Visa – Cracking Down on Rogue Merchant Service Companies

Jon Perry

Jon Perry

Visa Business News published on May 20, 2009 it is taking very seriously Third Party Agents (TPA) (formerly regarded as Independent Sales Organizations or ISO).  Visa is a multi-billion dollar brand and it wants to protect its image.  With security breaches by major processors and Payment Card Industry (PCI) Compliance a requirement, Visa is firing a warning shot across the bow.  It is letting those who remain unregistered know they are watching.

Unlike many industries, such as insurance or financial instruments, there are no licensing requirements in the merchant services industry.  Basically, if you can fog a mirror, you’re in.

An Accident Waiting to Happen

When a merchant signs an agreement, it is the agent that must have integrity, honesty and an understanding of  PCI Compliance.  Non registered TPAs have much less understanding of regulations and requirements.  They are unable to help the merchant navigate the waters of compliance and consumer safety.  If an infraction occurs, the merchant will bear stiff financial penalties.  Section 1.6.D Fines and Penalties Schedule of Visa International Operating Regulations can fine both the merchant and the acquiring bank that oversees the merchant’s processing.  Fines range from $5,000 to $25,000 per occurrence.  For many merchants, one infraction could put them out of business.

The TPA registration process is thorough.  Full and complete financial and background checks are performed.  Pictures are taken of the TPAs office.  The TPA themselves must be PCI Compliant.  With non-registered TPAs, the merchant doesn’t know if any background check has been completed, let alone the character of the agent.  It is this unregistered agent the merchant provides his driver’s license number, social security number and other data required by governing authorities.

In a world with identity theft and unscrupulous individuals, merchants take unnecessary risks when they provide their personal information to unknown, unregistered agents.

Is your merchant services agent registered?  You’ll find us on page 40 under our old URL

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