The Green Sheet Online Edition
May 11, 2026 • 26:05:01
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Online tomorrow, until you grow
If your company's tagline is "online tomorrow" and you're a merchant level salesperson (MLS), you may have some explaining to do. Most prospects will think that tagline is a service promise; most underwriters will just laugh and say, "You want it when?" That was my reality when I sold merchant services in the 1990s. Payment facilitators (payfacs) would have cleaned up in those days. What merchant could resist a next-day account activation? Payfacs make onboarding fast, easy and frictionless for small businesses and multi-location enterprises.
As Merchant of Record (MoR), they assume liability for sub-merchants' processing, compliance, security and chargebacks that happen down the line. Relationships work as long as sub-merchants stay within limits but can end without warning as businesses evolve and grow.
Onboard now, underwrite later
I recently discussed the payfac phenomenon with Joel Hurley, co-founder and CEO of HMF Balling, an ISO established in 2004. The veteran-owned business specializes in high-risk business segments, including CBD, firearms, TRT and hormone therapy clinics, peptides, GLP-1/weight management, coaching, and portable buildings. In this case, the tagline and service promise are one and the same: "If it's legal, we can write it."
Hurley affirmed that traditional merchant service providers can win back customers that have been hurt by the payfac model.
They could be contractors who close larger-than-usual jobs or ecommerce businesses that rapidly scale, only to find their accounts frozen and funds held.
In most cases, he stated, there's no warning, no conversation and no clear path forward when what was sold as simplicity turns into operational risk.
"Payfacs underwrite merchants after they onboard them, not before," Hurley said. "These merchants build processing relationships that were never vetted for their specific models."
Automated risk, downstream damage
Hurley pointed out that payfacs and technology platforms build automated risk systems around statistical norms and pattern recognition. These platforms don't have the same awareness as specialized ISOs and human underwriters, who understand that a TRT clinic running large transactions is a medical services business with a high average ticket or that a portable building company processing a $60,000 order in January is having a seasonal sale.
"Specialized ISOs know what 'normal' looks like for each merchant," he said. "When a roofing contractor with a $500 average ticket closes a $28,000 job, we're not going to freeze the account or hold his funds."
Hurley recalled seeing merchants lose employees because they couldn't make payroll while $40,000 of their money sat in a reserve they couldn't touch. These actions can devastate a business, he added, because payroll doesn't stop, vendors don't wait and rents are still due.
MATCH list
Hurley noted that when payfacs and technology platforms terminate processing relationships, their merchants can sometimes land on the Member Alert to Control High-Risk Merchants (MATCH) list, a database of merchants flagged for fraud, excessive chargebacks, noncompliance and other violations.
He pointed out that merchants can avoid MATCH by implementing low chargeback ratios, transparent refund policies, good fulfillment practices and other MATCH avoidance strategies. "Most merchants don't know MATCH exists until they're on it," he said. "And once they're on MATCH, it can follow them for five years."
Former Street SmartsSM columnist Allen Kopelman, co-founder and CEO of Nationwide Payment Systems, an ISO in business since 2001, shared MATCH recovery strategies in an Oct. 27, 2025, article titled "Turn MATCH into momentum," in Issue 25:10:02 of The Green Sheet.
"[MLSs] can earn respect, trust and even referrals by addressing a TMF (terminated merchant file) issue," he wrote, citing the following ways to help merchant customers:
- Have your merchant contact the processor that placed the merchant on the list.
- Email Mastercard at matchbusinessowner@mastercard.com for more details.
- Determine the reason code.
- Resolve the issue if possible.
- Work with a high-risk payment processor experienced in MATCH list cases.
- Introduce your merchant to qualified legal counsel when necessary."
High risk, not high fraud
Hurley mentioned that the "high-risk" category could mean a number of things. A firearms retailer, for example, with 12 years in business, a solid chargeback history and loyal customer base has a different risk profile than a vitamin supplement startup with no transaction history.
ISOs and processors need to assess a merchant holistically, by business model, ticket size, refund policies, chargeback history, how they market and what their fulfillment looks like, he explained.
"The acquiring bank doesn't just look at a category; they look at a business and it's our job is to present that business accurately and completely," he said.
"Don't run a merchant through a checklist; build a case for why this account makes sense and structure it accordingly."
Hurley claimed one of the biggest misconceptions in payments is that high-risk means high-fraud. In reality, the category is defined by things like chargeback potential, regulatory environment, reputational sensitivity to acquiring banks and industry history.
This misconception costs both sides, he added. Numerous high-risk merchants think no one will work with them and enroll in payfac platforms or hide inside aggregate accounts, paying exorbitantly for accounts that could be turned off at any time.
ISOs and MLSs avoid these verticals, leaving money on the table and merchants underserved. "High-risk merchants can be well-run businesses operating in spaces that make banks nervous," he said.
"Some pay effective rates of 9 to 12 percent, thinking they have no other options."
Relationships that last
Hurley and Kopelman agreed that trusting relationships matter more than ever in the increasingly competitive, commoditized merchant services profession. "Rates are tight, technology is everywhere, and PayPal and Square aren't going away," Hurley said.
"ISOs and MLSs who are winning are the ones who go deep into specific verticals and become the knowledgeable expert merchants call when things get complicated."
Kopelman proposed that merchants who use software to manage their businesses are more willing to pay premium rates for payment processing because they need the technology.
"ISOs and MLSs who sell software-as-a-service (SaaS) and integrated POS systems backed by local, personalized service have a competitive advantage over big tech," he said, adding that relationship management and technical support will never go out of style.
Be the expert and be reachable, Hurley concluded. Those are things no app can replicate. 
Dale S. Laszig, content strategy director at The Green Sheet and founder and CEO at DSL Direct, is a payments industry journalist, creator and consultant. Connect via email at dale@dsldirectllc.com and LinkedIn at www.linkedin.com/in/dalelaszig.
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