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Education

They outsource processing to suppliers just like acquiring information, scanning cardholders against OFAC sanction
banks. Indeed, some processors manage data related to lists, and monitoring cardholder activity for illegal or
both issuing and acquiring. That said, some processors suspicious transactions. For program managers that
specialize in one or the other. are FinCEN-registered, this would include submitting
suspicious activity reports to FinCEN.
The issuing bank will rely on its issuing program manager/
ISO to source an appropriate processor for a new card Why consider issuing?
issuing program. The ISO needs to account for the cost of With virtual cards and powerful gateways, card issuing
that processing service, which is always a substantial part has become much more versatile in helping cardholders,
of the start-up and operational costs of a card program. especially businesses, with expense management, fraud

control and security. Narrow margins in acquiring make
What is more, the processor will often not have all the issuing an opportunity to consider.
technology necessary for the entire card program, which
requires the ISO to develop its own technology prior to The barrier to entry in issuing can be high in terms of cost
launch—usually covering the "last mile" between the of technology and AML compliance, but it is a service that
processor and the cardholder (for example, a card app). can be an excellent complement to traditional merchant
While program-manager-in-a-box offerings do exist, the services, opening doors to a new variety of value-added
cost is always significant. services for merchants.

AML compliance for classic acquiring ISOs usually
consists of making sure names and IDs are collected In publishing The Green Sheet, neither the author nor the publisher is
from merchant owners. These are then scanned against engaged in rendering legal, accounting or other professional services. If
OFAC sanction lists by their acquiring bank or a processor legal advice or other expert assistance is required, the services of a com-
working with them. petent professional should be sought. For further information on this
article, please contact Adam Atlas, Attorney at Law via email at atlas@
On the issuing side of the business, banks expect much adamatlas.com or by phone at 514-842-0886.
more from the ISO, including collecting cardholder