Leaders Merchant Services Review
Taking $5,000 per month or less in card payments?
You’ll save with Square
- Date Established
- Camarillo, CA
- Caters to a wide variety of industries
- Accepts high-risk merchants
- Deceptive advertising
- Deceptive sales tactics
- Untransparent tiered pricing
- An early termination fee of $250-$350
- Expensive for low-volume merchants
- Numerous public complaints
Leaders Merchant Services Overview
In the sprawling landscape of credit card processors, it’s tough to stay on top of all the latest acquisitions and mergers. Let’s look at a merchant account provider called Leaders Merchant Services in light of some recent acquisitions. Founded in 2000 and based out of Camarillo, CA, Leaders Merchant Services has served over 100,000 merchants up to this point. After acting as an independent sales organization for a large merchant account provider called iPayment for over a decade, Leaders Merchant Services was purchased by iPayment in late 2017.
iPayment itself is a long-time ISO of First Data, one of the largest merchant acquirers in the US. Leaders Merchant Services continues to operate as a standalone business as far as we know. However, it still bears some similarities to its now-parent company as well as to other iPayment subsidiaries (Flagship and CreditCardProcessing.com come to mind). Unfortunately, the similarities aren’t always positive.
The acquisition plot continues to thicken. In 2018, Paysafe, a UK-based firm that’s been expanding its market reach in North America as of late, purchased iPayment. That means Paysafe technically owns Leaders Merchant Services as well. It’s also the owner of Skrill, a PayPal-like mobile wallet that has — believe it or not — an even worse reputation than PayPal for holding funds, losing money, and generally just treating its users (and merchants) poorly.
Why rehash who owns whom? I really dislike the way Leaders Merchant Services operates, so with every merger and acquisition, hope springs eternal that the company will evolve into something less shady. But if Paysafe is going to be any kind of positive influence (we aren’t holding our collective breaths, to be honest), it hasn’t trickled down yet. It’s still business as usual at Leaders Merchant Services. By that, I mean using misleading advertising and deceptive sales tactics, all while racking up lots of complaints and soliciting fake positive reviews to help counteract an increasingly poor reputation. It appears that Leaders Merchant Services has even hired outside agencies to post fraudulent praise on several review sites — including ours.
I can’t give Leaders Merchant Services more than a non-recommendable 1.5 stars. Shady testimonial-gathering practices and misleading advertising overshadow any redemptive qualities. We can’t just blame a few rogue independent agents here — Leaders Merchant Services has some real systemic problems. Check out one of our preferred providers instead or read on for the full story.
Table of Contents
Products & Services
Leaders Merchant Services is one of the “Classic” Clover POS/First Data resellers, which are a dime a dozen these days. The basic MO is to sell a whole lot of Clover products backed by First Data processing, plus offer a bunch of add-ons from other third parties (mostly for merchants that won’t be using Clover and its integrated apps). Here are features Leaders Merchant Services actively promotes at the time of this review:
- Merchant Accounts: Just like its most-direct parent company (iPayment), Leaders Merchant Services is an ISO of First Data, although it may offer merchant accounts from other back-end processors as well.
- Clover POS Line: First Data owns Clover, and using this equipment means your processing contract will automatically be with First Data. We’ve extensively reviewed the Clover line and also covered the best Clover resellers (spoiler alert: Leaders Merchant Services didn’t make the list).
- Card Terminals & PIN Pads: Hardware from Verifone, First Data, and PAX is featured. No pricing is discussed, but the agent recruitment website mentions a terminal lease program. If you’re tempted to lease a machine like this from Leaders Merchant Services, I’d suggest slowly (or quickly) backing away. You may also be offered a “free” terminal upon sign up, but these offers almost always come with a catch. Buy your hardware outright and say no to leases or “free” hardware that comes with strings attached.
- Mobile Processing: Currently, Leaders Merchant Services promotes the Walker 2.0 EMV mobile reader. It comes in either an audio-jack or Bluetooth form, but it doesn’t look like it can be used for contactless payments. I would hope low-volume, strictly-mobile merchants are using a more appropriate processor, and that these readers are used as mobile extensions of existing Leaders Merchant Services accounts. Walker can integrate with third-party POS systems and payment apps.
