UPDATE 8/11/2021: Payza has been indicted by a federal grand jury on charges that it “operated an Internet-based unlicensed money service business that processed more than $250 million in transactions.” Payza's U.S. website is inactive, and the company appears to no longer operate in the United States. Merchants are reporting that its European site is also not paying out money transfers. The US Department of Justice has requested that people damaged in the Payza event file for remission.
Payza (payza.com) is an online payment processor that functions in a manner similar to PayPal or Dwolla. There are a number of unusual features about the company and its service that make it a difficult provider to research and rate. For one thing, the company was formerly based in Canada and known as AlertPay before it was bought by MH Pillars, Ltd. in 2012. This “acquisition” appears to have been more of a rebranding, as there is not a great deal of information available online about MH Pillars, Ltd beyond the fact that it is a DBA of Payza.
To complicate matters further, the company appears to have offices all over the world. Payza is headquartered in London, has a regional office in New York City, uses an acquiring bank located in Moscow, and has made significant recent gains in the Bangladesh payments market. Part of this global success is likely attributable to the fact that the company actively promotes its ability to process remittances (the earnings that a foreign worker sends to his or her home country), which is a largely untapped market among payment processors.
In May 2016, the U.S. Department of Justice confirmed that it is conducting a criminal investigation of Payza and an India-based company called Obopay. The Department of Justice has not provided specific details about the investigation, and the investigation appears to be ongoing.
Payza appears to have only recently ventured into the U.S. market under the Payza name, but it does claim that it can process payments between U.S. users and businesses. Alastair Graham is listed as the CEO of Payza.
How Payza works
Payza operates by having its users send and receive money from dedicated Payza accounts. The company offers both personal and business accounts, and businesses can accept credit card payments from customers who do not have Payza accounts via “pay now” buttons on their websites. It's free for anyone to send money from their Payza account to someone else's Payza account, but a transaction fee is assessed for anyone who accepts money from another Payza user.
It seems that Payza users transfer funds through some sort of email authorization system like that used by Square Cash. The company allows users to fund their Payza accounts through ACH transfers, bank wires, cashier's checks, Bitcoin money orders, or credit and debit cards. Payza users can withdraw money from their accounts using ACH transfers or credit cards, or by loading a prepaid Visa card with their funds in countries where this service is available.
- Sales & Marketing: Payza does not employ independent sales representatives but has received some merchant complaints about its sales practices.
- Costs & Contract: Payza offers a month-to-month contract with variable transaction fees for personal and business users.
- Complaints & Service: Payza has received more than 200 public complaints.
- BBB Rating: Payza has a “D-” rating with the Better Business Bureau and has received 6 complaints in the last three years.
- Rates & Fees: How Merchants Got The Best Rates With Payza
Payza Customer Reviews
Here's What Their Clients Say
|Total Online Complaints
|Live Customer Support
|Most Common Complaint
Payza is currently showing over 200 complaints on various consumer protection websites, and many of these complaints accuse the company of being a fund-holding scam that signs new customers up for service with the intention of holding their funds and gathering interest on them. Some of these complaints have been filed against the company’s former name of AlertPay, and an equal amount have been filed in a forum specifically created to warn business owners against using Payza.
The story behind this forum, alertpay-payza-scam.com, is that the owner of a company called Themco felt that the company withheld $1.289 million from his business in order to fund its operations with the interest gathered on the amount. When legal recourse failed to obtain the disputed funds, Themco launched this forum to alert merchants to the risk of fund holds at Payza. The forum appears to be less frequently trafficked than it previously was, and it’s possible that many of its users are simply shareholders of the company. It’s difficult to determine the validity of Themco’s claim, since details about the organization are scarce. Regardless, the amount in dispute is an obscenely large hold amount and merits mention in this review on that basis alone.
There are also over 150 complaints filed against the company on this and other consumer protection websites, indicating that the fund hold issue is not limited to the former employees of Themco. Payza offers an FAQ section on its website, chat support, and a ticketing system.
In 2020, a long-time lawsuit was finalized against Payza. As mentioned at the top of this review, the company’s owners accepted a plea deal in a money-laundering case in which they are said to have knowingly passed $250 million in illegal payments through their system. Owners Ferhan Patel and Firoz Patel were sentenced to prison terms and forfeited $4.5 million.
