Founded in 2014, Magothy Payments (magothy.biz) is a merchant account provider that is capable of serving most standard-risk business types. The company is a reseller of Banc Certified Merchant Services and primarily serves merchants based in Maryland. Banc Certified Merchant Services is a registered ISO/MSP of Elavon, but Magothy is also capable of processing through Priority Payment Systems and iPayment if needed. Magothy Payments is headquartered at 8000 Jumpers Hole Road, Suite 209, Pasadena, Maryland 21122, and Jaron Rice is the company’s owner.
- Sales & Marketing: Magothy Payments does not appear to rely on independent sales agents and has not received any complaints about its sales practices.
- Costs & Contract: Magothy Payments offers month-to-month contracts through Elavon, Priority Payment Systems, and iPayment with no early termination fees.
- Complaints & Service: Magothy Payments has received fewer than 10 public complaints and a high number of positive testimonials.
- BBB Rating: Magothy Payments has received zero complaints with the Better Business Bureau and has an “A+” rating.
- Rates & Fees: How Merchants Got The Best Rates With Magothy Payments
Magothy Payments Products and Services
- Debit and credit card processing
- POS solutions
- QuickBooks integration
- Gift and loyalty programs
- Analytics and reporting
- American Express OptBlue pricing
Sales & Marketing
Key Points - Sales & Marketing
|Employs Independent Resellers||No|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Magothy Payments appears to primarily rely on referrals and networking to advertise its services. It employs W-2 and 1099 sales agents but requires its 1099 sales agents to comply with the company’s pricing guidelines. We are currently unable to locate any Magothy Payments complaints that accuse the company of nondisclosure or misrepresentation. In fact, there are a large number of positive testimonials about the company’s honesty and transparency.
Magothy Payments prominently advertises that it offers interchange-plus pricing and does not enforce long-term contracts or early termination fees. The company’s owner has reinforced those claims by testifying in support of legislation in the state of Maryland that would outlaw liquidated damages clauses, cap merchant cancellation fees at $99, and impose fines on processors that debit from merchants’ bank accounts later than 60 days after cancellation. Although the most recent version of the bill did not get signed into law, the changes sought would have established clear protections for merchants. Mr. Rice’s testimony can be seen here. In combination with the lack of complaints and large number of positive merchant reviews, this is a strong indication that Magothy Payments is committed to fair dealing and honest sales practices.
Magothy Payments Marketing Example
Costs & Contract
Key Points - Costs & Contract
|Visa/MasterCard Rate||Interchange + 0.50% + $0.10|
|American Express Rate||Interchange + 0.75% + $0.10|
|Early Termination Fee||None|
|PCI Compliance Fee||$8, $7.50, Or $12 Per Month|
|Equipment Lease Terms||By Merchant Request|
The standard Magothy Payments contract (available below) is a month-to-month contract through Banc Certified Merchant Services with no early termination fee, a monthly minimum fee of $25, a PCI non-compliance fee of $45, a monthly statement/support fee of $10, and a per-transaction fee of interchange plus 0.50% plus $0.10 (interchange plus 0.75% plus $0.10 for American Express cards). Merchants who require a payment gateway will pay an extra $15 per month and an extra $0.10 per transaction, and additional features such as digital invoicing or mobile payments can be added within the payment gateway for further monthly costs.
Magothy charges a one-time setup fee of at least $99 for all accounts, and this fee can increase to $249 depending on how much money Magothy is able to save the merchant. This fee covers payment gateway customization, reporting tool setup, PCI compliance assistance, and employee training. Merchants who are dissatisfied with the company’s service after one billing cycle can request a full refund of this setup fee, although a company representative has stated that this has never occurred.
Magothy’s PCI compliance fee varies according to each merchant’s payment solution and level of liability coverage. This fee is charged monthly and can total either $8 ($100,000 in coverage) or $12 ($250,000 in coverage) for physical terminals or $7.50 ($20,000 in coverage) for e-commerce or MOTO solutions. In addition, the company prefers to sell rather than lease terminals, but it will provide merchants with leased equipment if merchants request an equipment lease. In almost all cases, we advise merchants to purchase equipment outright rather than sign an equipment lease.
Magothy offers custom pricing for high volume merchants. The company also guarantees in its contract that the merchant’s interchange-plus markup will never increase and offers a followup analysis after one month of processing with each merchant to determine whether it did in fact lower the merchant’s effective rate. A company representative has stated that Magothy Payments does not offer tiered pricing.
We often recommend against signing up for some of these fees, such as statement fees, annual fees, and setup fees, but Magothy Payments appears to genuinely attempt to offset its fee structure with high savings and quality support. We are unable to locate any merchant complaints that mention excessive charges or unreasonable contract terms from the company. In fact, the available Magothy Payments reviews that mention pricing praise the competitiveness of the company’s prices and the savings they’ve seen through the company. The overwhelmingly positive consensus among merchants has earned Magothy an “A” rating in this category. See the Magothy Payments Merchant Agreement.
Complaints & Service
Key Points - Complaints & Service
|Total Online Complaints||<10|
|Live Customer Support||Yes|
|Most Common Complaint||N/A|
We are unable to locate any negative Magothy Payments reviews at this time, and there is no indication that the company is a ripoff or a scam. As noted above, there are many reviews of the company online, but they are unanimously positive. Most of these reviews are unverified, but we have no reason to suspect that any of them are fake. Merchants generally praise the company’s transparency and proactive customer service, and Magothy does offer phone support to its merchants.
Key Points - BBB
|Product & Service Complaints||0|
|Billing & Collection Complaints||0|
|Advertising & Sales Complaints||0|
|Guarantee & Warranty Complaints||0|
Magothy Payments currently has an “A+” rating with the Better Business Bureau and has been BBB-accredited since December 2016. The company has not received any complaints in the nine months that its profile has been active, but it has received 19 positive informal reviews. Given the company’s clean complaint record, we agree with the BBB’s rating at this time.
About Phillip Parker
Phillip Parker is a former merchant services sales agent who believes the industry has been overrun by people who engage in fraud and deception in order to steal from hard working business owners. He created this website to help you avoid the bad players, save money on fees, and to get peace of mind with your merchant account. If you would like to help support his work, learn more about our cost reduction service. We can evaluate your statement, tell you exactly how much you're overpaying, and then help you dramatically reduce your fees with your current credit card processor. Looking to switch instead? See our list of the best merchant account providers.Schedule a Consultation with Phillip