Win $2500 in Grants For Your Business
Enter by August 1st 2015!
APPLY NOW

Review of First Data Merchant Services

5565 Glenridge Connector NE, Atlanta, GA 30342

DISCLOSURE: Ads, Affiliates and Conflicts Merchant Negotiators accepts advertising via the Google Adsense platform, directly from advertisers, and has common parent ownership interests with other payments related companies leading to potential conflicts of interest. Read our Affiliate / Conflicts / Advertising Disclosure for a more detailed disclosure.

Overview

First Data is the largest global merchant services company, providing many resellers with their services. This company is a great fit for large businesses that want all the bells and whistles. They offer a wide variety of merchant services, and an equally large variety of fees to go with them.

First Data is the giant among giants in the credit card processing industry with more than six million global merchant locations. Headquartered in Atlanta, Georgia, this company provides electronic commerce and payment solutions for merchants, banks, and government. Founded in 1969, First Data was the first company to process VISA and MasterCard bank-issued credit cards in 1976.

Since that time, First Data Corporation was involved in a number of sales, buyouts, purchases, and acquisitions that eventually made this company the largest credit card merchant service in the world. First Data maintains numerous processing platforms and they also maintain Compass, an e-commerce platform derived from Chase Paymentech's joint venture with JPMorgan.

In other words, if you want to enter a merchant account agreement with any given company, make sure that that company isn't a reseller for First Data. You might as well go straight to First Data and avoid middle man charges. First Data is ready for you with their in-house sales team. Be aware that this merchant service business is huge - and they charge the fees to stay big. If you're a small business owner, you might avoid this company (including its resellers) unless you are savvy enough and have the time to get around all the "gotchas."

Detailed Review

Below is a detailed review of First Data Merchant Services offering. The review is broken down into the following categories.

Features

Depending upon the type of business you own, some of the following features may or may not be important to you.

First Data has it all, and well it should considering the size of the company. Remember that resellers also sell First Data equipment, so none of the options below should change. Be sure to read all contracts carefully, however.

Software Compatibility:
Intuit Quickbooks Yes
Sage 50 No
Microsoft Dynamics GP No
Hardware Compatibility:
Windows / Blackberry Yes - Blackberry
iPhone / iPad Yes
Android Yes
Alternative Transaction Types:
Phone Orders Yes
Internet Orders Yes
Wireless Orders Yes
Mobile Orders Yes
Snail Mail Orders Yes
American Express (AMEX) Yes
Add Tips to Bills Yes
eCommerce / Shopping Cart Yes
International Sales Yes
Recurring Payments Yes
EMV Chip Cards Yes
Contactless Cards Yes
Loyalty / Gift Cards Yes
eChecks / Electronic Checks Yes
Welfare Benefits (EBT/SNAP/TANF) Yes
Security / Fraud Prevention:
AVS Fraud Protection Yes
PCI DSS Secure Transactions Yes
Industry Specific:
HIPAA Compliance (Healthcare) Yes
Trust Account Debiting (Legal) No
Fleet Cards (Petroleum) No
Online Menu Orders (Restaurants) Yes
Countries Served:
U.S. Yes
Other Countries Yes
International Yes

We have to say "yes" to almost everything, because First Data does have it all plus some. In fact, from some of the complaints we read, First Data may be too rich in products to properly maintain them as far as upgrades and the follow-up service for those improvements.

The security features seem outstanding, especially for check fraud. Merchants can scan and deposit checks at the register, and also run the checks against a national registry of bad check writers. They also offer end-to-end encryption for optimal data security.

Back to top

For More Information About This Processor or To Sign Up

Pricing

Almost Every merchant account services company uses either Interchange Plus or Tiered Pricing (read more about this topic here). Where companies allow us to disclose pricing information, we show the deals that our secret shoppers were able to achieve. When companies offer both Interchange Plus and Tiered Pricing, we try to get a quote on both options.

Our Experience

First Data doesn't provide a single bit of financial information on their site. In fact, we had a difficult time even finding their fine print. We couldn't find it linked on their site, so we conducted a search and found the information in a PDF file. As far as contracts and terms are concerned, First Data gets around that lack of online transparency by stating that each contract is built to serve the merchant. This statement isn't rare for a large credit card processing company, especially when they have the flexibility to offer that route. We do know that they may offer a variety of billing options, including tiered, interchange-plus, flat rate or enhanced billback.

With that statement, however, comes a caveat: If you sign up with First Data, be sure to get everything in writing, and don't agree to sign unless they agree with your terms.

