|Sales & Marketing|
|Costs & Contract|
|Complaints & Service|
TSYS is one of the largest credit card processors in the United States, and the company has two primary areas of business. The first, which will be the focus of this review, is its direct sales channel called “TSYS Merchant Solutions.” The second is its processing platform, “TSYS Acquiring Solutions.” It’s important to understand the difference between these two entities because your relationship with the company will be different depending on which channel you’re dealing with. First we’ll cover the acquiring side.
TSYS Acquiring Solutions (tsys.com/acquiring/) is a merchant acquirer located in Tempe, Arizona. The company specializes in acting as a backend credit card processor for non-acquiring banks, Independent Sales Organizations (ISOs), and companies that create and sell credit card processing technology. In other words, it supplies the credit card processing for other companies that sell merchant services. As a merchant in this scenario, you would have a third party company between you and TSYS that would be setting up and managing your merchant account.
On the direct sales side, TSYS has its own sales offices with dedicated sales staff that can set up a merchant directly with credit card processing services. This channel is called “TSYS Merchant Solutions” (tsys.com/tms/). In this scenario, there is no third party company between you and TSYS, and you will be dealing with TSYS directly for account setup and management.
TSYS has been processing credit card payments since the 1970s and is one of one of the few processors listed on the New York Stock Exchange (NYSE: TSS). TSYS has acquired several other processors in its history, including First National Merchant Solutions (FNMS), Clarity Payment Solutions, Card Tech Ltd., TermNet Merchant Services, and, most recently, ProPay. Some of these companies have remained independently branded while others have been absorbed into the TSYS brand name. The president of TSYS is Thomas Boyer.
It is important to understand that a very large part of TSYS’s business is supplying backend credit card processing services for other sales organizations that resell services to small businesses seeking merchant accounts. In many cases, TSYS does not supply merchant accounts directly to merchants although the TSYS brand name may appear on the merchant account agreement. The banks, subsidiaries, and partners that resell TSYS credit card processing can often set the terms of their own contracts and mark up the processing rates and fees as they please. This practice can cause confusion with merchants as TSYS may have had nothing to do with the terms and pricing of the account. To add to the confusion, some partners manage the customer service of their accounts in-house while others outsource it to TSYS’s Back Office Support program. Depending on the partner, a merchant may either deal with the partner’s customer service or TSYS’s customer service. For the purposes of this review, we’ll focus on TSYS’s back office support and direct sales channel.
|TSYS Products and Services||Industries Served|
|Key Points – Sales & Marketing|
|Uses independent resellers?||Yes|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||No|
TSYS appears to use a variety of marketing tactics including W-2 employed sales agents, telemarketing, advertising, sub-ISOs, and strategic partnerships. A representative has stated that the company does not use independent sales agents, but merchants should note that the company’s use of sub-ISOs can result in some price variation among TSYS merchant accounts. Although sales experiences may vary, the company has received a very low number of complaints related to its sales team.
At the time of this update, the TSYS website contains a Simplified Pricing page that outlines three pricing plans. The “Pursue” plan lists a swipe rate of 2.5% plus $0.20 per transaction and a keyed rate of 3.5% plus $0.20 per transaction. The “Grow” plan lists a swipe rate of 1.99% plus $0.20 per transaction and a keyed rate of 3.1% plus $0.20 per transaction. The “Accelerate” plan lists a swipe rate of 1.7% plus $0.20 per transaction and a keyed rate of 3% plus $0.20 per transaction. At the bottom of the page, the company discloses in very small text that these rates are only applicable to “Qualified” transactions, while “Mid-Qualified” and “Non-Qualified” transactions will receive higher fees. This type of selective rate quoting could give merchants an unrealistic expectation of the rates they will pay. We have lowered the company’s score in this section accordingly.
TSYS Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||Variable|
Costs and fees of a TSYS merchant account will vary based on a merchant’s business type, processing volume and the agent setting up the account. Generally, this means that pricing is highly flexible. Merchants are encouraged to read “Fee Sweep” to learn how to negotiate the best rates and fees.
The company’s low score in this section is due to its standard merchant account contract terms. As of this review, TSYS Merchant Solutions’ basic contract includes a three-year service agreement that automatically renews for one-year terms unless the merchant cancels during a small window of opportunity. A representative confirmed that merchants who cancel outside of the grace period will be subject to a variable Early Termination Fee (ETF) based on the length of the contract and termination date. This, combined with an automatically renewing contract, greatly reduces the company’s rating in this section.
Keep in mind that these terms can often be negotiated. If you are dealing with a partner or subsidiary, the terms may be drastically different. As always, be sure to read the contract in its entirety.
|Key Points – Complaints & Service|
|Live customer support?||Yes|
|Most common complaint:||Contract length|
Most TSYS negative reviews can be traced back to the partner or subsidiary that sold and managed the merchant account. As mentioned earlier, these entities resell TSYS accounts and can set their own terms and pricing as well as provide their own in-house customer service. Several complaints seemed to target TSYS when the partner was truly the root of the problem.
There are only a handful of complaints that appear to be a direct result of a TSYS action or policy. In these complaints, the common theme is merchants reporting non-disclosure of the three-year service agreement, auto-renewing contract, and cancellation fee. Considering TSYS Merchant Solutions’ size and time in business, some of these complaints should be expected. Also, the overall number of complaints is very low compared to the massive size of the company. We therefore award TSYS an “A” in this section at this time.
Related: Best Processors For E-Commerce
|Key Points – BBB Report|
As of this review, the Better Business Bureau lists numerous reports for TSYS Merchant Solutions at various locations. The BBB is awarding the corporate headquarters in Omaha, Nebraska, an “A+” rating and reporting 59 complaints in the last 36 months. Most of these complaints are regarding problems with billing/collection or the product/service, and only 19 have been fully resolved to the merchants’ satisfaction. The remaining complaints either were not successfully resolved or did not receive a final response from the merchant. We believe “A+” ratings should be reserved for companies with zero complaints, so we have adjusted the rating of this section to an “A-” for the purposes of this review.
* Denotes CPO-adjusted BBB score
This review was originally published on 1/24/12 and was last updated on 10/13/15.
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