CPN (Capital Processing Network) Review

Note: CPN is now defunct as a payment processor. It has been absorbed by its parent company, Pivotal Payments, which is now operating under the name Nuvei following a rebranding. Check out our Merchant Account Comparison Chart to find our top-rated payment processors instead! 

Overview:

CPN is a merchant account provider headquartered in Phoenix, Arizona. Established in 2006, the company was originally named Capital Processing Network but has recently changed its name following its acquisition by Pivotal Payments in 2014.

The switch to a much more generic business name appears to have been deliberately undertaken to avoid some negative publicity the company was subject to back in 2012. At that time, while still operating as Capital Processing Network, the company was the subject of an unflattering news investigation by a local television station in the Phoenix area. It had come to light that Capital Processing Network had been hiring convicted felons to work as telemarketers in the company, and many of them were given access to clients’ sensitive personal data. The fact that some of these employees had previous felony convictions for identity theft and fraud (among other things) made the matter even more embarrassing. You’ll want to check out this video of the news report:

Now, to be fair, there haven’t been any reports of identity theft involving CPN or its employees since this came to light. At the same time, would you trust your business (and your customers’ credit card data) to a company that employs this kind of business practice? I didn’t think so.

The fact is, however, that there are plenty of other legitimate reasons to avoid doing business with CPN. Incredibly aggressive sales practices, long-term contracts with expensive termination fees (for some merchants), exorbitantly pricey equipment leases, and poor customer service all add up to a disappointing rating of 2.5 out of 5 stars. While you might be able to get a reasonable deal with some aggressive negotiation, there isn’t anything that CPN offers in the way of products or services that you can’t get elsewhere – and probably for less money and hassle. Check out our Merchant Account Comparison Chart to see how much better the terms of your merchant account can be.

Products and Services:

CPN covers all the basic needs of both retail and eCommerce merchants. Features include the following:

• Merchant accounts: Now that CPN is operating as a sub-ISO under Pivotal Payments, it’s not entirely clear who is the actual processor for their accounts. The contract we obtained indicates that Merrick Bank is underwriting the company’s merchant accounts. Also, note that CPN does not appear to market its services to high-risk merchants.
• Payment gateway: CPN advertises Authorize.Net as their payment gateway provider on their website, although they might be able to accommodate other gateways as well. Note that the Authorize.Net Verified Provider seal on their website returns an “Unable to Verify Site” error when selected. The company also offers a virtual terminal to go with their gateway, but doesn’t disclose any details about it.
• Credit card terminals: If you need one or more terminals, CPN can set you up with a wide selection of popular credit card terminals and PIN pads. All support EMV transactions and several models also offer NFC-based payment methods, such as Apple Pay. The company apparently will either sell you a terminal outright or offer you a leasing arrangement. We highly recommend that you buy your equipment outright, and avoid terminal leases. CPN doesn’t disclose any prices for buying your equipment through them, but you can probably get a better deal online and then pay a re-programming fee to install the software load for their system. Either way, it’s much more affordable than leasing – despite anything a sales agent tries to tell you. CDN’s leases are set up through First Data Global Leasing (FDGL), a company we recently highlighted as one of the worst credit card terminal leasing companies in the industry. Like most leasing arrangements, FDGL’s leases run for four years and are almost impossible to cancel. You’ll end up spending thousands of dollars for a machine that’s only worth a few hundred dollars at most. Don’t do it!
• POS systems: CPN claims that their payments system is “compatible with major POS software vendors,” but doesn’t provide any further details. Unlike credit card terminals, the company doesn’t appear to offer any POS systems for sale. We recommend that you buy your own equipment outright after confirming compatibility with a sales agent. Leases for POS systems are even more of a rip-off than they are for terminals, so don’t let an agent talk you into signing up for a lease arrangement.
• Mobile payments: If you’d prefer to use your smartphone rather than spend the money on a wireless terminal, CPN offers the PivotalMOBILE app and card swiper through their parent company, Pivotal Payments. It’s available for both iOS and Android. Both the app and the card swiper are free, but monthly pricing for the service is not disclosed. Unfortunately, like many other providers, the available card swiper is magstripe-only and doesn’t support EMV transactions.
• Shopping cart integration: CPN uses Authorize.Net as their payment gateway provider, and the company claims that it’s compatible with over 100 online shopping carts. Unfortunately, they don’t provide a list to make it easy for you to check if your preferred cart is compatible.
• Security features: CPN uses TransArmor, a software solution from First Data that provides encryption and tokenization features to protect your transactions from a data breach.
• Merchant cash advance: Like many providers, CPN has a cash advance program that allows you to take out a business loan if you need one. Their AdvanceMe program is designed to get cash into your hands as quickly as possible – and also put you on the hook for high interest rates. You should definitely read our article on merchant cash advances before taking out one of these loans.

