Taking $3,000 per month or less in card payments?
You’ll save with Square
- Date Established
- Lehi, UT
- Predictable flat-rate pricing
- No monthly minimums
- Good for direct selling industry
- Good for ecommerce
- Few public complaints
- Setup fee
- Annual fee
- Not good for high-volume retail & restaurant
When a merchant services provider names one of its product offerings Guardian Cybershield, it’s fairly obvious how they want you to feel about working with them: safe and well-protected — perhaps by one or more of the Avengers. But when today’s super-villains specialize in thieving personal data, and no business wants to send that dreaded mass email to its customers containing words like “breach” and “compromised,” Guardian Cybershield starts to sound intriguing.
Indeed, ProPay was a pioneer in payment data security, offering end-to-end encryption and tokenization services for its merchants since 2009. ProPay has targeted its card processing and ACH/eCheck services toward a broad spectrum of office-based industries such as mortgage and auto lending, utility companies, property management, and internet service providers.
Where ProPay straddles the line between large corporations and small businesses is in its long-time relationship with the direct selling industry. Mary Kay reps have happily run credit cards via ProPay from the comfort of friends-of-friends’ homes for over a decade, for example. ProPay was also one of a select few alternatives to PayPal accepted on eBay for many years, until eBay cut ties in September 2015.
So although ProPay is an ISO and relies largely on independent salespeople to reel in those big corporate accounts like Mary Kay, its website also includes eye-catchers like “lower rates than PayPal or Square” for attracting low-volume and non-traditional merchants. Its basic setup for small businesses includes a one-time signup fee, an annual fee that breaks down to about $3-$6 per month, plus flat rates for processing transactions. If you’re just learning how fees and rates for processing cards work, or need a quick refresher, we have a great infographic on the subject.
With an A+ BBB rating, 20 years of operation under its belt, and ballpark 1.5 million merchants signed, ProPay’s reputation is solid. But while ProPay has trucked along steadily over the years, newcomers onto the scene have matched and eclipsed it on many fronts, making some of ProPay’s claims to things like industry-leading security services sound more like a quaint reliving of the glory days.
Although clearly etched in ProPay’s logo, it’s worth pointing out that ProPay became a wholly owned subsidiary of TSYS, the second largest payment processor in the US, in December 2012. Please read our review of TSYS in conjunction with this one if you are considering ProPay for your business. Our trusty friend Guardian Cybershield is technically a TSYS-branded service for protecting against malware and suspicious IP addresses.
We’ll take a look at this and other examples of ProPay’s rather heavily-trademarked services in this review, to help you decide if this merchant account provider is a good fit for your business. So grab your Guardian, your Cybershield, or your Guardian Cybershield — and let’s go!
Table of Contents
Products & Services
Historically, most of ProPay’s merchant portfolio dealt in card-not-present transactions, and the majority of their products and services have been tailored accordingly. ProPay doesn’t offer traditional card terminals or point of sale equipment like most merchant account providers. Still, low-volume sellers looking for mobile processing and the lower rates of swiped transactions can find options here. Processing methods include a virtual terminal, the ProPay app, a couple of portable card readers, e-invoicing, and even touch-tone phone processing for the smartphone holdouts among us.
Merchant Accounts: A small business account can be set up in a few minutes, with two advertised plans available. If you’re working with a company that’s already partnered with ProPay, you should sign up through that company’s website. Customized accounts for larger merchants are also available, negotiated directly with ProPay’s sales department.
International Processing: Global processing is available in 180 currencies and 35 countries. Meanwhile, this Global Commissions video states ProPay can also disperse funds in 180 countries and 130 currencies, which is handy if you have international distributors or agents.
ProPay Gateway: Their proprietary gateway uses “ProtectPay” for tokenization and data storage for easier PCI compliance. Merchants can integrate with other gateways through ProtectPay as well.
Payment Intra-Network: This allows funds to be moved between ProPay accounts, with the direct selling model as a classic example. For more information on the ProPay intra-network, including fees to move money around, check out this agreement from the legal section of the website. Among the network’s main features are:
- SplitPay: Splits proceeds from sales between the distributor and the wholesale organization, depositing funds directly to the appropriate ProPay accounts.
- SpendBack: Lets distributors pay for wholesale orders directly from their ProPay accounts.
- Prepaid Debit Mastercard: Connected to a distributor’s ProPay account for the purpose of buying additional wholesale products or withdrawing funds.
Virtual Terminal: Free with all accounts, this allows users to process transactions from any internet-connected device with a web browser.
eCommerce: ProPay can provide a hosted payment page, integrate with simple shopping carts, and you can also add buy/donate now buttons to your own site.
ProPay Mobile App: The app is free for iOS and Android devices. ProPay can also provide a white-label version of the app to larger businesses.
