- Sales & Marketing
- Fees & Rates
- Contract & Cancellation Fees
- Processing Solutions
- Visitor Reviews
With so many processors from which to choose, as a business owner, it is important to carefully comb through the good, the bad, and the ugly before deciding on a provider. Investing a little bit of time researching a company will pay off big in the end, potentially saving you the stress of frustration and any unnecessary loss of profit.
Federated Payments, which also goes by the name Federated Payment Systems, is a credit card processor geared toward providing service for independently-owned businesses in the United States, as well as Canada. A look at its website, as well as at online reviews, comments and experiences indicates that even with 13 years of service under their belt, the overall experience for many merchants is not a positive one.
Federated Payments established in 1999 and its headquarters are currently located in Melville, New York. The company also has an affiliate in Canada, providing similar, although fewer, services as the company’s United States counterpart.
Federated Payments is a registered independent sales office (ISO) and member service provider (MSP) for HSBC Bank USA, National Association, and Deutsche Bank AG, New York. The company offers its customers the following:
- Credit and Debit card processing
- Full line of secure PCI compliant POS equipment
- Check acceptance services
- Gift and loyalty card programs
- Working capital cash advances
Federated Payments is currently listed on Visa’s Global Registry of Service Providers.
While the company does list a variety of ways to contact them to inquire about their services, we were unable to obtain even general information when calling. The impression we received was that unless we were a merchant prepared to start the registration process, no one would answer anything. In fact, the customer service representatives even seemed a bit suspicious of the general questions we had.
Email: No direct email address is available to contact Federated Payments. However, a general contact form is on its Web site to fill out and send an inquiry.
2 Huntington Quadrangle
3rd Floor North Wing
Melville, New York, 11747
Sales & Merchant Support: Phone: 800.217.8711
Sales & Marketing
Federated Payments relies heavily on an inside sales force as well as outside agents to acquire new business. The company’s inside sales force utilizes outbound telemarketing, and sales people are paid for performance, so increased sales pressure is likely.
A heavy reliance on outside agents helps to explain many of the complaints about Federated Payments that we discuss below. Outside agents are subjected to little oversight, and if they choose, are free to engage in questionable sales tactics such as undisclosed rates and fees.
Federated Payments was not running any online advertisements at this time of our review. The majority of information that we found online about the company were various reviews posted by customers.
Complaints about Federated Payments mainly focus on products and service as well as advertising and sales. There are numerous complaints about merchants having unexplained fees assessed as well as employees not being paid.
The below listed site, Ripoff Report, was one that offered the most reviews and feedback on Federated Payment Systems’ services. Click the link to review the customer comments.
- Ripoff Report has 13 postings from alleged customers, which by the nature of the site’s content are not positive. Many highlight unsavory service and money-handling situations.
At the time of this posting, Federated Payments has 57 complaints with the Better Business Bureau, 25 of which were posted in within 12 months.
Problems with Product/Service and Advertising/Sales issues account for the greatest portion of complaints (42) followed by problems with Billing and Collection issues (14).
The BBB listing for Federated Payments still has an “A+” ranking for Federated Payments. Considering the BBB’s own complaint resolution ratio, not to mention the consumer complaints outside of this, the rating seems hardly reasonable considering the large amount of negative feedback from users who posted comments online.
The numerous complaints we discovered about Federated Payments leave the definite impression that the company has unreliable business practices.
Charges Hidden Fees
The majority of the complaints regarding Federated Payments focus on fees being charged that were not previously disclosed, losing money via ACH withdrawals, poor customer service and the release of funds in an untimely manner.
Fees & Rates
The rates offered by Federated Payments are listed on its website, but they are based on tiered pricing, and only the qualified discount rate is disclosed. The mid-qualified and non-qualified rates are not mentioned. Displaying pricing this way may lead many potential customers to think that these rates will apply to all credit and debit card transactions, which is not the case.
The rates that Federated has posted on its Web site also border on bait-and-switch pricing. The 1.39% rate offered on retail and wireless merchant accounts is less than the interchange fee charged by Visa and MasterCard on credit card transactions (which is currently 1.51% + $0.10 for Visa, and 1.58% + $0.10 for MasterCard). Therefore, the 1.39% rate that Federated Payments is advertising will only apply to swiped debit card transactions.
In general, Federated Payments discloses very little information about its fees and rates on its website. This type of vagueness should be considered a red flag when choosing your processor. We contacted Federated Payments for clarification on its pricing, advertised rates, and other information, but no one would answer any questions without first starting the application process, which was not done, and therefore we were left without specific pricing details.
CardFellow acknowledges this concern and therefore offers some imperative information regarding fees. Visit our credit card processing fees page to make sure the fees being offered to you are in fact fair and accurate. We also encourage you to learn about (interchange fees) and card brand (assessments), which serve as the basis for credit card processing expense.
Contract & Cancellation Fees
Federated Payments advertises a “no contract” policy on their website, although that is all it mentions regarding the specifics of its contract terms.
Check out the article here at CardFellow to learn more about merchant account contracts and cancellation fees.
Federated Payment Systems can support a wide array of processing gateways, machines or software applications.
Federated Payments offers a proprietary gateway solution called SafePay that boasts features such as Recurring Billing, Batch Upload Processing and iSpyFraud Protection. The company also supports major gateways such as Authorize.net.
Credit Card Machines
Federated Payments offers a full-line of secure Payment Card Industry (PCI) compliant credit card processing terminals and equipment such as the Verifone Vx570, Vx510, Hypercom Optimum T4100, and more.
Mobile Phone Processing
Federated Payments offers traditional wireless credit card terminals such as the Nurit 8020.
Please use the form below to post your review of Federated Payments. Be be sure to support any claims about your Merchant One with details about your experience. Reviews lacking supporting detail will not be posted.