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Table of Contents

Lead Story

Lose the price war, win the merchant


Industry Update

Tribul Merchant Services: Bullish on merchants

Visa's vigilance pays off, PCI compliance takes off

When the system is down: Yipes!

Amazon flexes muscles with flexible payments

Cashless vending catches on


Taking the kiosk to the ATM

Tracy Kitten

Industry Leader

Mary Gerdts –
Pluck and intergrity lead from bean field to board room


Knock fraudsters down with knowledge

Patti Murphy
The Takoma Group

Certify the good, blacklist the bad

Biff Matthews
CardWare International


Street SmartsSM:
Buyer beware: That means you, dear MLSs

Dee Karawadra
Impact PaySystem

Risk assessment: What you need to know

Ross Federgreen

A real-life approach

Nancy Drexler
Marketing Moguls

Primo processor practices

Adam Atlas
Attorney at Law

The key to EBT

Jason Felts
Advanced Merchant Services Inc.

Banish chargebacks through communication

Steve Schwimmer
Renaissance Merchant Services

Company Profile

All card Processing-AAMonte-USA

3 Delta Systems

New Products

Merchant boarding simplified

Product: Comprehensive merchant application
Company: United Bank Card Inc.

Easy-as-pie PCI compliance

Product: HackerGuardian PCI PLUS Daily Scanning
Company: Comodo


Feed your reps, and they'll feed you



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

August 27, 2007  •  Issue 07:08:02

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Certify the good, blacklist the bad

By Biff Matthews

To its credit, the Electronic Transactions Association (ETA) has contemplated creating a list to spotlight the small, but significant portion of merchant level salespeople (MLSs) whose deceitful, unethical behavior wreaks havoc on the entire payments industry.

Nothing has been implemented yet. First, we need to establish how to fairly construct and maintain such a list. It goes without saying that it is paramount to prevent inaccuracies and misuse of a resource intended to warn potential customers and employers of nefarious agents.

This concern was discussed in "Bad blood blues or bona fide bad apples" The Green Sheet, Sept. 25, 2006, issue 06:09:02.

Lawsuits are a perceived risk, although there are solid, longstanding models that dispel this perception. For example, the Better Business Bureau, Angie's List and various sites for physicians that list patients (and their attorneys) who have demonstrated an affinity for malpractice actions.

Notably, challenges to information provided on these sites have often been deflated by first amendment free speech guarantees, as well as by mechanisms within the sites that allow response or clarification from the listed parties.

Two lists better than one

The best strategy would be two lists. On one, companies could add MLSs who have acted improperly. On the second, certified MLSs could add companies that have acted unethically.

It is, after all, a two-way street whose signage is well-known but not always heeded. (Read the contract. Negotiate carefully. If you can't live with the document's fine print, don't sign it.)

Like merchant contracts, agreements between acquirers and MLSs are lopsided. They are created to favor the companies and protect them from liability. But the chain of liability flows from the card Associations to the banks, ISOs, MLSs and, finally, the merchants.

Industry leadership, in particular the ETA, is the proper arbiter here. It can easily maintain the two Web-based lists of ISO and MLS rogues.

The simplest option is to list only the name of the company or individual, as well as contact information of the person or company making the post.

A more robust solution would be to include a summary of the dispute and a mechanism for adding comments. In either scenario, there should be procedures for rebuttal and for having a name removed.

Abuses will inevitably occur. Honesty and integrity in the lists' use is every bit as important as the practice of those attributes in our industry. Those abusing the lists must themselves be listed.

We've all heard the stories: A company won't post a bad MLS because it wants a competitor to hire the ne'er do well. Or, an MLS posts a company in retaliation for having been terminated with just cause.

Prudent management of postings, along with procedures for rebuttal or removal from a list will engender credibility.

This isn't genome mapping

Most readers are familiar with the Member Alert to Control High-Risk database. Called the MATCH list, it contains information on merchants who have been terminated for cause.

Member banks list merchants whose excess chargebacks, fraudulent transactions, improper cash advances, nondelivery of services or excessively restrictive refund policies make them undesirable partners.

If MasterCard Worldwide and Visa U.S.A. can maintain a credible list, the ETA can as well.

To not do so is a cop-out. What legitimate purpose does an organization have other than to advance the standards of its membership?

We all want to elevate the professionalism of the industry. To do this, banks must require ISOs to hold MLSs accountable. But because Visa and MasterCard do not hold banks accountable, this is not happening.

The card Associations' agenda has just one item: revenue generation. Their press releases say they want to "protect the brand," but by not walking the walk, they give tacit approval to the unscrupulous and thus become part of the problem.

Hundreds of honest, ethical salespeople have completed the ETA's training course. They deserve to be separated from the 2% to 3% who cause problems.

The troublemakers should be expelled. No doubt, they will go elsewhere. They likely engaged in questionable sales of used cars, stocks or subprime mortgages before joining the payments sphere. Once exposed, they will surely return to other shady endeavors.

We did not cause this problem. But we can solve it by routing out the rascals. If we don't manage our industry's reputation, they will sully it.

Responsible self-policing will prevent considerable loss.

It's time we regarded this issue seriously. We need MLS certification. The Green Sheet covered this topic in "To certify or not certify: That is the MLS question" by Dee Karawadra, May 29, 2007, issue 07:05:02, and "MLS certification: Boon or bane?" April 23, 2007, issue 07:04:02.

And let's blacklist the bad apples and gotcha-gamers at all levels. Only then will we be able to determine, with confidence, whom to partner with and whom to avoid -- without being victims first.

Biff Matthews is President of Thirteen Inc., the parent company of CardWare International, based in Heath, Ohio. He is one of 12 founding members of the Electronic Transactions Association, serving on its board, advisory board and committees. Call him at 740-522-2150 or e-mail him at

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

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