Velocity Merchant Services Review

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Date Established
Downers Grove, IL


If you read my review of Appstar Financial, you know that first impressions based on website layout and design are important to me. In that review, I remarked about the spareness of the design and lack of specific, useful content. Well for Velocity Merchant Services, we have the absolute other end of the spectrum – complete immersion into a flashy digital sales environment.

Run by the wife and husband team of Dema Barakat (founder) and Danoush Khairkhah (CEO), this company has a youthful energy and clean, controlled style that gives me a good initial feeling about them. Their five-minute introductory video seems realistic, although the poor script reading is distracting at times (I’m looking at you, Danoush). Still, they sold me on their concept in the video, even though it included no mention of rates and no educational material to explain to me how rates are dictated.

Dema Barakat cut her teeth at EVO Merchant Services, doing business under them until 2006 when she registered her own ISO and started VMS. We gave EVO a 3.5-star review in 2011, citing concerns about the unregulated practices encountered due to their reliance on independent sales agents, as well as a growing number of BBB complaints. In some ways, it looks like Barakat has modeled her company after EVO, right down to the web address ( compared to In the process, she may have taken the bad with the good.

In this interview, she talks about how she got in on the credit processing business at age 19 and never looked back. Barakat’s story of building a business as a woman in a male-dominated industry is pretty inspiring. Unfortunately, in the same interview, she goes on about how important offering terminal leasing and other services like cash advance loans are to her business. Both of these practices rarely benefit the merchant, so I’m a little disappointed to hear this.

On a side note, does this couple look familiar to you? Well, you might recognize them from TV. Here’s a bizarre twist. A Fox reality series from 2013, called “Does Someone Have to Go?“,  featured this company on their pilot episode. In this show, employers cede complete control of the company to the employees, who then adjust salaries and fire coworkers as they see fit. VMS got two, hour-long episodes. I have not as of yet watched them, but apparently, Barakat and Khairkhah employ a number of family members, some of which might not be pulling their weight according to colleagues (Oh no you didn’t!).

Joking aside, this company continues to grow each year and doesn’t have the terrible complaints trail that you might expect to see from a business of this size and age. Overall, I’d consider VMS average when looking from the outside. Unfortunately, my investigation into their sales tactics and rates revealed some pretty bad news including the potential for horrible rates/fees as well as unethical sales tactics. I’d encourage you to read the whole review for a more complete picture and to check back for updates. But for the moment, I can only offer VMS 3 out of 5 stars. I hope to revisit this with good news in the future, but won’t hold my breath. Neither should you…

Products & Services

  • Merchant Accounts
  • Gateways and shopping carts – VMS will gladly get your online business going with a gateway and third-party shopping cart.
  • VMS Charge – Using this virtual terminal allows users to accept credit cards from any computer. Well… any PC. This software doesn’t work with Mac. In can, however, be linked with QuickBooks, a nice feature. They also have a basic web-based virtual terminal that works will all major browsers.
  • Mobile Processing – VMS offers several card readers compatible with phones and tablets.

Velocity Merchant Services offers a number of “value-added” services. In my opinion, to call something a value-added service, it should be provided for free or at a fee much lower than the industry standard. This is how it ADDS VALUE. Otherwise, it’s really just a service, isn’t it? I’m afraid in some cases VMS disagrees with me on that. Also, you should remember that nothing is really free. You are going to pay for these so-called value-added services whether you use them or not. It’s just built into the cost of your service plan. Unfortunately, VMS does not disclose any costs associated with the “value-added” services, which includes:

  • Fast Cash – Velocity MS provides cash advances (not loans… but basically loans) ranging from $3,000 to $1,000,000 based on your current credit card transactions. (Note: You’ll have to sign up and provide your information to find out how much you really qualify for.) What do you owe them? “The money is paid back only when you are making sales.”  This means they are getting a cut money made as it’s processed. Maybe this is exactly what you’re looking for, but be careful. The terms of this sort of contract can have devastating consequences.
  • Check Services – VMS will set you up with a digital check reader to digitally process and deposit checks as part of their terminal leasing services.
  • Gift Card Accounts – Gift card accounts along with card printing services are offered.
  • Website Development – This is only free when you lease a terminal, and even then only if you qualify for it. Their site design options didn’t impress me.
  • Fleet Card Processing – This service may interest independent gas stations, convenience stores, or auto care businesses.

