Why Is This Stuff Still Going on?

Those of you who go to payments conferences where Heartland Payment Systems chief executive Robert O. Carr speaks know that Bob has lately taken to pointing out deceptive practices by acquirer representatives in their efforts to sell to merchants. He describes these abuses in some detail and, just to underscore his point, he also passes out a single-page rundown of some of the more egregious ones.

In this issue, under the headline “Time for the Abuse To Stop,” you’ll find a detailed examination of the same problem, with examples of merchant ripoffs ranging from rigged terminal leases to outrageous PCI fees. Like Bob Carr, author Alex Nouri is a member of the acquiring fraternity who has seen, and had, enough of these shenanigans.

Good for Bob and Alex. More top bosses with merchant processors and independent sales organizations should be talking about these practices and doing their level best to root them out. This is imperative not just because merchant-gouging is just plain unethical. It’s also important because of how it reflects shame on the industry.

In fact, the larger question Bob’s speech and handout—and Alex’s article—raise for me is why this chicanery is still going on. You see, I have a personal interest in this subject. Way back in 1989, I wrote a cover story for another magazine that described the ripoffs then running rampant in the acquiring industry—not just merchant ripoffs but also thievery committed against sales representatives by their own firms. The story carried the headline, “Here Come the Tin Men,” after the title of a then-popular movie about unscrupulous aluminum-siding salesmen.

Here we are, 26 years later, and I feel a deep sense of déjà vu as I read Alex Nouri’s article and listen to Bob Carr speak. Twenty-six years later, and so little seems to have changed. The only difference now, it seems, lies in the new opportunities for plunder opened up by the urgency surrounding EMV and other payments technologies.

As both Bob and Alex know, the best way to clean up this mess is by working at it from within the industry. The last thing you should want is for a government regulator to take an interest. As recent developments like Operation Choke Point have shown, government agencies aren’t shy about intruding into the payments business, particularly the acquiring side of the business.

I’m no evangelist for any cause, but I’m genuinely puzzled about these reports of continued abusive practices. So I ask, again, why is this stuff still going on? Why does this industry tolerate it? Why are so many so silent about it?

—John Stewart, Editor, john@digitaltransactions.net