by Ben Dwyer Pivotal Payments offers credit card processing services, but is it a good choice for your business? Let’s take a look at CardFellow’s experience.
Note: Pivotal Payments has changed its name and goes by Nuvei. It’s possible that the new company does not engage in the same practices noted in this article. We’re leaving it here for historical purposes, but will no longer be updating it. If it turns out that Nuvei utilizes the same practices, we will create a new article detailing those situations.
- Pivotal Payments Fees – a $3,445 cancellation fee
- Three-year auto-renewing contract term
- Liquidated Damages
- The Latest Update
Pivotal Payments’ fees aren’t the only thing to investigate. There’s a reason why we scrutinize each processor before we invite them to participate in CardFellow’s marketplace. We look at reputation, sales tactics, customer complaints, and more. We even make each processor sign a legal agreement forbidding cancellation fees, requiring interchange plus pricing, as well as a host of various other stipulations to safeguard businesses that use our service.
A recent interaction with Pivotal Payments comes as a stern reminder why we’re so thorough, and why businesses need a service like CardFellow. Our safeguards exist to keep companies like Pivotal Payments out of our marketplace.
Update: June 23, 2016 – Pivotal Payments has reached out to CardFellow with details of changes to its contract terms and liquidated damages policy. We’ve noted the changes in the relevant sections below, however, we’re leaving the original situation as a historical record. Updated policies are marked with [Updated].
Recently, we helped Tom save quite a bit on his business’s credit card processing fees. Unsure of exactly just how much he could save, Tom sent statements for us to take a look at.
After completing our free comparative analysis, we showed Tom that he would save about 31% with the best offer he received through CardFellow. The reason for the great savings was that Pivotal Payments was charging high fees on a tiered pricing model. Tom’s Pivotal Payment fees were significantly more expensive than necessary.
Per our recommendation, Tom accepted the best quote for his business. The new processor got him up and running quickly with no problems.
Tom wanted to make sure things were going to work out as expected with his new processor before he closed his existing merchant account. When he received his first statement from the processor he found through CardFellow, he was happy to see that the actual savings shown were greater than the 31% we had estimated. (We overestimate base costs in order to underestimate savings when doing comparative analyses. That way, we don’t promise more savings that aren’t there.)
Pivotal Payments fees – a $3,445 cancellation fee.
Here’s where the problems started. When Tom called Pivotal Payments to cancel his old account, he was told that he still had two years left on his merchant account contract, and the cancellation fee would be $3,445.
Pivotal Payments uses three-year auto-renewing contract terms.
Since his merchant account was seven years old, Tom figured that any term had expired. Unfortunately, Pivotal Payments has an auto-renew clause in their agreement. The contract term renews every three years, indefinitely. Tom was only given a thirty-day window every three years to cancel the agreement.
**[Updated] Pivotal Payments explains that its new contract policy is a 3-year original term, renewing automatically for one year at a time thereafter. Additionally, Pivotal states that month to month agreements may be possible for some businesses. **
When Tom called us to explain the situation, I told him that I would contact Pivotal Payments to see if there was anything that Pivotal could do. Unfortunately, termination fees are not something that processors let go easily.
I spent over an hour on the phone with Pivotal Payments, but it was clear that they had no interest in waiving their $3,445 cancellation fee.
Even though we weren’t able to get Tom’s cancellation fee dropped, Pivotal Payments agreed to lower the fee to $400 if they couldn’t match the offer that Tom received through CardFellow. So, the ordeal with Pivotal Payments is still unraveling.
Our goal here at CardFellow is to help businesses find the best credit card processing service, and we’ll go the extra mile even if businesses are forced to stay with their current processor. We’re not done yet, though. We’re keeping a close eye on Tom’s situation with Pivotal Payments to help where we can.
Even if Tom ends up stuck with Pivotal Payments, we’ve offered him our free monitoring service to ensure Pivotal Payments sticks to their promise to match the rates he received through CardFellow.
