Payment Alliance International Review

Payment Alliance International was acquired by Clearent in January 2017 and no longer directly boards new merchants under the PAI brand. This review will no longer be updated. Check out our reviews of the best high-risk merchant account providers, or compare our highest rated all-around processors. 

Payment Alliance International Overview

Established in 2005, Payment Alliance International is a popular merchant account provider based in Louisville, KY. Other PAI locations include a sales office in Florida, a hardware and shipping center in Mississippi and an ATM center in Montana. ATMs, in fact, are PAI’s bread and butter. In addition to running card processing for these machines, PAI has managed the sales, installation, branding, and maintenance for upwards of 70,000 units across North America.

Beyond the ATM industry, which CEO John Leehy III admits sounds “particularly uncool” in an era of Bitcoin and ApplePay, PAI occupies a couple of other interesting niches in the merchant acquirer landscape. The most notable example is that they offer processing for firearms sales, which is considered high-risk in the payments industry. PAI is an openly gun-friendly merchant account provider and is endorsed by the NRA, the National Shooting Sports Association, and gunbroker.com.

Other risk-mitigating features provided by PAI cater to unbanked, underbanked, and low-income consumers. You can read more about these in upcoming sections of this review. But with over 85,000 retail customers on board, PAI offers eCommerce, storefront, and mobile card processing solutions to a wide variety of small and medium-sized businesses.

I will confess right off the bat that it’s challenging to review a payments company that employs both inside and outside sales reps, uses multiple processing platforms, and whose website isn’t the key entry point for new customers. But that’s exactly what I’ll do if you’ll stick with me!

Products & Services

While I called PAI to obtain some of the basic info for this review, most of this section’s content can be found online. A few of the products and services listed below require extra hardware and most will come at an additional cost to the merchant, so be sure to understand all associated fees when negotiating your contract. Oh, and I hope you enjoy trifold brochures in pdf form because PAI’s got heaps of ’em.

• Merchant Account: When you sign up with a PAI merchant account, you’ll have a separate card processor providing your payment gateway, monthly statements, transaction dispute resolution, and other behind-the-scenes services. Global Payments is PAI’s primary processor, but they also use WorldPay and TSYS to underpin some accounts.
• Payment Gateway: PAI accounts are frequently set up on Authorize.Net or eProcessingNetwork, but are also compatible with most other common gateways. The website wording is confusing and vague regarding eCommerce offerings, but at the very least you should be able to integrate their payment gateway with your website and shopping cart.
• Virtual Terminal: PAI’s online terminal supports standard features such as telephone orders, recurring billing, and ACH.
• Mobile Card Reader: PAImobile Plus consists of an EMV-capable, headphone-jack card reader and accompanying mobile POS app from SwipeSimple. See this brochure for specs.
• Wireless Terminals: The website features the iWL250 Ingenico card terminal, but you can probably use other terminals compatible with PAI’s payment platforms. The iWL series runs on wi-fi or a data plan.
• ATMs: As one of the largest ATM distributors in North America, PAI is an expert in all things Automated Teller Machine. PAI promotes ATMs as add-ons to existing brick-and-mortar shops and financial institutions, or as a (literal) standalone small business opportunity. From sales and installation of EMV-capable and wireless ATMs to branding and continued maintenance, PAI has this industry covered. Here is a summary brochure, but there’s plenty more info at their ATM superstore.
• Check Services: PAI caters to business that process a high proportion of checks in addition to credit and debit cards. Electronic check conversion, mobile capture/deposit, check verification/guarantee, and deferred payment programs are examples of their check-friendly services. Particularly if your business struggles with bounced checks, collection issues, or serves customers with less-than-stellar credit, you may be interested in these solutions offered by PAI.
• Prepaid cards: This covers a variety of revenue streams for merchants, from the creation of your own gift and loyalty cards, all the way to setting up a full-fledged, multi-business gift card mall inside your store. Here’s another brochure to peruse the options.
• Bill Pay: As a service to unbanked and underbanked customers and an additional revenue stream for you, Bill Pay allows convenient payment of utility bills, cable/satellite bills, and even retail bills for other businesses–all at your register.
• PAI CA$H Advance: If you’ve been in business more than one year, are current on your rent, and have at least $8000 in monthly credit card revenue, you can apply for a cash advance with PAI. Just promise me you’ll read our cautionary articles on this topic before you do!
• Data breach security: This program is called PAI Secure and provides assistance in maintaining PCI compliance as well as financial and technical support if you encounter a breach. Your coverage and associated fees will depend on your business type and size.
• Industry-specific packages: PAI customizes “bundles” of the aforementioned products and services for its most targeted industries, including firearm sales, financial institutions, medical/dental/vet offices, convenience stores, and fuel stations. Several associations in these industries partner with PAI to offer special pricing and perks to their member businesses.

