Ironwood Payments Review

Pros

• Transparent cost-plus pricing
• Improved website & advertising
• No early termination fee

Cons

• No pricing disclosed online
• Expensive for low-volume merchants
• Numerous public complaints

Ironwood Payments Overview

Once upon a time, there was a company called ElitePay Global (EPG). This merchant services provider had a poor reputation for non-cancelable leasing agreements, bait-and-switch rate offers under a tiered pricing structure and excessive early termination fees on long-term contracts. As you might guess, sales reps were either not well-trained or intentionally deceptive, and often unreachable after the contract was signed.

In the summer of 2015, the Oxford, Mississippi-based pair of John Lewis and Dewitt “Dee” Lovelace purchased the assets of ElitePay Global. They formed a new company called Ironwood Payments and set up headquarters in Oxford. According to Ironwood’s LinkedIn page, Lewis and Lovelace “set out to create the finest, most trustworthy credit and debit card processing company in America.” Quite a goal.

Well, we all love a good redemption story. We also recognize that a complete turnaround in a corporation with countless moving parts is never instantaneous. When we conducted our first review of Ironwood following year one, its story hadn’t deviated much from the discouraging ElitePay narrative. On top of this, a pending class action lawsuit against Ironwood for past practices of recording calls without notification, and an alleged cover-up by the current owners, did not exactly bode well.

And then came the plot twist.

Ironwood’s owners contacted us in January 2017 to say they had completely restructured the company. Here is just some of what Ironwood was up to behind the scenes over the past year and a half:

• Retained First Annapolis, a merchant processing consulting firm, for counsel on how to improve their business.
• Discontinued offering terminal leases (September 2016)
• Implemented an “Ironclad Guarantee” that merchants may leave at any time with no early termination fees.
• Let go of all the former EPG sales management team and 95% of the sales reps. They now call their sales reps “Business Solutions Advisors.”
• Closed the operations center in Logan, Utah and restructured the Salt Lake City operations center to focus on customer service.
• Closed appointment-setting call centers in Chicago and Salt Lake City.
• Decided to hire all employees on W-2 and gave the opportunity for existing 1099 contractors to convert.
• Created a new and much-improved website.
• Launched new social media pages and worked with the social media companies to close “unauthorized” accounts.

Those are pretty dramatic changes, right? Some are self-evident and easily verifiable. Others are more subtle and complex, requiring deeper investigation or simply more time to manifest a measurable impact. It’s clear those Mississippi pals should have taken a closer look at what they were getting into from the start. Only they know the precise share of responsibility they shoulder for Ironwood’s rough beginnings.

Whatever the case, Ironwood Payments is certainly trying its darnedest to clean up its act and resulting reputation. Redemption may still be at hand. Let’s take a closer look at the latest chapter in the Ironwood story.

Products & Services

This section of the Ironwood website has seen major updates since our last review, but it’s still an ongoing project for Ironwood to ensure all the information is current and accurate. I’ve included a “Coming Soon” section to highlight items they’ve told me are on the near horizon.

You can now click on each piece of hardware on the website to see the purchase price in one or three installments, or the cost to rent monthly. Current Ironwood merchants may still have equipment leases in progress, but Ironwood stopped selling any new leases in Fall 2016.

• Merchant Accounts: All new Ironwood accounts are boarded with National Processing Company (NPC), a subsidiary of Vantiv.
• Gateway/Virtual Terminal: Ironwood’s preferred payment gateway is Authorize.Net. 
• eCommerce: This section of the website is still sparse and will likely be fleshed out as time goes on, but it currently displays a couple of MagTek magstripe card readers. Authorize.Net’s standard set of eCommerce integrations, like shopping carts, should be available with Ironwood.
• Countertop and Wireless Terminals: A variety of Ingenico and Verifone terminals are offered for sale or rent.
• POS Systems: Ironwood advertises the Shopkeep line of iPad-based point-of-sale equipment. You can also transfer your current POS system over to an Ironwood account for reprogramming, as long as there are no insurmountable compatibility issues. We review Shopkeep and other POS systems at MM, so give our POS finder tool a whirl.
• Mobile Payments: The NPC Mobile Card Reader and the ROAMpay reader are the featured headphone jack devices. Neither are EMV-ready at the moment.
• Coming Soon: I’m told Ironwood will soon add the Poynt “Smart Terminal” with integrated POS software to its arsenal, as well as an EMV and NFC-capable mobile card reader from Swipe Simple. Watch for updates to the website when this equipment becomes available.

