XCharge Review

Overview:

XCharge is a payment gateway and merchant account provider headquartered in Pleasant Grove, Utah. It also has offices in Henderson, Nevada and St. Louis, Missouri. The company began life as a division within CAM Commerce, a point-of-sale (POS) software company, back in 1983. It was later spun off as Accelerated Payment Technologies, which was acquired in turn by Global Payments in 2012. Today, XCharge operates as a subsidiary of OpenEdge Payments, LLC, itself a division of Global Payments. The company’s primary product is XCharge, a virtual terminal that can be used in conjunction with its XWeb payment gateway. XCharge combines their software products with an integrated merchant account, which is provided by Global Payments.

In theory, this should be a pretty convenient arrangement. Unfortunately, there are problems. According to XCharge’s website, their software is compatible with Microsoft Windows versions up to… Windows Vista. Given that Microsoft ended support for Vista back in 2012 (extended support ends in early 2017), it’s a pretty clear indication that no further updates are planned and that the product is gradually being phased out. While the software probably runs on newer versions of Windows, the lack of updates is a clear sign that it won’t be around much longer. The XCharge Mobile app, while still available in the iTunes and Google Play stores, is officially considered obsolete, with a recommendation that customers download the newer OpenEdge Mobile app instead.

So why is XCharge still in business? Well, it integrates with the Mitchell 1 auto repair shop management software, providing a payment gateway and bundled merchant account to businesses using that software. In fact, if you’re using Mitchell 1 to manage your shop, it’s the only available option. With a large customer base still using the product, XCharge is still being supported, but it’s apparent that they’re gradually moving new customers over to OpenEdge.

It gets worse. The merchant accounts that come bundled with XCharge’s gateway have lengthy contract terms and a liquidated damages clause if you try to close your account early. The company also relies on independent sales agents to sell their accounts, and many of those agents don’t disclose the draconian terms of their contracts.

While current customers of XCharge are probably stuck with them for the time being, I can’t recommend signing up if you’re a new customer looking for a merchant account and a payment gateway. Obsolete software and overly strict contract terms add up to a rating of only 2.5 out of 5 stars. New customers should consider going with Global Payments directly. You’ll actually get more favorable (and more flexible) contract terms with Global than you will by going through XCharge.

Products and Services:

Although XCharge primarily markets their virtual terminal software, they also provide enough other services to allow you to accept credit cards and manage your business. Offerings include the following:

• Merchant accounts: XCharge, of course, is not a direct processor. All merchant accounts are provided by Global Payments. Accounts are available for customers in the United States and Canada.
• Payment gateway/virtual terminal: The XCharge virtual terminal is the company’s primary product. It’s designed to be used in conjunction with their XWeb payment gateway. When combined with a USB-connected card reader, this system will allow you to process and track transactions on your computer. There’s no need for a credit card terminal or POS system – although you might want one anyway due to the additional features that come with them.
• Offline payment processing: One unique feature of XCharge’s virtual terminal is its ability to process payments even when your internet connection is down or the XCharge server is undergoing an outage. If the software detects an outage, it encrypts transaction data and re-transmits it automatically when service is restored. While this might be a handy feature if you experience frequent disruptions in your internet connection, be aware that if the encrypted data can’t be transmitted to another server or computer, it will have to be stored – however temporarily – on your computer. This raises some PCI compliance issues, and XCharge doesn’t address how the offline processing feature complies with PCI-DSS requirements under these circumstances.

• Credit card terminals: While XCharge is designed primarily to use your computer to swipe credit cards, it can also be set up to integrate with a traditional countertop credit card terminal. If you need a terminal, XCharge can sell or lease them through Global Payments. Whatever you do, don’t lease a terminal! Terminals obtained through Global Payments will come pre-programmed to work with their merchant accounts, but it’s probably less expensive to buy your own terminal online and pay the reprogramming fee to make it compatible with their system.

