Newtek Merchant Solutions Review

Newtek Merchant Solutions is the merchant services division of Newtek Business Services, a New York City-based financial solutions company. Established in 1998, Newtek is often named as a central figure in a controversy surrounding CAPCO investments in multiple states over the past 10 years. According to multiple reports (2 of which can be found here and here), the company accepted tax credits from state governments as part of an agreement to create jobs and spur business growth within these states. The company has been criticized, though, for investing primarily in its own business ventures rather than non-Newtek-affiliated small businesses.

In 2023, Newtek acquired the National Bank of New York City. This appears to be a major acquisition, and we will update as it affects Newtek’s model.

Payment Gateway

Newtek Merchant Solutions provides its own payment gateway, Newtek Gateway, which is Level 1 PCI-compliant. This gateway includes a modular anti-fraud system called Fraud Stopper, real-time reporting, a virtual terminal, retail swiping, recurring payments, pre-certified shopping carts, and integration with POS systems and terminals. Additionally, it offers live developer support, developer emulators, user management tools, customizable receipts, and a built-in customer database.

Customized Payment Processing Services

Newtek Merchant Solutions focuses on offering customized payment processing solutions tailored to the specific needs of small and medium-sized businesses.

Multi-Channel Payment Acceptance

Newtek provides various payment processing options, including in-store, online, and mobile payments.

Compatibility with Various POS Systems

Newtek Merchant Solutions is compatible with a wide range of point-of-sale (POS) systems, enabling businesses to integrate their existing hardware and software with Newtek’s services.

Support for High-Risk Merchants

Newtek Merchant Solutions offers specialized payment processing services for high-risk merchants, ensuring they have reliable payment processing while minimizing chargebacks and fraud.

Advanced Security Measures

Security is a primary concern for Newtek Merchant Solutions. They use advanced encryption and tokenization technologies to safeguard customer data during transactions. Their fraud prevention tools assist businesses in detecting and preventing fraudulent activities.

Dedicated Account Management

Newtek assigns a dedicated account manager to each merchant, providing personalized support and ensuring a reliable point of contact for any questions or issues.

In-Depth Reporting and Analytics

Merchants using Newtek Merchant Solutions have access to comprehensive reporting and analytics tools. These tools help monitor sales performance, track customer behavior, and optimize payment processing operations.

Limited Complaint Total

We have identified over 10 negative reviews of Newtek Merchant Solutions, with some expressing concerns about the company possibly being a scam or ripoff. Most complaints seem to stem from Newtek’s association with the TYS telemarketing scam. Other grievances relate to undisclosed fees, poor customer service, and challenges in canceling the merchant account, with recurring themes noted. Despite Newtek’s low complaint volume relative to its size and tenure, the recent FTC settlement and consistent complaint patterns have impacted its rating in this aspect. If you have your own experience to share concerning Newtek, please feel free to do so in the comments section below.

Newtek Merchant Solutions Customer Support Options

Newtek provides phone and email support to its merchants. While the company has been rated a “B” in this category, it currently falls short of being recognized as a top-performing credit card processor for customer service.

PaymentPop Rating for Newtek

Positive Feedback

There are no positive reviews published about Newtek on the PaymentPop website.

Newtek BBB Rating

The Better Business Bureau maintains 2 separate profiles that both appear to be related to Newtek’s services. The profile for “Newtek Merchant Solutions, LLC” currently has an “A-” rating and is prefaced by a warning regarding the FTC action against the company, while the headquarters profile for “Newtek Business Services Corp.” has an “A+” rating. For the sake of simplicity, we will combine the data from both of these profiles.

The company’s BBB profile under Newtek Merchant Solutions, LLC is prefaced with the following warning:

This warning relates to the government action taken that has been addressed in the complaints and service section of this review.

Over 40 Complaints Across 2 Profiles

Newtek has received 48 total BBB complaints in the past 36 months. This is an extremely large increase from the 10 across 3 profiles at the time of our last review, though it appears that many of the complaints have to do with the loan side of the business and not credit card processing.