Back to top

For More Information About This Processor or To Sign Up

Contract Fine Print

First Data's fine print is all within a 48-page PDF file that does, indeed, have some very fine print. Here's what we discovered:

Fine Print Fees:
Termination Fee Yes, Variable
Setup / Application Fee Yes, on most products and services
PCI Compliance Fee Yes
PCI Inaction Fee Yes
Gateway Fee Yes
1099-K Fee Yes
Statement Fee No
Online Reporting Fee None
Monthly Minimum Volume Fee Yes
Accept International Pymt Fee Per Transaction
Voice Authorization Fee Possible
Monthly Min. Process Fee Possible
Daily Batch Fee Possible
ACH / Direct Deposit Fee Possible
ACH Charge Fee Possible
ACH Return Fee Possible
FANF Fee Yes
Chargeback Fees Standard
Freebies:
Initial Consultation
No Application Fees
Free Customer Service

Our Take

Here's a little hint to small business owners: Even if you play by all the rules and never have a chargeback or return for the length of your contract, you may still need to pay a fee to end that contract on the termination date. That's a "gotcha" if I've ever seen one. Here are more fees:

  • A substantial portion of the Discount Rate or Transaction fee you pay go toward VIA, MasterCard, Discover, or AmEx exchange sales and chargebacks.
  • If First Data doesn't receive receipt of your PCI compliance within the first 120 days of your contract with First Data, you will be charged a monthly non-receipt fee until you become compliant.
  • Chargeback fees range from $25 to $150 per transaction. If you obtain an Authorization Approval Code during the sale, you might avoid those fees. You also are subject to card organization chargeback fees. VISA and MasterCard currently charge a $250 filing fee and a $250 review fee to dispute chargebacks.
  • First Data likes daily submissions of sales. If you're late, you may pay fines and experience higher interchange rates.
  • The merchant is responsible for all shipping and handling interchange fees.
  • If your sales volume changes, First Data also changes...they can alter your rates and fees at any time without notice, especially if you see increased sales.
  • Merchants must pay a Batch Closure Fee. This fee is different than the Batch Settlement Fee. Those fees are based upon two different types of card transactions, which mean the merchant may pay two separate fees upon submitting a daily batch. See page 17, Article 18.7.
  • If the merchant doesn't pay all fees within thirty days, interest is added to the remaining bill.

That list is just a portion of what we discovered in the Merchant Services Terms and Conditions. The word, "fee" is included in that document 328 times, although a majority of those uses concerned chargebacks. From what we understand, First Data is ready to shut you down for any reason, but chargeback frequency seems to be the main reason and we can see why. Unless you run a large corporate business, there's no way to pay those fees on a frequent basis. Add interest to remaining items on your bill and you could be paying First Data for life.

Back to top

For More Information About This Processor or To Sign Up

Equipment

Clover Station

While your transactions usually take place electronically, the actual device that you use to swipe a customer's card is referred to as "the equipment." This equipment includes hardware and, often, software or apps for that hardware to function properly.

First Data not only supplies their own customers with hardware and software - they supply their resellers with the same equipment. This is an important issue to remember when you deal with a reseller, because you'll be signing two contracts - one with the reseller and one with First Data (especially with leases). We can't even imagine the difficulty a merchant might encounter if they have trouble with this software as a reseller client, as we heard some horror stories about dealing with First Data directly:

Hardware

  • Clover Station: This is a control system design, supposedly, for small business that tracks inventory, manages employees, and provides analytics about customers via transaction records. It includes cloud-based software connecting a terminal and screen to the merchant's information. The setup is similar to Square, but it comes with its own screen (no iPad required).
  • First State FD400: This is a wireless and portable terminal design for POS on the road. This setup does require a mobile phone or tablet.
  • FD35: This is a peripheral that accepts EMV transactions via a terminal.
  • Other Solutions: First Data offers a wide variety of terminals for sale or lease that accept basically every credit or debit card under the sun, along with gift cards and checks. Some solutions provide a turnkey ATM Program that provides the merchant with the ability to offer Automated Teller services. First Data also sells scanners, touch screens, POS displays and more.

Software

  • POS Software: This software is general and keyed into whichever terminal you chose upon sign-up with First Data.
  • First Data Retail Solution: This software replaces the cash register and payment terminal with a single system to manage an entire business.
  • First Data Global Gateway Virtual Terminal: This software turns any Internet-connected PC into a POS device without installing that software.
  • ICVERIFY: This software is a PC-based alternative to traditional POS software required to accept credit, debit, and purchasing cards.
  • Perka: This mobile program helps merchants with online sales via the customer's mobile device (online store).
  • Datawire Secure Transport: Even more software...this solution leverages existing Internet connections to increase security and to reduce transaction times.
  • Apps: First Data offers a growing number of apps that seem to replace the patches or upgrades that many machines require. Other apps provide merchant solutions such as apps for inventory, etc.

Back to top

For More Information About This Processor or To Sign Up

Countries Served

First Data Merchant Services can handle payments from and for merchants in the United States, Canada and abroad.