• Point-of-Sale (POS) systems. As with credit card terminals, XCharge will work with many existing POS systems. While they claim compatibility with “hundreds” of systems, they don’t provide a list. Check with your sales agent to ensure compatibility before you spend a lot of money on a POS system.
• Mobile payments: While you can still download the old XCharge Mobile app from either the Google Play or iTunes stores, it’s listed as obsolete. Users are directed to use the newer OpenEdge Mobile app instead. It’s available for both iOS and Android. Both versions are compatible with the IDTech Shuttle secure card reader, a magstripe-only, plug-in reader. The iOS version is also compatible with the Magtek uDynamo and iDynamo readers. While both are magstripe-only, the uDynamo connects via the Apple Lightning port and will work with the iPhone 7. Hopefully, OpenEdge will introduce EMV compatibility through a newer card reader soon.
• eCheck (ACH) processing: XCharge offers eCheck processing through their XCheck service.
• PCI Compliance. XCharge uses OpenEdge’s PCIAssure program to ensure PCI compliance. This service includes quarterly IP network vulnerability scans and $100,000 in data breach insurance (with a $0 deductible).
• Developer tools: XCharge offers several solutions for software developers, including their XCharge PC software and X-Web Secure.

Fees and Rates:

Like many providers, XCharge doesn’t disclose any pricing information on its website. There are two reasons for this. First, pricing is customized to each merchant. There are no standard fees that apply to every merchant using XCharge. Second, all fees and rates charged for merchant accounts are paid to Global Payments, not XCharge. When you sign up for XCharge, your Merchant Application is actually through Global Payments. XCharge is listed as a third-party software vendor.

It’s worth taking a closer look at that Merchant Application, however. This document includes both an application to apply for a merchant account and a recital of the standard terms and conditions. In the Application section, you’ll find a mind-numbing list of 32 separate possible fees that you might have to pay – none of which are disclosed. There’s also a blank for even more fees to be added to your contract. Fortunately, not all these fees will apply to every merchant. At a minimum, however, you can expect to pay a monthly account fee, an Annual Membership Fee, and a Wireless Service Fee if you’re using a wireless terminal. The Application doesn’t list a fee for PCI compliance, but you’ll probably be paying for it anyway under one of the other monthly or annual fees.

The most important thing to recognize with a contract like this that lists so many possible fees is that it provides a carte blanche for your sales agent to tack on any number of extra, “junk” fees to your contract. You’ll want to carefully go over every fee with your agent when you’re negotiating your contract, and most importantly, review the entire document before signing up. Sales agents – particularly independent agents like XCharge uses – are notorious for not disclosing all contract terms before you sign up. They’ll also pressure you to sign your contract right away, without a chance to thoroughly review it. Don’t fall for these tactics!

Contract Length and Early Termination Fee:

As with its prices, XCharge doesn’t disclose any information about its contract terms on its website. However, the Merchant Application we obtained states that the contract runs for a period of three years, with an automatic renewal clause that will renew it for successive one- year terms thereafter. This is the industry standard today, although more and more providers are ditching long-term contracts like this in favor of month-to-month billing arrangements.

What if you’re not happy with your service and want to close your account? Well, you’ll have to provide at least 60 days’ written notice, which is twice the industry average of 30 days’ notice. This can get really expensive if you’re closing your account before the end of the contract period. Unlike many providers, XCharge doesn’t include a fixed early termination fee in their contracts. Instead, their contracts through Global Payments include something potentially much worse: a liquidated damages clause. Here’s what the Merchant Application says:

Notwithstanding anything to the contrary set forth herein, in the event Merchant terminates this Card Services Agreement in breach of this Section 13, the following amount(s) shall be immediately due and payable to Global Direct: the lesser of (a) the maximum amount permitted by state law, and (b) all monthly fees assessed to Merchant under this Card Services Agreement and due to Global Direct for the remainder of the then existing term of the Card Services Agreement, including all minimum monthly fee commitments.

