First Data Merchant Services Review (Now Fiserv)
- Full line of Clover terminal, mobile, and POS systems
- Competitive interchange-plus rates available to high-volume businesses
- Extensive online knowledgebase
- Overpriced equipment leases
- A four-year standard contract with a liquidated damages clause
- High recurring account fees
First Data Overview
Fiserv is a financial services and merchant services provider headquartered in Brookfield, Wisconsin. Until recently, the company was a relatively minor player in the merchant services industry, focusing mainly on providing various financial services for businesses and individual customers. That all changed in July 2019 when Fiserv completed a $22 billion acquisition of First Data, the largest merchant account provider in the United States and one of the world’s largest such providers.
How big is First Data? Even before the acquisition, more than 6 million merchants relied upon First Data credit card processing services worldwide, giving the company the most extensive client base of any processor in the industry. In the United States, it’s estimated that a whopping 45% of all credit and debit transactions were handled by First Data or one of its many resellers. Worldwide, it processed $2.2 trillion in transactions annually, averaging 2,800 transactions per second.
Let’s be clear: This huge portion of the processing industry’s market share isn’t going away. With the acquisition, Fiserv is consolidating all of First Data’s products and services under its own name. While the First Data brand name will eventually disappear, it’s estimated that integrating the two brands, including their complex payment processing systems, may take as long as ten years. However, as of early 2021, the old First Data website has been taken down and now redirects to a Fiserv-branded site. You will still see many references to the old First Data brand name on the web, particularly on the websites of First Data ISOs and resellers.
For this review, we’ll mainly stick to referring to the merged company by the name First Data because that’s what most current and prospective customers know it as. Remember, First Data has over 3,000 independent resellers, and they all have to switch over their websites, documentation, and contracts to reflect the new brand name. It’s going to take a while. Even now that the name change has become official, plenty of people still think of it as First Data.
We’re also focusing on First Data’s direct sales channel. Its terms can — and usually do — vary from what you’d receive from a reseller. One word of warning: This is a huge business organization, and its services are geared to the needs of other big businesses. Although the company markets itself to small businesses, its terms and costs aren’t a very good deal for a small or mid-sized business.
The main benefit of signing up directly with First Data is that you’ll have access to all the special features, such as advanced data analytics, that you might not get with a reseller. You also won’t have to deal with the potential confusion resulting from having one company manage your merchant account and another one process your transactions. There are no middlemen in this arrangement.
Of course, there are also disadvantages to getting a merchant account directly from First Data. The main drawback is that the company offers a premium product — at a premium price. The company’s services are expensive, and smaller businesses won’t have much leverage to negotiate those costs down to a more manageable level.
You’ll also have to deal with long-term contracts (typically four years) and a high early termination fee if you close your account early. Finally, the company has a reputation for being quick to hold funds or shut down accounts entirely for a number of reasons.
First Data rates merely as an average merchant account provider (note that in the processing industry, the “average” is pretty lousy). We’re awarding it a score of 3 out of 5 stars for now. Be aware that this is an average figure because your experience with them will vary quite a bit, depending on your business’s size. Large businesses will have a much better experience with the company, while smaller ones will most likely end up paying way too much for services they probably don’t need.
First Data Review Verdict: First Data, now known as Fiserv following a merger, has built itself into one of the biggest names in credit card processing. Despite its enormous reach and a wide variety of payment tools for businesses, First Data has never been friendly to small businesses.
First Data reviews from merchants also point out issues with funding holds, poor customer service, and exorbitant fees. Small businesses that like the First Data product lineup — including the Clover POS line — are much better off finding a reputable reseller of First Data’s credit card processing services than going to the company directly.
Table of Contents
Products & Services
As befitting such a huge company, First Data offers every conceivable product and service you might ever need to run your business successfully. These features are all very high-quality but don’t expect them to be a bargain. You’ll pay full price, but for many merchants, the cost is well worth it in terms of what they can do for your business. Here’s what First Data/Fiserv provides:
- Merchant Accounts: First Data is a direct processor, so you’ll be dealing with the company for every aspect of maintaining your merchant account. You might not get the personalized customer service that a smaller company can offer, but it provides a measure of stability that a smaller organization can’t always give you.