Liquidated Damages
The reason Pivotal Payments was able to charge such a high cancellation is because it has a liquidated damages clause. A cancellation fee based on liquidated damages is determined by lost profit instead of a flat charge. For example, if a processor is making $300 a month on a business’s processing volume, and the business cancels its processing agreement ten months before the terms expires, the business will owe the processor $3,000 based on liquidated damages.
Latest Update
**[Updated] Pivotal Payments tells CardFellow that it now charges a lower flat cancellation fee of $395 for businesses processing less than $25k and $495 for businesses processing more than $25k. There is no cancellation fee for the month to month agreements. **
Update: September 26, 2012
Despite Pivotal’s hefty cancellation fee, Tom decided to switch to a processor that he found through CardFellow. I had a chance to catch up with Tom during his free rate audit, a service available to CardFellow clients. Tom told me his dealings with Pivotal Payments are finally winding down.
Here’s what he said:
“We did need to close our bank account to stop Pivotal from using it like it was their bank account. We have received three phone calls from them demanding $3,445.07 that they claim that we owe them. Each time I have been very courteous and have asked them to please send me a copy of the contract that I signed, and if indeed my attorneys agreed that the money is owed, I would send a check. They agreed to send me the contract. It has now been several months and I have not received it.”
I’m happy to report that Tom is now paying about 40% less with his new processor than he was paying. Per CardFellow’s guarantee, he also doesn’t have to worry about cancellation fees in the future. Tom managed to free himself of expensive Pivotal Payments fees and secure a more competitive solution.
For those interested, a complete Pivotal Payments review is also available at CardFellow.
Great write-up Ben! I’ll definitely be reconsidering the Pivotal Payments rating during the next update.
Take care!
Amad
My advice to anyone and everyone. Whatever you do, do not sign up with Pivotal Payments! I got scammed into signing up by a sales guy, and now it is a nightmare. Pivotal forces you to stay with them by mentioning their cancellation rules, which basically rob you of thousands and thousands of dollars. Do not feed this monster anymore! They will take thousands right from your account before you know what has happened.
Pivotal Payments is a scam. With their auto renewing contract and unholy early termination fees. Their salesman assured me it was “not a contract”, now a year and a half later they withdrew $2870.00 from my account for early termination fees. If companies offered a good product at a good price there would be no reason for long term contracts with fine print.
I really wish I had take more time to review this scam payment company before I fell for thier lying sales rep’s crap. I was told repeatedly that there was no contract and that I could cancel at any time if I was not happy with their rates. The salesman assured me there would be no monthly fees, just a per transaction charge. When I received my first statement it was loaded with all kinds of fees that added up to more than 40% of the sales volume processed. I then found that the rep had neglected to give me a complete copy of the contract (I only have the first three pages of ten). It was only when I called to cancel that I was made aware of the early cancellation fee. I put a block on my bank account to prevent them from deducting this bogus charge, but that did not stop them. They simply charged my account under a different name in order to bypass the block. We will be meeting again in court. DO NOT DO BUSINESS WITH THEM!!!
I was also scammed by pivotal payments. We had a man walk into our salon identifing himself as a visa representative. He said they go to businesses to make sure they are getting the lowest rates visa has to offer. I did not realize I was signing a long term contract and did not take enough time to review all the fine print. They have continued to rob me of money even though I do not process my credit cards through them. They say you have to write a letter to cancel your contract and yes it is within a 30 day window. I am still fighting with them. Whatever you do do not use them. Every 6 months there is a new fee. PCI, statement fees, etc… In the contract they have written it so they can change the terms of the contract anytime they want and you are still obligated to the contract. Where is goverment regulation when you need it? DO NOT SIGN ANYTHING WITH THIS COMPANY!!!!!!!!!!!!
Do not use Pivatol Payments. I got taken by them, and the sales representative lied to me from the get go. He claimed there was no contract, that I could cancel at anytime with no penalties, and a 1% rate. I was only given the first page of the contract. Now my business has gone under and Pivatol Payments calls me everyday claiming I owe a $650 cancellation fee. What am I supposed to do? I explained to them nicely what had happened and I requested a copy of my contract and a bill for the fee. Well, no contract ever showed up and the cancellation fee bill is just a piece of paper that says “fee $650.”