Fees & Rates

Ironwood is in the process of tweaking their fees and rates after restructuring the company, so expect what I’ve outlined below to fluctuate for awhile. The website’s pricing explanation still needs work, but they are apparently now committed to offering transparent interchange-plus pricing to new merchants. Unless you specifically ask for it, you probably won’t see a tiered pricing proposal at all. This is a complete about-face from EPG’s strategy and a very welcome one.

Although no hard figures are currently presented online, an employee quoted me around 0.40% + $0.05-0.08 as their average interchange-plus markup. Ironwood does not have preset pricing brackets based on processing volume and business type, so come prepared with some good negotiating skills.

Here is Ironwood’s baseline tiered offering, also with room for customization:

• Qualified Credit: 1.69% + $0.15
• Mid-qualified Credit: 2.29% + $0.15
• Non-qualified Credit: 2.89% + $0.15

For a tiered program, these rates aren’t too bad. But before we move on I need to give you a couple quick warnings. Firstly, ElitePay Global reps were notorious for offering freakishly low qualified rates (i.e. 1%) on a tiered pricing scheme while failing to clearly disclose the higher mid-qualified and non-qualified rates. Those employees and tactics should be gone by now, but it’s still on the merchant understand how tiered pricing works. Also, remember that which transactions fall into which tier is at the discretion of the merchant account provider.

Many EPG reps also neglected to mention that the mid-qualified rate was equal to the qualified rate plus the stated mid-qualified rate, and the non-qualified rate was all three rates added together. That quickly added up to about 6% for non-qualified transactions. This treating of the tiers as cumulative surcharges is a prime example of why tiered pricing isn’t as “simple” as it may seem at first.

While I was told that the new Ironwood tiered plan does not add up the rates like this for mid-qualified and non-qualified transactions, the application they sent me still includes this additive language in the fine print. I’m confident the new rates above are the totals but clarify this point before signing any tiered contract.

As we move on to other fees associated with Ironwood accounts, again remember that their pricing could easily change in the coming months. It changed several times even over the course of my conversations with employees last week! Below is what I ended up with, but I fully expect them to email me with corrections as soon as I press publish.

Fees:

• Annual fee: $0-$99
• Monthly minimum fee: $25/mo
• On File fee: $10/mo
• PCI and data breach coverage fee: $10
• Retrievals: $15
• Chargebacks: $15
• Authorize.Net gateway: $59 setup + $7.95/mo + $0.05 per transaction
• Optional paper statements: $4.95/mo

These fees are pretty standard for a traditional merchant account but do watch out for that annual fee. I’d recommend checking out our negotiation and fee guides to help determine the total cost of your account before signing a contract.

Contract Length & Early Termination Fee

Speaking of signing contracts, Ironwood now has an intriguing program called their Ironclad Guarantee. Have a look for yourself at the exact wording, but I will give you the upshot. When you sign up for a merchant account with Ironwood, you will be on NPC’s standard three-year initial term, with an automatic renewal for successive two-year terms. However–and this is a big “however”—if you are not satisfied with your service at any time for any reason, you may submit a written request to cancel your account and pay no early termination fee.

NPC’s contract (section 6.C) and the Ironwood merchant agreement both stipulate an early termination fee in the form of liquidated damages (a.k.a. early deconversion fee). While Ironwood says this fee is $275, there is a potential for a lot more “damages” that could be charged. Past complaints indicate higher amounts. But whatever the total amount, Ironwood is going to eat that cost on your behalf. All they ask in return is a chance to talk to you before you cancel in order to resolve any issues and ultimately talk you out of leaving if they can.

Often times if a merchant account provider offers no early termination fee, this means they’ll provide an accompanying waiver of the fee that’s still listed on the backend processor’s contract. Ironwood tells me the newest version of their merchant agreement will have a spot to put in $0 for the ETF from the start. Either way of showing that you’ll pay nothing is actually fine, as long as it’s crystal clear. This printed copy of the Ironclad Guarantee will come along with your contract for both parties to sign.

So is this a month-to-month plan or not? Not exactly. You’ll still have a long-term contract in place. Ironwood simply stuck out its neck out with this guarantee to say you can leave whenever you want, and they will shoulder the financial burden. In that sense, it’s functionally an hour-to-hour, minute-to-minute plan. We’ll have to watch the public complaints and testimonials to see if his promise is fully “ironclad.”

