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Education
Legal ease improve their records on individual agents. Where agent
agreements are formed electronically, there could be an
easy tie-in to agent pricing, thus ensuring that agents
ISOs going paperless are correctly paid. That kind of transparency benefits all
parties and makes the legal agreements stronger.
– a legal perspective Bank, processor and merchant
Here is where we have seen the greatest advances in
By Adam Atlas paperless contracting. A number of acquirers are able
Attorney at Law to allow ISOs and agents to board merchants through
a paperless sign-up portal. Note that there are no fewer
ndustry observers have been predicting the end of terms and no fewer pages to be accepted in the paperless
paper in acquiring for about a decade. And paper- scenario than in the regular paper scenario.
less signup of merchants is finally taking hold in
I a way that makes it increasingly normal. The U.S. That said, it's easier to keep track of 50 electronic pages
Federal Electronic Signatures in Global and National accepted by a merchant than 50 pages waiting to be faxed
Commerce Act (E-Sign) provides that, subject to certain to the ISO and then on to the acquiring bank. A paperless
conditions, electronically executed documents are legally boarding tool should permit the portal to be branded with
binding in the same manner as hard copy documents the name of the registered ISO so as to help build the
executed by hand signature. brand of the ISO in the marketplace.
In simple terms, those conditions are: The tool is also best when deployed in a collaborative
format that would allow the agent to populate a merchant
1. The electronic signature is associated with the signup form in the presence of the merchant, on an iPad or
agreement and related documents. laptop, with the merchant being able to review and accept
2. The signer consents and intends to be bound by the the terms on the spot.
agreement and related documents.
3. The agreement is delivered in an electronic record Concerning rendering bank and processor merchant
capable of retention by the recipient at the time of agreements electronic, it is important for each party
receipt (that is, print or otherwise store the electronic to agree to this process. An ISO could be in for a rude
record). surprise if a bank has not consented to electronic contract
formation, when the ISO has migrated bank paperwork
Now I'll discuss issues for ISOs to consider in relation to into an electronic sign-up portal. This is not to say that such
paperless contracts for specific types of payments industry contracts will necessarily be invalid. Instead, electronic
relationships. contract formation without consent of all parties will pose
serious challenges related to the contracts' enforceability.
Processor and ISO
If your processor does not have a paperless contract
The contract between a processor and ISO is a heavily formation solution, meet with the processor to discuss a
negotiated legal agreement. As such, it should not be timeline for implementing one. Without this kind of added
treated as a document in which the parties simply fill in efficiency, you could lose out to competitors that can sign
their names. While I have yet to see a processor provide for up merchants with greater ease.
the electronic execution of an ISO agreement,
there is no reason not to do it – provided the
drafts are editable throughout the negotiating
process.
Merchants often complain of
Paperless ISO agreements might be beneficial never having had a chance to see
in terms of recordkeeping for all parties
concerned. Today's pen-signature agreements all the terms and conditions of
are usually scanned anyway, with the
electronic scan being the definitive copy for their merchant agreements; that
party records.
ISO and agent problem is nipped in the bud by
Here again, agreements are ripe for being a well-built electronic contract
rendered paperless, provided the parties are formation platform.
able to negotiate terms before acceptance.
ISOs could benefit because transitioning to
paperless agent agreements would vastly
52
Legal ease improve their records on individual agents. Where agent
agreements are formed electronically, there could be an
easy tie-in to agent pricing, thus ensuring that agents
ISOs going paperless are correctly paid. That kind of transparency benefits all
parties and makes the legal agreements stronger.
– a legal perspective Bank, processor and merchant
Here is where we have seen the greatest advances in
By Adam Atlas paperless contracting. A number of acquirers are able
Attorney at Law to allow ISOs and agents to board merchants through
a paperless sign-up portal. Note that there are no fewer
ndustry observers have been predicting the end of terms and no fewer pages to be accepted in the paperless
paper in acquiring for about a decade. And paper- scenario than in the regular paper scenario.
less signup of merchants is finally taking hold in
I a way that makes it increasingly normal. The U.S. That said, it's easier to keep track of 50 electronic pages
Federal Electronic Signatures in Global and National accepted by a merchant than 50 pages waiting to be faxed
Commerce Act (E-Sign) provides that, subject to certain to the ISO and then on to the acquiring bank. A paperless
conditions, electronically executed documents are legally boarding tool should permit the portal to be branded with
binding in the same manner as hard copy documents the name of the registered ISO so as to help build the
executed by hand signature. brand of the ISO in the marketplace.
In simple terms, those conditions are: The tool is also best when deployed in a collaborative
format that would allow the agent to populate a merchant
1. The electronic signature is associated with the signup form in the presence of the merchant, on an iPad or
agreement and related documents. laptop, with the merchant being able to review and accept
2. The signer consents and intends to be bound by the the terms on the spot.
agreement and related documents.
3. The agreement is delivered in an electronic record Concerning rendering bank and processor merchant
capable of retention by the recipient at the time of agreements electronic, it is important for each party
receipt (that is, print or otherwise store the electronic to agree to this process. An ISO could be in for a rude
record). surprise if a bank has not consented to electronic contract
formation, when the ISO has migrated bank paperwork
Now I'll discuss issues for ISOs to consider in relation to into an electronic sign-up portal. This is not to say that such
paperless contracts for specific types of payments industry contracts will necessarily be invalid. Instead, electronic
relationships. contract formation without consent of all parties will pose
serious challenges related to the contracts' enforceability.
Processor and ISO
If your processor does not have a paperless contract
The contract between a processor and ISO is a heavily formation solution, meet with the processor to discuss a
negotiated legal agreement. As such, it should not be timeline for implementing one. Without this kind of added
treated as a document in which the parties simply fill in efficiency, you could lose out to competitors that can sign
their names. While I have yet to see a processor provide for up merchants with greater ease.
the electronic execution of an ISO agreement,
there is no reason not to do it – provided the
drafts are editable throughout the negotiating
process.
Merchants often complain of
Paperless ISO agreements might be beneficial never having had a chance to see
in terms of recordkeeping for all parties
concerned. Today's pen-signature agreements all the terms and conditions of
are usually scanned anyway, with the
electronic scan being the definitive copy for their merchant agreements; that
party records.
ISO and agent problem is nipped in the bud by
Here again, agreements are ripe for being a well-built electronic contract
rendered paperless, provided the parties are formation platform.
able to negotiate terms before acceptance.
ISOs could benefit because transitioning to
paperless agent agreements would vastly
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