Fees & Rates

PAI provides no pricing details on its website. If you’re searching for clues to the mystery, you can pull up two merchant service agreements at the bottom of the front page, one from Merrick Bank and the other from Global Payments. Here you’ll find several references to mid and non-qualified processing surcharges, which means we’re looking at a tiered pricing structure.

We explain tiered pricing and other common rate structures in our complete pricing guide and infographic, but suffice it to say that tiered is the worst. You are always in danger of a large percentage of your transactions ending up in the higher, non-qualified rate bucket, and your “simplified” statement will lack transparency on individual transactions. At this point, we’re forced to assume this is the default rate program for PAI, and that it’s up to you to negotiate something better or look elsewhere.

Despite this bleak picture so far, I’ve been assured over the phone that PAI’s in-house sales reps only offer interchange-plus pricing. Below is an eCommerce and in-store bundled package I was quoted for merchants who are members of one of PAI’s partnered associations:

Sample association member package:

• Interchange-plus rate: 0.75% + $0.10
• One-time gateway setup: $50 (regularly $150)
• Monthly fee: $30 (regularly $60). Includes gateway fee, statement fee, PCI fee/PAI Secure
• Mobile & countertop terminal: free (regularly $800). Free equipment upgrade after three years.
• Equipment shipping: none (regularly $30)
• Mobile device encryption fee: Waived for first year (regularly $49/year)
• Chargebacks: $20 (standard for all accounts)
• Monthly minimum fee: None (standard for all accounts)

The rep also noted that if you refer a new customer to PAI, the same interchange markup of 0.75% + $0.10 will apply to that account, regardless of whether the referral is an association member. She also mentioned a storefront-only plan for low volume merchants with a flat 2.5% processing rate and a monthly fee of $8.95, but we didn’t get into the fine print of these accounts over the phone.

All things considered, PAI’s pricing is pretty reasonable for the industry, as long as you can secure a “preferred” package. If you’d like to take a closer look at how these rates stack up to our best merchant account providers, check out our comparison chart.

Contract Length & Early Termination Fee

We have good news and bad news in this section. How about we get the bad news over with first?

When it comes to the website, we’re left with no choice but to head back to the Merrick Bank and Global Payments legalese to find contract terms. The Merrick document stipulates three year contracts, with auto-renewals for 3-year terms unless you provide three months notice before the contract ends. Global Payments is slightly more lenient, with one-year renewal contracts after the three initial years and two months notice to cancel. Still on the theme of bad news, both service agreements refer to early termination fees in the form of liquidated damages.

The good news? According to the folks I spoke with at PAI, all their merchant accounts are month-to-month with no early termination fees. I asked specifically if this is true even for regular merchants not signing up under a larger association’s partnership program, and was assured this is the only type of account they offer. Go figure.

Ultimately, it doesn’t matter what the website says or what PAI reps told me over the phone. What matters is what’s in your own contract. But since it looks like month-to-month plans are at least possible in theory, do not settle for anything less!