- Payment Gateway: Leaders Merchant Services is a reseller of the ubiquitous Authorize.Net payment gateway for online payment processing. The Leaders Merchant Services website discusses how Authorize.Net can be set up for various types of merchants, including MOTO merchants who are just looking for a virtual terminal.
- Shopping Cart Integration: CartManager is the featured online shopping cart provider. This company’s been around since 1998, and I noticed its website is still stuck back there.
- Check Processing: Leaders Merchant Services features the Magtek Mini-MIRC paper check reader. (Magtek itself no longer promotes this scanner, and the linked PDF is from 2003.)
- Business Loans & Cash Advances: Through a program called Leaders Funding, Leaders Merchant Services offers merchants $5,000 to $500,000 in cash advances and up to $1 million for business loans. Both use your company’s projected sales to determine funding limits. Use caution here, especially when considering a cash advance.
- InstantAccept QuickBooks Integration: This virtual terminal/makeshift POS system lets you process payments from a computer where QuickBooks isn’t installed and then syncs everything on the back end.
Fees & Rates
Leader Merchant Services gives only a brief answer to the question of “What will my rates be?” in its website’s FAQ:
There are a lot of factors that go into what your discount rates will be. Factors like what type of transactions you are going to accept; face to face, MOTO, or internet. Speak with a New Accounts Associate to discuss what which of our rate programs will best fit your business needs.
Not all that helpful, right? Still, it’s true that Leaders Merchant Services doesn’t have much standardization in pricing, partly because the company uses independent agents who can set their fees to some extent.
The Leaders Merchant Services website does offer insights into the company’s pricing model preferences. The glossary of terms includes definitions of tiered and interchange-plus pricing. In the case of interchange-plus pricing (our preferred model), Leaders Merchant Services states: “This type of pricing is usually used for larger volume merchants.” We aren’t given the definition of “larger volume,” but I’m concerned that many merchants — even mid-sized merchants who’d most definitely benefit from this pricing — could easily be steered away from it. Generally, any merchant processing more than $10,000/month in credit cards should have no trouble getting an interchange-plus agreement. Even some smaller merchants might qualify if you can find a reputable processor.
What will business owners get steered toward instead? The posted sample statement uses a tiered model, as we can determine from the additional charges for mid-qualified and non-qualified transactions in the excerpt below. Check out our article on tiered pricing to learn about the pitfalls of this model. In short, tiered pricing, which at first glance seems more straightforward, tends to hide a lot of the charges assessed for processing card payments. It can also create the impression that far more of your charges will be at the “qualified” rate than what actually will.
I also need to point out that there’s some funky stuff going on with the statement guide. Leaders Merchant Services is entitled to invent its own rates numbers for the sake of an example (2.5% in the case of qualified transactions above). However, it has completely left out the rates for mid- and non-qualified transactions. If you do the math, mid-qualified comes out at 2.4%, somehow lower than 2.5%, which makes no sense. (Unless the 2.4% is a surcharge on top of 2.5%, which would be even more insane).
Leaders Merchant Services is also using a daily discount method here. This is a bit of a side note, but an important one. When you see “less discount paid,” that’s the big clue that you’re already charged some of your processing costs throughout the month and then the rest at the end of the month. Basically, you’re on a rolling billing system where you need at least two months of statements to reconcile what you’ve paid in any given month. I think a daily discount is even more convoluted when combined with tiered pricing because you’re not charged your mid-qualified and non-qualified surcharges until the end of the month.
What about other merchant account fees? Looking back at the sample statement, the three mentioned are a monthly statement/customer service fee ($10), a monthly minimum fee (amount not listed, but in the glossary as $25), and a chargeback fee ($35). There’s also a batch fee, which gets charged every time you settle your terminal, typically at the end of each business day.
Leaders Merchant Services also partners with several third-party review sites that publish pricing figures. Some of these sites, as we’ll discuss later, are more reputable than others. It’s difficult to say if the fee lists are current or complete. Taking into account all the sources I’ve combed through (including merchant complaints), I’ve compiled a quick list of additional fees to watch for with Leaders Merchant Services:
- PCI Compliance Fee: I’ve seen this fee up to $129 per year for Leaders Merchant Services.