Terminal Leases

VMS outsources their terminal leases, and will likely not disclose this during sales discussions. Their leasing provider, Northern Leasing Systems, has had its fair share of scandal in 2013 (see here for a merchant’s complaint). Terminal leasing rarely (if ever) benefits a merchant. Yeah, some terminals have high price tags. With limited investment capital, leasing seems tempting. Don’t do it. You’d be better off borrowing the money to buy the terminal and paying interest than you would with a lease in almost all cases. Trust me.

Fees & Rates

Velocity Merchant Services does not disclose any fees or rates online.

I contacted sales reps both by phone and through their online chat feature. Read my experiences below.

Online Sales Experience

Let me lead off by saying this was the single worst online chat experience with a processor I have ever had. With painfully slow responses that offered little information, the rep who served me was clearly either very busy or totally inept – or maybe a combination of the two. I asked about fees and rates for a business that primarily processes through keyed entry online. After ten minutes of failing to answer my initial question about fees and rate, I asked again to get us back on track. The sales rep answered:

  • Him (03:09:47) : if you wanted our virtual [sic] terminal to process online your processing rate would be 1.29%
  • Me (03:10:52) : Okay. Is that the only rate information I need to know?
  • Him (03:11:06) : with a 0.15 transaction fee [sic]. The setup cost is a one-time gateway activation fee of $95.00
  • Me (03:12:15) : Okay. What other fees would I expect to pay each month or year?
  • Him (03:15:43) : you will need to process a monthly minimum of 25.00 in processing fees, along [sic] with a 5.00 statement fee. There is a semi-annual fee of 49.99, and to maintain the virtual terminal it is only 15.00
  • Him (03:16:28) : if you need further explanation [sic] please feel free to contact us 888-902-6227 ext XXX

(I added bolding and removed names.)

This is wrong in so many ways. I’ve had oversimplified rates offered before, but nothing like this. This guy is telling me that I have only one rate to worry about: 1.29% with a $0.15 per transaction fee. What the what?! In what universe is that an appropriate response to my question about rates and fees? But then I remembered something I read on Ripoff Reports, allegedly from a sales agent with another processor trying to expose what VMS is doing:

Now what VMS is doing is giving them a rate of 1.29% on top of interchange.  So what that means is the merchant is paying somewhere close to 3%.  Now in my industry it is getting very cutthroat so companies are getting creative with how to sell this product.  But they’re not getting creative; they’re deceiving merchants. [Edited for typos.]

Yep, I knew I heard the rate 1.29% before. Anyone who knows anything about interchange knows that to charge a fixed rate of 1.29% is not possible, especially for online keyed-entry processing. The average interchange rate is closer to 1.8%, so every sale would be a loss for them. Educated consumers also know that 1.29% OVER interchange/assessment is way, way too high, especially with a $0.15 per transaction fee on top of that. I mean – really? I knew I had to get on the phone to straighten this out.

Phone Sales Experience

Day One

Can you imagine that it gets worse? Well, it does. An hour or so after my chat experience, I called the main number listed on the VMS site. An automated system picked up, which I worked my way through and eventually selected the option to contact the sales department. After I selected sales, the line went quiet. A robotic voice came on the line ten seconds later to say “Goodbye,” and hung up on me. Great. I called back, went through the steps again, selected the sales option… “Goodbye,” click. Great. Then I called back and entered the extension the terrible chat-based rep gave me. This time a robot voice explained to me the party at that extension was currently unavailable and forwarded me to a voice mail system. Great. I understand that the sales department might have gone home for the day, but that still doesn’t excuse this kind of service, especially on the sales end.

