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The Green Sheet Online Edition

March 25, 2019 • Issue 19:03:02

Street SmartsSM

Some things I've learned

By Steve Norell
US Merchant Services Inc.

Editor's Note: It is with much gratitude that we bid farewell to Steve Norell as author of Street SmartsSM. He jumped in to help last summer, when we had an unexpected need for a new author. And what a superb job he has done. His articles have been honest, fresh, insightful and reflective of his extensive industry experience. We hope he will continue to submit articles for our Education and Views sections as time allows. We are also thrilled to say that Dee Karawadra is returning as Street SmartsSM author beginning with our April 13 issue. He wrote the column from April 2007 through March 2008. And this time around, his wife and business partner, Emily Karawadra, will co-author the articles. Be prepared to be inspired.

In this, my final article as Street SmartsSM author, I'll go through some things I've learned, experienced and witnessed, starting with the ISO-MLS relationship. When I entered the industry, I was a merchant level salesperson (MLS) who knew next to nothing and had no one to get answers from. So, like most MLSs, I signed with an ISO. The relationship went as far as it could until I moved my business to a different ISO, and moved again, and again, and finally, I became an ISO.

Each of those other ISOs wanted me to feel like they had my best interests at heart, and we were one big, happy family. Nothing could be further from the truth. Their main goal was to get most, if not all of my business. They did what was expected, but at the end of the day, they failed to pass on important information and, dare I say, misled me on pricing, costs, software development, marketing programs and other particulars I've since forgotten.

ISOs are out to make money. All of the dinners, trips and promotional giveaways in the world cannot hide the fact that, in the end, MLSs are paying for all of that. I'd rather have the lowest of costs versus all the trips, dinners, get togethers or whatever else they could think of. You know what else I learned? Never get married to one ISO.

Costly lawsuits

Avoid lawsuits like the plague. However if you do get involved in a legal hassle with your ISO or an MLS, ask these questions before you fork over a boatload of money:

  1. What am I suing over and is it worth it?
  2. What are my chances of winning?
  3. If I win, can I collect?

Also, most lawsuits between ISOs and MLS occur because one of the parties didn't do an adequate job of reading the agreement or get qualified professional help in understanding the agreement. This can be avoided by hiring an industry attorney – not an attorney outside the industry, but one who knows the trap doors. I've seen countless MLSs have their agreements reviewed and approved by a family attorney, only to find out later that they were paying ridiculous rates and were prisoners to a one-way contract.

Remember, the person at your ISO who treats you like family today is usually the same person who will be on the other side of the conference table during depositions. Often, it's the head of the ISO or someone at the top. Your best tool is the agreement. If you screw up your first one, get it right on the second.

Useless merchants, reps

After all these years, I can finally say that many merchants produce more grief than income. They are the small ones that do very little volume and switch at the drop of a hat. The best merchants produce good revenue, have above average volume and appreciate what you do for them. I'd rather have 100 great merchants that produce good profits than 1,000 pains in the ass. Go for quality, not quantity.

We've all seen equipment and technology come and go. Most have stood the test of time –such as Verifone, Ingenico and several others. However, one thing that drives me crazy is when a rep tells you how much he loves you and wants you to buy his product, only to switch jobs and then say his new company's product is way better than his previous employer's. Be very careful when a rep you know gets you to take a chance on a new company. I have done so only to have the company close shop, and I was left holding the bag.

Questionable recruiters

The ISO recruiter position should be done away with. It's a waste of time and money. Recruiters go from company to company, thinking they can call their list of MLS contacts to get them to send their business to them. The first thing the recruiter asks the MLS is, How many deals can you deliver a month? The MLS blows the number way up. Then the recruiter offers the moon to get the MLS to sign: lower costs, signing bonus, free equipment, new cars, a trip to Mars and so on.

The MSL signs and submits a whopping five deals a month, and they are all garbage merchants. Sound familiar? After a year or so, the recruiter gets the heave ho and goes to the next ISO to recruit again.


We are all allowed to collect the most sensitive of information from merchants, and no state, federal or local government agency, or the card brands know who we are. I have spent 20-plus years trying to institute some type of meaningful certification, only to be rejected at every turn. Visa and Mastercard don't seem to care. As I've said before, when was the last time you saw them enforce the rules pertaining to MLSs? The rules say that all MLS must market under the name of the ISO they write for, yet I know of thousands of MLSs who use their own name. No one seems to care.

Visa once had a program that required all MLSs to pay $1,000 a year to play in this arena. Unfortunately, the person who was in charge of the program retired, and it went dark. If only this program would resurface, we would see a vast improvement in the way MLSs operate in our industry. At the very least, it would greatly reduce the "Flying Monkeys" as one well-known MLS likes to call them.

I could go on and on, but it's time for me to go into the sunset and let someone else rant and rave. I really appreciate what The Green Sheet has allowed me to do with this column, and I hope everyone who has read my articles has enjoyed them and learned something. Best wishes to all, and go out and sell something. end of article

Steve Norell is director of sales at US Merchant Services Inc. Based in Port St. Lucie, Fla., he oversees the USMS sales force and maintains the company's bank and processor relationships. You can reach him by email at steven@usmsllc.com or by phone at 772-220-7515.

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