- PCI Non-Compliance Fee: When mentioned, it’s typically $40 monthly on top of the regular compliance fee.
- Gateway Fee: Like other gateways, Authorize.Net usually has a setup fee, monthly fee, and/or per-transaction fee. Resellers such as Leaders Merchant Services can structure this pricing in a variety of ways, but somewhere around $25/month seems common. Leaders Merchant Services has also advertised a free gateway and equipment upon signup. Examine the fine print of these offers because you are most likely paying for any “free” stuff in other ways.
- Setup Fee: This could be disguised as a $25 “Business Verification Fee,” so keep an eye out.
- Premium Customer Care: I get the impression that Leaders Merchant Services has mostly phased out a separate fee for customer care and has just started including it as part of the monthly fee. Keep it on your radar, though.
- Annual Fee: We’ve seen various dollar amounts for this, but it may have been the Premium Customer Care fee or PCI compliance fee.
- Equipment Service Program Fee: Optional program for $4.95 monthly. Be careful if you’re offered a “free” terminal — this could very well be part of the deal. You’ll also want to be clear on whether you’re considered to own or lease the equipment.
- Per-Transaction Fee: This is different from your processing rate, and I’m mentioning it again because Leaders Merchant Services omits its transaction fees from ads. Review sites tend to peg this fee between $0.18 and $0.30 per transaction, but also note that each tier of a tiered pricing plan may have a different transaction fee. I’d suggest reading our article on transaction fees to help ensure you’re not charged multiple transaction or authorization fees on one transaction. Looking at the statement guide, I could see this easily happening with Leaders Merchant Services if you’re not careful.
Contract Length & Early Termination Fee
The default contract length with Leaders Merchant Services is three years. Although the dollar amounts have been removed from the most recently posted merchant program guide, references to the contract length and the existence of an early termination fee are still there. As far as we know, the standard ETF is still $350 if you cancel before the first year is up, and $250 if you cancel within the second or third year. By removing the dollar amounts from the website, however, it’s only opened it up for independent sales agents to tack on more.
For me, even $250-$350 isn’t good enough. So many providers are willing to go month-to-month these days. My impression is that Leaders Merchant Services will negotiate on this point with some merchants. You should definitely ask about it if, for some strange reason, you’ve decided not to run away from this company. Unless you are getting something special (and most often you’re not), don’t agree to an ETF from any provider.
Sales & Advertising Transparency
Leaders Merchant Services has a few points in its favor when it comes to transparency. The Resources section of the website provides a statement sample, a glossary of terms that includes some pricing model definitions, and the terms and conditions of its banking partners. Many companies I’ve reviewed don’t bother to link to any of this information publicly, so I respect the openness here.
That’s about where the positives stop, though. Now, on to the Leaders Merchant Services sales and advertising practices that I don’t like. (By the way, you know it’s a bad sign when we need a full-on bullet point list in this section.)
- No Pricing Page: The best providers are very open about pricing on their main websites. The closest we came for Leaders Merchant Services was the sample statement, but the actual rates shown were pretty nonsensical.
- Advertising Only “Industry-Low” Rates & No Transaction Fees: Leaders Merchant Services no longer advertises a specific “as low as” rate for qualified transactions, advertising instead that it offers “industry-low rates.” While this is arguably more honest than its past tactics, it doesn’t really provide any useful information to customers.
- Soliciting False Testimonials: This is a big one. We’ve got a whole section to discuss this later in the review. I’ll just mention here that Merchant Maverick has experienced this bad behavior from Leaders Merchant Services first hand. Our site has received a handful of positive reviews about Leaders Merchant Services, all with different names and email addresses. They all had one thing in common, though: the same IP address in Delhi, India. Needless to say, we did not publish them.
- Partnering With Shady Review Websites: Leaders Merchant Services partners with several “review” sites that rank providers but function more like paid ads. Some even admit that payments influence ranking positions. Again, we’ll get into this more when we discuss reviews for Leaders Merchant Services, but the operative word here is definitely “shady.”