While we’re on the topic of contracts, you should know that PAI may also set up a reserve account to help manage risk. I spotted references to reserve accounts in both the posted merchant agreements. It’s difficult to know how standard this is for PAI, or what the precise conditions are, so be sure get clarification for your contract. Funds in a reserve account can potentially be held beyond the end of the contract, or could be automatically withdrawn by your processor to cover an early termination fee.

Before we move on, please note that if you have an ATM with PAI, you will sign a separate contract with its own terms and conditions. It’s common for ATM agreements to involve multi-year commitments with auto-renewals and early termination fees, so understand precisely what you’re signing up for.

Sales & Advertising Transparency

Judging from the website alone, transparency needs a lot of improvement. No pricing information is presented, save for what’s buried inside a couple of linked merchant service agreements. We can’t confirm whether these are standard agreements, to what extend the terms are applied, or if it’s all just outdated information. But no matter the reason these agreements are posted, we are left with the impression that long-term contracts, auto-renewals, early termination fees and tiered pricing are the default. That’s pretty grim.

In stark contrast, I was told over the phone that interchange-plus pricing on a simple month-to-month agreement is standard for all their merchant accounts, and has been for several years. So why not just advertise this on the website, even without specific numbers? While the PAI site is not the greatest specimen of a website to begin with, it has clearly been updated in other ways within the last year.

I was informed that they employ about 35 in-house sales reps who all offer these fairer accounts, but PAI also works with outside sales agents who resell PAI’s products and services. This brochure from 2013 puts the number at 1,300. Could it be that PAI wants to give leeway to these agents to insert their own profit-hiking contract terms and junk fees? Although complaints about this happening aren’t rampant by any stretch, they do exist. Whether it’s a calculated choice or simple marketing laziness at work here, I suggest you only deal with an in-house rep if you are interested in PAI.

Finally, I do wish they wouldn’t advertise “wholesale rates” for members of partnered associations on the website. PAI needs to clarify what this means because they are not offering the straight interchange rate determined by the card networks with no markup. Now that really would be great, wouldn’t it?

Do you have positive or negative experience with the in-house PAI team? How about their outside sales reps? Help improve the accuracy of this review by telling us your story in the comments.

Customer Service & Technical Support

The same phone number is listed on the website for all four of PAI’s offices and will initially connect you with the sales office in West Palm Beach, FL. I’m told by this office that the Louisville-based tech support line operates Monday through Saturday from 8am-12am and Sunday 8am-6pm EST, although you won’t find this information on the contact page.

The website does include an email contact form, from which you can expect a same-day response if you’ve submitted between 8:30am-5pm EST on a weekday. Otherwise, look for a response the next business day. I emailed mid-day on a Wednesday and received a response to my question in 5 minutes. Speedy!

PAI’s youtube channel features several short ads explaining key products and services, as well as a 12-minute talk given by the CEO about the intersection of the mobile payment era with the future of ATMs. The Facebook, Twitter, and LinkedIn pages, although current, are not updated all that frequently. Meanwhile, the website blog is as close to a customer knowledge base section as you’ll get, but it’s only showing three posts in the last two years.

Negative Reviews & Complaints

While there are several entries under “Payment Alliance International” at the BBB, I was particularly interested in the accredited Louisville and West Palm Beach offices. The Florida sales office sports an A+ rating and no registered complaints, while the Louisville headquarters shows just 8 complaints in the last three years and also receives an A+. Six of these complaints were registered under billing/collections issues, but two of these were related specifically to ATM problems. And of the eight total complaints, half give no details.

From sifting through the scant information at BBB and a handful of other complaints around the web, we find that the main issues merchants encounter with PAI are held funds and difficulty closing accounts. They also report poor customer service in resolving these problems, which makes sense since they’ve resorted to consumer protection sites. One particularly epic tale of woe from a firearms retailer in Montana can be pulled up on Ripoff Report if you’d like to settle in for an extensive play-by-play.

