First American Payment Systems Review
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- Date Established
- Fort Worth, TX
Based out of Forth Worth, Texas and operating since 1990, First American Payment Systems (FAPS) has over two decade’s worth of payment processing under its belt. As of now, they do about $10 billion in transactional volume annually, which puts them in the mid to upper tier as far as size is concerned. Without a doubt, this company has made a name for itself in the industry. Unfortunately that name is, in many cases, an expletive…
My main problem with FAPS (besides their acronym) is overall inconsistency. They employ a large salesforce of independent agents, but do not seem to provide adequate training or support to these contractors. You can find dozens of complaints from former sales agents alongside complaints from the merchants these agents sold to. It adds up to a lot of unhappy people.
My secondary problem is their convoluted branding and subsidiary structure. I’ve heard many reports of First American using this tangle of business names to deceive merchants and to overall reduce the transparency of their operations. In my experience, companies with many DBAs are trying to cover something up and confuse those trying to assess their reputation. First American Payments seems to fit this bill.
FAPS is not the worst merchant services provider I’ve come across. They have a pretty nice website and don’t employ too many overtly deceptive sales gimmicks publicly. But I’m having a hard time coming up with any reasons to recommend you do business with First American. At best, it’s a gamble. At worst, it’s a nightmare. They don’t offer enough added value to make up for the added expense of their contracts, and customer support seems to be lacking. I’m awarding them three stars for the moment, but FAPS will have to make some substantial changes to the way they do business in order to increase this rating.
Alternate and Associated Brands:
First American Payment Systems has the single most convoluted and confusing web of associated brands and sales offices I have ever seen. Keep an eye out for:
- Merimac Capital Corporation (handles leasing)
- First Advantage (gift and loyalty cards)
- First Fund (ACH payments)
- FirstPay.Net (gateways)
- First View (online reporting)
- Secure-Chex (check processing)
Associated or subsidiary companies:
- Certified Payment Processing
- Summit Merchant Solutions
- Trans Tech Merchant Group
- Eliot Management Group
- Apex Merchant Group
- Heritage Payment Solutions
- Trinity Merchant Group
- Appstar Financial (not sure about the nature of this relationship)
- goEmerchant.com (the only FAPS-related company I like)
But, to be clear, FAPS doesn’t seem to have any association with the similarly named 1st American Card Service.
Products and Services:
- POS system: FAPS offers a proprietary 1stPayPOS software/hardware combo. (You supply the iPad and reader.)
- Mobile payments: Offered via GoEmerchant’s proprietary M+Terminal. I like GoEmerchant, so seeing this partnership actually boosts my confidence in FAPS by a notch or two. No free reader seems to come standard.
- Terminal sales and leasing: Includes proprietary Xion counter top terminal. Leases come through Merimac Capital, a First American subsidiary. In my opinion, you should never lease. Merimac leases are non-cancellable and extend for 60 month, usually at about $45 per month (plus insurance). That means that even if you want to cancel the next day, you will be stuck paying $2,700 to buy out the contract for a machine worth a couple hundred dollars. Check out this article for more info.
- Online reporting: This comes via the proprietary FirstView reporting system.
- Gateway: First American Payments uses a proprietary gateway called FirstPay.Net.
- Check processing: Via Secur-Chex.
- Gift and loyalty cards: Offered as an in-house service through the FAPS FirstAdvantage brand.
- Cash advances
Fees and Rates:
Apparently First American Payments thinks it’s just terribly gauche to talk about money. I don’t think you’ll find a single dollar sign or percentage mark anywhere on the FAPS site.
But from what I’ve seen from FAPS merchants, these accounts are incredibly expensive, with most of the money going directly toward agent profits. Look out for annual fees of about $100, statement fees up to $20, annual PCI compliance fees around $100, steep monthly minimums and costly tiered pricing.
If you do choose to use First American for credit processing, I have three words for you: Negotiate, Negotiate, Negotiate. And be careful! Demand interchange-plus pricing and no monthly minimum. If they won’t do that for you, I’d recommend you take your business elsewhere.
Contract Length and Early Termination Fee:
You can expect to see three-year, auto-renewing contracts from First American Payment Systems, carrying early termination fees of about $495. Since FAPS relies heavily or independent resellers and so many subsidiaries, there’s not a whole lot of standardization here. But if you don’t see a signed wavier form attached to your contract, chances are there is an early termination fee.
Sales and Advertising Transparency:
The First American Payment Systems website is actually fairly attractive and up-to-date. When you dig in to it, there’s not a whole lot of in-depth information, but it’s not bad as far as corporate web advertising goes. I was actually surprised to see this, pleasantly surprised. You can find a separate page for each FAPS service with a few bullet points, and a flyer or brochure in PDF form for each as well. I didn’t find any outright lies in this marketing material.
