Leaders Merchant Services Review
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- Date Established
- Camarillo, CA
- Caters to a wide variety of industries
- Accepts high-risk merchants
- Deceptive advertising
- Deceptive sales tactics
- Untransparent tiered pricing
- Early termination fee of $250-$350
- Expensive for low-volume merchants
- Numerous public complaints
In the sprawling landscape of credit card processors, it’s tough to stay on top of all the latest acquisitions and mergers. Personally, I’m just patiently awaiting the day when one giant company completely monopolizes payment processing, having either assimilated or vanquished the competition. I often find myself casually wondering who will become the Amazon or Google of the processing arena. When that day arrives, I’m probably also out of a job as a merchant account reviewer. Don’t worry, I have made peace with my destiny.
I’m still gainfully employed for now, so 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 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 was actually purchased by iPayment in late 2017.
iPayment itself is a long-time ISO of First Data, one of largest merchant acquirers in the US. Leaders continues to operate as a standalone business as far as we know, but 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. iPayment was purchased by Paysafe in 2018, a UK-based firm that’s been expanding its market reach in North America as of late. This means Paysafe technically owns Leaders Merchant Services as well.
Why rehash who owns who? Well, for one thing, it means Leaders Merchant Services is likely in a transition phase. As it stands, I really dislike the way Leaders operates, so I’m hoping any imminent changes will be for the better. However, there’s always a chance we’ll just observe business as usual for Leaders going forward. By “business as usual,” 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. (I threw up in my mouth a little while typing that last sentence.) It appears that Leaders 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. Any redemptive qualities are overshadowed by shady testimonial-gathering practices and misleading advertising. We can’t just blame a few rogue independent agents here — Leaders has some real systemic problems. Check out one of our preferred providers instead, or read on for the full story.
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Table of Contents
Products & Services
Leaders is a classic Clover POS/First Data reseller, of which there are a dime a dozen these days. The basic M.O. 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 is an ISO of First Data and Wells Fargo, although Leaders may resell merchant accounts on other processing platforms as well.
- Clover POS Line: Clover is owned by First Data, 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 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, 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.
- Mobile Processing: Currently, Leaders promotes the Walker 2.0 EMV mobile reader. It comes in 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 to begin with, and that these readers are used as mobile extensions of existing Leaders accounts. The Walker can be integrated with third-party POS systems and payment apps.
- Payment Gateway: Leaders is a reseller of the ubiquitous Authorize.Net payment gateway for online payment processing. The Leaders website discusses how Auth.Net can be set up for various types of merchants, including MOTO merchants 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 apparently still stuck back there.
- Check Processing: Leaders features the Magtek Mini-MIRC paper check reader. (Magtek itself no longer promotes this scanner, and the linked PDF is from 2003). A standard electronic conversion program from CheckPoint was once promoted, but I’m not seeing it actively advertised anymore. Note that these programs come with additional fees.
- Business Loans & Cash Advances: Referred to as Leaders Funding, working capital programs from $5K to $1 million are available. Use caution here, especially when considering a cash advance.
- LMS Creative Solutions: Website and logo design services.
- InstantAccept Quickbooks Integration: A virtual terminal/makeshift POS system that lets you process payments from a computer where Quickbooks isn’t installed, and then syncs everything on the backend.
- StampMe Rewards Card App: An alternative to physical gift and loyalty cards.
- SimplyPaid Payroll: Fun fact — this is the payroll system Uber uses. The Leaders site emphasizes the Visa Payroll cards.
- Open Dining Network Online Ordering System: A platform for restaurants to enable orders via the web, social media, and mobile apps/devices.
Fees & Rates
To sum up Leader’s already-brief answer to “What will my rates be?” from the website FAQ: “It varies depending on your business, so talk to a sales rep.” Not all that helpful, right? Still, it’s true that Leaders doesn’t have much standardization in pricing, partly because the company uses independent agents who are able to set their own fees to some extent.
The Leaders website does offer insights into the company’s pricing model preferences. Leaders posts a glossary of terms in which both tiered and interchange-plus pricing are defined. In the case of interchange-plus pricing (our preferred model), Leaders 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.
