have resulted in numerous complaints (on this website and elsewhere) citing nondisclosure of fees and aggressive sales tactics by agents. The primary source of complaints, though, appears to be the use of deceptive rate quoting by agents and in the company’s official marketing materials. This does not compare favorably to our list of best credit card processors.
Phony Review Websites
As mentioned in the company overview, PaySafe Group appears to have created several phony review websites where it ranks Leaders Merchant Services and a few of its other poorly rated subsidiaries as “top picks.” These review websites often overtake all of the sponsored placements at the top of Google search results when users research the company, its subsidiaries, and competitors. We find this method of marketing to be both deceptive and intentionally misleading. See our PaySafe Review for our most recent list of suspected phony review websites.
Deceptive Rate Quotes
At the time of an earlier update, the home page for Leaders Merchant Services prominently quoted “rates as low as 0.35%.” As of this update, the company is advertising “rates as low as 0.15%” on its rate quote page and in Google search results. These advertisements make no mention of the higher “Mid-Qualified” and “Non-Qualified” rates that merchants will pay for the vast majority of their transactions. In addition, the company’s “rates” page previously offered an explanation of Qualified, Mid-Qualified, and Non-Qualified rates and stated that “the rate you should receive most frequently” is the Qualified rate. For most merchants, this is simply not true.
We have reviewed several merchant account statements from Leaders Merchant Services clients. In nearly all cases, these clients were being grossly overcharged for credit card processing service. In all cases, the clients were under a “tier pricing” scheme that lack clear transparency and included numerous junk fees.
Tiered Pricing Explained
Tiered pricing is a credit card processing pricing model that groups transactions into different “tiers” or categories, each with its own rate. Typically, there are three tiers: qualified, mid-qualified, and non-qualified.
Qualified transactions are those that meet certain criteria, such as swiping a customer’s card in person. These transactions are charged the lowest rate. Mid-qualified transactions are those that don’t meet all of the criteria for a qualified transaction, such as manually entering a card number. These transactions are charged a higher rate than qualified transactions. Finally, non-qualified transactions are those that are deemed the riskiest or most expensive, such as processing a rewards card or a corporate card. These transactions are charged the highest rate.
The problem with tiered pricing is that it lacks transparency. Processing fees can vary greatly depending on the type of transaction, and it can be difficult to determine which tier a transaction falls under. This can make it challenging for businesses to accurately compare processing costs across different providers or to understand the true cost of each transaction.
Furthermore, because tiered pricing allows processors to charge different rates for different types of transactions, it is nearly always more expensive than other pricing models, such as interchange plus pricing or flat-rate pricing. This is because processors may have an incentive to classify more transactions as non-qualified or mid-qualified, which allows them to charge a higher rate. This can result in businesses paying more in processing fees than they would with a more transparent pricing model. Overall, tiered pricing can be the least transparent and most expensive credit card processing pricing model because it lacks transparency and can result in unpredictable costs for businesses. Our review of Leaders Merchant Service statements indicates that the company may be taking full advantage of the lack of clarity to charge businesses excessive processing fees.
Legal Action Due to Deceptive Rate Quotes
Part of the 2021 lawsuit detailed elsewhere in this review was over deceptive rate quotes given by Leaders’ sales agents. This is a further strike against the company, as we already deemed their sales practices as deceptive even before the lawsuit.
Don’t Blindly Trust Your Agent
We consider this type of rate quoting to be deceptive because it is likely to give merchants an unrealistic expectation of the rates they will actually pay. Many publicly available complaints confirm this to be precisely the case, as merchants report their sales agents quoting them the Qualified rate and never mentioning other possible rates before signing. If you suspect that your sales agent snuck extra fees into your account, we recommend seeking a third-party statement audit to find and eliminate hidden fees.
Suspicious Positive Reviews
Finally, there is some evidence that positive reviews of Leaders Merchant Services have been copied and pasted on this site and elsewhere, possibly by fake accounts or reputation management firms. Merchants are advised to take this into consideration when searching for Leaders Merchant Services reviews.
Leaders Merchant Services Review Summary
Our Final Thoughts and Opinions
Leaders Merchants Services rates as one of the worst merchant account providers in the industry, according to our criteria. The factors that harm its rating include a history of unethical sales and marketing tactics, deceptive promotion via questionable review websites, documented proof of excessive processing fees and other costs, and expensive early termination fees and lease agreements. The company can improve its rating by better regulating its sales agents and by removing deceptive rate quotes from its sales pitches. Additionally, the company could benefit from working to lower its complaint rate. Merchants are advised to carefully examine the complete terms of any Leaders Merchant Services contract they are given, as the company currently ranks among the worst merchant account providers we’ve reviewed.
Related: Comparing The Best Merchant Accounts of 2023
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