What’s conspicuously absent from this sales information is any mention of cost or educational material about how merchant processing fees work. To quote Shakespeare, I’d like to see “more matter, less art” in their marketing. This is likely done to accommodate a large and diverse pool of resellers who all have the freedom to set up accounts with a wide variety of fees and rates. While I recognize that rates will differ from merchant to merchant, I’d really like to see some standardization and disclosure of scheduled fees. This helps to ensure that sales reps are selling fairly priced contracts. Take a look at the great resources offered by companies like Helcim or Dharma Merchant Services and compare this to First American Payment Systems. It’s like night and day.
In terms of individual sales experiences, FAPS does not deliver with any amount of consistency. Their independent agents seem, in many cases, poorly trained and/or poorly regulated. So while you could get a great sales agent, you could also get a terrible one. This is not a gamble I advise merchants to take.
Customer Service and Technical Support:
You can read in our comments section a number of reviews that cite rude or otherwise unsatisfactory customer service. Corroborating complaints exist across the web. So while First American Processing does offer 24/7/365 in-house customer service, and they did win the ATSI Call Center of Distinction award in 2013, not everyone would agree that this adds up to excellent customer support.
Basically, here’s my take away: having a well-staffed call center is a band aid on a bullet wound when sales reps are scamming merchants into signing expensive and unfair contracts. If you’ve had experience with FAPS customer service, please let me know how it went in a comment.
Negative Reviews and Complaints:
First American Payment Systems has racked up a decent number of complaints, but not an obscene amount. They have 127 complaints filed with the BBB in the past three years, with 27 in the past 12 months. This means that complaints are on a downtrend.
An additional 66 complaints come up on Ripoff Reports. Many of these complaints are very detailed and articulate, as well as damning. Some issues are agent-specific, while others seem more systemic. You’ll also find a bunch of complaints from independent sales agents complaining about the business practices at First American Payment Systems.
The responses to merchant complaints are impersonal and not very apologetic, and they will absolutely not cancel terminal leases, but they will sometimes waive early termination fees.
Here are some of the most common complaints against First American Payment Systems:
- Unethical sales tactics: Overall, merchants are unsatisfied with the sales experience provided by many FAPS agents. Specifically, complaints include non-disclosure of contract terms and fees, as well as receiving misleading information about how credit card processing works and how rates are decided. The fact that FAPS does not provide any useful educational material or rate information on their website makes the sales experience even more opaque.
- Bad leasing agreements: Just about any company that still sells the old standard four-year non-cancellable leasing packages should be, as a rule, avoided like the plague. These companies are desperately looking to make money at your expense and via your lack of industry knowledge. These leases end up costing thousands of dollars just for the pleasure of borrowing a machine that is only worth a few hundred dollars. Don’t do it. Read this article for more information.
- Overall expensive: Some merchants complain about rate hikes and high percentages of non-qualified transactions. Others bemoan their hefty early termination fees. Others hate finding so many undisclosed fees on their statements. But most complaints I read had in common a general feeling that FAPS is charging more than they are worth. Based on everything I’ve seen, I tend to agree.
Positive Reviews and Testimonials:
I couldn’t find any positive reviews or testimonials for First American Payment Systems. To be honest, I have no real reason to encourage you to pursue using this company’s services. While I’m sure they have a substantial number of satisfied merchants on their side, FAPS delivers very inconsistent sales and service experiences. With so many other truly exceptions providers out there, why settle for the lower end of mediocrity?
If you disagree, please let me know in a comment. I’m open to valid arguments in favor of or against any provider I’ve reviewed!
With a company like First American Payment Systems, one could argue that a few bad apples ruin the bunch. With so many independent sales agents out there working for this company, there are going to be some good ones and some bad ones. The amount of inconsistency I’ve seen from FAPS sales agents leaves me feeling troubled. But the issues don’t end there. I’m not satisfied with the FAPS advertising at the corporate level. Their business structure is convoluted and confusing; their marketing is vague and uninformative. I want to see providers educating merchants to help them make a good decision. First American is definitely not doing this, at least not as a rule. (For comparison, see Helcim.)
Complaints against First American Payment Systems include insane terminal leases and expensive contracts peddled by dishonest sales reps, alongside poor support and difficultly closing accounts. And, of course, expensive early termination fees. With all of riding against FAPS, it just doesn’t make sense to partner with them. Quite a few providers offer interchange-plus pricing with no early termination fees, and not to mention outstanding customer service, all for less than FAPS will charge you.
First American Payment Systems get a meager three stars. The fact they’ve earned that much is just a testament to how bad this industry is. FAPS is not good, don’t get me wrong, but believe it or not there are many worse providers out there. I encourage you to steer clear of any provider rated below four stars. Take a look at our comparison chart to see some of your better options.