Page 26 - GS131101

ChapterTitleViews

An open letter to the electronic payments

industry: Let's put a stop to criminal

practices in our industry – now!

By Robert O. Carr and designed to prey upon merchant customers, and
Heartland Payment Systems Inc. which I feel must change.
Within hours of my address, one of our industry publications
On Oct. 16, 2013, I delivered a keynote address to the published an article, titled "Heartland's Carr Calls for
Strategic Leadership Forum of the Electronic Transactions More Regulation." The article claims that I called for more
Association (ETA) on my views of the evolution of the regulation of ISOs and, in the process, offended their readers.
payments industry. At the beginning of this address, I Really? I did not specifically attack ISOs at all. In fact, all non-
told the audience that some of my comments would be banks, by definition, are ISOs, including Heartland Payment
controversial and I kept my promise, knowing that some Systems. I called out criminal and misleading practices
members of the audience would be supportive and that in our industry, specifically 1) falsifying interchange; 2)
others might be offended. Frankly, I didn't care if I offended deliberately misrepresenting MCC codes; and 3) using
some of the attendees because we need a discussion of extortion and intimidation tactics to enhance merchant
what is unethical vs. what is criminal in our industry. The retention, which extend beyond the ISO community, and
goal of my address was not to tell others how to run their called on the industry to change these practices.
business, but rather to shed light on the criminal practices
currently taking place in our industry that are duplicitous If these practices don't change, I believe the government
will be forced to step in and take action. This article
indicates that I called for the Federal Trade Commission
Has Danielle taken you on (FTC) to "police" our industry, leading to the inescapable
conclusion that our industry is incapable of telling the
your personalized truth to merchants, incapable of providing understandable
merchant statements and contracts, and incapable of
virtual tour yet? abandoning "bait and switch" tactics. But I don't think so.

I think that government regulation may be unnecessary if
we can clean up our industry on our own. But this article
is a good example of what happens in our industry all too
often. Some of those benefiting from bad behaviors look
the other way and attack the messenger in the ultimate act
of intellectual dishonesty.

My purpose in writing this letter is to ask for your help
once and for all in lifting the veil of dishonest practices
that have tarnished our great industry for decades. The
Bankcard Services Association (later to become the ETA)
was formed in 1988 for the primary purpose of ridding the
industry of the unethical practices called out by industry
journalist Linda Punch in an article called "Here Come the
Tin Men." I served as a source to Linda for that article and
am proud that I did.

In an early effort to clean up the industry, Jay Hearst, a
man of great integrity and honor, sent a letter to his
industry peers and invited them to attend a meeting in
Chicago at the O'Hare Hilton. About 15 of us showed up
for that meeting, including representatives from Peachtree,
Call Danielle directly a processor run by a known convicted felon. Recognizing
707-284-1686 that we were gathered to combat unethical practices, I
asked the group if we would be comfortable allowing
convicted felons into the organization, and the Peachtree
26
26