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Education

2. What contracts should an ISO manage?

The facile answer to this question is all contracts. That
said, the allocation of resources to contract management
Legal ease: should be a function of the value or risk associated with
the contract. Merchant agreements, for example, form the
basis of the equity of a given ISO. Even if the merchant
agreements belong to the acquirer, it is not unusual for
ISOs to be the custodians of merchant agreements, at least
ISO contract management at the sign-up stage.

in the digital age Agent agreements and referral agreements are no less
important. They often contain important non-solicitation
and confidentiality provisions that need to be accessible
By Adam Atlas if they are to be enforced. If a rogue agent is stealing
Attorney at Law merchants in violation of the agent agreement, the ISO will
be hampered in its enforcement of those terms against the
agent if the ISO cannot find the agreement and prove that
long time ago, ISOs had filing cabinets full of the agent signed it.
merchant agreements; now they have cloud
folders, servers, hard drives and the odd The ISO's main ISO agreement with its acquirer is
A thumb drive. The purpose of this article is to also essential. ISOs are often parties to a series of ISO
provide helpful thoughts on contract management in the agreements, sometimes with multiple amendments.
digital age.
Each of these agreements and amendments should be
1. What is contract management? meticulously recorded in a secure ISO storage location.
Contract management is the process of managing the ISO contract management, by the way, should cover not
creation, signature and storage of contract records. only contracts and records of formation of contracts, but it
Contracts form the core basis of the value of an ISO. should also cover key correspondence under each contract,
From the ISO's main processor agreement, to its agent such as notices of price changes and notices of default.
agreements, referral agreements, employment agreements
and merchant agreements, each has a distinct role to play 3. Who should manage ISO contracts?
in protecting the ISO's business and rights under the law.
Everyone at an ISO should be aware of the importance
of contracts, but the ultimate responsibility of contract
Good contract management results in the ability to management might end up with a business operations
effectively and securely record the various forms of lead and an IT lead.
contracts in use and the contracts that are actually
executed. Most contracts are never read after they are The business operations person can ensure that each part
signed. However, a key purpose in creating a contract is of the ISO where contracts are used is sending executed
for it to serve as a record of the agreement made so that, contracts to the contract management system and
if there is a disagreement, the parties can return to the following up where there are gaps.
contract as a written record of their understanding. There
is little value in a contract that you cannot find.
On the IT side, the ISO might allocate energy to seeing that
contract management systems keep contracts secure, with
In the contemporary digital age, the record of a contract limited rights of access, archives contracts to ensure that
is often much more than simply a scan of the parties' they are not lost, and also supports easy retrieval when re-
signatures. Instead, it is a file that contains envelope quired. The greater the efficiency of contract management,
information about the time of acceptance, IP addresses of the better the ISO business is served, as discussed below.
signors, operating systems, email addresses and various
other data points that help connect a signor to a contract.

Separating the digital record of a contract from its Separating the digital record of a
envelope, or digital breadcrumbs, can be fatal to the contract from its envelope, or digital
contract archiving process because it may be hard to prove breadcrumbs, can be fatal to the contract
that the contract was accepted without that information
on file. Online contracting platforms, like Adobe Sign archiving process because it may be hard
and DocuSign, make it easy to pick up that information. to prove that the contract was accepted
ISO CRM platforms, like IRIS, also integrate with these without that information on file.
services, making it even easier to collect all the information
related to a given contract.
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