The Green Sheet Online Edition
September 10, 2007 • Issue 07:09:01
A call to AgenTalk action
I got the Aug. 13 copy of The Green Sheet ... and saw my name on the cover ["AgenTalkSM: David E. Hanlin Jr.: A colorful life, a day at a time," issue 07:08:01].
Thank you, Green Sheet, for the privilege of sharing. I'd like to see the rest of my MLS Forum buddies respond to the e-mail address at the end of each AgenTalk article [firstname.lastname@example.org] so that we can hear your little pearls of wisdom and insights.
David E. Hanlin Jr.
MLS Forum member Slick Streetman
EPI explains loss vs. risk
In the Street Smarts(tm) column ["Buyer beware: That means you, dear MLSs," by Dee Karawadra, The Green Sheet, Aug. 27, 2007, issue 07:08:02], the writer is confusing two terms, "losses" and "risk."
Albeit very similar, they are ... very different terms with entirely different results for the MLS and ISO.
As noted in the article, under our normal ISO program incorporating a $5 statement fee, EPI will incur an expense of $2.50, with the ISO also incurring a mutual expense of $2.50 where an account has generated zero revenue to cover the expense we share.
Both EPI and the ISO incur a shared loss, but while EPI has several programs that incorporate a full-liability relationship, registration and BIN sponsorship, our typical ISO/MLS program does not involve any risk for the ISO/MLS. It is a zero liability program.
The example referenced [in the article] as written on GS Online's MLS Forum deals specifically with MLSs and their revenue splits, while the author's commentary indicates that EPI forces its ISO and MLS partners to share in liability on merchant risk losses. That is emphatically not the case.
Our MLS partners do not share in liability or losses caused by ACH [automated clearing house] rejects or other merchant losses.
The above example I wrote shows that if they [the ISO/MLS] price a merchant to not incur any fees (and thus generate zero revenue), then we both share a mutual expense of a $5 statement fee in keeping that account on file -- far less than the expense thousands of dollars in ACH rejects and uncollected chargebacks would be if our MLS partners bore that burden too.
Electronic Payments Inc. (EPI)
In issue 07:08:02, I had stated that "Having a true partner that will share in your losses and your gains is key in building your portfolio. The only negative to this is that you would also share risk."
I want to clarify that in no way was I insinuating that Michael Nardy, or EPI, passed chargeback and ACH reject losses on to the MLS. I was speaking in general terms. My sincere apology to Michael Nardy.
In "A pandemic is sweeping POS terminals: Are you ready?" [By Biff Matthews, The Green Sheet, July 23, 2007, issue 07:07:02], Matthews incorrectly stated that VeriFone and Microsoft have "teamed to provide a fully integrated, end-to-end solution that incorporates credit card processing, accounting and ordering." The deal is between Microsoft and First Data Corp.
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