What about MLSs and international acquiring?
In response to "ISOs no longer need bank sponsorship in Europe: Are you ready to go?," by Carrie Hometh, The Green Sheet, Jan. 23, 2012, issue 12:01:02, several merchant level salespeople (MLSs) asked us whether U.S.-based MLSs can take advantage of international opportunities resulting from Europe doing away with bank sponsorship requirements, or whether this is really something only ISOs can benefit from.
And if MLSs can't benefit from this, is there another way they can break into doing business internationally?
We asked Hometh for her thoughts on this, and she said:
Payment institution licensing and full principal membership requires capital, the ability to be domiciled in Europe and full multiple currency processing capabilities. Most MLS individuals and companies find these requirements beyond their strategic, operational and financial strengths. They can benefit by reselling for a licensed institution or acquirer who has licensing in Europe.
So it appears partnerships are a way for MLSs to extend their reach beyond U.S. borders and enjoy the benefits of the new acquiring opportunities in Europe.
Passing on debit savings to merchants
Authors Jeffrey Shavitz and Adam Moss asked the following question in "Durbin - the aftermath," The Green Sheet, Jan. 23, 2012, issue 12:01:02:
"Given the new and reduced debit pricing as part of the Durbin Amendment, did you:
Lower the debit pricing on your portfolio?
Keep the pricing the same in order to increase your profitability?"
We received the following response:
The Acquirer that I am an MLS for passed 100 percent of the lower debit pricing through to 100 percent of our merchants. And they are 100 percent right to do so.
I found it very ironic that the question [about passing on debit interchange savings] was in the same issue as the Inspiration article Paul Green wrote in the same issue, "Belief makes dollars and sense."
What was the clear and obvious intent of the Durbin Amendment? There is no question that it was meant for the merchants. The intent was clearly not to increase the profits of MLSs or their ISOs. The fact that Dick Durbin did not think to make that a part of the amendment does not give us, as MLSs or ISOs, free license to increase our profits at the expense of the intended recipient.
Your question should be: If you did not pass 100 percent of the Durbin rates through to all of your merchants, please explain why you are not a crook?
And we continue to wonder why our industry gets a bad rap? ... Paul finishes his article with "Thus, when you hear horror stories about what goes on at less than ethical or careless ISOs, you can be grateful that you are not associated with them. And if you are unfortunate enough to work with such an ISO, maybe changing that situation is in order for the new year."
Exactly right, Paul. Thank you.
Bill Neville, MLS
Thank you, Bill, for your feedback. The authors asked their question in the spirit of sharing information so that all ISOs and MLSs can improve their business practices and serve merchants better. We hope more payment professionals offer feedback so the discussion can continue.
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