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Education

StreetSmarts SM

Lear n. Connect. E ngage.
Learn. Connect. Engage.

atasa Cvijano
vic
With Natasa Cvijanovic

W
ith N

Contract negotiations — Part 2

Making agent agreements great again

By Natasa Cvijanovic include agents, ISVs and ISOs, major credit card brands,
Tesla Payments hardware providers, payment gateways, and financial
institutions. She was gracious enough to provide insights,
his article's title is the extent of my political feedback and her top list of must-have and must-not-have
discourse. It is not an homage to any former provisions for any MLS or ISO agreement.
president, but rather a colleague's humor-laced
T optimism at its peak. Now, on with the second I'll begin with the obvious, which is your Schedule A. But
installment of my Street SmartsSM series on contract before I go any further, it makes sense to clarify the role
negotiations. and meaning of a Schedule A in the payments industry.
Anyone who has sold merchant services for more than
One of the most important decisions you'll have to make a week should be familiar with the importance of the
as a merchant level salesperson (MLS) is selecting the information set forth on a Schedule A. Many may gloss
right processing partner to help you build your portfolio. over this fundamental concept, but a portion of new MLSs
First and foremost, a great partner will provide you with have no idea what Schedule A is.
a competitive compensation plan, agent agreement terms
that are mutually beneficial, an unrivaled product suite, Schedule A is one of the most important documents in
continuous industry and product training, and a team our industry, and some have even referred to it as the
that is dedicated to your success. Holy Grail of merchant services. Schedule A typically
sets forth your revenue share, interchange pass-through
After completing your research and determining that you fees, transaction fees, BIN sponsorship fee, authorization
have found the ideal business partner, the next step is to and settlement fees, batch fee, monthly/statement or on
negotiate a great agreement. What makes an agreement file fee, AVS fees, PCI fees, wireless fees, chargeback and
great? retrieval fees, etc.
The all important Schedule A Your merchants pay these fees, generating revenue for your
business as a result. Your Schedule A is used to calculate
I'm not a lawyer, so I wouldn't expect you to take my your processor/ISO's costs, which are deducted from the
word for it, but I did reach out to one of the best industry revenue collected from the merchant. The resulting profit
attorneys, Jill Miller of Bodman PLC. She has been advising is shared with you in accordance with your residual split.
clients in the payments industry on contractual matters, In a nutshell, Schedule A dictates how MLSs get paid.
mergers and acquisitions for over 17 years. Miller's clients

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