Is what the FTC is saying about Qualpay accurate?
The picture painted by the FTC is far from the whole truth, and many of its allegations are taken out of context. The reality is that Qualpay worked cooperatively with the FTC for more than a year and even sought direction from the FTC about whether to terminate MOBE. Qualpay processed for MOBE for about 18 months, and for the vast majority of that time, we were cooperating with the FTC. During that time, we terminated underperforming MOBE accounts, brought MOBE’s chargebacks way down, and worked hard to ensure that MOBE complied with our applicable card brand rules. Through our own monitoring processes, Qualpay even stopped MOBE from running certain transactions that the FTC complained about. We never have and would never work with a merchant we believe was engaged in unfair or deceptive conduct.
If risk and underwriting staff thought Qualpay should close MOBE down, why didn’t the Company do it?
Qualpay did close down certain of the MOBE businesses that were not performing in accordance with card brand rules. The accounts that were performing within card brand rules were allowed to remain open and were monitored very closely by our team. The FTC complaint took out of context a few isolated emails by Qualpay personnel with colorful statements. Still, it did not tell the rest of the story—which was that our risk and underwriting team met and came to consensus on how to handle the MOBE accounts.
Why did Qualpay settle?
Qualpay is not the first processor to be pursued by the FTC, and we won’t be the last. Ultimately, it just made better business sense to settle on favorable terms—with no monetary payment and with operating guidelines that we found acceptable—than to engage in protracted litigation with the federal government. Further, we excluded certain business verticals from the Order, including all Oil and Propane businesses.
Can Qualpay continue to operate?
Yes. The Order does NOT shut down Qualpay. Qualpay has plenty of working capital to continue its operations and growth. We remain committed to and continue to implement our original vision of technology-enabled solutions for our customers.
Is my merchant account with Qualpay safe?
Yes. Qualpay is actively opening new merchant accounts, servicing existing merchant relationships, and developing new products and services. The FTC’s Order restricts us from working with a small category of merchants in sectors we had already exited.
Are my card payments with Qualpay safe?
Yes. All merchant funds are deposited directly into a Sponsor Bank Settlement Account and disbursed directly to each merchant from the Settlement Account by the Sponsor Bank.
Will the FTC Order change my relationship with Qualpay?
No. Not at all and particularly in the Oil and Propane business vertical. Qualpay will continue providing best-in-class technology and service, and we’re committed to seeing our merchants succeed.
What does a “suspended” judgment mean?
From Qualpay’s perspective, a key reason to settle with the FTC was to allow Qualpay to focus exclusively on serving our clients and growing our business. Absent egregious conduct, the FTC tries not to put companies out of business. In this settlement, we agreed there would be no fine imposed on Qualpay and the typical judgment amount the FTC seeks from the processor, which is based in part on the total amount of sales volume processed, was suspended because imposing such a judgment would have impaired Qualpay’s ability to continue in business. It is a one-time analysis made at the time of the settlement.