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Education

allow their lawyers enough time to give their contracts the
attention they deserve.

Legal ease: Lawyers, of course, have to pick up the pace and get the
work done without delay. The rush by everyone brings a
degree of excitement, but also takes a toll on quality.
Big processors do the right thing, or not
Legal culture Large payment processors used to rely on their reputations

as adroit and honest companies. Previously, when ISOs
in payments trusted in processors to pay them correctly and for the
right period of time, large processors often said, "We are
[fill in the name], and we would never do the wrong thing."
By Adam Atlas This is not true anymore.
Attorney at Law Large processors are under never-ending demand for
profit, and some have significant debt to service. Whether
fish rots from the head down. The same is true out of necessity or greed, large processors have sharpened
in business, so the saying goes. Most compa- their pencils and are ready to take more from ISOs than
nies have a corporate culture, and that culture before in negotiations, subtle contract wording or self-
A is present not only in business relations, but serving interpretation of language during the course of a
also in legal work. This shares several telling observa- contract.
tions about contemporary legal culture in the payments
industry. Recently, an ISO was selling their portfolio. Their key
Take it or leave it ISO agreement required prior consent of the processor
for assignment of the agreement, which was necessary
More than ever, my colleagues and I are working opposite to complete the transaction. The processor agreed in the
payments counsel inside large payment processors and wording of the agreement that consent for assignment
other platforms that have a take-it-or-leave-it approach would not be unreasonably withheld, delayed or
to contract negotiation. It's hard to pin the blame for this conditioned.
on one cause, but there are a handful of obvious sources.
First, in-house legal counsel are under ever-more pressure We weren't expecting any problems. How wrong we were.
to turn documents quickly in support of their internal The processor unreasonably delayed and conditioned the
business clients. This makes it harder for them to engage consent, causing considerable difficulty to our client. With
in productive negotiation, which can be time-consuming. a different culture, this would not happen.

Second, numerous products and services these days are The takeaway here is that brands are not what they
procured on a take-it-or-leave-it basis. We don't negotiate used to be. The Wirecard insolvency and other scandals
with app developers when installing or uninstalling are additional proof that we must not judge a payments
apps on our phone. This binary approach to business company by their reputation or size alone.
relationships is present in payments, too, to the detriment
of meaningful negotiations between parties. Simple is better
On the bright side, professionals are tending to use simpler
Third, more complex models may prevent adjustments to language in legal drafting. Naturally, some concepts
key concepts. Payment processors, DDA-account program
managers, prepaid issuing program managers and other, require a degree of complexity to be properly framed in
law. However, wordy agreements of yesteryear are fading
increasingly complex providers are subject to specific
constraints from payment networks, government and also away, making room for writing that is easier to understand
(though harder to write).
sponsoring banks, all of which reduce the ability to be
flexible in contract negotiations. When negotiating opposite What's in your culture? You might see the answer in how
a regulated entity, respect their legal requirements, but do
not let them use regulation as an excuse to steamroll your your lawyer represents you.
concerns.
In publishing The Green Sheet, neither the author nor the publisher is
Now is too late engaged in rendering legal, accounting, or other professional services.

Contemporary payments providers (like other businesses) If legal advice or other expert assistance is required, the services of a
are eager to eliminate all delays to going live. Legal competent professional should be sought. For further information on
review, which always takes time, can cause delays that are this article, please contact Adam Atlas, Attorney at Law by email at
never welcome. The challenge is for payments providers to atlas@adamatlas.com or by phone at 514-842-0886.
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