Payza Online Ratings
Here's How They Rate Online
|Product & Service Complaints
|Billing & Collection Complaints
|Advertising & Sales Complaints
|Guarantee & Warranty Complaints
Payza is not an accredited business with the Better Business Bureau at this time and is showing a “D-” rating based on 6 complaints filed in the last 3 years. Of these complaints, 5 are related to problems with the product or service and 1 had to do with billing or collection. Only 3 of these 6 complaints were resolved by the company to the satisfaction of the merchant. The remaining 3 were resolved to the dissatisfaction of the merchant or received no final response. Considering the company’s complaint volume and resolution ratio, we see no reason to adjust the BBB’s rating.
Payza Fees, Rates & Costs
A Closer Look at The Contract
|Early Termination Fee
|PCI Compliance Fee
|Equipment Lease Terms
Payza does not charge setup fees, monthly fees, PCI Compliance fees, or cancellation fees. The company offers two tiers of service with different transaction rates, although there appears to be no difference between the rates paid by “Personal” users and “Business” users.
Personal and Business users may send funds for free at all times, but payments are assessed a fee of 2.9% plus $0.30 on any payments they receive. Some industries (likely high-risk business types) will be assessed a fee of 3.90% plus $0.59 per transaction, but it’s not clear which industries this applies to. The company’s “Fees” page also states that credit card payments will start with a receiving fee of 5.49% plus $0.65. Both account types can add funds to their Payza accounts via credit card for 3.50% per transaction, via a bank wire for $8.00, via a bank transfer for free (transactions over $200 USD) or $2.00 (transactions under $200 USD), or for free through Bitcoin. It also appears that customers are charged either $0.50 (for bank transfer), 2% (for Bitcoin), or a minimum of $8.00 (for credit cards) for each withdrawal from their Payza account. This withdrawal fee is a clear incentive for users to wait until their balances are very large before making a withdrawal.
Despite the company’s lack of long-term contracts and its mildly expensive transaction fees, its grade has been lowered to a “D” for what appears to be an aggressive and inconsistent fraud prevention policy. Public complaints abound regarding funds withheld from user-to-user payments, personal-to-business payments, refunds, and withdrawals, sometimes for no clear reason. For example, in early December 2013, it appears that the company abruptly sent out a notice to its users explaining that it was suddenly unable to process payments in the U.S., effectively freezing the accounts of any U.S. users until further notice. Payza appears to have since found a U.S.-based processing partner, but the possibility remains that the same situation could occur again. The reasons given by the company for holds and service interruptions are disturbingly vague in most cases, and they’re made more worrisome by language in the company’s official terms and conditions that threatens merchants with a fine if they contact Payza’s partner banks when investigating a hold. Simply put, there are much simpler ways to transfer money without having to worry about dedicated e-wallets, complicated fee structures, or withheld funds.
Payza Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Employs Independent Resellers
|Advertises Deceptive Rates
|Discloses All Important Terms
Payza mostly markets its services through its website, and the company does not appear to employ a large outside sales team or utilize telemarketing. While these sales and hiring practices are favorable in our view, the company still has a long way to go when it comes to transparency.
It is difficult to understand the details of how Payza works by visiting its website. There appears to be some sort of email authorization that takes place between users who are sending payments, and the company seems to be oriented exclusively toward e-commerce rather than brick-and-mortar merchants. According to some merchant reviews, the company has a complicated fee transfer schedule depending on the type of transaction taking place and the type of account involved. Payza does not visibly list its rates on any of its product description pages, but its “Fees” page does appear to fully disclose its pricing.
For a brief period in August 2016, we received a large number of bogus positive Payza testimonials in the comment section of this review. When we placed a warning on this review that further attempts to post fake reviews would lower the company’s grade, the attempts ceased. Merchants are advised to use their best judgment when reading online reviews of Payza.
It’s tempting to simply attribute the company’s complicated payment system and rate structure to poor website design, but there may be more to the story. The vast majority of Payza negative reviews by merchants have been filed with regard to sudden, long-term fund holds and account freezes. Most of these merchants seem to have very little understanding of what exactly they did to cause Payza to hold their funds, and the public reasons given by the company both on its website and in its public responses to these complaints are numerous and inconsistent. Since the company reserves the right to place any funds withheld from merchants in an interest-bearing account, Payza does have some incentive to withhold funds. Given the company’s apparently aggressive hold policies, the lack of clear information on its website is a major cause for concern and has lowered the company’s score to a “C” in this section.
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