The sad part of this story is that I saw the representative to ask about all of this and she said, “Too bad, that’s not my problem. My job is to get people to sign the paperwork — goodbye.”
I’m kicking myself everyday.
Did anyone get of those liars successfully? I wouldn’t mind if there was a single cancellation fee, but they told me I have to pay for 5 years. Any suggestion?
I signed up with Pivotal Payments in July. The high fees started immediately. My representative is no help. He did not give me a copy of my contract, so I have called the company to get a copy. It has been over a month and two calls and I still don’t have it. My representative pretty much lied about everything. He said he would save me money… nope. He said if I wasn’t happy I could switch back… nope. He won’t help, and I can’t even reach a higher person to complain. I had been with my other credit card processing company 13 years and only switched to save money. Now I am spending more. Do not sign with Pivotal Payments.
MAY 2013 –
I have been dealing with the scum known as Pivotal Payments since 2011, and they continue to punish me with extra fees and charges for almost anything and everything. They never get back to me within a reasonable time period because once they have raised my rates and added new fees the game of dragging it out begins. They want to keep charging those higher rates and fees for as long as they can. On top of that, they make it look like they are doing me a favor. As they gouge every last dollar out of me, nothing gets done. They string me along and pass me through multiple different people with different “titles” just to drag the game on further. The sales people that signed me up lie about everything to get me to sign up. They will tell you whatever you want to hear to lure you in. Do not waste your time with Pivotal Payments! They will lie to you about reducing fees! Even if they do reduce fees, they just go up again.
DON’T USE PIVOTAL PAYMENTS. I have only been with them for two months and they put a hold on my account without notice and will not let me out of the contract unless I pay a $650.00 cancellation fee. I am just going to bite the bullet and get released from these scam artist before they take me for any more money.
Sounds like it’s time for a class action lawsuit…
It is time for a class action suit, and I believe with the new enforced Code of Conduct this should be investigated. I have never seen a company more despised on the internet. With hundreds of complaints, and my personal experience, they are dishonest at best. I have an associate who eventually got a contract copy of his contract, and it is not his signature. Pivotal will write the contract for you, get it signed by fax, and you never get a final copy. A faxed contract is being challenged in most areas as possibly illegal due to the absence of a witness during signing. Check this out and challenge them.
Look at Pivotal’s BBB rating, complaints on internet, and verifiable references. If a company fails with any of the 3 move on. New York and Montreal seem to be the worst spots for card companies. I’ve been with my current company for over a year and never had an issue.
I have been trying to cancel my account with Pivotal Payments for 3 months. They have given me 3 bogus fax numbers to fax a letter of cancellation, and when I call back to confirm receipt, they tell me they never received the fax. I have never signed a contract with Pivotal Payments. I was on hold again this morning for 1 hour and 20 minutes when I requested a supervisor, and Wendy (I think their phone reps are given bogus names) told me it would be 24-48 hours before someone could call me back. Every time I called they have never had notes in their system, and when I give them the name of the person I spoke to last they tell me they have no one there by that name. I called the 1-866-447-8805 phone number and they told me I spoke to someone from American National Payments instead of Pivotal Payments, so they are passing the buck. I am writing an email to the Mo. Attorney General, to Pivotal Payments’ attorney or whoever it is in Quebec Canada, the Better Business Bureau, and my attorney. Anyone who wants to start a class action lawsuit, I am in.
Class action is a go for me…how do we start that?
I only have 4 months remaining of my 3 year contract. My problem is trying to find where or whom to send my request to not have my contract “auto-renew.” I (and all contract holders with Pivotal Payments) am required to give 90-days notice prior to end of contract, or I get signed up automatically for 3 more years of being stuck with these scammers. No thanks.
Pivotal Payments is the biggest rip off / scam artist out there. We had a super nice sales representative come by and totally take advantage us from the beginning. He lied about the cancellation fee, and there rates are constantly changing. I’ve spent hours on the phone with them and I get no satisfaction or straight answers.