Fees and Rates:

First, the good news. CPN doesn’t try to fool you with misleading “rates as low as…” claims on their website. This is a common trick in the processing industry. Companies quote their lowest possible qualified rate in their advertising, without disclosing that there are also mid-qualified and non-qualified rates as well. Not only are these other rates much higher, but they’re also much more likely to apply to the majority of your transactions. In some cases, companies will even quote their lowest debit card processing rate, without identifying it as such. Debit rates are, of course, much lower than credit card processing rates.

At the same time, while the company doesn’t quote artificially low processing rates, they also don’t disclose any rates or fees on their website. This is actually a reasonable practice when it comes to processing rates, as there is too much variability in them to try to list them all out. The same can’t be said for fees. There are plenty of account fees that are the same for every merchant, and it’s disappointing that CPN chooses to hide them deep in their contracts.

We’ve been able to obtain a CPN contract (from 2014) that lists a few of their standard fees. These include a PCI compliance fee of $139.80 per year, which is quite a bit higher than the industry average (usually $99 per year). You’ll also pay $25.00 for each chargeback, which is pretty standard with almost all processors. There’s also a $25.00 monthly minimum, which might be a factor if your processing volume is very low.

While these are the only fees found in the Terms and Agreements section of CPN’s contract, there undoubtedly will be more in the Merchant Application section. These will vary from one merchant to the next, but will almost certainly include a monthly account fee, gateway fee, and a separate PCI non-compliance fee if you don’t maintain your account in accordance with PCI-DSS standards. You may or may not also have to pay an application fee and account setup fee when you initially establish your account.

CPN doesn’t discuss their processing rate models, but they appear to offer a tiered pricing plan to most businesses. They may or may not also offer interchange-plus pricing to merchants who qualify, so feel free to ask for it when negotiating your contract. We believe very strongly that interchange-plus pricing is the fairest, most affordable pricing model for most merchants, and most major processors now offer it – even if they won’t tell you about it unless you ask.

Contract Length and Early Termination Fee:

CPN currently provides two different sets of Terms and Conditions on its website, although they’re both only accessible through the Sitemap. One contract states that merchant accounts “will continue on a month-to-month basis, unless Merchant provides written notice of non-renewal at least 15 days before the end of the then-current monthly term.” In other words, you’re on a true month-to-month contract with no early termination fee (ETF). This, of course, is a great provision and much better than the long-term contracts many providers offer.

However, the other contract has a different contract length clause, specifying that accounts “will continue for three years and will automatically renew for successive three-year terms, unless Merchant provides written notice of non-renewal at least 60 days before the end of the then-current term.” That’s not nearly as good a deal, and we’ve seen plenty of complaints from merchants who were signed up for the three-year contracts and then hit with an early termination fee – as high as $495 – when they tried to get out of their agreement.

Whether you’re offered the month-to-month contract or the three-year contract is probably going to depend on several factors, including your length of time in business and processing history. The most important thing you can do, of course, is to ask for the month-to-month contract when negotiating your account. It’s unlikely that CPN’s sales staff is going to offer it to you on their own.

As with any merchant account contract, we encourage merchants to review their contract documents very carefully before signing up. Do not under any circumstances rely on any verbal assurances from your sales agent! If you’re a current CPN customer and your contract includes a fixed-length term and an ETF, by all means, try to re-negotiate your contract to switch to month-to-month billing. You’re quite likely to get it if you ask, especially if the company thinks you’re likely to move to another provider.