Sales & Advertising Transparency

As always in this section, we first look for what the merchant account provider’s website offers in terms of transparency toward potential merchants. In my last review of Ironwood Payments, I heavily criticized their website for spambot-speak. Basically, they’d thrown together a site with lots of empty links and cut-and-pasted text for the sake of having some kind of web presence. They clearly had much bigger systemic company problems demanding their attention.

In January 2017, Ironwood sent us the link to their new website. With much incredulity in my heart, I clicked on over. Frankly, I was shocked at the transformation. For starters, they took my spambot note quite seriously. They’ve actually overdone the personal touch in some sections, like the “Ironwood Story,” but I’m not really complaining. Here is the key passage:

When Ironwood purchased the assets of the Nevada-based company, John and Dee were unaware of underlying business changes that needed to take place. The new owners realized that the corporate culture and management practices previously established were broken.  First Annapolis, a highly respected payments industry consulting firm, has been engaged by John and Dee to provide an independent review of the Company’s strategy and best practices while offering objective insights and advisory services to enhance Ironwood’s sales and operational performance. 

As the two sole owners, John and Dee established a different course under their company, Ironwood. Changes include a focus on enhancing customer relations, discontinuing current sales of equipment leases, and maintaining an open book management style. The Ironwood company much like the Ironwood tree is deep-rooted sturdy, resilient to adverse conditions.

While they don’t mention ElitePay Global by name, they still have it on LinkedIn and I hope they keep the reference. Mostly, I’m impressed they’ve publically admitted the problems with the company, inherited or not. I also like that they’ve profiled their core team on the website. It’s good to know the real people who are willing to stake their reputations on this company, in spite of any problems so far.

The new website isn’t perfect yet. There are inconsistencies in information (i.e. photos not quite matching up with equipment, incorrect features, etc), but I don’t think they are intentionally deceptive. The only mention of Ironwood’s cost structure for processing cards is half-way down this page and is lacking clarity. They were very forthcoming with me about pricing on the phone, so I’m hoping to see this openness better reflected online in the future.

Another welcome website find is the front-and-center link to their BBB profile, complaints and all. We’re keeping an eye on these, but they’ve slowed significantly the last few months. To help ensure against continued complaints about tricky sales tactics that don’t align with the company’s values, they let go of all the old EPG sales managers and 95% of the sales reps by late 2016. The new sales reps (a.k.a. Business Solutions Advisors) are all in-house, with no sub-agents or ISOs to muddy the waters.

Ironwood also restructured its sales process to prevent any misuse of iPads to mislead merchants into signing something they haven’t read properly. This includes a final follow-up call to go over terms of the signed contract and all associated documents before it’s officially submitted to NPC for onboarding.

Add all this to the clearly posted Ironclad Guarantee, and the company’s headed in the right direction. We’ll just need to make sure the changes bear tangible fruit in the coming months.

Customer Service & Technical Support

Live phone support from the operations headquarters in Utah is available 8am-5pm Mountain Time. If you require technical support after hours, you’ll be redirected by the automated system to NPC’s 24/7 customer care. Emailing [email protected] is also an option, as well as a contact web form. During Mountain Time business hours, they say you can expect a near- immediate response to email.

Of course, you can always call your sales rep Business Solutions Advisor for help as well. The employee I spoke with says he fields calls 24/7. If he can’t help the merchant himself, he’ll set up a conference call with the processor or other third-party. Sometimes he’ll call on behalf of the merchants if they can’t step away from the register.

On the social media front, Ironwood has recently launched Facebook, Twitter, and Youtube accounts along with its website overhaul. Their LinkedIn has remained mostly unchanged. In the meantime, they’ve worked with the social media companies to remove various “unauthorized profiles,” a couple of which Ironwood suspects were instigated by former disgruntled employees of EPG. The new official profiles are largely inactive at this point. Increasing customer engagement via social media, as well as creating a merchant resource library on their own site, are big upcoming projects for Ironwood. We know they’ve had bigger fish to fry.

Negative Reviews & Complaints

After racking up approximately 40 complaints in their first year at the Better Business Bureau (August 2015-August 2016), the stream has slowed considerably. Ironwood has retained its A rating, and only two additional complaints have surfaced since our last review (for a grand total of 48). One includes no details and the other references an account opened in March 2016, before much of the restructuring took effect. Both were ultimately resolved to the merchant’s satisfaction.