- Credit Card Terminals: The company offers a variety of terminals, including both wired and wireless models. First Data’s current lineup includes new terminals (such as the FD150) that support EMV and NFC-based payment methods. The FD150 is an upgraded version of the old First Data FD130 and features a faster processor and twice as much onboard memory. The company also offers the RP10, a PIN Pad terminal that can be used with either the FD150 or a third-party terminal. Ironically, the FD150 has PIN debit functionality built-in, so you really don’t need the RP10 unless you’re using a different terminal. Equipment may be bought outright or leased. While the website does not disclose any pricing, we recommend that you shop around before purchasing a terminal directly from First Data/Fiserv. Many of its resellers can offer you a lower price for this equipment. We also highly recommend that you avoid leasing your equipment, as you’ll get locked into a noncancelable contract, which will cost you many times more than what the equipment is worth over the life of the lease. Unfortunately, First Data leases are handled through its subsidiary, First Data Global Leasing (FDGL), one of the industry’s worst equipment leasing companies.
- Point Of Sale (POS) Systems: One of First Data’s most powerful features is the line of Clover point of sale (POS) systems. While the Clover Station is the company’s flagship product, a smaller model, the Clover Mini, is also available. These products all boast a very impressive set of capabilities. However, you should be aware that they’re rather expensive compared to the competition. For example, Clover Station typically costs around $1,000 or more. You’ll also incur a hefty service fee (usually $25 to $50 per month) to use these systems, which is in addition to your monthly merchant account fee. Finally, they’re proprietary products, so you can’t simply swap out the software the way you can with a tablet-based system.
- Mobile POS Systems: First Data also offers the Clover Flex, a portable device that combines point of sale functionality with the smaller form-factor of a smartphone. It has a 5” color touchscreen, a built-in barcode scanner, and an integrated thermal receipt printer. The Clover Flex can accept magstripe, EMV, and NFC-based payment methods and can also manage your inventory. First Data doesn’t disclose pricing on its website, but Dharma Merchant Services sells this model for as little as $499 plus $15 per month for a wireless data plan.
Get The Best Deal On Clover Products
|heading||Payment Depot||Dharma||National Processing||Clover Corporate|
Dharma Merchant Services
Official Clover Store
Provides all Clover products
Transparent pricing with no hidden fees
Rate matching and negotiable quotes
Fair entry-level quote standard
0.00% + $0.05-0.15 markup
0.15% + $0.07 markup
(Must process $10K+ per month)
0.15% + $0.07 markup
2.3% + $0.10 for in-person transactions
- Mobile Processing: First Data offers the Clover Go mobile payment system, which consists of the free Clover Go app (available for iOS and Android) and a card reader. The card reader supports swipe and EMV transactions as well as NFC-based payment methods. Apple Pay, Google Pay, and Samsung Pay are all supported. The reader connects via Bluetooth, so it will work with newer phones that don’t have headphone jacks.
- eCheck Processing: With Clover Check Acceptance, you can accept both paper checks and ACH (echeck) payments. While checks are declining in popularity as a payment method, this is a beneficial service to have if your customers like to pay by check. Processing costs are also much lower, although this will be offset by the (undisclosed) monthly fee for the service.
- Payment Gateway: If your business has an online presence, First Data’s proprietary Payeezy Gateway has every feature you’ll need to accept payments and keep your customers’ data secure. It integrates with over 70 different shopping carts and accepts payments by credit or debit card, echeck, or PayPal. It also supports multiple currencies. Pricing for this feature is not disclosed.
- Virtual Terminal: If you need to be able to key in transactions manually using a laptop or mobile device, the Clover Virtual Terminal is an easy way to do so. This feature doesn’t require any additional monthly fees to use, and all transactions are processed at the keyed-in rate.