ProPay JAK Mobile Card Reader: This headphone jack magstripe reader is $10 or free, depending on your account. Note this reader is not currently EMV chip card capable.
ProPay FLASH Card Reader: Formerly the MicroSecure Card Reader and advertised at $99.95, this USB powered swiping device must be used on Windows and, um, Internet Explorer. Since the website redo, I double-checked that. Sure enough, they still link to the FLASH data sheet from 2011. Up to 71 transactions can be swiped and stored offline, to be processed once a web connection is established.
Industry-Specific Partnerships: A whole section of the website now focuses on ProPay’s partnerships with certain target industries. Several pages mention perks beyond the basic small business setup, such as no start-up fees or annual fees. Click on the Partners tab to see some of ProPay’s key software partners.
Custom Services and APIs: ProPay offers a developer portal for setting up and customizing integrations. Some of the tools will only be interesting to enterprise-level customers and those with intra-networks between multiple ProPay accounts.
ProFac Express: I pronounce “ProFac” in my head as “pro-FASS,” rather than “pro-FACK.” Why? Well, ProFac Express refers ProPay’s program that helps you become your own payment facilitator company. That’s a FASS-ilitator, not a FACK-ilitator. So it has to be “pro-FASS!” I’m right, aren’t I? Probably not. Just don’t ask me how to pronounce “gif.”
Fees & Rates
With ProPay, keep in mind that your rates may be specialized depending on your company affiliation (e.g., if you’re a direct seller with Mary Kay). Just the website à la carte options are mentioned below. You can compare ProPay’s “lower than Square and PayPal” rates with competitors by examining the chart in our article on the best mobile and low-volume processors.
There are two standard plans and they are much easier to access since the website revamp:
- Sign-up Fee: $39.95
- Annual Renewal Fee: $39.95
- Swiped rate: 2.60%
- Keyed-in rate: 3.55%
- Amex, Swiped and Keyed: 3.40%
- JAK mobile card reader: $10
- Bank Transfer Fee: $0.35
- Sign-up Fee: $69.95
- Annual Renewal Fee: $69.95
- Swiped rate: 2.40%
- Keyed-in rate: 3.35%
- Amex, Swiped and Keyed: 3.20%
- JAK mobile card reader: Free
- Bank Transfer Fee: $0.30
For both plans:
- Monthly minimum: None
- Maximum monthly volume: $3,000
- Maximum volume per transaction: $500
As you can tell by those processing limits, ProPay’s baseline offering is geared toward micro-merchants. Do note that while the processing rates on their own are lower than PayPal or Square, you’re also hit with a setup fee right off the bat, as well as an annual renewal fee. Of course, you may be able to negotiate a better deal than what’s advertised if you process more than the $3,000 monthly limit.
In addition to the main pricing page, a summary of ProPay’s pricing may be found inside the Payment Services Agreement for small and medium-sized business. Notable fees include:
- Chargeback fee: $25
- Non-sufficient funds fee: $20
- Retrieval request (for chargebacks): $10
- Investigation fee (for chargebacks): $20
- Refund a card: $0.35
- Monthly paper statement (optional): $10
Lastly, below are some fees involved in electronic fund transfers, which you’ll want to especially note if you’re operating in connection with larger corporate account (i.e., you’re a distributor, agent, consultant, etc.)
- ACH Out (transfer funds out of a ProPay account): $0.10-$0.35 per transaction
- ACH Debit (transfer funds into your ProPay account, max $250 per transaction and $1,000 per month): Free
- Intra-ProPay transfer: Free
- ACH Payment (accepting payment from a customer): $0.75 per transaction
- ACH return: $10
Contract Length & Early Termination Fees
ProPay publishes its merchant agreement terms in the Legal section of the website. Reading these legal documents is a pain, isn’t it? If you’re signing up with ProPay, you’ll want to examine it all in detail, but I’ll provide the basics here. The key information is found in sections 18 and 33 if you’d like to get down and dirty with the legalese yourself.
To sum up before we even begin: Although some merchants may opt for month-to-month agreements with ProPay, you’re financially incentivized to sign up for yearly contracts with subsequent renewals for the same length of time. Here’s a breakdown of the two scenarios:
- If you cancel your ProPay account within 30 days of signing up, you’ll be refunded “a portion” of your annual fee. (That amount was all but $13.31 when I discussed it with a customer service rep a while back).
- If you cancel after 30 days, none of your annual fee will be refunded, but you also would not pay any extra early termination fees.
- You may terminate the agreement by providing notice of intent not to renew at least 30 days prior to the expiration of the current term, with no early termination fee.
- If your annual renewal comes up and you fail to pay it in time, they’ll start charging you monthly fee, which is equal to double your normal annual fee divided by 12.
