The Green Sheet Online Edition
August 24, 2009 • Issue 09:08:02
Should we become an ISO?
I am writing you from Stockton, Calif., at the University of the Pacific. I found your Web site through searches and wanted to contact you for thoughts on an idea we have been talking about here. We currently have approximately 40 active merchant accounts crossing many different types of products and services. We have been carefully reviewing what we are paying in merchant fees and have begun wondering if there is a better way. We have been preparing to go out to bid for this service, but after a very cursory review of your Web site, I am left to wonder whether or not a business can be its own ISO (or "acquirer" per www.corporate.visa.com/md/in/in_transactions.jsp). Are there laws or industry regulations that prohibit this? It would certainly seem to make sense at a glance. Does anyone there have thoughts on this? I am asking for knowledge here, nothing written in stone but whatever help, information or advice you would be willing to share would be great. Even if we cannot become an ISO or acquirer, do you have a list of companies that we could approach about merchant processing services that would offer competitive rates (all dependent upon their review of our existing merchant statements, of course)?
University of the Pacific
We referred your question to Jay D. Reeve, an attorney specializing in the payments industry. Formerly Senior Counsel and Associate General Counsel for Chase Paymentech Solutions LLC, he opened The Reeve Law Firm in July 2009. Following is his answer:
The Visa Inc. or MasterCard Worldwide rules would govern the registration procedures the University of the Pacific would need to follow if it were to become a registered ISO or member service provider (MSP). I'm not aware of any reason the university could not register if it wanted to, but the registration process is both time consuming and expensive.
It appears that your motivation to ask the questions you have may be over fees. If you become a registered ISO/MSP, you may be able to negotiate better rates with a processor, but you will also take on increased responsibilities for compliance with card company rules (including data security rules).
Further, becoming a registered ISO/MSP does not automatically guarantee that you will be able to secure better rates for the university's merchant accounts and will likely just create bigger headaches for you in the long run. My advice would be to talk to a few respected ISOs/acquirers that have a track record for taking diverse merchant processing accounts and "aggregating" them for pricing purposes only. A properly constructed processing agreement can allow you to aggregate transactions for pricing purposes, but keep the transactions separated on a merchant by merchant basis to maintain compliance with the card brand rules and applicable law. A good ISO or acquirer partner will help you save money, remain compliant with the applicable rules and avoid the burden of ISO/MSP registration.
In terms of finding a few respected ISOs, The Green Sheet cannot endorse specific companies, but many of the major ISOs and acquirers support our magazine. If you peruse the advertising within our magazine and Web site, contact several companies that interest you and then ask targeted questions about their ability to meet your needs, you should be able to find a company that will work with you to provide the kind of pricing and service you seek.
How green is The Green Sheet?
Are The Green Sheet hard copy issues recyclable? Would it be with newspapers or magazines?
Total Merchant Services
The Green Sheet is a recyclable magazine. The fact that it uses black ink only instead of a four-color process may give a it newspaper-like appearance, but the green paper upon which it is printed is magazine quality, not newsprint. Our assumption is that in recycling programs that group magazines and newspapers separately, it would be grouped with magazines. But since rules vary from community to community, it would be a good idea to check with the company providing your recycling service to make sure.
#h4 Industry pillar Marc Shultz remembered
The payments community lost a pillar Aug. 1, 2009, when Marc Shultz succumbed to the H1N1 virus (commonly referred to as the swine flu). Shultz was known for his pioneering work in wireless payments, which helped to usher in the next generation of mobile, virtual and integrated solutions at the POS. He was also Vice President, Business Development at Charge Anywhere LLC and an Electronics Transactions Association committee member. Dale Laszig, Managing Director of DSL Direct LLC, who has known Shultz professionally for many years, said, "He always put people first. He was absolutely fascinated with people and he had great personal relationships." She added that he knew the individuals attached to his accounts down to birthdays and "all the different echelons of customers." A press release issued by Charge Anywhere stated, "Marc knew how to engage an audience and cared deeply about people, volunteering his time with the Electronic Transaction Association and as a Little League coach in his hometown of Portland, Ore."
Condolences may be sent to Marc Shultz Family, 515 NW Saltzman Rd., PMB # 833, Portland, OR 97229. Memorial donations can be sent to the Marc Shultz Memorial Fund, U.S. Bank, 12550 NW Cornell Rd., Portland, OR 97229. Proceeds will fund H1N1 virus vaccination research.
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