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Education

StreetSmarts SM

What MLSs should expect from

ISOs and processors – Part 2

By Dee and Emily Karawadra begins, and you will typically receive a pricing schedule.
Impact PaySystem Charles' top three must-haves: 1. Make sure the NDA is

n the first article of this two-part series, published mutual for both sides. 2. Expand the NDA to include the
July 8, 2019, Emily discussed expectations merchant salesperson's information, as well as all the merchants
level salespeople (MLSs) should have of their ISOs and prospects respectively disclosed. 3. Include a non-
I or processors. This follow-up article is about con- circumvention provision. This ensures any disclosed
tract negotiations, a time when expectations can be clari- merchant or agent information is protected.
fied and set forth in writing. Pricing negotiation

Negotiating a contract involves many important steps. The pricing schedule generally lists all buying rates. When
Typically, the flow goes something like this: sign non- this is presented, it is time to negotiate splits, general buy
disclosure agreement, negotiate pricing schedule rates, etc.
agreement, negotiate agreement terms and conditions, Agreement terms and conditions negotiation
sign documents, and renegotiate.
This is a broad subject, so I have broken it into sections.
I reached out to my friend Charles Bishota, founder of
Bishota Law, for his expertise on negotiation steps. Charles Protect residuals
brings a unique perspective to his work as a payments
attorney: his career before law school included more than This is the most important part of your agreement and
12 years of employment at two major processors. I've the reason you work so hard. Residual income must be
incorporated his advice and reflections on "must haves" protected, and it's the job of the ISO/MLS to abide by
into this article. the terms and conditions.
Non-disclosure agreement Charles' top three must-haves: 1. Determine if
circumstances exist when the residuals can be taken
The non-disclosure agreement (NDA) creates a away from you. Ideally, there will be none. 2. Make
relationship between two or more parties, usually to sure you are paid residuals based on all the revenue
protect confidential and proprietary information or trade the ISO or processor receives from the merchants you
secrets. This is generally the first step in a negotiation. solicit. 3. Confirm you will receive residuals for as long
Once the NDA is executed, the discussion about pricing as the merchant is active and processing.

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