Back to top

Contract Length / Termination

I generally don't like long-term contracts or termination fees in merchant services agreements, because the ability to cancel keeps the credit card processor on its best behavior, including the willingness to make you happy if there's a dispute. Plus, this ability to cancel gives you the ability to move on if you find a better deal.

First Data isn't clear on the length of their contracts, so we gave them a call about that (see below under customer service). We do know this: Early termination fee equals a number of credit card organization fees times the number of months left in your contract. See page 19, Article 23.5 in their contract for Merchant Services Terms.

With all that said, when we called the sales office at First Data, I learned something valuable to know for any merchant - you can, possibly, write your own terms. See below...

Back to top

About the Company

The merchant account services industry is multi-layered. Understanding how those layers fit together can be confusing (Read More in this Article). A good thing to know, however, is whether or not your company is a direct processor (good if yes) or, if not, then to know who they process with and whether or not that processor is reliable. The second thing to know is whether or not the service or sales staffs are in-house or outsourced. In-house staffs are preferable for you, as these staff members may have more access to sources that can resolve your issues.

Processor:

First Data cuts out the middleman with its combined services as a merchant acquirer (aka an "ISO") and payment processor. This is a plus for merchants who want to use this service, because that lack of a middle man means savings to you, the business owner. You won't have to worry about the confusion that a middle man can cause when it comes to contracts or service. However, First Data is very fond of acquiring resellers, too, and those resellers may not be upfront about their deal with First Data. Be sure to do your homework.

Account Sales:

According to First Data, their sales team is in house, but they also rely heavily on their resellers. These resellers include seemingly reputable services such as Wells Fargo merchant services. While Wells Fargo was upfront with us about using First Data as their merchant service processor, we understand that many other ISOs are not transparent and use misleading sales tactics and deceptive marketing practices. We also understand that First Data's sales force often isn't forthcoming with all the fees included in the contract, especially lease terms and termination fees. Again, we're suggesting that you get everything in writing before you sign up.

Account Service:

First Data offers customer service via phone, email, and support center for their customers. This support is offered 24/7, which makes sense for serving global business and their varying hours.

Back to top

For More Information About This Processor or To Sign Up

Customer Service

As part of our review process, we try to test merchant account service companies' claims by placing test calls and working through the customer service process.

When:

1/9/2015; TIME: 3:39 pm EST

Who:

Call to Customer Support

Our Experience:

We called sales to learn if the support and sales teams were in-house or outsourced and to get a better feel about contract terms. Dominique answered the phone in native English and she was very friendly. She offered to take our information before she handed us to sales, but I refused. She insisted on learning about the type of business we were in, as she was vetting us for acceptance. Financial information wasn't important to her. After I told her I was in retail (antiques), she patched me through immediately to a sales representative. Sherry, also native English speaking with a southern twang, was full of information and promises. Some of that information surprised me after reading the initial terms and conditions provided by First Data.

  • Merchants can own their own equipment, provided it is EMV compliant.
  • Merchants cannot ever break their contracts when they lease equipment from First Data until the contract is terminated (terms can run for four years).
  • Merchants can name their own terms for contracts, including no termination fees. Sherry stated that this inclusion meant that I could walk at any time, provided I wasn't leasing equipment.

I asked her about the $30 termination fee upon successfully terminating a contract, and she stated it doesn't apply. At that point I realized that I could, possibly, write my own contract with my own terms and present it to First Data, rather than have them present me with a contract.

Although I'm sure that option isn't truly a possibility, I say it to illustrate how flexible they seemed (at least on an initial call). In the end, I was made to understand that I would need to use their terms and conditions to make sure I covered everything I needed to cover when committing to First Data.

Our Take:

Although Sherry sounded like a great soul to do business with (she even provided me with a direct contact number), I remain leery about her claims about a lack of termination fee. At the same time, if I had that agreement in writing, it puts a whole new color on the services that First Data offers, especially if I was aware of all the other fees and conditions. We're still adamant that any businesses needs to fully comprehend the fine print before committing to First Data.

 

Back to top

Common Customer Complaints / Our Verdicts

We scoured the web to find past and current customer complaints about this processor. Then, we investigated those complaints that seemed legit, and provide our verdict on how well the processor handled the issues. First Data has issues across the board, and the complaints are all over the web. It wasn't difficult for us to find them...but it was difficult to discern which complaints weighed heaviest on the scale.

Reseller Headaches:
Customer Complaint:

Many consumers complained that they didn't realize that First Data was their payment processor, and that lack of information led to some horrific stories about leases, contracts, and customer service.

Our Verdict:

We understand that some resellers don't tell the full truth. On the other hand, we know firsthand that some other resellers are up front about their services and the fact that they're middle men. Sometimes, this full disclosure doesn't mean a thing to merchants who don't understand the difference. There's no excuse any more for merchants not to know, and the fact that this is happening via First Data's resellers looks really bad.

