The Green Sheet Online Edition
January 12, 2026 • 26:01:01
When payment providers trap merchants
The fintech landscape is more competitive than ever: neobanks, payment processors, alternative payment methods, instant payments, digital wallets. Merchants don't even know what to pick. Innovation and low fees dominate every merchant's roadmap, but for some unknown reason, sourcing and evaluating payment providers are still considered something that finance takes care of. This is a BIG mistake.
Payments and banking today impact customer experience, risk management, technology, product development, data security, compliance, finance and more. These should be considered a standalone function, an essential element of the business strategy, not just a part of finance.
Even more alarming: the people managing payment providers are not adequately trained to spot the traps. Key areas such as how providers affect cash flow, contracts, compliance and other essential aspects in a business remain absent from accounting, economics courses and MBAs.
The case
One FTC case that shook the industry started with a handful of providers targeting small and midsize merchants, many with limited English proficiency, using false promises of low monthly fees (as low as zero) and significant savings. For years, these transactions were handled with hidden three-year auto-renewing contracts, and the provider failed to disclose periodic rate hikes, as well.
Thankfully, regulators stepped into action when they realized how these providers trapped merchants, and the FTC sued The First American Payment Systems LP (d/b/a Merimac Capital), along with affiliates Eliot Management Group LLC (d/b/a Sundance Payment Solutions) and Think Point Financial LLC (d/b/a Cypress Bay Solutions and Impulse Payments) in 2022.
Key allegations
The investigation uncovered a pattern of misleading commercial behavior that went far beyond aggressive sales tactics. The providers sold on the headline pricing alone and intentionally left out essential fee components, which obviously distorted the merchants’ ability to assess the real cost of their service.
Many businesses received charges from the provider even after cancellation or withdrawal of consent, which came from unfamiliar or altered company names, which made tracking even more confusing for the victims.
The cancellation journey itself added another layer of complexity to the mix, as merchants faced long, unclear processes combined with unexpected early termination fees that were all hidden behind hyperlinks in online agreements, rather than being clearly presented during the onboarding process.
Court ruling, remedies and outcomes
The proposed court order required First American to pay $4.9 million as remedy for the merchants but also introduced stricter conditions for the future. The order removed early termination fees for electronic agreements signed before April 2020 and set clear and simple cancellation procedures for all new business. The order also made transparent disclosure mandatory for all material terms with explicit, informed consent before any charges.
Refund distribution started soon after, with more than $2.6 million already returned to affected merchants by early 2025, but the case continued with a formal monitoring program.
The issue
This case highlights a much bigger issue than a simple, unfair contract or one aggressive provider. Even though banks and payment providers are private businesses fighting for profit, taking advantage of merchants' lack of knowledge creates an uneven playing field, and we face the consequences of it every day. When providers benefit from confusion rather than clarity, the motivation is to keep merchants in the dark, but this only creates more regulatory pressure and long-term instability for everyone involved. The root cause runs deeper, as payments and banking still operate without shared standards, proper education, or widely accepted frameworks that merchants could rely on when making decisions, or source providers.
Uninformed decisions and finance professionals making decisions outside of their scope and expertise leaves assumptions built on sales narratives, introductions and hidden motives instead of facts.
Unfortunately payment and banking choices often rely on guesswork rather than a planned, disciplined approach, even though cash flow is the actual bloodline of any operation. Currently the lack of knowledge encourages short-term gains (making decisions on pricing alone) at the cost of sustainable growth and industry integrity.
Why education matters
Today, only a handful of people understand how payments and banking actually work, and how the complex system traps merchants. The worst part is the lack of transparency: introducers are often the ones we trust: our accountant, lawyers or those "low-fee experts" who are all selling the merchants for the highest commission paying partner, earning off the lack of knowledge and confusion of the victims.
Only an independent payments and banking education can bring clarity across this entire chain and help businesses build a strategy that considers every aspect payments and banking affect: customer experience, risk management, technology, product development, data security, compliance, finance and more.
Knowledge is power
The First American case serves as a sharp reminder that even though providers try to trap unaware merchants with deceptive pitches and unbreakable contracts, knowledge is the ultimate escape.
As competition intensifies, only a dedicated payment strategy—led by informed leaders like the Chief Payment Officer—can turn these risks into resilient growth, ensuring cash flow stays protected, negotiations stay sharp and no provider ever holds any business hostage again. If you snooze on payments knowledge, you lose. But now you know. 
Editorial Note: Viktoria Soltesz is the CEO and founder of PSP Angels and The Soltesz Institute. She is a leading advocate for strategy-led financial operations, ethical industry practices, and structured education in an area too often overlooked in traditional business training. PSP Angels is a globally awarded, independent payment and banking consultancy that has supported over 1,000 companies in building scalable, secure financial infrastructures. The Soltesz Institute is the first and only independent online organization offering EU-accredited training and certifications focused exclusively on payments and banking. To contact Viktoria, please email viktoria@pspangels.com.
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