First American Payment Systems Review
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- Date Established
- Fort Worth, TX
Headquartered in Fort Worth, Texas, First American Payment Systems (FAPS) has been in business since 1990. They currently process about $10 billion in transactional volume annually, which puts them in the mid- to upper-tier as far as size is concerned. Although First American hasn’t always been our favorite provider, the company seems to be making gradual improvements to both its services and its reputation.
My main problem with FAPS is overall inconsistency. They employ a large sales force 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. While this is true of many payment processing companies, and customers are far more likely to complain than to praise, it’s still not great to see.
My second problem is their confusing branding and subsidiary structure. I’ve heard many reports of First American using a tangle of business names, which can deceive merchants and reduces the overall transparency of their operations. In my experience, companies with many DBAs are usually trying to cover something up and confuse those trying to assess their reputation. First American Payments seems to fit this bill.
FAPS is not an inherently bad merchant services provider. They have a pretty nice website and don’t employ too many overtly deceptive sales gimmicks publicly. I’m also happy to report that the company’s complaints volume has continued to decrease since our last two review updates. But if I am going to rate the brand as a whole, I’d say at best it’s a gamble. They don’t offer enough added value to make up for the expense of their contracts, and their customer support seems to be lacking. But, with that said, as long as you are willing to advocate for yourself, negotiate, and generally make sure your contract is fair, First American is a very capable company that offers a diverse selection of payment-related services and it can be a good provider for some businesses.
Table of Contents
First American Payment Systems is the parent company for a large number of subsidiary companies, many of which specialize in servicing particular categories of businesses, such as non-profits, churches, restaurants, etc. Here’s a partial list:
- Certified Payment Processing
- Eliot Management Group
- Accelerated Card Company
- Velocity Payment System
- iATS Payments
Products and Services:
First American offers a full range of products and services, including the following:
- Mobile payments/POS system: FAPS offers a tablet-based POS system, 1stPayPOS. For mobile payments, they offer 1stPayMobile.
- Terminal sales and leasing: FAPS offers the proprietary Xion countertop terminal, which is EMV-compliant and NFC-capable. Other terminals available include the Ingenico iWL 250/252 and the Verifone Verix Vx520. Leases are provided by Merimac Capital, a First American subsidiary. In my opinion, you should never lease. Merimac leases are non-cancellable and extend for 60 months, 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 that you could purchase outright for only a few hundred dollars. Check out this article for more information.
- Online reporting: This comes via First American’s proprietary FirstView® reporting system. FirstView® allows you to view merchant statements online, generate customized reports, and analyze processing data. It’s also encrypted to ensure the security of your data.
- Gateway: First American Payments supports eCommerce through their proprietary payment gateway, FirstPay.Net™.
- Merchant cash advances: These are available through First American’s Merchant Cash Advance Program.
- FirstAdvantage: This offering supports in-house gift and loyalty cards.
- ACH payments and paper check processing are supported through FirstFund® ACH and Secur-Chex®, respectively.
Fees and Rates:
While First American Payments bombards you with an information about all of their wonderful products and features, their website doesn’t mention a word about how much any of this will actually cost you. I couldn’t find a single dollar sign or percentage mark anywhere on the FAPS site.
For processing rates, this isn’t necessarily a bad thing. Rates are highly negotiable, and it’s often not practical to try to list all of them on a website. Also, unlike many other processing companies, they’re not trying to lure you in by deceptively quoting a low qualified rate that is much lower than what most of your transactions will actually be charged.
Fees, unfortunately, are another matter entirely. From what I’ve seen in comments from merchants using FAPS, these accounts can be incredibly expensive, with most of the money going directly toward agent profits. First American currently offers merchants a choice between either a $95.00 annual fee or a $25.00 monthly minimum on their standard contracts. Monthly statement fees are variable but can run as high as $20.00 per month. There’s also an annual PCI compliance fee of around $120. Finally, First American will offer you a costly tiered-pricing plan if you don’t ask for interchange-plus 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 insist on a month-to-month contract with no early termination fee. If they won’t do that for you, I’d recommend you take your business elsewhere.
Contract Length and Early Termination Fee:
A standard merchant agreement from First American Payment Systems runs for three years. It automatically renews for one-year periods thereafter, unless you provide adequate notice that you wish to end the contract. Early termination fees for breaking your contract are variable but generally run from $300 to $495, unless you negotiate a month-to-month contract with no ETF.
Since FAPS relies heavily on independent resellers and so many subsidiaries, there’s not a whole lot of standardization here. If you don’t see a signed waiver 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 into 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 pleasantly surprised to see this. You can find a separate page for each FAPS service with a few bullet points, and an occasional PDF brochure as well. There are also infographics and videos available to help you get started.
While I didn’t find any outright lies in their marketing materials, there is a conspicuous absence of any mention of costs, and very little 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 a more transparent 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 enough consistency to earn my seal of approval. Their independent agents seem, in some 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 takeaway: 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 earned their BBB accreditation in January 2015 and they currently have an A+ rating with the BBB. They’re pretty proud of this, not only displaying it prominently on their website but also including a direct link to their BBB report. They are to be commended for their transparency for doing so, as they currently have 65 complaints filed over the past three years, with 22 new complaints filed in the past year.
While this may seem like a lot, and it is troubling, it’s actually a fairly average number of complaints for a processor of their size. First American had 71 complaints at our last review update, and 76 complaints before that. So, they’re definitely trending in the right direction. Hopefully, this downward trend in complaints is due to improved service and not a result of frustrated merchants canceling their contracts and going to another provider.
Over at Ripoff Reports, you’ll find an additional 74 complaints. Many of these complaints are very detailed and articulate, as well as damning. Some issues are agent-specific, while others seem more systemic. Most troubling, you’ll also find a bunch of complaints from several independent sales agents themselves criticizing the business practices at First American Payment Systems.
Unfortunately, the responses from First American to merchant complaints are generally impersonal and not very apologetic. They will absolutely not cancel terminal leases administered through Merimac Capital, but they will sometimes waive early termination fees. Apparently, a lot of merchants haven’t read their contract thoroughly enough to be aware of the early termination penalty, and far too many sales agents aren’t discussing it when trying to close a deal.
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 nondisclosure 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 confusing and misleading.
- Bad leasing agreements: Any company that still pushes the old standard four-year non-cancellable terminal leases should, as a general rule, be 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 cost: 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:
Unfortunately, I couldn’t find any positive reviews or testimonials for First American Payment Systems – not even on their own website. 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 exceptional providers out there, why settle for 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!
Overall, First American Payment Systems currently rates a rather average 3.5 out of 5 stars. While this isn’t a bad rating, it’s certainly not good, either. With a company like this, one could argue that a few bad apples ruin the whole 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. It’s the overall level of inconsistency I’ve seen from FAPS sales agents that troubles me. But the issues don’t end there. I’m not satisfied with First American’s advertising. Their main website is noticeably vague and uninformative. Their business structure, with its numerous DBAs and multiple subsidiary websites, is convoluted and confusing. 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 insanely expensive and non-cancellable terminal leases and pricey contracts peddled by dishonest sales reps. Poor customer support and difficulty closing accounts are also frequently mentioned. And, of course, expensive early termination fees. With all of these issues riding against FAPS, it’s difficult to recommend partnering with them. There are now quite a few other providers out there who will offer you interchange-plus pricing with no early termination fees, not to mention outstanding customer service – all for significantly less than FAPS will charge you.
So, take a look at our comparison chart to see some other options!