Additionally, three more negative reviews have trickled in at the BBB page. These merchants cite deceptive sales practices and poor customer service, as well as a terminal lease and a disputed ETF. It’s difficult to know how long into Ironwood’s restructuring the problems first arose for the disgruntled parties, so the best we can hope for is no new reports from now on.

While complaints are tapering off at the BBB and around the web, it’s still important to document Ironwood’s problems from the time of formation. Below are the issues that arose most frequently. Ironwood has implemented sweeping changes that should correct most of these issues, but it won’t be instantaneous.

• Hidden/poorly disclosed fees: Whether it’s the possibility of hefty early “deconversion” fees (liquidated damages), or other high monthly and annual fees that will come with the account, merchants said these issues were often not discussed openly at the time of the sales call.
• Bad lease agreements: The third-party terminal leases offered by Ironwood agents until September 2016 were typically four-year agreements, so buying these out has cost merchants thousands of dollars. According to several complaints, the lease terms were not explained well to merchants.
• Pressure to sign on an iPad: Merchants complained of tablet slight-of-hand techniques, with reps pressuring them to sign quickly without properly seeing what’s on the screen. Some say they never saw the emailed contract that was promised to follow. A few have even complained of forged or cut-and-pasted signatures, although the company firmly denies this.
• Bait-and-switch rates of 1% credit 0% debit: Whether this 1% was actually a markup over interchange or just one artificially low qualified bracket in a tiered scheme, sales reps weren’t being forthright. Ironwood now mainly offers interchange-plus pricing and even their tiered structure has changed, so we shouldn’t see any more 1% bait-and-switch complaints for accounts opened in 2017.
• Poor customer service: Merchants complained that Ironwood’s response to all of the above was “too bad, you signed the contract.” This attitude was reflected in some of the written responses from Ironwood at BBB as well. The original reps were hard or impossible to reach once the deal was done.

Positive Reviews & Testimonials

It’s usually difficult to find positive reviews of merchant service providers, even when they’re doing a decent job. There are five positive testimonials at the BBB. The most recent one is repeated on this review and on Facebook, and oddly references a tour of the Ironwood facilities. In one from Feb 2016, the merchant says s/he’s been with Ironwood for over a year. That doesn’t quite add up timing-wise. The others are basic enough that it’s impossible to tell if they’re real, and two were left on the same day.

As part of the website overhaul, Ironwood launched a “Featured Customer” section. Currently, there is one merchant profiled: a men’s clothing store. I really like this idea and I hope it continues, but they need to add some quotes from the business owner for it to count as a testimonial. Right now, it just tells us that Ironwood has at least one non-ashamed customer.

If you’ve had a positive and verifiable experience with Ironwood Payments, we’d love to hear about it in the comments.

Final Verdict

I’m awarding the new-and-improved Ironwood Payments a cautiously optimistic 3.5 stars. If all the changes they’ve made come to full fruition in the coming months, we could see that rating bump even higher next time around. I especially respect that Ironwood stopped leasing equipment, switched to promoting interchange-plus pricing, and publicly guarantee you can leave at any time without paying early termination fees. These factors alone put them solidly in above-average-merchant-account-provider range.

However, we must balance these great improvements with past complaints. Ironwood stacked up way too many to be recommendable in their first year, whether or not they inherited a “broken” company from ElitePay Global. Even under the best circumstances, it could take awhile for Ironwood’s slowing flow of complaints to reach a complete standstill. The pending class action suit still looms over the company, so we’ll be keeping an eye on that as well.

Meanwhile, I’d like to see continued improvements to the website, particularly concrete rates and fees in addition to the equipment pricing they currently advertise. Our preferred providers are the standard for transparency here. I will say that with their monthly minimum fee and other monthly and/or annual fees, Ironwood may never be an ideal option for very low-volume, strictly mobile merchants. We have good recommendations for this type of merchant too.

Overall, I’ve been impressed with Ironwood’s willingness to admit shortcomings, and the leadership’s determination to turn the “Ironwood Story” into one of triumph over adversity. If they manage to thoroughly overcome their rocky start and continue to improve, I’ll officially declare it a redemption story. Those are the best kind, aren’t they?

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