- Integrated Omnichannel Payments Platform: In recent years, payment processors have begun to introduce cloud-based proprietary platforms that integrate in-person and online sales, allowing merchants to monitor every aspect of their business from any web-connected device. Fiserv’s entry into this growing sector is Carat, which offers more than 30 precertified integrations with existing third-party services. Unfortunately, most of the information disclosed about Carat on the Fiserv website consists of empty marketing fluff rather than concrete, detailed information about what Carat can do for your business. It also appears to be aimed at very large commercial enterprises rather than small businesses.
- Website Builder: For the budding eCommerce entrepreneur, the Clover Online Store allows you to build your website and integrate it with the Payeezy Gateway. Web hosting and shopping cart integrations are built-in, making it easy to get set up and start selling online.
- Reporting & Analytics: Clover Insights is an app-based reporting solution that offers a variety of analytical data about your business. While this is a standard feature these days, it’s still useful if you want to optimize how you run your business.
- Security Features: Clover Security (offered through TransArmor) provides optimal data security through end-to-end encryption, which encrypts every transaction at each stage of processing. The Clover Security package includes other features, such as data breach insurance, and costs an extra $19.95 per month.
First Data Canada Merchant Services
First Data/Fiserv is also available to merchants in Canada, and the company maintains a separate Canadian website. Unfortunately, the First Data Canada website isn’t any more informative than the US site. There are a few disclosures regarding rates and fees, but these are limited to information about interchange rates and other pass-through fees that are actually charged by the issuing banks. There’s also some information about the Code of Conduct for the Credit and Debit Industry in Canada, which Fiserv has pledged to adhere to. If you’re a Canadian business owner looking for a merchant account provider that offers excellent service to small businesses, take a look at our article, The Best Merchant Account Providers For Canadian Small Businesses (& The One Company You Should Avoid At All Costs).
These are just the main reasons to consider using merchant services from First Data. There are other, more specialized features, such as a developer portal for the Payeezy Gateway and loyalty/gift card programs. Unfortunately, there’s no mention of First Data’s rates or fees for any of its products or services on its website. Unless a feature is specifically advertised as being free, it’s probably safe to assume that you will have to pay extra if you want to include it with your First Data/Fiserv account.
First Data Credit Card Processing Fees & Rates
Do First Data’s large size and extensive reach translate to high-quality merchant services at a fair price? Well, yes and no. On the one hand, the company has the resources to provide every conceivable product and service you might need to run your business. At the same time, First Data processing fees and contract terms can vary widely. In many cases, you’ll end up paying far more than you should for access to all those wonderful features.
First Data’s website contains a tremendous amount of information about its many products and services, but there are no pricing disclosures. There’s a reason for this: The company sets prices differently for every customer. The tremendous variability in First Data credit card processing fees makes it all but impossible to list them all. Depending on the nature of your business and your processing history, you might be offered a tiered, interchange-plus, or even a flat-rate pricing plan. Even within those broad categories, there are plenty of variabilities.
While we’d like to see a more open discussion of the possible rate plans you might encounter, we’re at least glad that First Data doesn’t employ the misleading “rates as low as…” trick that you’ll see on many other processors’ websites. Quoting just the lowest processing rate that the company offers is very deceptive, as only the largest and most established businesses will qualify for it.
Account fees, on the other hand, are a different matter. Many of these fees are standardized, and all merchants will pay the same amount for a particular fee regardless of how big their business is. We’d like to see more transparency on the fees that are the same for everyone.
What can you expect to pay in the way of First Data account fees? You may be charged an application fee when you apply for a merchant account as well as an account setup fee if your application is approved. You’ll almost certainly have to pay a monthly account fee, although the amount could vary quite a bit from one business to another. This is one case where larger businesses generally pay more, although they’ll save money overall due to the lower processing rates. You may also have an annual fee to cover upgrades, etc.
