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Payments, a retrospective
Payments, a retrospectiv e The most renowned case was when I was the star witness
for the U.S. Department of Justice in the criminal case
against Jeremy Johnson and fellow iWorks executives. It
was sobering to testify in a case where a man’s liberty was
at stake. I saw firsthand the methodical and overwhelming
evidence the U.S. attorneys brought to bear. The statement,
Don’t make a federal case out of it, remains etched in my
mind.

One professional's Accelerated innovation

During this period, developers and payments executives
journey - Part 3 learned that maintaining PCI compliance was expensive
and unnecessary. Divergent evolution produced the
superior semi-integrated solution. PC based solutions
By Ken Musante became a liability and gave way to cloud based solutions,
card accepting apps and smart terminals.
Napa Payments and Consulting
The pace of innovation quickened. Terminals became an
[Editor's note: This is the third and final article in Ken Musante's retro- afterthought and way to accept cards in a PCI-compliant
spective series. Parts 1 and 2 are available at www.greensheet.com/ fashion and with EMV capabilities. Wallet apps became a
emagazine.php?article_id=7365 and www.greensheet.com/emaga- thing. One of the first wallet apps was launched in 2012
zine.php?article_id=7402 , respectively.] by a joint venture between Verizon, AT&T and T-Mobile.
n 2008, First National Bank of Arizona/Nevada Unfortunately, they named their wallet app the same as a
was heavily invested in the mortgage market and yet to be identified Middle Eastern terrorist group — ISIS.
was among the first banks to fail. Its subsidiary The name was most unfortunate.
I Humboldt Merchant Services became an asset of
the FDIC and was sold to Moneris Solutions, U.S. as a Further, another failed large merchant payment consortium
distressed asset. added credence to Mastercard and Visa’s contention that
escalation of U.S. payment card interchange rates and fees
I was blessed to lead a company from cradle to grave, was justified because merchants on their own could never
but it was a dishonorable death. I assisted with Moneris' build as efficient a payment card acceptance network.
integration of Humboldt and driving sales. I reported to
Greg Cohen, and while I was treated well, the situation Eureka Payments had a large merchant that grew
was difficult. We sold the Humboldt Merchant Services exponentially. The merchant was referred to me by an
name and high-risk portfolio to Marc Gardner. It was a ISO because the account was in danger of being closed for
great fit. I’m pleased the Humboldt name lives on. factoring. I worked with the merchant and the processor to
register the business as a payfac and fit within the newly
Running a small ISO developed payfac rules.

After 18 months, during the depths of the great recession, The merchant was subsequently purchased by a national
I left to start a direct-to-merchant ISO, Eureka Payments. media company and grew virally through its free app and
My partners, Steve Kimberling and Scott Bartlett, and I additional utilities for youth sports teams and their fans,
built a niche portfolio. About the same time, the Durbin players and payers. The age of the payfac, as a legitimate
Amendment passed, rolling back debit rates for regulated vehicle for processing, had come.
debit transactions and effectively disabling the efficacy of
the three-tier pricing model. A new chapter

The liability shift for non-EMV transactions went into To be close to my children, I accepted a position with
effect as well. Magnetic stripe terminals, which had lasted WePay, a large payfac, now owned by JPMorgan Chase.
for decades, were replaced by EMV devices that failed I was a product manager assisting developers with
monthly and cost three times as much. integrating card-present functionalities into WePay’s
card-not-present environment. It was great first-hand
As an executive of a small ISO, I picked up a new skill: experience managing the scrum cycle and understanding
expert witness testimony. This began because a former sustainable engineering alongside marketing wants and
client reached out, believing my knowledge of the roadmap realities. At times, the "viable" within "minimum
card brand rules and industry norms qualified me. I viable product" became elusive, and reality clashed
reluctantly accepted an assignment. Doing so opened an with deadlines, but I sat shotgun in the ride to card-
entirely new line of work. (For more details, visit https:// present device certification and integrations. I met some
napapaymentsandconsulting.com/blog/f/expert-testimony.) wonderful people, but two and a half years at a large bank
is an eternity.
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