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Education

Pricing protection: Charles' top three must-haves: 1. In the event an ISO
Your buy rate and split should be safe. If pricing or the or processor sells, ask that the obligations associated
split changes after signing, it affects your commissions. with your residuals be transferred to the new owner.
2. Ask for an opportunity to be included in the sale
Charles' top three must-haves: 1. Throughout the term of the ISO portfolio at the same multiple the ISO is
of the agreement, your processing buy rate shouldn't receiving. 3. Ask for the right to sell other products to
change. If this isn't an option, ask for an ability to your portfolio without violating your agreement with
terminate the agreement. 2. Any changes for card the ISO/processor.
brand requirements should be based on an actual Document signing and renegotiation
change received by the ISO in writing. 3. Ask for a right
to review the ISO's costs in the event of a third-party Everything is finalized when documents are signed.
increase. Remember, the agreement is only fair if it's fair to both
parties.
Mitigate liability
If you have a retail deal (in which the processor When you reach the end of your contract's term, you should
holds the risk on liability), it's important to recognize be set to renegotiate your existing agreement with better
clawback clauses that could hurt your business. pricing. Changing a provider has challenges, including
attrition which was at 20 percent for Impact PaySystem on
Charles' top three must-haves: 1. Ensure you aren't our last conversion. Ask yourself whether a new deal is
liable for actions taken by the ISO or processor that lead lucrative enough to enable you to afford a 20 percent loss
to fine assessments or merchant losses. 2. Make sure in merchants.
you are not personally guaranteeing the performance
of the contracts. 3. Be aware of performance obligations During renegotiations, you should have perfect leverage
such as minimums included in the agreement. if you delivered what you promised at the beginning of
your relationship. The beauty of remaining with the same
Minimize future fees processor/ISO is that you can negotiate new pricing and
have it go into effect on all your merchants, including past
Many in this industry are known for adding merchants. Instant raise.
"compliance" or "product" fees after a contract is signed.
Such fees are simply revenue streams for the ISO/ The downside is that you're stuck with one relationship.
processor. It's essential to validate all fees ‒ present and This means you may not have access to all available
potential. platforms. This can be a deal breaker for many reasons,
such as lack of integration and unsupported hardware
Charles' top three must-haves: 1. Ask that anticipated or terminals. Eight years ago, we had only one processor
changes in pricing be communicated to you in writing. and one platform. Today, we have many platforms, which
2. Be clear about all fees you will be billed, and ask facilitates equipment placements. This alone is worth the
for the right to negotiate (or opt out of) new fees that card brand's registration fees. Do your due diligence; don't
are introduced. 3. Make any change or addition of fees settle for the first company that comes along.
a material event, and ensure you can terminate the
contract in the event of such changes. I hope you find value in this two-article breakdown of
a deal ‒ from service provider expectations to contract
Limit other liabilities: negotiations. I want to thank Charles Bishota for taking
Many other liabilities could hinder your growth. It's the time to answer my questions. Safari Njema!
imperative to limit these in your agreement.
Dee Karawadra is president and CEO of Impact PaySystem, and Emily
Charles' top three must-haves: 1. Make sure your Karawadra is the company's chief financial officer. Since 2001, Impact
rights to residuals aren't capped by the limitation of PaySystem has been a leading provider of payment processing technolo-
liability language. 2. Ensure any indemnification in the gies and services to merchants throughout the United States. Through
agreement is mutual. 3. Ensure rights to deduct fees alliances with payments industry leaders such as Chase Paymentech,
or debt from your residuals are limited to undisputed First Data, Buypass, Sage and more, Impact PaySystem offers tailored
charges or fees only.
solutions to meet the unique needs of each merchant. Dee and Emily will
Protect your portfolio: welcome your questions and comments at dee@impactpays.com and
emily@impactpays.com, respectively.
Protecting your customer portfolio is also critical when
negotiating a contract. It ranks right up there with
protecting your residuals.

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