I tried 2 years ago to cancel and Pivotal said I had a 4-year contract. So I waited to cancel and then they told me I went over the 3 years and got signed up for 3 more years. I hate this company.
I can’t believe there is no class action suit against this company. I dealt with the same issues of trying to cancel my service. When I found out I had been renewed for another three years without my consent I was told a contract was sent to me. I explained that I never received a contract and asked for the address they had supposedly mailed it to I was given an old address – An address where I had not lived for 2 years prior to using their services and yet I received (to my actual address) my statements, PCI notifications, etc. no problem! How or why they had this previous address of mine was never explained. They claimed it was the address I had supplied them with and could not give me a reason why two address changes later they would still have that on file in the first place. It was never explained why I could receive all of the other information they needed to send but not the contract. Scam artists plain and simple.
I believe Pivotal Payments is a scam and a fraud. Their business model seems to be based on forcing clients to stay in a relationship with them with their crazy termination fees. Their salesperson never mentioned anything about this stuff.
Do NOT even think of doing business with these people. They are in the business or TRAPPING you into LOYALTY. Anyone currently using them should cancel their bank account – wait two weeks and tell them to GET LOST.
Think about it. If you like the service you’re getting – who needs to be trapped into NOT leaving?
Stealth auto renewals need to be banned nationwide.
Worst customer service ever. Nobody has a clue what is going on in customer service. I have even sent in multiple emails prior to even calling in for support. A simple program was all that was needed. I have had multiple issues in the past, so I wanted to be sure that this time we were ready to go before I called. I have been on the phone holding with upper level support for over an hour and still have not had any solutions. Meanwhile, I have been unable to use my terminal or assist customers. They are even refusing to call me back so that they can figure things out on their end, so I have no choice but to continue holding while they continue to waste my time!
I would like to know how to get on to the Class Action Suit, since Redpayments is a deceptive company.
I started with Redpayments about a year and a half ago. They are not even my main processing company since I use Mindbody software. But I have a terminal that is used as a back up in case the internet is down. So I had told the sales guy that it would only be for maybe one or two charges a month if that and wanted to get away for EVO which is another messed up company (which I was forced into when I need a cash advance with MCC). But anyway the sales guy never said anything about a contract, they would pay the $300 cancellation fee for Evo. So I signed up since the rates looked good.
Couple months go by and I get a call from Evo that I owe a cancellation fee, so I gave them Redpayments information and told them to call them and deal with them. Come to find out 4 months ago that they put me into collections, which messed up my credit score. Then when I call Redpayments to see what happened they said that I don’t make enough transactions to warrant them covering the fee. So being mad that I got lied to I told them then I was cancelling with them. Then they pop the surprise on me that I am in a 3 year contract and the cancellation fee is $1000. Not only do they get me put into collections, but try to strong arm me. So the lady says they will drop my monthly charge to $25 a month for the remaining of the contract. Being stuck as a small business I had no choice as I’m focused on dealing with the collection company. Then 2 months ago my terminal died on me, which I had since opening my business. So since I am not doing any charges on it don’t even think about anything. Then I get a call that I have no activity on my account. So I told them my terminal died and I don’t do charges on it so it does not matter and I am just going to waste $25 a month until my contract ends then quit.
So this woman tells me that the account will be closed in 60 days if there is no activity on it and I would be charged the cancellation fee. So I can get a free terminal for a deposit price depending on which terminal I want and just to do one charge a month to keep it active. So she emails me a form for the deposit program. I really can’t believe this company. They want me to sign an agreement with then for a terminal and try to lock me into another contract. STAY AWAY FROM REDPAYMENTS.
Has anyone talked to a Lawyer about this yet?
Pivotal pulled the same BS on us – after 8 years – charging us over $400 to get off their business. We never knew of the auto renew – and don’t even remember what month it “renews” to be able to cancel without penalty. As frustrating as it is, I couldn’t wait to be DONE with them!!!