Sales and Advertising Transparency:

Unlike many providers, CPN has a clean, professional-looking website. At first glance, it appears crisp and well laid-out. Delve a little deeper, however, and you’ll discover that most of the content is marketing fluff that doesn’t tell you much of anything about specific features of the company’s services. Scroll to the bottom of the home page, and you might notice that the two latest entries in the company’s blog were actually placed there by hackers. The most recent hacked entry was from June 2014. In two and a half years, CPN hasn’t done anything to remove the hacked entries or secure their website against further intrusions. At this point, you have to ask yourself whether you really want to entrust your sensitive business data to a company that doesn’t even notice that it’s been hacked for so long. Probably not, right?

Of course, CPN doesn’t really market its services through its website. Instead, it relies on a network of telemarketers to contact merchants and try to convince them to reach out to its sales team and sign up for an account. There are probably few things that are more irritating to a business owner than being bombarded by telemarketers on a daily basis. We’ve seen a very high number of complaints about this practice from irate owners, very few of whom went on to sign up for CPN’s services. In fact, there are probably more complaints about the company’s use of telemarketers than there are about its actual merchant accounts. The overwhelmingly negative feedback from merchants about the company’s marketing practices makes it clear that they’re hurting, rather than helping, themselves by using this sales practice.

Most companies today know that an active social media presence, with frequent updates, is a vital part of getting the word out about what your business can offer to potential customers. Unfortunately, CPN isn’t one of them. Both the company’s Facebook and Twitter accounts still use their old business name of Capital Processing Network, and neither account has been updated with new content in several years. CPN’s LinkedIn profile is more up-to-date, but it doesn’t include any content beyond a generic blurb about the company. Likewise, their YouTube channel hasn’t been updated in four years. It does, however, include several user tutorials for troubleshooting credit card terminals and even a few testimonials from customers.

Customer Service and Technical Support:

CPN offers 24/7 telephone support, which is ideal for after-hours help. This assumes, of course, that the representatives providing coverage outside of regular business hours are fully trained and authorized to solve your problem. That doesn’t always appear to be the case, as we’ve found numerous complaints alleging poor customer service being provided by the company’s representatives.

The company also claims to have a live chat feature, but it’s apparently not accessible directly from their website. You’ll probably need to be a current customer and log into the First Data Portfolio Manager to access this feature.

While CPN doesn’t offer a complete knowledgebase on their website, they do feature a FAQ and Glossary that can answer some of your more basic questions. It’s a decent resource, but you probably won’t be able to troubleshoot a technical issue with it. Also be wary of some of the self-serving advice provided in the FAQ. No matter what CPN or any other company tries to tell you, leasing a credit card terminal is almost never a better deal than simply buying your own equipment.

Negative Reviews and Complaints:

Due to CPN’s recent name change, the company has two BBB profiles. The older profile is filed under Capital Processing Network, LLC, and lists the company as having been accredited by the BBB since 2013, and also having an A+ rating. There have been 26 complaints filed within the last three years, five of which were filed within the last twelve months. Customers also left 18 reviews on this profile, with all but one of them being a negative review.

The newer profile, CPNUSA, lists the company as not being BBB accredited and having a B rating. There have been five complaints filed against the company, all of which were posted in the last twelve months.

Additionally, there are four older complaints on Ripoff Report. We also found a significant number of negative reviews of CPN on Yelp, as well as on their own Facebook page. The overall complaint volume is quite high for a relatively small provider like CPN. Common issues raised in these complaints include the following:

Use of telemarketers: This is far and away the single biggest source of complaints about CPN. Merchants note that the company’s telemarketers call back over and over again, despite repeated requests to be placed on the “Do Not Call” list. In some cases, merchants have had to resort to filing a BBB complaint against the company to make the harassing phone calls finally stop. Most of the complaints come from merchants who don’t even have an account with CPN, and it’s evident that the company’s overbearing sales tactics are a prime reason why those businesses didn’t sign up with them.

