By Missy Baxter
ATMmarketplace.com
This story was originally published on ATMmarketplace.com, July 12, 2007; reprinted with permission. © 2007 NetWorld Alliance LLC. All rights reserved.
ISOs in Florida are experiencing the agony of political defeat, and paying a hefty price for it. On June 28, Florida Gov. Charles Crist vetoed a bill that would have allowed ATM deployers in the Sunshine State to surcharge international ATM users.
But for now, international account holders accessing accounts outside the United States will continue to have free access to cash, at least in Florida.
Visa U.S.A. and MasterCard Worldwide prohibit surcharging foreign users, except in states where state law "expressly" allows the charges.
For ISOs in vacation hot spots like Orlando, Fla., the veto is a direct hit to those ISOs' bottom lines, industry experts say.
"In the Orlando area, it's not unusual to see 40% of transaction volume coming from international cardholders," said Glen Lyons, President of Orlando-based The ATM FLA Group Inc.
Lyons would not divulge the number of ATMs he has in Orlando, but he did say the veto "will have a huge economic impact" on his business, as well as the businesses of other ISOs in the state.
"Basically, we're working for free for international cardholders, and that's not OK with me," he said.
"We all had hopes that this bill was going to make it through this year, but it ended up morphing into something else.
"We hope that the politicians or the people at Visa and MasterCard will realize that it doesn't make sense for ATM companies in the U.S. to keep giving away their services for free to foreign visitors."
To Lyons, the regulations seem unfair, especially when one considers that U.S. cardholders are routinely charged for ATM transactions they make when traveling overseas. Even soldiers pulling a tour overseas pay fees at ATMs, according to the military newspaper Stars and Stripes.
In 2006, Stars and Stripes said that some service personnel on bases in Germany have paid as much as 2% for bills at an ATM.
"It definitely doesn't seem fair that Americans have to pay the fees in other countries, but visitors coming here don't have to," Lyons said.
"It seems nonsensical to me, and it's costing businesses like mine a lot of money."
J. Michael "Mickey" Brown, President of First Bank and Trust of New Orleans and an active member of the ATM Industry Association, estimates that more than 30% of Florida's off-premises ATMs are owned by mom-and-pop operations that lose up to $3,000 a month in fees because of the lack of an international surcharge.
ATMIA, which spearheaded legislative efforts for an international surcharge, said it was surprised by Florida's veto, especially since a similar bill died last year, allegedly because of unclear wording that was challenged by Visa and MasterCard. Since then, the wording has been clarified.
"ATMIA is disappointed in this outcome, to say the least," said Lana Harmelink, ATMIA's International Director of Operations. "We have been fighting for two years to get this passed."
Harmelink said Florida's international surcharge bill, which unanimously passed the House on April 26 and the Senate (with a vote of 38-1) on May 3, was vetoed because of a May 3 amendment requested by the Florida Retail Federation.
The controversial amendment would have allowed retailers to up the late fees they charge customers with delinquent credit accounts from $10 a month to $25 a month. The complicated legislative process was part of the problem, Harmelink said.
A written statement from Crist, issued June 28, confirmed that the fate of the international-surcharge bill was adversely affected by the controversial amendment.
"The citizens of Florida are already feeling the combined weight of an immense property tax burden, escalating insurance premiums and a sharp rise in energy costs," Crist said of his reason for the veto. I do not support placing an additional burden on our citizens who are struggling financially."
"I do not support placing an additional burden on our citizens who are struggling financially." Harmelink said ATMIA plans to work with Florida legislators again next year to resurrect the bill once again.
"We will ask Rep. [Jennifer] Carroll to file the bill again next year and, in the meantime, continue to talk with Visa about overriding the international surcharge rule and grant an exemption to the rule for all nonbank-owned ATMs in the U.S.," Harmelink said.
"We also are setting up an economic research proposal to look at the impact of Visa's interchange on ISOs, retailers and consumers, and will present the proposal soon." Surcharging international users is nothing new.
Florida was poised to become the 19th state to enact international surcharging legislation.
A similar bill was recently passed in New York, allowing ATM deployers in New York to begin collecting surcharge fees in October 2007.
Although news of the New York bill's approval was a big boost for ISOs in that state, the veto in Florida was a knock in the ATM industry's face.
Michelle Fowler, a Legislative Assistant for Carroll, said news of the veto "was very disheartening," because approving an international surcharge would not add any extra tax burden to Florida's citizens.
"By not approving this, it's actually going to take money away from Florida businesses," Fowler said.
And it will impact other businesses, like Long Beach, Miss.-based Triton Systems, one of North America's largest off-premises ATM providers, as well.
Triton representatives said they're disappointed that the bill didn't pass, but they're optimistic that Florida will eventually come around, following the lead set by other states.
"It is encouraging to see that 18 states have passed legislation allowing ATM owners to treat international visitors the same as they do local consumers," said Brian Kett, Triton's President.
"The recent legislation simply closes a loophole in the law.
"The fee associated with using
an ATM is not an undue burden
on consumers, but is a convenience
fee designed to offset the costs associated
with owning and managing
an ATM." 
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