If you use the Payeezy Gateway, you can expect to pay around $25 per month for it on top of your monthly account fee. Fees for PCI compliance are also very common, although this is often included as part of the Clover Security package ($19.95 per month). Additionally, there are many other smaller, per-occurrence fees, such as Address Verification Service (AVS) fees, chargeback fees, etc. See our article, The Complete Guide To Merchant Account & Credit Card Transaction Fees, for more information. Lastly, be sure to review your contract thoroughly before you sign up. Most (if not all) of the fees you might be liable for will be spelled out somewhere in the fine print of your contract.
Contract Length & Early Termination Fee
There are two ways to get connected to FDMS. One way is to sign up with the company directly. The other way is to sign up with one of the many Independent Sales Organizations (ISOs) that resell First Data credit card processing and use the company for back-end infrastructure.
First Data’s standard merchant account contracts include an initial contract term of four years, with an automatic renewal clause for successive one-year periods thereafter. However, contract length appears to be negotiable, and you might be able to get approval for a shorter initial term. We prefer to see merchant account providers offer month-to-month billing instead of a multiple-year term. However, it’s unlikely that you’ll get this from First Data unless your business is very large and you have some serious negotiating leverage.
Long-term contracts almost always include an early termination fee (ETF), and First Data is no exception. Its ETF is equal to your monthly minimum, plus your monthly customer service fee and your monthly account fee, multiplied by the number of months remaining in your contract. This type of liquidated damages clause could conceivably cost you over $1,000 if you close your account within the first year or two of your contract. Fortunately, it’s not too difficult to have this clause waived. However, you must negotiate to have it dropped before signing your First Data credit card processing contract. Be sure to keep a written copy of your waiver in case you later decide to close your account.
As for First Data resellers, be aware that some are really good, and many others are absolutely terrible. An ISO can offer you lower rates and fees than you might be able to obtain by signing up with First Data directly. However, they can just as easily charge you higher rates, tack on excessive fees, and lock you into long-term contracts with expensive early termination fees. However, some resellers offer month-to-month billing with no long-term commitment as a standard feature.
Dharma Merchant Services is one of our favorite processors, mostly because it offers transparent interchange-plus pricing, fair account fees, and month-to-month billing. For most businesses (especially small to mid-sized ones), Dharma can provide you with a much better overall deal than you’d receive by signing up for FDMS credit card processing directly. Dharma operates under the philosophy that if you offer your customers services at a lower cost and with fair contract terms, you’ll attract more customers overall. And, more importantly, you’ll retain more of those customers for the long haul.
Sales & Advertising Transparency
As of this writing, the First Data/Fiserv merger has progressed to the point that the old First Data website has been retired and replaced with a Fiserv site. Because Fiserv also offers a variety of financial products and merchant services, all relevant information regarding payment processing is now tucked into its own section of the main Fiserv website.
The site itself is quite impressive from a web design standpoint, with lots of flashy graphics and animation. However, it doesn’t provide very much information that’s useful in making a decision about signing up with the company. It’s also pretty obvious that the company primarily caters to very large businesses. Testimonials from users such as Google and Microsoft certainly won’t give you a warm fuzzy that Fiserv cares about you as a small business owner. Like many other merchant services providers in the payments industry, Fiserv’s website serves primarily as a marketing device rather than a source of specific, useful information. While there’s a fair amount of coverage of the Clover product lineup, you won’t find detailed specifications or in-depth information about specific features. Pricing information, of course, is nonexistent.
One very positive thing about First Data payment processing is that the company employs a full-time, in-house sales team, so you won’t have to worry about dealing with independent sales agents if you contact the company directly. You shouldn’t experience the intense sales pressure or the misleading claims you commonly have to deal with when working with independent agents.
Nonetheless, you should still negotiate aggressively to get the lowest rates and the best contract terms you can. You definitely should also thoroughly review your entire contract before you sign up for an account.
