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Table of Contents

Lead Story

Warning: Merchants turning up the heat on interchange

News

Industry Update

Wal-Mart banks on the underbanked

MasterCard wins injunction against Visa

A new, happy tune for GS Online

Features

GS Advisory Board:
Value-adds: Recipe for success? Part I

Coinstar and the unbanked

Marvin Lazaro
Kiosk Marketplace and Self-Service World

The symmetry of sponsorship

Industry Leader

John McCormick –
Sharing many kinds of riches

Views

PayPal: 21st century cash

Patti Murphy
The Takoma Group

Spot-on sales savvy

Steve Schwimmer
Renaissance Merchant Services

Kicking the horse we all rode in on

Biff Matthews
CardWare International

Education

Street SmartsSM:
Veritably valuable added services

Dee Karawadra
Impact PaySystem

The lowdown on locked documents

Adam Atlas
Attorney at Law

Shape up those level 4 merchants - now

Ken Musante
Humboldt Merchant Services

10 keys to unlocking your million-dollar portfolio

Jason Felts
Advanced Merchant Services Inc.

What do your customers say about you?

Joel and Rachael Rydbeck
Nubrek Inc.

Company Profile

Central Point Resources Inc.

New Products

POS equipment fit for royalty

EZPROX, Vega9300 and Vega7000
Castles Technology Co. Ltd.

A gift-bearing kiosk

Reward and Gift Card Kiosk
Pay By Touch

Inspiration

Are you living in current reality?

Departments

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

June 25, 2007  •  Issue 07:06:02

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The lowdown on locked documents

By Adam Atlas

More often than not, you, as ISOs and merchant level salespeople (MLSs), are asked to sign standard-form agent and ISO agreements. Sometimes those documents are sent in a format that prevents you from proposing any changes.

Common formats used for this include PDF and locked Microsoft Word documents. One processor has even been sending documents that cannot be searched.

The question of negotiability arises every time a processor presents an ISO or MLS with an agreement to review and sign. The truth is everything is negotiable, the 10 Commandments and card Association rules excepted.

This article contains pointers for dealing with some typical document format issues. I hope they help you in deciding whether a given processor is right for you.

Form speaks volumes

A negotiation between a processor and an ISO or MLS typically involves the processor sending over a draft of the proposed agreement.

Take a minute to look at the format of documents you receive, and consider the story this tells about the flexibility of the entity with whom you are negotiating.

When a processor sends a new ISO or MLS a locked PDF document, for example, it is sending the message that the deal is take it or leave it. That is not what most processors want to or should convey.

If you are sent a document that cannot be searched, be on notice that the sender clearly does not want you to easily find issues of interest to you in the document.

The entity may also be trying to divert your attention from something in the agreement it does not want you to see.

In brief, the format of a document says something about the organization that sent it. In my view, all first drafts should be circulated in an unlocked Word document.

Reason opens doors

Remember, short of breaching card Association rules or asking for something a processor is unable to provide, everything in an agent or ISO deal is negotiable. Do not take a locked document as an indication otherwise.

However, just because everything is negotiable does not mean you should haggle over every clause in the agreement. That would be counter-productive.

Take a stand on important issues such as termination of residuals, notice and cure periods, limitation of liability, and the right to assign residuals or move merchants under certain conditions.

If you make unreasonable demands during your negotiations, you will put in jeopardy the issues that are most vital to your interests. When deciding what is important, consider asking the advice of an industry consultant or lawyer.

Changes can't hide

Other than wishing to avoid negotiations, one key reason a processor sends a locked draft is to prevent tampering with the document.

A devious agent could make a change to an agreement that the processor might not notice. This could give the agent an advantage in the deal, and the processor would be unaware of it at the time of the document's execution.

This concern, in my view, is unfounded. The functions that track text changes and compare documents in Word and similar software allow parties to modify wording in an agreement and identify all of the changes made, as well as compare documents to find altered text.

Locking a document for security purposes is outdated in light of how easy it is to see precisely where changes have been made.

Scanning can work

One simple solution to a locked document is to scan it into your computer system and use text recognition software to create an editable version.

This is a waste of time because an editable version of the agreement exists on the processor's system.

Nonetheless, this is sometimes the only way to put an unlocked version of the document in the hands of ISOs, MLSs or their attorneys.

Copyright matters

Most agreements are subject to copyright. Processors spend significant money on lawyers to draft their agreements according to their particular needs.

They do not want third parties to benefit from the investment they have made in the wording of their documents; hence, the locking of agreements.

ISOs and MLSs should be aware of existing copyrights and should honor them. That being said, when a processor asks for your comments on an agreement, you are put in a tough spot trying to mark up a document that cannot be edited or searched.

Openness builds trust

Always present your comments in an easily understood manner. Use the Track Changes option in Word, or highlight all the changes you propose. Never make changes to a document without telling the opposite party about them. That would be dishonest and counterproductive.

At the end of the day, trust is the most important commodity in our industry. Locked documents bespeak a lack thereof.

When examining a new agreement, pay attention to language, and read the fine print. But also consider what the format says about the organization that produced the document.

In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, seek the services of a competent professional. For further information on this article, e-mail Adam Atlas, Attorney at Law, at atlas@adamatlas.com or call him at 514-842-0886.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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