Hidden Fees:
Customer Complaint:

These complaints also were tied into leasing contract information, specifically that they either didn't know they had a lease, or shocked at how expensive it was.

Our Verdict:

Again, merchants need to do their homework and understand that leases usually always are more expensive than an outright purchase. Resellers may not be upfront, but the merchant is signing a contract, and that contract should be clear about terms.

Lousy Customer Service:
Customer Complaint:

This complaint actually was low on the totem pole, considering First Data's size. Again, complaints centered on not being able to tell the difference between First Data or its reseller.

Our Verdict:

At this point, we have to point at First Data and wonder why this company is allowing so many resellers to ruin First Data's reputation. We can say this: If you're getting a service rep who doesn't speak native English, then you're probably dealing with the reseller's service options and not First Data.

Back to top

For More Information About This Processor or To Sign Up

Who Should / Shouldn't Use this Processor

Who It's Good For

  • Low Chargeback Businesses: You don't want chargebacks for any reason, but this is the number one reason why First Data may terminate or suspend your service. Keep those sales clean and be sure to collect all the information you might need to dispute a chargeback or even a return.
  • Large Businesses: If you have a CFO, an attorney, and a staff that can help you keep an eye on First Data, then go for it and enjoy all the bells and whistles that First Data offers. Otherwise the lack of transparency and tons of fine print are worrying.
  • Internationally Focused Merchants: We might qualify this label by stating "large internationally focused merchants." Small businesses might do business overseas, but they still might not be able to afford First Data's fees.

Who It's Not Good For

  • Small Businesses: If you, as a small merchant, decide to use First Data (and you should use them instead of a reseller), we will warn you that you should get an attorney to look over First Data's terms and come up with a set of your own terms. If First Data accepts them, then by all means move forward. Still, we'd advise you to watch this company like a hawk and keep your own nose clean re: chargebacks and returns. Or, you could go with a small-business-friendly processor.
  • High Chargeback Business: If you're in the business of creating chargebacks, you can look at some high-risk processors who might be more amenable to your business. This company might suspend you if you even think about the word.
  • Fee Conscious Businesses: First Data might get you coming and going. If you can't deal with finding all the various fees that First Data charges and deal with them upfront, then find another processor for your business.

Back to top

For More Information About This Processor or To Sign Up
First Data Merchant Services
Ratings
Overall
Price
Customer Service
Customer Reviews
Rates
0.15% - 3.45%
Features
  • 24/7 Customer Service
  • Clover Station POS
  • Largest Processor
Monthly Fees Breakdown
Setup Fee$0.00
Monthly Fee$7.95
PCI Compliance Fee$8.25
Online Reporting Fee$0.00
Batch Fee$0.00
Gateway Fee$7.95
Chargeback Fee$15.00
Termination Fee$300.00
Contract LengthYearly
Sign Up Now

Disclaimer:

DISCLOSURE: Advertising, Affiliate and Conflicts of Interest: Merchant Negotiators accepts advertising via the Google Adsense platform, directly from advertisers, and has common parent ownership interests with other payments related companies leading to conflicts of interest. Read our Affiliate / Conflicts / Advertising Disclosure for a more detailed disclosure.

About the Reviews: These reviews, and for that matter any reviews, are inherently subjective, and should be regarded as our opinion, not as a statement of fact. Selecting a merchant services provider is an important decision, and we urge you to use no single source of information as the basis of that decision.

About the Pricing: This pricing is an estimate based on limited available information. In some cases, the Processors' pricing information was provided directly by the company, in others, we obtained it from public information, through calls to the company, or through past or current clients of the company. Where, despite these efforts, we were unable to obtain any information about certain fees, we used estimates based on similar providers in the industry. While we're working, in some cases, with the company directly to get more accurate pricing, even in those circumstances, we can't guarantee the pricing's accuracy. Complicating all of this, is that for some companies individual salespeople are given authority to modify terms on a deal by deal basis. In any case, if you know of an error, please let us know and we'll fix it.

About the Calculations: With respect to your estimated savings, this is based on a lot of factors and some hard math. The reason we do it, along with the "Actual Gross Rate" calculation is that every Processor prices their product differently (e.g. interchange v. 3 tier v. 4 tier v. flat v. membership, etc.) and some make it intentionally complicated or opaque. Trying to convert their pricing structure to a consistent "Overall Cost of Processing" is the only way you, the merchant, can do an apples to apples pricing comparison and know whether an offer is actually a good deal. Our system isn't perfect but we're trying.

Conclusion: In sum, these rankings, ratings, and scores are inherently subjective, and should be regarded as our opinion and not as a legal statement of fact. Moreover, use these prices and estimates at your own risk, and make sure to verify the pricing you see here in any formal contract you receive. Finally, if you do find something wrong in our pricing, terms, etc., tell us and we'll try to fix it.