The company has an active social media presence, with accounts on Facebook, Twitter, and LinkedIn. These accounts are a great source of information about products and services as well as partnerships with other businesses. First Data also has a YouTube channel with dozens of videos on various topics. Unfortunately, there’s a much stronger emphasis on marketing efforts in these videos than there is on providing educational resources for merchants.
Customer Service & Technical Support
Very large businesses have a reputation for providing poor, impersonal customer support, and First Data is no exception. While the company offers 24/7 telephone and email support, we’ve received many complaints from small business owners alleging impersonal, unresponsive support from the company’s customer service representatives. Promised follow-up actions fail to happen, forcing merchants to spend hours on hold and repeatedly contacting the company to report a problem that often never gets fixed.
Now, we’re pretty sure that big-name clients such as Microsoft never have these kinds of problems. Unfortunately, it’s quite clear — even down to how Fiserv’s website is organized — that small business owners are treated as second-class citizens and relegated to the back of the line behind the much larger companies that bring in a greater share of the company’s revenue. Fiserv is certainly not the only large corporation to behave this way, but it’s particularly disappointing given that the company certainly has the resources to do better.
The re-launched Fiserv website now includes a number of online support resources, although it’s not very intuitive to find. Simply click on ‘Clients’ in the menu at the top of the home page, and you’ll be directed to the revamped Merchant Support section of the website. Here, you’ll find links to Clover support resources, FAQs, a video library, and other helpful information.
First Data Merchant Reviews & Complaints
First Data has relatively few complaints from customers for such a large company. Note that while both Fiserv and First Data still have separate BBB profiles, we’re only going to address the First Data profile. None of the recent complaints on the Fiserv profile relate to merchant services.
Negative Reviews & Complaints
Remarkably, neither Fiserv nor First Data is accredited by the BBB, although Fiserv nonetheless has an A+ rating (First Data’s rating has recently dropped to a B+). First Data’s BBB profile — which will eventually disappear due to the merger — currently shows a whopping 752 complaints within the last three years. Of those, 192 were filed within the previous twelve months. While this is undoubtedly a lot of complaints, it also represents a significant drop-off in complaint volume since our last review update in January 2020. We attribute the decrease in the number of complaints primarily to the Fiserv/First Data merger and the resultant confusion among merchants about which company to file their complaint against.
It’s also important to compare the number of complaints against the company’s client base of 6 million merchants. If you do the math, that means that only 0.013% of them were dissatisfied enough to file a complaint. There are 282 First Data merchant services reviews on the company’s BBB profile, with an average of 3.37 out of a possible five stars. Nearly all of the recent reviews have been 1-star ratings. While that’s certainly not good, remember that satisfied merchants very rarely take the time to write positive reviews. This is especially true for a site such as the BBB, which is designed primarily to solicit complaints about businesses. The company does deserve credit for responding to every negative review and offering to correct the situation — a practice that not all providers follow.
You’ll also find a further 595 complaints on Ripoff Report under the First Data brand name. Many — perhaps even the majority — of the complaints on both the Ripoff Report and the BBB are directed at one or more of First Data’s resellers and not the company itself. First Data has little or no control over the business practices of smaller companies that resell its products, so, naturally, its complaint volume is very inflated. We also found a significant number of complaints directed at First Data Global Leasing, the company’s notorious equipment leasing subsidiary. Looking at First Data credit card processing reviews from merchants who signed up directly for payment processing, we’ve identified the following common issues:
- Overpriced Equipment Leases: As we’ve mentioned above, leases are handled by First Data Global Leasing, a subsidiary. These leases come with noncancelable four-year terms, meaning that you’ll still have to make your monthly lease payment, regardless of the circumstances. You could close your account or even sell your business, but you’d continue to be on the hook for those payments. After four years, not only will you have paid far more than what the equipment is worth, but you also still won’t own it. Avoid leasing under any circumstances and buy your terminals. First Data’s terminals and Clover POS systems aren’t cheap, but they’re a lot less expensive than what a lease will cost you.
