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Table of Contents

Lead Story

Lose the price war, win the merchant


Industry Update

Tribul Merchant Services: Bullish on merchants

Visa's vigilance pays off, PCI compliance takes off

When the system is down: Yipes!

Amazon flexes muscles with flexible payments

Cashless vending catches on


Taking the kiosk to the ATM

Tracy Kitten

Industry Leader

Mary Gerdts –
Pluck and intergrity lead from bean field to board room


Knock fraudsters down with knowledge

Patti Murphy
The Takoma Group

Certify the good, blacklist the bad

Biff Matthews
CardWare International


Street SmartsSM:
Buyer beware: That means you, dear MLSs

Dee Karawadra
Impact PaySystem

Risk assessment: What you need to know

Ross Federgreen

A real-life approach

Nancy Drexler
Marketing Moguls

Primo processor practices

Adam Atlas
Attorney at Law

The key to EBT

Jason Felts
Advanced Merchant Services Inc.

Banish chargebacks through communication

Steve Schwimmer
Renaissance Merchant Services

Company Profile

All card Processing-AAMonte-USA

3 Delta Systems

New Products

Merchant boarding simplified

Product: Comprehensive merchant application
Company: United Bank Card Inc.

Easy-as-pie PCI compliance

Product: HackerGuardian PCI PLUS Daily Scanning
Company: Comodo


Feed your reps, and they'll feed you



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

August 27, 2007  •  Issue 07:08:02

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Primo processor practices

By Adam Atlas

Sometimes I run across contracts that evidence a high degree of goodwill on the part of processors. I think it's time to appreciate those responsible for creating policies that make life a little easier for you, as ISOs and merchant level salespeople (MLSs).

You cannot expect to benefit from all five of the following exemplary business practices. However, under the right circumstances, you can benefit from many of them.

1. Willingness to negotiate

Take-it-or-leave-it deals are usually bad for both parties to an agreement. Every business relationship requires a measure of customization.

A processor or processing ISO willing to negotiate the terms of an ISO or MLS agreement is signaling, from the inception of your relationship, that it is willing to accommodate some of your specific concerns and interests.

If you encounter a processor that is rigid from the start, do you think it will be cooperative if something goes wrong after you are working together?

Inevitably, conflicts arise in business relationships. When selecting a processor, get a feel for each candidate's flexibility on contractual issues, and factor that into your decision.

2. Access to decision-makers

Processors with the best negotiation techniques (from the point of view of ISOs and MLSs) make a concerted effort to appoint decision-makers within their organizations who are accessible and empowered.

Make sure you don't have to run proposed changes up five layers of command to get a seal of approval from a five-star general.

Selecting, hiring and retaining the talent required to have decision-makers at the ready is difficult. I applaud processor executives who consistently rise to the challenge of keeping talent on board.

3. Commitment to service

Some processors promise their ISOs that they will perform under merchant agreements up to a specified industry standard. Others do not. Seek companies that will make this promise to you.

Someone outside of our industry would be shocked at the absence of such a commitment. It is common practice for salespeople to impose a certain level of performance on those who deliver their products.

4. Right to assign residuals

A number of processing entities permit their respective ISOs and MLSs to assign rights in residuals to a third party. These rights, when granted, are usually subject to a right of first refusal in favor of the processor.

Remember, unless you are planning to service your merchants forever, you have to consider an exit strategy. A common way for MLSs to exit their relationships is to assign their residual rights to a third party.

If you want to do this, you must consider ongoing service obligations to your merchants, as well as the fit between the purchasing entity and the processor. Nonetheless, it is common for MLSs to be granted some rights with respect to assigning their residuals.

5. Right to move merchants

Rarely available before the end of a contract's initial term, the right to move merchants is perhaps the most difficult right to attain in our industry. But, a number of ISOs and MLSs have successfully negotiated this into their agreements.

Some processors charge an exit fee. Some demand a right of first refusal. Others impose unnecessary burdens on agents by requiring them to submit new applications for all the merchants they wish to move.

If you are given the right to move your merchants, make sure to read the conditions that apply. They may be so burdensome as to make the right ineffective.

The agreements processors offer reflect their respective corporate cultures and values. If you're given no room for negotiation, you have to wonder whether you're dealing with the best entity available.

There is fierce competition among processors for the merchants you solicit. Don't settle for partners that will not make an effort to accommodate your specific concerns and interests. And send your business to the ones that do.

In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, seek the services of a competent professional. For further information on this article, e-mail Adam Atlas, Attorney at Law, at or call him at 514-842-0886.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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