- ProPay still expects that you are signing up for at least 180 days (six months) of service.
- If you terminate within 180 days of the effective date, you must pay liquidated damages of $20. (They don’t call it an ETF, but it’s basically a small-ish one.)
- If your account goes inactive for 180 days, you’ll be charged an ongoing monthly maintenance fee of $5.
- If you cancel service before or after 30 days, you will not be refunded any fees you’ve paid.
- Although the agreement does not clearly indicate a set monthly fee for month-to-month plans, from the wording, we’re left to assume you’re looking at two times the annual fee, divided into 12 chunks and assessed on a monthly basis.
As you can see, although it’s possible to go month-to-month, it’s just not financially sound given those terms. While we recommend merchants look for month-to-month accounts, there are way too many strings attached to this one.
Sales & Advertising Transparency
With ProPay’s 2016-2017 website overhaul came a much needed digital deep clean of cluttered dropdown menus and outdated links. Since ProPay operates mainly as a reseller/ISO and relies on sales reps for finding clients and closing deals, I’m guessing that web advertising had not been their highest priority in the past. A clean, well-organized website goes a long way toward enhancing transparency, so I’m glad to see these long-awaited changes finally implemented.
There are still confusing sections, perhaps because they’re catering to so many different audiences and business sizes. Nothing looks intentionally deceptive, however. I really like the clear pricing page and additional pricing info inside the legal documents. They’ve also added a High-Risk Acceptable Use policy, which lets you know up-front if your business type would likely be restricted or rejected. All in all, ProPay’s advertising transparency is way above average.
A while ago now (2015), ProPay published a Position & Roadmap on EMV card readers that did not sit well with me. With the rollout of the new website, all traces of this document have disappeared. I still feel the need to mention it, though, since there are no signs of an EMV reader from ProPay as of this update. Here were the sections that caught my eye:
ProPay has conducted an analysis on the adoption of EMV technology for its merchant portfolio. Its conclusion is that the rapid implementation of the technology would impose higher costs on its merchants, without a significant countervailing benefit. Additionally, while the mix is changing, the majority of ProPay merchants are “card-not-present” merchants, meaning that the liability shift and adoption of EMV will not have an impact on them… By extending the rollout, ProPay can better manage costs and expectations among its merchant base…
With this in mind, it is important to note that there is no impact to the the security of ProPay’s solution because of the delay in adopting EMV. ProPay has developed strong risk and fraud monitoring practices that are specific to the unique challenges of our merchant portfolio. As a result, ProPay’s overall fraud rate is very low, under 10 basis points. The cost of EMV adoption, however, is very high and ProPay estimates the break-even point to be more than two years. Further, with the adoption of EMV, merchants would be required to upgrade their current “mag stripe” card readers to EMV-enabled terminals. The wholesale cost of these EMV readers is approximately $50-$75 per unit. The cost of upgrading to such a unit at this point outstrips the potential fraud prevention benefit.
ProPay initially stated that they expected to roll out their EMV readers in early 2016. The rep I spoke with in summer of 2016 said that target date was changed to early 2017 because they were still working on integration. That sounded a bit more believable than the above paragraphs. Yet, according to the promotional video from May 2017 at the bottom of their mobile payments page, it looks like they’re still offering a basic, non-EMV swiper.
Judge for yourself, but when I read between the lines of the official position, I sensed that the October 2015 liability shift snuck up on them because they had invested heavily in other aspects of their business and portfolio instead. I think they were doing their best to retroactively justify the delay in releasing new equipment. Perhaps I should offer ProPay more grace, but at the very least it would not make me feel all that important to this big provider if I were a small merchant staring warily at my little JAK magstripe reader. We can help you find EMV hardware if you need it sooner rather than later.
Customer Service & Technical Support
The resource section of ProPay’s website is wider in its scope since the update, but it still warrants ongoing expansion in some areas. You can peruse their YouTube channel for a handful of tutorials or find them through the main website under Contact Support. Other support topics include a Getting Started page and Knowledge Center with a few general FAQs. If you’re looking for 24/7 phone support, you’re better off dealing with TSYS directly, as ProPay’s support lines are only open 6:30am-7:30pm Mountain Time.
Any Contact Us button on the site will take you to a web form, while also displaying department-specific contact info along the side. The live chat feature worked fine when I last reviewed ProPay, but I haven’t had any luck with it this time. Instead, I’m seeing a whole lot of this:
I was also put on hold for 25 minutes when I tried calling customer service. The agent who finally answered was apologetic, explained that they were experiencing a high volume of calls this week “for some reason,” and that normal hold times are more like 10-15 minutes. The point is, if I were a real merchant with a real problem, I’d have probably given up before he answered. On the bright side, his vibe was friendly and helpful. You also have the option of waiting for a callback if you’d like to hang up and keep your spot in the queue.