What will business owners be 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.
I also need to point out that there’s some funky stuff going on with the statement guide. Leaders is entitled to invent its own rates numbers for the sake of an example (2.5% in the case of qualified transactions above), but they’ve 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 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 your big clue that you’re already charged part of your processing costs throughout the month, and then part at the end of the month. Basically, you’re on rolling billing system where you need at least two months of statements to reconcile what you’ve actually paid in any given month. I think 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.
Beyond the statement guide, the strongest indication we have that Leaders actively favors tiered pricing is in its advertising. Ads promote rates “as low as .15%.” With an “as low as” number that’s this low, we’re looking at a four (or even six) tiered pricing structure. Only the lowest tier — the qualified rate for certain debit card transactions — is promoted, and only a select few transactions will process at the advertised rate. There is also no mention of the accompanying per-item transaction fee in these ads.
What about other merchant account fees? Looking back at the sample statement, the three mentioned are a monthly statement/customer service fee ($10), monthly minimum fee (amount not listed, but in the glossary as $25), and a chargeback fee ($35).
Leaders 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:
- PCI Compliance Fee: I’ve seen this fee up to $129 per year for Leaders.
- 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 like Leaders can structure this pricing in a variety of ways. Leaders has also advertised a free gateway and equipment upon signup. Examine the fine print of these offers, because you are mostly 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 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.
- Per-Transaction Fee: This is different than your processing rate, and I’m mentioning it again because Leaders 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 if you’re not careful.
Contract Length & Early Termination Fee
The default contract length with Leaders 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, they’ve really 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 will negotiate on this point with some merchants, so you should definitely ask. 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 has a few points in its favor when it comes to transparency. The Resources section of the website provides a program guide, a statement sample, a glossary of terms that includes some pricing model definitions, and the fine print of an albeit-gimmicky savings guarantee. Many companies I’ve reviewed don’t bother to publicly link to any of this information, so I respect the openness here.
That’s about where the positives stop, though. Now, on to the Leaders sales and advertising practices 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 was the sample statement, but the actual rates shown were pretty nonsensical.
- Advertising only “as low as” rates and no transaction fees. As you saw in the Fees & Rates section, Leaders wants to bait you with just the qualified debit tier of its multi-tier rate structure, while also completely omitting the transaction fee. You won’t fall for it, right?
- Removing dollar amounts from the published program guide. Leaders must have decided it wasn’t worth it after all to be transparent on the website about the exact amount of the ETF and other fees. You’ll need to check these are all clearly outlined on your own merchant agreement (i.e., more than just a suspiciously short document you’re asked to e-sign on an iPad). You can’t rely on the sales agent to tell you about these ahead of time, as we’ve read in many complaints.
- Soliciting false testimonials. This is a big one. We’ve got a whole section to discuss this later in the review, but I’ll just mention here that Merchant Maverick has experienced this bad behavior from Leaders first hand. Our site has received a handful of positive reviews about Leaders, 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 partners with several “review” sites that rank providers, but that actually function more like paid ads. Some even admit that ranking position is influenced by payment. Again, we’ll get into this more when we discuss reviews for Leaders, but the operative word here is definitely “shady.”
- Gimmicky savings guarantee. You’ll see a common sales gimmick on the Leaders site: a “guarantee” that they will save you money, and a $500 check to you if they can’t. These promises are rigged in the processor’s favor every time, trust me. This is not to mention that Leaders doesn’t actually have to save you money, they just have to project savings:
The guarantee payment of $500 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 guarantee 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.
For these reasons and more (some of which we’ll cover in the complaints section), Leaders 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 be passed to third-party support after hours. I also gave the live chat feature a whirl myself, but was cut off when I started asking too many questions.
Aside from handful of Resource pdfs and a limited FAQ, Leaders’ web-based self-service support tools are basically non-existent. Some additional resources may be offered through the iAccess merchant portal, an iPayment system used by many of its subsidiaries.