- Gimmicky Savings Guarantee: You’ll see a common sales gimmick on the Leaders Merchant Services site: a “guarantee” that it will save you money and send a $500 check to you if it can’t.
These promises are rigged in the processor’s favor every time, trust me. This is not to mention that Leaders Merchant Services doesn’t actually have to save you money. According to the fine print, it just has to project savings: The $500 Assurance payment is payable only if LEADERS’ analysis shows no projected savings when compared to the merchant’s current rate structure and processing profile. Any savings shown in our analysis, regardless of dollar value, renders the $500 offer unpayable. Actual savings for months in which the merchant processes with LEADERS’ may vary from month to month, depending on processing volume and profile. Actual savings are not guaranteed. This offer does not apply to high-risk merchant types or merchants with poor credit
For these reasons and more (some of which we’ll cover in the complaints section), Leaders Merchant Services falls breathtakingly short when it comes transparency.
Customer Service & Technical Support
While Leaders Merchant Services advertises 24/7/365 phone-based support, many customer complaints have cited poor quality in this area. Also, be advised that the in-house support team is probably not available around the clock (I’ve seen 6:30 AM-6:00 PM PT Monday-Saturday referenced elsewhere for that). You’ll likely get passed along to third-party support after hours. There’s also a live chat, but don’t expect to glean too much information from the chat team; they’re mostly there to usher you into a phone call with a sales rep. If you’re using the Clover suite, expect to be directed to Clover for any technical support, by the way.
Aside from a handful of Resource PDFs and a limited FAQ, Leaders Merchant Services’ web-based self-service support tools are virtually non-existent. Some additional resources may be offered through the iAccess merchant portal, the iPayment system used by many of its subsidiaries.
You should know that we’ve also seen evidence that Leaders Merchant Services merchants have been automatically opted-in to Premium Customer Care with an additional fee when filling out the application. Many merchants, if they realized what it cost them, would not agree to this. I’m hoping this is completely phased out by now, but be on the lookout nonetheless.
Negative Reviews & Complaints
Hoo boy. Where to begin? On the BBB site alone, you’ll find 240 complaints from the last three years, which is a lot for a company of this size. BBB doesn’t base its ratings on user reviews, but Leaders Merchant Services has gone down to a B rating for the sheer volume of complaints alone. Other consumer protection sites are also inundated with angry merchants looking to get revenge on Leaders Merchant Services.
Here are some common complaints:
- Undisclosed Early Termination Fee: This came up way too many times to be a coincidence. Most likely, the fee is included in the final contract; the fact that salespeople are either leaving this information out or otherwise out-and-out lying about it seems obvious. As one complaint response from Leaders Merchant Services stated, “The agent did not say there was no ETF.”
- Other Hidden Fees & Terms: In case undisclosed early termination fees weren’t enough, Leaders Merchant Services has you covered. The overwhelming majority of complaints involve hidden fees. Many agents will be glad to leave PCI compliance fees undisclosed and unexplained, as well as non-compliance fees, annual fees, and any other fee you might encounter. Many merchants state they were given an application to sign electronically but never saw documentation of the full gamut of fees and legal terms until later.
- Difficulty Canceling Service: This wasn’t mentioned as often as it is with some other providers, but it did come up now and then while I sifted through complaints. Still, it’s a huge disappointment to see merchants being charged an early termination fee and having trouble closing the account.
- Climbing Rates: Even if Leaders Merchant Services seems like it’s giving you very low rates in your tiered pricing plan, that’s not a guarantee that they will stay low. Some merchants complain that rates skyrocketed in the first year of service — another reason to always insist on interchange-plus pricing.
Positive Reviews & Testimonials
Usually, this is where we’d typically look at the silver lining. Instead, this is where things really go off the rails, I’m afraid. Fraudulent positive reviews on user review sites are all too commonplace, but whoever’s been working on these lately has tried super hard to make some of the reviews sound believable, which usually just ends up making them worse. In fact, so many are clearly fake that I don’t even care anymore if some of them might be authentic. It’s that bad, folks.