In addition to those 48 complaints, Newtek has received 106 informal reviews across its 2 BBB profiles. All but 2 of these reviews are negative in tone. Again, however, the majority of these reviews come from the loaning side of the business, and it appears that Newtek takes the time to personally respond to and investigate each review. The most recent review that refers to card processing details unexpected charges:

This prompted a response from the company:

For clients who believe their processor is charging undisclosed fees, we recommend seeking a third-party statement audit to find and eliminate hidden charges.

An “A” Performance

Despite the subject matter of the reviews, it appears that much of the consumer dissatisfaction has to do with the convoluted structure of the loans they apply for and the related deposits. While the BBB references the company’s legal history, the reviews and complaints across both profiles don’t shed light on any new issues. In light of these figures, we agree with the BBB’s score at this time.

Trustpilot Rating for Newtek

Newtek has a 1.8 out of 5 star rating based on 48 user reviews on Trustpilot.

Google Maps Rating for Newtek

Newtek has a 1.9 out of 5 star rating based on 26 user reviews on Google Maps.

Newtek Agreement Details

The standard Newtek merchant contract (available below) entails a two-year commitment facilitated by Redwood Merchant Services. It automatically renews for one-year terms and includes an early termination fee of $295. Additionally, clients are subject to various monthly and annual charges, including PCI compliance fees, monthly minimums, and fluctuating transaction fees. Although specific fee details are not readily accessible, client feedback suggests the presence of an annual “security fee” of $89.95, potentially related to PCI compliance, which businesses must actively decline to avoid. While other fees remain ambiguously labeled in client feedback, several reviews highlight undisclosed and unexpected monthly charges imposed by Newtek.

Concerns Over Fund-Holds

A notable portion of the available complaints against Newtek stem from fund-hold issues. Similar to numerous processors, Newtek retains the authority to place funds in a reserve account in response to excessive chargebacks. While there’s no evidence of Newtek abusing this policy presently, merchants should acknowledge the possibility of encountering fund-holds when utilizing the company’s services. They may need to take remedial actions to prompt Newtek to release their funds. Access the Newtek/Redwood Merchant Services Merchant Agreement for further details.

In 2013, the FTC filed a complaint against Newtek for processing payments related to a telemarketing credit card scam known as TYS (Treasure Your Success). The complaint alleged that Newtek processed payments for TYS without customary reviews and despite clear signs of fraud. Further details on the case and settlement can be found here. In subsequent legal proceedings, Newtek was ruled against and ordered to pay $1.7 million to the FTC, with conditions set to prevent future violations.

Outside Sales Agents

Newtek appears to utilize independent sales agents and strategic partnerships to market its services. The use of independent sales agents is frequently linked to high complaint rates due to the lack of oversight and training these agents typically receive. In this case, we have located a handful of negative Newtek reviews that describe misrepresentation or nondisclosure by the company’s sales representatives, specifically with regard to the company’s “Meet or Beat” guarantee.

Incessant Sales Calls

In addition, a large number of online telemarketing complaints name Newtek as the source of constant, unwanted sales calls. This is most likely due to the company’s association with TYS, a telemarketing scam that was recently the subject of legal action by the FTC. Although Newtek did not operate this scam itself, its partnership with TYS has contributed to its being included in these complaints.

No Affiliation with the SBA

As a final note, the Newtek website was previously found at “thesba.com” due to the company’s use of the slogan, “The Small Business Authority.” Despite this former domain name, business owners should not confuse Newtek with the U.S. Small Business Administration, and the company’s homepage at one point explicitly stated that Newtek is neither affiliated with nor endorsed by the SBA. To its credit, Newtek’s website does not prominently feature any misleading rate quotes. If you suspect that Newtek is charging you undisclosed fees, we recommend seeking a third-party statement audit to find and eliminate hidden charges.