- Excessive Account Fees: These complaints about First Data payment processing mainly come from merchants who didn’t bother to read their contracts very carefully when they signed up. First Data charges a fee for just about everything, and most of its fees are on the high side of the industry average. The company sees itself as something of a luxury brand, and it charges accordingly for every service it provides. While larger businesses can afford these fees and will save money overall through lower processing rates, that’s not the case for a small business. If you’re a small business owner looking for a cheap merchant account, you’ve come to the wrong place. First Data merchant services are not for you unless you can sign up through a reputable reseller (such as Dharma Merchant Services).
- Withheld Funds & Account Terminations: Like any processor, First Data may freeze your funds or even terminate your account if it suspects fraud. Check out our article, How To Keep Your Payment Processor From Holding Funds Or Terminating Your Account: What Small Businesses Need To Know, for tips on preventing this from happening to you.
- Enhanced Billback: This billing technique isn’t popular with merchants, and it’s generated a lot of complaints. There isn’t much you can do about it, but you can check out our article, Billback & Enhanced Billback…Buyer Beware, for more information about how it works.
On the positive side, First Data appears to respond to every BBB complaint. It also issues refunds and takes other actions to try to resolve the merchant’s issue.
Positive Reviews & Testimonials
The First Data website used to have an entire section devoted to Client Success Stories that included dozens of video testimonials and case studies from satisfied merchants using its services. The videos were very polished and professional-looking but still came across as authentic. Most of the participating merchants focused on the capabilities that First Data’s POS (Clover) and other services had brought to their business. Unsurprisingly, there wasn’t any mention of the company being the least expensive option for merchant services.
Unfortunately, Client Success Stories is no longer available on the new Fiserv website. In its place, you’ll find case studies from several of Fiserv’s larger corporate clients, including Microsoft and Google. These case studies aren’t particularly relevant to small business owners and don’t include any compelling information about why Fiserv is a better choice than its competitors.
First Data is a huge company, and its services are geared primarily to large businesses. Yes, you’ll see a lot of advertising aimed at small businesses on its website. Don’t be fooled! If your business is small or doesn’t have a lengthy processing history, you simply won’t have much leverage to negotiate a good deal. Instead, you’ll be stuck in a lengthy contract with high fees and even higher processing rates.
On the other hand, if your business is large and well-established, First Data’s payment processing includes a lot of extras that other providers can’t match. Account fees aren’t nearly as burdensome on large businesses, and in many cases, the significantly lower interchange-plus processing rates will balance them out and save you money overall. Regardless of your business’s size, it’s imperative that you negotiate aggressively for the best terms you can get. Don’t accept the first offer that a sales representative gives you.
First Data’s biggest strength is the wide variety of products and services it can provide. You’ll never have to worry that your business’s needs will grow beyond what the company has to offer. The Clover POS systems are excellent (although pricey) products and integrate with just about every third-party service on the market. The Payeezy Gateway provides all the essential features that an eCommerce business needs to run smoothly.
Our one caveat is that you should avoid leasing any equipment through First Data Global Leasing. Not only will you pay way too much, but your lease contract is also separate from the one for your merchant account. This means that even if you close your account (and possibly pay a substantial early termination fee), you’ll still be on the hook for monthly lease payments on equipment that you might not even be able to use anymore. Remember also that Clover hardware products cannot be reprogrammed to work with any other processor’s payment network. However, you should still be able to use them if you switch to a different First Data reseller.
Overall, we’re giving First Data a score of 3 out of 5 stars. This is an average rating because your experience with the company will vary a lot, depending on your business’s size. First Data’s score is a little higher for large businesses and significantly lower for smaller ones. If you are a small business owner looking to take advantage of the company’s powerful products and services – but without the long-term contract and excessive fees — then you should take a look at Dharma Merchant Services. It’s hands-down the best overall First Data reseller we’ve found. For a quick overview of Dharma and other top-notch providers, check out our Merchant Account Comparison Chart.
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.