Credit Card Processing, News

Global Payments’ Diabolical Plan: Silence Heartland, Bail Out Mercury, Grow Portfolio

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You may have read about a deal Global Payments struck to purchase competitor Heartland Payment Systems, but there’s more than meets the eye. Read between the lines of Global Payments’ motives to acquire Heartland and you’ll see something more scandalous than a simple desire to grow its portfolio.

Global Payments is positioning itself to win a lawsuit filed against its prized ISO, Mercury Payments Systems, by buying the plaintiff, Heartland Payment Systems.

Allow me to provide an overview of the lay of the land for those not too familiar with the relationships between these companies.

Global Payments is a credit card processor with a relatively unimpressive reputation among businesses and independent sales organizations (ISO) that is looking to expand its client base through acquisitions.

Mercury Payment Systems is a large and quickly growing ISO that uses Global Payments to process its transactions. Mercury was acquired by Vantiv last year, but the recent Mercury processing statements we’ve reviewed indicate it’s still running transactions through Global Payments. Mercury is well-known within the processing industry for eliminating a business’s competitive choice through partnerships it forges with POS developers and then slipping hidden fees into its clients’ charges in the form of excessive assessments.

Heartland Payment Systems is a well-respected credit card processor with a solid reputation among businesses and ISOs that is currently suing Mercury Payment Systems, alleging false advertising, unfair competition, and more. The basis for the suit is the excessive assessment charges I mentioned in the preceding paragraph.

Now that you have an overview of the players involved, here’s a closer look at how the pieces fit together.

Global Payments handles the transaction volume for Mercury Payments, which generates significant revenue. Mercury Payments is being sued by Heartland Payments, which has damaged Mercury’s reputation and has had a negative impact on its transaction volume and in turn the money Global earns on the volume.

Global Payments claims it is looking to expand its portfolio through acquisition but coincidentally purchases the processor that is currently engaged in a lawsuit that damages its prized ISO’s reputation and negatively impacts its bottom line.

Heartland’s CEO, Bob Carr, has long been an advocate for transparency in the processing industry, and his strength of character is pretty evident from reading his personal blog. This makes it that much more intriguing that Bob is selling Heartland Payments to a company with strong ties to another that he’s currently suing for deceptive business practices.

Is this simply selling, or selling out?

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Ben Dwyer

BY Ben Dwyer

Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing.As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.

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1 COMMENT

  1. from greg noren, on May 4, 2016 18:31:59

    Heartland Payment Systems Customers have filed a class action suit in New Jersey Courts against the processor for consumer fraud possibly 2.6 billion in unjust enrichment!

    Heartland Payment Systems merchant’s filed a class action suit claiming that in 2014 Heartland implemented a scheme committing consumer fraud resulting in unjust enrichment. The class action complaint was filed in the United States District Court District of New Jersey, the Plaintiff Rudel Corporation Civil No: 3:16.cv-02229 Squitieri & Fearon, LLP NY, NY The 29 paged suit exposes Heartland’s plot in detail of how they used an American Express Program called OptBlue to bait and switch customers into thinking Heartland was acting in the customers best interest with transparency. According to the documents it appears at first Heartland was indeed giving the New American Express Opt Blue savings to the customers as they claimed they were. However, the merchants claim this was smoke and mirrors. Instead of passing on the savings to the customer Heartland kept the savings for themselves. American Express lowered their fees. Heartland decided not to pass those savings onto their customer as they claimed. Instead they added a new American Express Discount fee for their customers to pay. So the customer paid less to American Express but more to Heartland for the exact same services Heartland had already been providing for the lower fee the month before. The customer was saving money, as I am sure we will hear Heartland rebuttal, but not what they should have been saving apparently. Here is where it gets sticky. Four months after the initial supposed scheme was implemented they increased their fee again. The suit states the increase was fifteen times the initial amount. It also states that Heartland sent a notice on their statement to the customer’s stating they miscalculated their rate they needed to charge. But the fees were just part of the issue, apparently this notice Heartland sent was a breach of the customer’s contract as it violated a 15 days notice which Heartland did not honor. Heartland better be prepared to explain to these customers how they miscalculated pure profit. That would be my question. Especially profit that needed increased in 4 months and back billed as well which apparently Heartland billed to customers on their October 2014 statements. According to the suit there is approximately 2.6 billion dollars over the last two years in question. This will be an interesting one to follow. What will this mean for Global?

    What I can’t believe is how I saw this on the docket and think this is bigger news than the stockholders class action suit when Heartland announced the sell to Global, yet you haven’t reported this yet at all. Heartland has built its reputation on honesty and transparency. If they are found guilty, this means not only do we have a lying Ted, we have a lying Bob who pulled a fast one on the consumer, then knowingly sold his sour lemon off.

    Time will tell but its worth investigating further in my opinion.