In other words, you’re on the hook for all 36 months’ worth of fees the moment you sign your contract, whether you keep your account open for that long or not. How much this will actually cost you will depend on how much you’re paying in monthly fees and how long you have left on your contract. If you cancel during the first year of your contract, it could potentially cost you over $1000. One thing to note is that this liquidated damages clause differs from what other providers impose in that it doesn’t factor in what you’ve been paying in processing charges in calculating damages. Nonetheless, it could cost you far more than the $300-$500 early termination fee other providers charge.

You should note that your damages are also limited by state law. In other words, if the calculated damages would exceed the amount allowed under state law, you’ll only pay the lesser amount. That’s because liquidated damages clauses are so unfair and one-sided that several consumer-friendly states have passed legislation to limit the amount providers can charge you as liquidated damages.

The inclusion of a liquidated damages clause in their contracts is a big strike against XCharge, and it’s enough to automatically put them in our “do not recommend” category. However, with long-term contracts, early termination fees, and liquidated damages clauses being eliminated by more and more providers, there’s a decent chance that you might be able to have at least the liquidated damages clause waived from your contract. You’ll have to ask for it, and even if it’s approved, be sure to get it in writing.

Sales and Advertising Transparency:

XCharge’s website has a very dated appearance and looks like it hasn’t been updated in years. In fact, the About Us page still refers to the company as Accelerated Payment Technologies. The product demo no longer works, and there are remarkably few details about the company’s products or services. Downloadable brochures add a little information, but mostly serve as advertisements rather than educational resources. Quite frankly, it’s hard to take a software company seriously with this kind of website. You’ll find much more information on the OpenEdge website, although the limited references to XCharge suggest that all of XCharge’s features are slowly being rolled into the OpenEdge brand.

It’s obvious that XCharge isn’t relying too heavily on its website to bring in new customers. Instead, the company depends almost entirely on a network of independent sales agents to market its products and services. While this practice is common in the processing industry, it’s also lead to a high volume of complaints from merchants. Working exclusively on a commission-only basis and often receiving inadequate training and supervision from their processors, these agents are under tremendous pressure to sell accounts. They, of course, transfer that pressure onto you, often trying to get you to sign up before you’ve had a chance to even read your contract. While some independent agents provide high-quality service, the majority of them do not. Agents frequently neglect to disclose all important contract terms – especially that liquidated damages clause! When dealing with an independent agent, your best defense is to insist on reviewing your contract before signing it, and get every waiver in writing.

XCharge doesn’t have a presence on social media, although you will find a few video advertisements for their gateway on YouTube. There are also eight videos from the now-defunct Accelerated Payment Technologies on their AcceleratedVideos YouTube channel.

OpenEdge, however, is very active in the social media sphere. They have accounts on Facebook, Twitter, LinkedIn, and Google+. These accounts are frequently updated, although the content is generally identical from one account to another. There’s also an OpenEdge YouTube channel with more recent content. The videos on this channel are focused primarily on marketing, although there is one testimonial as well.

Customer Service and Technical Support:

Support for XCharge products is apparently now provided by OpenEdge. The XCharge website doesn’t provide any contact information and makes no mention of customer support options. OpenEdge, however, has a Support page that lists telephone and email options for contacting the company. Telephone support is reportedly available 24/7, but we’ve seen several complaints from merchants about having difficulty reaching customer support. There are also complaints about the company not contacting merchants who’ve left a voicemail message or reached out via email.

While 24/7 telephone support should theoretically lead to excellent customer service, it doesn’t always work out that way in actual practice. Smaller companies such as OpenEdge turn to outsourcing in order to provide after-hours support, but the support representatives they use frequently lack the authority or training to fix difficult technical issues. In-house support is usually much better, but it’s typically only available during normal business hours. Even then, we’ve seen complaints from merchants alleging that they were transferred from one department to another, with no one at the company being able to resolve their issue. Overall, customer support for XCharge through OpenEdge rates as mediocre. Unfortunately, less-than-adequate customer service is a very common complaint against merchant account providers.