You should know that we’ve also seen evidence that Leaders merchants have been automatically opted-in to Premium Customer Care with an addition fee when filling out the application. Many merchants, if they realized what it was costing 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
My head nearly exploded while researching this section. There were just so many complaints to read — my vision is still a little blurry from it. On the BBB site alone, you’ll find 181 complaints from the last three years. Other consumer protection sites are also inundated with angry merchants looking to get revenge on Leaders.
Here are some common complaints:
- Undisclosed Early Termination Fee: This came up way too many times to be a coincidence. It’s likely that the fee is actually included in the final contract, but the fact that salespeople are either leaving this information out or otherwise out-and-out lying about it seems obvious. As one Leaders complaint response stated, “The agent did not say there was no ETF.” Cute.
- Other Hidden Fees & Terms: In case undisclosed early termination fees weren’t enough, Leaders has you covered. Many agents will be glad to leave PCI compliance fees undisclosed and unexplained, as well as non-compliance fees, annual fees, and basically any other fee you might encounter. Complaints of this nature come up again and again with Leaders. Many merchants state they were given an application to electronically sign, but never saw documentation of the full gambit of fees and legal terms until later.
- Difficulty Canceling Service: This actually 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 seems like they are 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.
A speck of good news here? It seems that Leaders does at least make an attempt to respond to complaints posted publicly, oftentimes issuing refunds and coming up with compromises. So while I believe that these complaints should have been resolved before a third-party site needed to be involved, I’m at least glad to see that Leaders support is coming through in some cases. I’m guessing this partially explains Leaders’ A+ BBB rating.
Positive Reviews & Testimonials
This is where things really go off the rails, I’m afraid. Maybe its because I’ve read thousands of merchant account provider testimonials as part of my job, but most Leaders testimonials smell off to me. Whoever’s been working on these lately has tried really 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 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 is within 5-star Google reviews. I found several Google profiles that have only reviewed two or three companies in total, Leaders being one of them. Well, guess what? The other one or two companies these reviewers scored besides Leaders (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, Flagship, and Creditcardprocessing.com) really 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 all their negative reviews are outnumbered by positives. At the time of this update, Leaders has 54 positive reviews at the BBB (to its 34 negatives), some of which are repeated at other sites. Again, even the testimonials that seem like they might be authentic at first glance are just trying way too hard to sound real.
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. Here are a few examples of these sites, so you know I’m not just a paranoid conspiracy theorist:
And the worst one is from a site called Top 10 Best Merchant Services:
Why is that last example the worst? First of all, those 2000+ “user ratings” are from simple one-click votes — no written testimonials are collected here. My own meaningless little click just bumped the total from 2092 to 2093 votes. Secondly, the text of the actual review is poorly done and downright misleading in places. Thirdly, this site definitely accepts compensation for ratings and ranking position (at least they admit it). And finally, this is the site Leaders references when it claims to be “most recommended” and “voted #1” on its very own review site:
Yes, Leaders 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? Like I said, I don’t even care anymore.
I could go on, but I’m guessing you’re sufficiently disturbed by now. If you have a verifiable positive experience with Leaders, I’d love to hear from you in the comments. Just don’t be alarmed when I reach out to investigate if you’re the real deal!
The internet as a whole is rife with fake reviews, but what drives a company like Leaders Merchant Services to solicit so many low quality and fraudulent testimonials? This looks like desperate behavior 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 and other iPayment-associated 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 of this fake testimonial garbage is a reaction to complaints of hidden fees, deceptive sales tactics, and misleading marketing. I have a feeling that Leaders’ 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 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, and then Paysafe bought iPayment, so we’ll have to see how all this acquiring eventually shakes out. In the meantime, don’t be fooled by an A+ BBB rating or a bunch of glowing reviews at sketchy independent ranking sites. Until I’ve seen that Leaders has cleaned up its act, 1.5 stars is all I can muster. I can’t even recommend that you bother trying to negotiate for interchange-plus pricing and month-to-month contract with these turkeys. Thankfully, you have plenty of better options.
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