Editor-In-Chief's Note: The following letter was received from Anthony Ogden, based on a previous article ("Terminated Merchant File [TMF] Match Accounts") written by Mr. Ogden. The following provides further ideas that should be of interest to our ISO readership.
First, I was pleased with the almost immediate response I received after publication of the "Attorney to the Rescue" article. The responses literally spanned across America. For example, I would receive telephone calls and e-mail ranging from New York in the early morning to Hawaii in the late afternoon. I gained valuable insight to the geographical dispersion of your readers and to just how widespread the TMF/MATCH problem is in the bankcard services industry.
Second, many of the responding ISOs, merchants and banks informed me that prior to The Green Sheet article, they were unaware that anyone could help them resolve their TMF/MATCH problems. This is an incredible statement given the magnitude of the TMF/MATCH on the merchant bankcard industry. The Green Sheet clearly provided its readers with a valuable resource by publication of the article in print and on the Web site. As an added positive result, I have successfully represented several Green Sheet readers (or their merchant referrals) as new clients. I convey a hearty "Well Done!" to The Green Sheet in providing real service to its readers.
Well, based on The Green Sheet reader inquiries and responses, I conducted further research and determined how I could better assist those afflicted with TMF/MATCH problems. I have identified some key or common-thread TMF/MATCH issues which deserve attention and resolution by the bankcard industry. I have also developed a mechanism for effectively dealing with these key issues.
Consider this: the acquiring side of the credit card industry is an extremely competitive environment. No doubt the participants in this arena expend enormous amounts of resources seeking to compile that lucrative portfolio of merchant accounts. Even with the expenditure of considerable resources (if you have them), other factors often limit your returns.
Not only are there new banks and ISOs entering the fray virtually everyday, there are also frequent bank and ISO mergers and acquisitions which further alter and re-shape market dynamics. Indeed, the market seems saturated with banks, ISOs, agents and related entities all pursuing a finite number of elusive new merchant accounts. Factor in the variables of minimizing risk, compliance with the prevailing laws, rules and regulations (i.e. the OCC, MasterCard International and Visa USA), and the negatives start to seriously affect your bottom line.
II. Perception of Risk
For most banks, ISOs and merchants, a TMF/MATCH listing is perceived to be as attractive as some dreadful, life threatening disease. This "perception" is the operative component which elicits risk-avoidance behavior from banks and ISOs when considering listed merchants as prospective accounts. While the merchant bankcard industry is increasingly ultra-competitive and lucrative, very few banks and ISOs want to risk signing and processing credit card transactions for the "high-risk" listed merchant. The negatives appear to outweigh the positives.
It is clear that there are certainly some merchants deservingly classified as a "high risk" and who reinforce the negative perception discussed above. However, I still contend that a significant number of legitimate merchants have been listed on the TMF/MATCH because of some good faith mistake, inadvertence, or other appearance of wrongdoing. A very real number of these listed merchants are the type of accounts that risk-averse banks and ISOs would be pleased to have in their portfolios. However, the stigma of the listing and the associated high risk of loss, whether real or perceived, remain a barrier to establishing a mutually beneficial relationship.
III. Turning Negatives into Positives to Increase Revenue
When you consider that MasterCard International estimates the number of listed merchants to be more than forty thousand (40,000+), the magnitude and ramifications are profound.
My experience as a Business Transactions Attorney has shown me that several critical factors dictate the occurrence or nonoccurrence of a successful outcome for endeavors undertaken in highly competitive markets. All other things being relatively equal, the difference between the entities which succeed versus those which fail comes down to: proper evaluation of opportunities (including those which at first appear to be negative situations), cooperative problem solving and resolution, and innovative thinking to capitalize on hidden opportunities and new markets.
Since 1994, The Law Office of Anthony L. Ogden has successfully removed merchants from the TMF/MATCH, all of whom are still processing at the time of writing this article. How is this possible? Well, consider that any merchant who is listed has suffered one of the most painful types of aversion therapy óakin to electroconvulsive or shock therapy. That is, the merchant has been rendered unable to process credit cards in a market where consumer credit is prevalent and accounts for a tremendous number of cashless sales transactions. Many of these merchants may go out of business as a result of the listing and the entire bankcard industry loses revenue from the merchant's demise.
Bear in mind that some of these merchants can be removed from the TMF/MATCH with diligent attorney inquiry, circumstance re-evaluation, and cooperative resolution with the listing bank and MasterCard International security personnel. After removal, these merchants are likely to be extremely conscientious and diligently follow the processing rules to avoid the painful experience of being terminated and listed again.
IV. The Solution in a Nutshell
Banks and ISOs can get more return for the effort they are currently expending. Banks/ISOs can turn "untouchable" merchants who are listed on the TMF/MATCH into valuable unlisted accounts by slight modification of their market approach.
The process is simple:
If the merchant is suitable for removal and is subsequently removed, everybody wins. The merchant is able to process credit cards and quickly increase revenues far greater than the retainer paid for removal. The merchant, being pleased with the removal, is very likely to process with the bank/ISO making the referral and the merchant bankcard industry benefits as a whole.
Anthony L. Ogden