Hidden fees: As with almost any provider, there are also some complaints about hidden fees. When merchants raise the issue of “hidden” fees, they’re usually referring to charges that their sales representative either didn’t disclose or outright lied to them about. CPN’s fee schedule, while a little on the high side compared to industry averages, are fully disclosed in their contracts. The company deserves some credit for making the Terms and Conditions section of their contracts available online, even if they don’t make it easy to find them. As a merchant, it’s up to you to read every single word of your contract before you sign it. You simply can’t trust a sales agent – whether from CPN or any other company – to give you an accurate and complete answer to your questions about fees. You should also be aware that merchant account contracts usually consist of at least two documents – a Terms and Conditions section that contains details that apply to all merchants, and a separate Merchant Application section that will include your processing rates and any fees that apply just to your account.

Terminal leases through First Data Global Leasing: Almost every merchant account provider that leases equipment to their merchants has a lot of complaints about the leasing terms, and CPN is no exception. It’s good that the company will offer you the option to either lease your equipment or buy it outright, but they also try to deceive merchants into believing that a lease arrangement is more cost-effective overall. It absolutely is not. If you lease, you will be stuck in a noncancelable lease that runs for four years – a year longer than the contract for your merchant account, in some cases. At the end of your lease, you’ll have paid thousands of dollars for a machine that can be purchased for only a few hundred dollars. And you still won’t own your equipment.

Positive Reviews and Testimonials:

As we’ve noted above, CPN has only a single positive review on one of their BBB profiles. Unfortunately, it’s from someone who admitted that they hadn’t actually signed up for the company’s services yet, so take it with a grain of salt.

There are a few older video testimonials from customers on CPN’s YouTube channel. While they’re not very professionally made, they come across as being fairly authentic, as they haven’t been overly scripted by the company.

Positive feedback from merchants is relatively hard to obtain even for the best providers, but with CPN’s marketing issues it’s not surprising that they haven’t generated very much positive buzz from their clients. If you’ve had a good experience with the company, please leave a review in the Comments section below.

Final Verdict on CPN (Capital Processing Network):

If you’ve been reading this far, it probably comes as no surprise that we aren’t going to give CPN a positive recommendation. Good companies don’t need to rely on telemarketers to sell their services, and hiring convicted felons as telemarketers when you’re in the credit card processing industry is just phenomenally bad business judgment. It’s apparent from the sheer volume of complaints on this issue that CPN has lost far more potential customers with this business practice than it’s gained. Hopefully, the company’s recent acquisition by Pivotal Payments will lead to the discontinuation of this sales method.

Even without the shady marketing practices, however, there isn’t anything that CPN offers that you can’t find elsewhere with a better provider. Most of the company’s products and services come from First Data, with CPN merely functioning as a reseller. There are a lot of First Data resellers in the processing industry, and while quite a few of them are just as bad as CPN, some of them are actually quite good. For example, one of our favorite providers, Dharma Merchant Services, is a First Data reseller.

Things aren’t all terrible with CPN, however. If you can get past the telemarketers and do some aggressive negotiating, you could end up with a month-to-month contract, no early termination fee, and some reasonably competitive processing rates. However, none of these things are guaranteed, and it’s clear that a lot of merchants are still being saddled with three-year contracts, an expensive termination fee, and a costly tiered pricing plan. Your experience with CPN will be worse – far worse – if you agree to lease your equipment and get trapped in an outrageously expensive leasing contract.

Overall, CPN rates a below-average 2.5 out of 5 stars. They’re not the worst processor out there by any means, but most merchants will end up with higher overall costs, less favorable contract terms, and poorer customer service than what most competing providers can offer.

If you already have an account with CPN, we recommend that you try to re-negotiate your contract to switch to month-to-month billing. If you have a terminal lease, there unfortunately isn’t any easy way to get out of it. For everyone else, give the company a pass when they try to call you, and check out our Merchant Account Comparison Chart to see what the top-of-the-line merchant account providers have to offer.

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