I’ve already mentioned that we’ve received several fraudulent positive reviews for Leaders Merchant Services on our site, all from a single IP address in India. You can rest assured those comments all went straight to our trash. It’s a common practice for companies to hire outside firms to do “reputation management.” Common doesn’t mean ethical, however. The cherry on top is when companies are sloppy about it.
Besides the Indian IP address debacle, another embarrassing example of this sloppiness from Leaders Merchant Services is within 5-star Google reviews. I found several Google profiles that have only reviewed two or three companies in total, one of them being Leaders Merchant Services. Well, guess what? The other one or two companies these reviewers scored besides Leaders Merchant Services(with 5-stars, of course) are the same one or two companies every single time! Very fishy, if you ask me.
iPayment and its subsidiaries (such as Leaders Merchant Services, Flagship, and Creditcardprocessing.com) take the cake when it comes to online reputation management. As far as I can tell, they’ve tried every trick in the book to ensure that positive reviews outnumber all of their negative ones. At the time of this update, Leaders Merchant Services has an average BBB rating of a little over three stars, suspicious given the amount of vitriol you’ll find there. As strange as it may sound, it’s less suspicious when a company has a negative user review rating on the BBB because when a customer is pleased, the first site they think to drop a positive review on is probably not the Better Business Bureau.
Another strategy these companies use is directly partnering with review sites with sketchy ranking criteria. In the worst cases, it’s as simple as paying for a good ranking position. There are fewer instances of this behavior now than just a couple years ago, but you can still run into some head-scratchers.
Note the top 3 contenders.
What a weird coincidence:
And finally, this is the site Leaders Merchant Services references when it claims to be “most recommended” and “voted #1” on its very own review site:
Yes, the company created a separate “Leaders Merchant Services Reviews” website in an attempt to snag anyone searching its reputation. Lots of written testimonials are posted on this site, but I know you’ll be shocked to learn that the quality is low. Who knows if any of them are authentic customers?
All of that static makes it hard to zero in on what Leaders Merchant Services’ actual positive selling points are. The virtues, such as they are, appear to be:
- Willingness To Work With High-Risk Merchants: If you fall into a high-risk category and the idea of working with a third-party processor isn’t an option, Leaders Merchant Services does seem willing to extend a merchant account to most businesses. However, we know of plenty of other great high-risk processors that you should check out instead.
- Few Industry Restrictions: Also falling into the “we don’t care whom we’re working with” bucket of virtues, Leaders Merchant Services is willing to work with any business that “meets its underwriting standards.” This kind of approach benefits no one except scam artists and the processing company.
If you have had a verifiable positive experience with Leaders Merchant Services, I’d love to hear from you in the comments. Be sure to read our comment guidelines first!
The internet as a whole is rife with fake reviews, but what drives a company such as Leaders Merchant Services to solicit so many low quality and fraudulent testimonials? It looks desperate coming from a merchant account provider that’s been racking up too much negative feedback, so the scales must be tipped back the other way at all costs. The bad news is that Leaders Merchant Services and other iPayment-associated companies will likely only continue to develop more sophisticated, aggressive, or sneaky reputation management techniques. The good news is that we’ll continue to call them out for it!
All this fake testimonial garbage is a reaction to complaints of hidden fees, deceptive sales tactics, and misleading marketing. I have a feeling that Leaders Merchant Services’ extremely low advertised rates have something to do with the large number of “hidden fees” complaints. I suspect that most merchants are getting lured in by the “low rates,” then getting a wake-up call once their first statement arrives. This scenario illustrates why you shouldn’t shop for a merchant account based solely on advertised rates. Companies like this count on merchants not truly understanding pricing models and interchange.
iPayment recently bought Leaders Merchant Services, then Paysafe bought iPayment, but it doesn’t look like there’s been too much of a change in their MO. In the meantime, don’t be fooled by a bunch of glowing reviews at sketchy independent ranking sites. Until I’ve seen that Leaders Merchant Services has cleaned up its act, 1.5 stars are all I can muster. I can’t even recommend that you bother trying to negotiate for interchange-plus pricing and a month-to-month contract with these turkeys. Thankfully, you have plenty of better options.
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.