iPayment Inc. Review

Pros

• Large company with a long track record
• Opportunities for negotiation

Cons

• Early termination fee likely
• Undisclosed contract terms reported
• Withheld funds somewhat common

iPayment Inc. Overview

iPayment has been in the game since 1999, and currently have almost 200,000 companies in their network, making them a fairly large processor. They also have thousands of independent sales offices and agents that resell their services on a day-to-day basis, not to mention the companies that they’ve bought-out over the past few years.

What does this all mean to you? Well, most of these larger organizations that rely on a network of outside contractors and subsidiaries tend to have less control over what those contractors and subsidiaries do. It becomes difficult for them to keep everybody in line, so they end up paying for their partner’s mistakes. Don’t feel too bad for iPayment though; they are, after all, making money off of ALL of those partners and sister companies.

Personally, I think that if you’re going to have such a wide network of resellers and sister companies, then you should dedicate just as much time, money and effort to make sure those entities are representing your brand and services the right way. I’m not too sure if iPayment is doing that though.

Don’t get me wrong, there are plenty of iPayment resellers that are good, including MerchantPlus and Flagship Merchant Services, but there are others that aren’t so great. You’ll find a large number of complaints both on their BBB profile, and other review/complaint type websites. Check out the Negative Reviews section below to find out which ones stand out the most. The only testimonials I found on the iPayment site are from partners and resellers. Just goes to show how important partners and resellers are to them.

If you sign up with iPayment, there’s a 3-year contract, and you’ll most likely pay a cancellation fee of $350 if you break that contract within the first year. Their customer support is questionable, and their public advertising/contract term disclosure is basically non-existent. For big businesses looking for a low rate quote, iPayment may be worth checking out. But for small and mid-sized companies, I’d look elsewhere. iPayment gets 3.5 out of 5 stars today.

Products & Services

iPayment is a large direct processor with the capability to set up even big businesses with extensive hardware, software, and services. The company doesn’t advertise specific services publically since most of their accounts aren’t boarded through their online sales material. If you choose to sign up with iPayment directly, you will have to ask your account representative about specific service capabilities. From what I’ve seen, there are not many proprietary solutions offered by iPayment.

Fees & Rate

You won’t find any fees or rates disclosed in iPayment’s public marketing, which leads me to believe there may be issues with standardization of scheduled fees. Here are some fees that I’m aware of:

• PCI compliance fee: $100 annually
• PCI non-action fee: $30 monthly if you don’t complete the PCI self-assessment
• Chargeback fee: $25
• Statement fee: $8

Again, this is not a comprehensive list, and your actual fees may vary based on the account rep that signs you up.

As for rates, I’d encourage you to ask for an interchange-plus plan. iPayment is willing to negotiate with you, so don’t feel obligated to settle for their first offer.

Contract Length & Early Termination Fee

You can expect a three year, auto-renewing contract with iPayment, but I was told that they’re willing to negotiate. Most all processors are willing to waive the contract term so long as you’re worth it to them as a merchant. Termination fees are assessed based on the amount of time left on your contract: $350 if you cancel before the first year is up, and $250 if you cancel within the second or third year.

Sales & Advertising Transparency

As I mentioned earlier, you won’t find many specific claims made in iPayment’s advertising, so it’s difficult to assess transparency. Is a non-existent window transparent? Generally, I consider a lack of public information to be discouraging.

Aside from the branded corporate advertising, all bets are off when you go to deal with iPayment’s independent sales offices and subsidiaries. Your sales experience will vary greatly depending on who sells you the account, and who that person is working for. A few subsidiaries/DBA’s of iPayment are: Card Payment Solutions, CSI Processing, 1st National Processing, E-Commerce Exchange, First Federal Financial Services and Integrated Card Service. In 2012 iPayment bought out Flagship Merchant Services too.

Customer Service & Technical Support

Judging by some of their negative reviews, their service isn’t much to talk about. Don’t expect a lovely experience when dealing with their customer service, especially when you have billing issues or questions for the risk management department.

Have you worked with iPayment? Feel free to leave us your review. Don’t forget to read the user review and comment policy.

Negative Reviews

iPayment’s corporate BBB profile has an “A+” rating, with 285 complaints in the last three years. This is a bit up from the previous 278 complaints, but I’m really disappointed to see that the majority of these complaints (224 to be exact) were not solved to the satisfaction of the merchant. You can find plenty of negative reviews and complaints against iPayment on RipOffReport and other popular complaint sites. The most common complaints I’ve seen include:

• Undisclosed contract terms and fees: Since iPayment relies so heavily on independent sales contractors, this is to be expected.
• Poor customer service: I know some will argue that the quality of customer service depends on your account representative, and that is somewhat true. But a lot of service calls go through the corporate call centers, not your personal agent, and – based on what I’ve heard from merchants using iPayment – these exchanges leave much to be desired.
• Withholding of funds/termination of accounts:  This is a very common complaint, but we can’t always blame iPayment for these issues. They accept a certain amount of risk for taking on a merchant. If that merchant starts conducting business outside of the agreed upon terms, then iPayment has a right to investigate. Granted, there will be the occasional false positive, but that’s part of the deal. There are two main reasons that will get you red flagged and/or shut down by iPayment. (1) If you start processing way beyond the estimated monthly processing volume that you initially gave them when you signed up, and (2) if you sell something that is way above the average ticket price that you told them. If you anticipate either of those two numbers will change in any way, I highly recommend that you contact iPayment’s risk department to let them know ahead of time. I would, of course, also like to see iPayment work proactively to prevent this type of headache for you.

Positive Reviews

The iPayment site does have a few testimonials, but they all seem to be from their referral partners. It’d be nice to see some case studies from actual merchants that they’ve worked with. In the meantime, be sure to ask for references. Especially for businesses that are in the same industry as you.

Final Verdict

If you’re in charge of selecting a payment processor for a large company, I think iPayment is worth getting a quote from, along with other direct processing providers like Chase Paymentech and First Data. But for small and mid-sized businesses, there’s little reason to go directly through the iPayment corporate office. You’re better off having your account services by a smaller ISO running through iPayment, like MerchantPlus or Flagship Merchant Services or consider some mobile processors.

Whether you sign up with iPayment directly or through an independent office, I recommend that you firmly negotiate your contract terms and get quotes from at least a few other processors, so you have some bargaining chips. Remember that iPayment needs to win your business. Don’t give it up without a fight! For now, I can offer iPayment Merchant Services 3.5 stars out of 5. They get the job done, but overall I’m not really impressed.

Make sure to check out our merchant account comparison chart, and don’t forget to comment below with your iPayment experiences and reviews!

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