Negative Reviews and Complaints:

XCharge does not have a separate profile with the BBB. However, there is a profile for OpenEdge. The company has been accredited with the BBB since 2012 and currently has a B+ rating. There have been 16 complaints filed against OpenEdge within the last three years, with 10 of those complaints being filed within the last twelve months. Out of the 16 complaints on file, only four were resolved to the satisfaction of the customer. There are also two negative reviews left by customers on OpenEdge’s BBB profile. Unfortunately, most of the complaints on their BBB profile don’t include any details, so it’s impossible to determine whether any of them involve XCharge’s payment gateway.

There is also one complaint against XCharge on Ripoff Report, but it’s from 2010. Remember, Ripoff Report never removes complaints once they’ve been filed.

Together with other complaints against XCharge and OpenEdge scattered around the web, the following trends emerge:

• Difficulty canceling account: This is a very common complaint against merchant account providers, who often seem to go out of their way to avoid actually closing a merchant’s account when requested to do so. Part of the blame also lies with merchants who are unaware of the requirements for closing an account. This is not something you can accomplish with a simple phone call to customer service. Procedures for closing your account are spelled out in your contract, and you’ll have to follow the directions to the letter before a provider will close your account. We recommend submitting the required written documentation well ahead of the required notice period (60 days in this case). It’s also a good idea to send your closure form via registered mail, so you’ll have proof that it was actually delivered and accepted by the provider.
• Poor customer service: Again, this is a common issue with many merchant account providers. If at all possible, try to call during business hours to improve your chances of receiving good support.

One thing to note is that we couldn’t find any complaints about the quality of XCharge’s payment gateway or associated services. From a technical standpoint, they seem to be fine, functional products. All of the complaints appear to stem from the merchant account side of their services.

Positive Reviews and Testimonials:

There aren’t any positive testimonials on either the XCharge or OpenEdge websites. OpenEdge’s YouTube channel has one testimonial, but it’s not relevant to XCharge’s gateway or merchant account services. The lack of positive reviews isn’t such a bad thing, as satisfied customers rarely take the time to post a review. They’re much, much more likely to post a negative review when things don’t go well.

If you’ve had a positive experience with XCharge, please be sure to leave a review in the Comments section below.

Final Verdict on XCharge:

It’s always a little sad when software is left to die on the vine, and that’s what appears to have happened to XCharge. Caught up in a series of business mergers and acquisitions, it’s stuck in a kind of purgatory where the product hasn’t been discontinued, but also hasn’t been updated in years. Needless to say, it’s simply not possible for me to recommend XCharge to new customers looking for a payment gateway and a merchant account.

If the outdated software wasn’t enough of a problem, the liquidated damages clause in XCharge’s merchant account contracts through Global Payments would also be reason enough to avoid them. Charging you every monthly fee for the remaining months of your contract – for a service you’re not even using – is nothing short of highway robbery. Having to pay it all in one lump sum just makes it that much worse. We don’t approve of early termination fees in general, but this kind of clause could potentially cost you much more than the industry average of $300 – $500 for an ETF.

As we’ve noted, many current XCharge customers are only using them because they’re also using the Mitchell 1 automotive repair shop management software, and XCharge is the only provider available to Mitchell 1 users. If you’re stuck with XCharge for this reason, I’d recommend trying to renegotiate your contract to waive the liquidated damages clause. With no updates on the horizon for XCharge’s products, there’s no reason to be stuck in a long-term contract. I anticipate that XCharge will eventually be replaced with similar OpenEdge-branded products, but there’s no telling when that might happen. Until then, XCharge rates a disappointing 2.5 out of 5 stars.

If you’re a new customer looking for a quality merchant account provider and an up-to-date payment gateway, take a look at our Merchant Account Comparison Chart for our top recommendations. Current or former customers of XCharge are also encouraged to leave a review of their experience in the Comments section below.

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