You could also try reaching out to ProPay on one of its social media channels, as it maintains relatively active accounts on LinkedIn, Twitter, and Facebook. You’ll find ProPay’s Twitter and Facebook are largely geared toward the direct selling community, as well as some of their YouTube advertising, by the way. Tell me this ad wasn’t targeted toward middle-aged, work-at-home moms (myself included).
Negative Reviews & Complaints
ProPay has been accredited with BBB since 2000 and boasts an A+ rating, which appears well-deserved. In the last three years, 16 complaints have been resolved, while 23 remain unresolved. For a company with a long history and 1.5 million merchants served, this seems a low grievance count to me. Those latter 23 issues all received some resolution effort by ProPay, and most involved the merchant waiting for a refund that ProPay has conceded to and claims to have paid as part of the resolution. It’s difficult to say whether those funds finally came through or not.
Whether at BBB or on Ripoff Report or ConsumerAffairs, you’ll find the standard selection of complaints of freezes, terminations and holds placed on accounts for the typical reasons, but none appear a strong cause for alarm and many are quite old. As an outsider looking in, ProPay appears to do what it can to rectify problems and publicly admit when it’s at fault. Nevertheless, I’m clearly not the only one who’s experienced long hold times!
I did bristle slightly at the condescending tone of a few of ProPay’s responses. Take this, one for example:
I don’t have a mechanism to “add” what amounts to 20 more dollars to this account. Even if I did that would require the need for you to login again and transfer the funds out–the issue from the beginning. It’s safe to say that the transfer errors and fees were not the result of any errors by ProPay but by the user. ProPay stands by it’s claim of a fair resolution considering the menial amount in dispute.
I get that it’s no fun to settle an ongoing public dispute, but I don’t care for this rep calling the amount in question “menial,” nor the overall tone. If I’m the small business owner, I’m feeling quite menial myself in ProPay’s eyes at this point, kind of like I did when I read their EMV position paper.
Positive Reviews & Testimonials
ProPay collected several testimonials a while back, but the new website doesn’t link to them anymore. Most lauded the ability to start accepting credit cards in general, rather than explaining specifically why ProPay beats the competition. Facebook is probably the best place to find glowing endorsements (over 200 5-star reviews), mixed in with some negative feedback. The majority of the positive comments are from–you guessed it–direct sellers. They really do love ProPay! Also worth a brief mention are the various awards ProPay has garnered over the years.
The recent website revamp that I’ve discussed ad nauseum in this review will definitely help ProPay keep pace with an ever-growing list of competitors. Along with kudos for the update, I award ProPay high marks for transparency. Although their customer service is a bit hit-and-miss, I’d say it’s also above average for the industry. The flat pricing plans with low rates and low monthly limits definitely favor micro-merchants, and I can certainly picture those rates working well for direct sellers dealing in small volumes. I’m still not a huge fan of the annual fee structure, though.
While the website improvements better showcase its small business offerings, I still think ProPay prioritizes its large businesses that run mostly card-not-present transactions. This is where it has invested most of its time and money over the years. All its data security infrastructure was originally built for processing computer-based, keyed transactions. I get the impression that the small mobile merchants out there with their JAK magstripe readers don’t register as more than a blip in ProPay’s portfolio, except perhaps as one facet of its big corporate direct selling accounts. And you probably know by now that we favor merchant account providers who offer interchange-plus pricing as an option. This may only be available to enterprise-level customers, if at all.
But let’s talk recommendations. Mid- or high-volume retail and restaurants with nearly all swiped transactions are incompatible with ProPay’s features, so we’ll leave those off the table. But maybe you’re a low-volume business who’s been scared off by Square and some of the other newer, cooler kids on the scene, with their countless stories of sudden account freezes and terminations. Maybe you want some of the benefits and features of a more traditional merchant account with a long-standing reputation, fewer complaints and more resolved ones, and clearer guidelines on monthly maximums. I could see ProPay as an option if you’d like to better know where you stand in these ways, and if you can be patient for the release of their EMV reader.
Or maybe your business is set up entirely online, you’re not into mobile processing at all, and what you really need is a trusted virtual terminal for keyed transactions or the ability to facilitate recurring billing and ACH services. That “makes sense” with ProPay as well, to steal its own advertising gimmick. Have a look at some of our highest rated merchant account providers first before making your final decision.
Whatever you do, please don’t use Internet Explorer just so you can swipe a few of your transactions with the ProPay FLASH reader. I can’t fathom that this restriction is still in effect, but until they update the FLASH product description, I’m leaving you with the following PSA: Friends don’t let friends use Internet Explorer!
Credit Card Processor Rating Criteria.