Day Two

The next morning I received an email from a new sales rep following up with me, as well as a phone call. In some ways, this marked a moment of redemption for VMS, especially in light of the previous day’s nonsense.

This sales rep asked me a few questions, gave me a spiel about how they are a “direct processor,” and then provided a rate quote for my online business:

  • Markup over interchange: 0.40%
  • Transaction fee over interchange: $0.08

While I’ve seen better rates, this quote impressed me. Rarely will a sales rep offer an interchange-plus deal right out of the gate. Good job VMS! He went on to give me the following fees:

  • Monthly Minimum: $10
  • Gateway Setup Fee (one time): $120
  • Gateway Monthly Fee: $15
  • Statement/Monthly Fee: $6 (discounted from $10)

Additionally, he promised:

  • Month to month agreement
  • No early termination fee
  • No additional PCI fee

I asked again and again about the termination fee, and he insisted that I would not have one. That’s pretty awesome, although it contradicts many complaints I’ve read. You might also notice that some of this information contradicts my online experience:

Previous Estimate

  • Processing rate: 1.29%+ $0.15
  • Gateway Activation Fee: $95.00
  • Gateway Maintenance Fee: $15.00
  • Monthly Minimum: $25.00
  • Statement Fee: $5.00
  • Semiannual Fee: $49.99

What gives? I asked the sales rep I had on the phone about the 1.29% rate I received the day before. He explained that this is the (absurdly high) markup offered to brand new businesses that have never processed cards before. Since I have an established business already, this wouldn’t apply. Nice save, VMS. Too bad that I told the online rep at the beginning of our conversation that I’m doing $3,000 in monthly credit transactions currently. I think there’s a little VM-BS going on here.

In the end, the representative I spoke with was friendly and not too pushy. I had to dig some information out of him, but he provided a better sales experience than average, I’d say.

At 0.40% over interchange/assessment for my business, I have a hard time believing that they would give me $1,000 for finding a lower rate. (Read on for info on the VMS $1,000 Guarantee.) But hey, maybe I’ll go ahead and try to cash in on that!

Contract Length and Early Termination Fee

Some previous customers have complained of a $700 cancellation fee if the customer cancels within the first two months. Other customers say a $495 fee applies in canceling during the three-year contract.

The representative I spoke to promised no contract and no cancellation fee. Readers: Do any of you have a merchant agreement with Velocity Merchant Services that has no cancellation fee? Please chime in!

Sales & Advertising Transparency

A number of complaints have confirmed the use of high-pressure sales tactics by Velocity, although it’s not clear whether upper management promotes these tactics or not. The job listings on the VMS site show that the company uses both in-house sales and independent sales offices. You should note that when you speak to an “Account Executive” at Velocity Merchant Services, you are talking to a salesperson. Don’t let the title fool you. Every salesperson is an executive at VMS, apparently.

Velocity has an interesting proposition for new and existing customers:

Send us your statement or competitor’s quote and we’ll analyze it (for free) to find missed savings. If we can’t meet or beat the competition, we’ll give you $1,000.

I’m pretty sure they don’t give away much money, so that means either (a) They have the absolute lowest rates in the industry, or (b) The game is rigged in their favor. I don’t know about you, but I’m pretty sure one of those sounds more likely than the other. Generally, you’d expect to find the absolute lowest rates with processors who have fewer bells and whistles, fewer “value-added services.” So even if VMS does keep their rates low enough to make good on this promise, you can bet they’re charging and arm and a leg in other fees to make up the difference. So, for me, this gimmick doesn’t work.

Customer Service & Support

On their site, VMS promises 24/7 in-house support, which is nice to see. If any current customers care to chime in to verify this in practice, I’d love to hear from you.

My experience with their online chat representative was horrendous. Likewise, dealing with the automated service system gave me little hope for their customer service. Generally, the sales end of a business provides the most responsive service. If the sales support sucks, what will it be like after they get your name on the dotted line?

