Founded in 1997 and based in Lehi, Utah, ProPay (propay.com) is a merchant account provider that shares attributes of both a traditional credit card processor and services like PayPal, Stripe, 2Checkout, and Google Checkout. ProPay was acquired by TSYS in late 2012 and now operates under the ProPay name as “a TSYS Company.” Dave Duncan is the president of ProPay.
ProPay’s similarities with a traditional merchant account include the ability to swipe credit cards at the point of sale, which can result in a lower processing fee, as well as the ability to accept payments for other purposes such as e-commerce and mail order/telephone order sales. Unlike a traditional merchant services provider, ProPay does not support the use of desktop credit card terminals like the type used at most retailers. However, like PayPal and 2Checkout, ProPay has an easy signup process and is open to non-traditional merchants such as direct sellers and micro-merchants. ProPay acts as its own holding account and merchants must manually transfer their money to a linked checking account.
ProPay offers several ways to accept credit card payments, including mobile options. The first, “ProPay Jak,” is a service similar to that of GoPayment, Square, and Pay Anywhere in which merchants can use a card reader with a smartphone to accept credit cards. However, unlike the other three options, ProPay Jak includes a variety of other services which are not offered by its competitors, such as access to a virtual terminal.
The second mobile option that ProPay offers uses a small skimming device called the “ProPay FLASH Card Reader” (formerly known as the MicroSecure Card Reader) which allows merchants to collect credit card data by swiping the card’s magnetic strip and storing it for later processing when the merchant has access to an internet-connected computer. Merchants can also use the ProPay FLASH device to process real-time sales through ProPay’s virtual terminal once the device is connected to the Internet. Lastly, ProPay offers an automated phone system where merchants can call in to process real-time sales.
ProPay Jak Video Introduction
Sales & Marketing
Key Points - Sales & Marketing
|Employs Independent Resellers||No|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||Yes|
ProPay does not use any deceptive marketing or sales tactics that are apparent to this reviewer. The entire signup process is handled in-house and on the company’s website. Additionally, ProPay’s pricing is transparently displayed and does not hide pernicious fees. We are not seeing any merchant complaints at this time that accuse the company of deceptive advertising strategies, which indicates that ProPay deserves an “A” rating in this category.
ProPay Marketing Example
Costs & Contract
Key Points - Costs & Contract
|Early Termination Fee||None|
|PCI Compliance Fee||None|
|Equipment Lease Terms||None|
ProPay offers an annual agreement with an annual fee but no monthly fees, monthly minimums, gateway fees, or statement fees. We are unable to determine at this time whether the company charges a cancellation fee for merchants who terminate their contracts early, but ProPay has not charged such a fee in the past. We also have not seen any complaints regarding a termination fee.
ProPay offers three plans, and each plan charges different rates and fees. The “Premium” plan costs $39.95 per year and charges 2.60% for swiped Visa/MasterCard/Discover transactions, 3.40% for American Express transactions, and 3.55% for all keyed-in transactions. The “Premium + Card Reader” plan costs $41.95 per year and charges the same rates as the Premium plan, but it comes with a physical card reader. The “Platinum + Card Reader” plan costs $69.95 per year and charges 2.40% for swiped Visa/MasterCard/Discover transactions, 3.20% for American Express transactions, and 3.35% for all keyed-in transactions. There is also a “Bank Account Transfer Fee” of $0.30 to $0.35 that likely applies whenever merchants transfer their money from their ProPay accounts to their business bank accounts.
ProPay’s rates and fees are competitive with most traditional three-tier merchant account setups, and probably less expensive in many cases. However, ProPay is more expensive than Interchange Pass-through rate pricing.
Complaints & Service
Key Points - Complaints & Service
|Total Online Complaints||25+|
|Live Customer Support||Yes|
|Most Common Complaint||Fund Holds|
ProPay has very few complaints for a company of its size, and most of these complaints were filed before 2014. Many of the complaints that it does have appear to have been filed by merchants that have a limited understanding of how credit card processing fees are assessed and would experience the same issues with any provider.
The one common theme in the legitimate complaints filed against that company is that ProPay has a tendency to hold funds and freeze accounts if a merchant starts making charges that differ from its normal transaction history, or if the merchant suffers a chargeback. It some cases, it appears that ProPay will suddenly terminate an account without notice, thereby leaving the merchant without a way to accept credit cards. Understandably, these same merchants complain of receiving poor customer service.
ProPay appears to be very cautious about how much risk it is willing to accept from a merchant, so higher risk businesses may want to look elsewhere. It is also wise to avoid chargebacks at all costs if you choose to go with ProPay.
Generally, we do not count complaints regarding fund holding against a providers unless there is a clear pattern of abuse or deception. It is a standard industry practice for providers to hold funds in the event they suspect high risk transactions or fraud. In ProPay’s case, it appears that it is operating within normal guidelines when choosing to hold funds. To learn more about fund holds, see this post: Why Credit Card Processors Hold Funds.
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Key Points - BBB
|Product & Service Complaints||31|
|Billing & Collection Complaints||0|
|Advertising & Sales Complaints||2|
|Guarantee & Warranty Complaints||0|
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, ProPay is accredited with the Better Business Bureau and holds an “A+” rating. The company has 36 reports filed in the last 36 months, which is a slight increase from the time of our last review. Of the 36 complaints, 20 are due to problems with products and services, 13 to billing and collections disputes, and three have to do with advertising or sales issues. Twelve complaints were resolved to the merchants’ satisfaction, while 24 either were not successfully resolved or did not receive a final response from the merchant. We have adjusted the BBB‘s rating to an “A-” for the purposes of our review based on our own rating criteria.
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About Phillip Parker
Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded CardPaymentOptions.com to help merchants enact positive change in the credit card processing industry. Schedule a Consultation with PhillipSchedule a Consultation with Phillip