A couple of complaints mention early termination fees, but not necessarily surprise ones. I also found an instance of an apparently undisclosed auto-renewal. If my conversations with the Florida office assuring me that in-house PAI reps only offer month-to-month plans with no early termination fees have been entirely transparent, it could be the just the occasional rogue ISO that sets up long-term contracts. This would certainly help explain why bad contract complaints don’t show up more often.

Because PAI serves some high-risk industries, it’s not too surprising that fund holds are an issue. Even when the circumstances constituting a hold and the procedure for handling unusually large transactions have been established ahead of time, the occasional disagreement between merchant and provider comes with the territory. The point here is that, overall, the complaint volume is relatively low for a business this size that caters to high-risk merchants.

Lastly, both the PAI website and the Louisville office’s BBB profile include a warning regarding a letter/check phishing scam perpetrated in PAI’s name. The scam originated back in 2012, however, and any complaints regarding this issue have all but fallen off the edge of the internet by now.

Positive Reviews & Testimonials

Three positive reviews pop up on several pages of the PAI site. One is in reference to PAI’s partnership with the NRA:

“Payment Alliance International has been one of the most successful royalty-based programs to date for the NRA’s Clubs & Business Alliance network. They provide an outstanding benefit to our members and package it with exceptional customer service. I would recommend PAI to any association or group looking to boost their member benefits program or any merchant looking to save money on payment processing costs.”
Elizabeth M. Bush, National Manager, Clubs, Associations & Range Services – National Rifle Association

The next is from the DenteMax association, a leasable dental PPO network:

“PAI’s program is one of our most successful affinity programs to date. Through our partnership, we have been able to gain new customers as well as add value to the DenteMax network.”
Jamie Vos, Product Development Provider Relations – Dentemax

The third testimonial is from a dental association that appears on each of the brochures at the bottom of this page and refers to good customer care.

In addition to these very brief blurbs, two restaurant owners provide video testimonials that describe how the PAI Secure program helped them manage data breaches.

In my search around the web, I found a gunbroker.com forum discussion from 2012 in which a couple of customers chimed in that they’d been happy so far with PAI’s service and rates. One potential customer mentioned he was offered interchange-plus pricing on a month-to-month plan with no early termination fees. It was encouraging to see that this ideal account setup has been offered for several years now.

It’s worth mentioning that back in 2011, PAI won the ETA’s Top ISO of the Year award. More recently, the company has received “Best Places to Work in Greater Louisville” awards. Employer review sites tend to reinforce this picture of PAI as a solid, family-friendly place to work. While this employment perspective is not directly related to the quality of PAI’s merchant services, it earns PAI a few “good company” points.

Final Verdict:

Payment Alliance International is a mixed bag. On the one hand, we see a relatively low complaint volume, an A+ at the BBB, decent customer service, reasonable monthly fees, and in-house reps offering interchange-plus pricing on month-to-month processing agreements. On the other hand, we have an unknown number of ISOs signing up merchants for…well…who knows what exactly. Without any openly advertised pricing info, and nothing but contradicting and scary-sounding merchant agreements on the website to guide us on contract terms, we are faced with a bit of a conundrum.

Taking this all into consideration, I’m giving PAI 4 stars. This is rating is adjusted for that it acts as a high-risk account provider, where the standards are a little different from a standard provider. But even so, I’ve seen enough good providers who publicize their rates online to know that it can be done, so I don’t buy the “flexibility to customize a plan for each merchant” excuse for not throwing us a pricing bone. As I already admonished, the best thing you can do is to call PAI up yourself, armed with the information in this review.

Speaking of armed, I also recognize PAI’s endorsement from the NRA will be a deal maker or breaker for some business owners reading this. And that’s perfectly fine. We don’t get political here at MM. Instead, we review a diversity of credit card processors with hopes that there will ultimately be a good match for every type of small business out there. Processors accommodating high-risk merchants are few and far between, so PAI could be a fine fit for many of these businesses. If you can already tell PAI isn’t for you, give our merchant account finder tool a try.

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