If you want to check out some shining examples of quality customer service, take a look at our highest rated providers in the customer service category. We have thoroughly confirmed their support practices.

Negative Reviews & Complaints

After reading through dozens of customer complaints, here are the most common ones:

  • Altered Contracts – VMS has faced some pretty intense accusations on review sites. Most frighteningly, some merchants have complained that VMS altered their contracts after signing. If this is true, the perpetrators will face some pretty serious charges. I can’t confirm this, however, so I simply encourage readers to remain cautious.
  • Deceptive Sales Reps– Velocity’s sales reps also received numerous complaints for impersonating various associations (and here). This complaint has come up again and again, from merchants and former employees alike. Needless to say, I find this practice entirely unacceptable, especially if encouraged by the company’s management.

When looking at the BBB report for VMS, I have two thoughts. First, I’m impressed by the minimal number of complaints filed with the BBB (only 19 in the past three years, with 3 in the past 12 months). Complaints tended to be about difficulty canceling services and deceitful sales tactics. Next, I feel confused. Ripoff report has 18 complaints filed, all adamantly decrying Velocity sales reps as a bunch of con artists employing despicable tactics. VMS did not respond to any of these accusations. A number of former agents even chime in, supposedly blowing the whistle on the whole operation. They claim the problems are systemic, not related to one or two bad salespeople. If things are really this bad over at VMS, then why so few complaints overall? Something just doesn’t add up for me. I’m missing a piece of this puzzle.

I think it’s safe to say, though, that VMS’s telemarketing practices are annoying to many merchants. Telemarketers are pretty annoying in general, but it sounds like some of the VMS telesales team won’t take no for an answer.

I feel like I should clear something up for merchants here, though. A number of complaints say that Velocity keeps on calling them despite the fact that they are on the Do Not Call Registry. They go on to state that this illegal practice shouldn’t go unpunished. Unfortunately, there’s no such thing as a Do Not Call Registry for businesses. It only applies to residential lines. Velocity presumably has their own in-house list of numbers not to call, but there’s no regulation of that. Bad sales practice? Absolutely. Illegal practice? Not in most cases, unless it crosses the line into harassment or comes in on a residential line.

Positive Reviews & Testimonials

Aside from the fair amount of complaints listed for VMS, a number of positive reviews and testimonials also came up in my research.

There are a handful of positive reviews on Google. However, most of the 4 and 5-star ratings are 2-3 years old with the more recent reviews singing the same tune about poor salespeople and unfair rates. Even VMS seems to have nixed its own testimonial page.

Final Verdict:

I’m not crazy about VMS. If the customer service really stacks up and I can easily get someone on the phone to correct the inevitable billing mistake and ask billing questions, then I’d say they could make an acceptable provider. If their so-called “value-added” services look like options you’d utilize, I’d encourage you to ask your sales rep… I’m sorry… your account executive to fill you in on any and all fees associated with the services. Don’t assume it’s free, and don’t assume it will add any value to the services VMS provides you with.

At the end of my research, I don’t feel like VMS has much integrity or trustworthiness to offer. Their sales copy and sales talk don’t ring true to me, and often contain dishonest statements. I’m sure Dema Barakat’s company serves many happy merchants, and that at least some of those merchants are actually getting good rates. Don’t let your guard down with Velocity, though. They have a bright and shiny exterior, but underneath all of the usually processing industry problems await you. For this, I give them 3 out of 5 stars.

Let us know what you think about VMS or find a processor that works for you!

Tom DeSimone
Tom loves asking tough questions and getting straight answers, so he has a lot of fun calling payment processing companies for Merchant Maverick to cut through their smoke and mirrors and find the real deals. He has run a full-time editorial business from his home in New York’s Hudson Valley since 2010 and could not imagine a better job. When not busy writing about merchant services and keeping credit card processors honest, Tom enjoys backpacking in the mountains.
Tom DeSimone
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1 Comment

    William Christian

    Very professional service.

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