Visa U.S.A. is considering publishing a list of registered ISOs, representatives said during an April Compliance Day seminar sponsored by the Electronic Transactions Association. The company provided an overview of its Acquirer Risk Program.
The program has set a goal to review 95% of acquirers with ISOs by the end of 2007, Ginger Bergman, Director of Visa's Acceptance & Risk Compliance Group, told ISOs.
"Don't think we're going after you, because we're not. We recognize the value [ISOs provide] within the payment system, but with that comes increased risk," she said.
Acquirers need to more thoroughly review the merchants and transactions ISOs bring to them to ensure they comply with acquiring bank policies, Bergman said. "It's going to keep you in compliance."
The Office of the Comptroller of the Currency has stepped up its oversight of the ISO role in the transaction process, she added.
Two acquirers have exited the ISO business as a result of the Acquirer Risk Program, she said. Visa has performed 19 operational reviews of ISOs. Ten have validated compliance with Visa rules; seven are in remediation.
Of the two that exited the business, one was a credit union in violation of rules governing such institutions, as well as ISO rules.
"The purpose is not to drive them out of the business," Bergman said. "The acquirer decided this was not where they belonged," she said.
The other acquirer "barely met the minimum capital requirements" and discovered that one of its ISOs was starting to use a personal bank account for business purposes.
"While it's a scary thing that acquirers have exited, it speaks to what controls are about," Bergman said. "We want acquirers in the business. We just want it done right."
Acquirers newly entering the ISO business are getting upfront education to make sure rules are followed.
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