By Adam Atlas
Attorney at Law
The term "online marketing" seems almost quaint now, given the preponderance of marketing that takes place online. It is fitting, then, for me to provide tips on legal issues for how to promote an ISO business online today.
One of the first compliance lessons for ISOs and merchant level salespeople (MLSs) is in the application of the payment network rules. These rules are the "law of the land" in the merchant acquiring business.
Rules have been established for the branding of an ISO sales program, for example. In short, if an ISO is not registered with the payment networks (Visa Inc. and MasterCard Worldwide), it must not use its own name in sales and marketing. The name that must be used is the name of the acquirer or the registered ISO for whom one is soliciting.
Following these marketing rules is tricky in an online/social media context where one often blurs the line between personal and professional. Visa's rules are provided at www.visa.com/rules; MasterCard's are at www.mastercard.com/us/wce/PDF/13000/_MSP-Entire_Manual.pdf.
There are a few issues to keep in mind when choosing a URL for your ISO business. First, the name should bear some resemblance, if not be identical, to your registered name.
If your business name is "Acme Payments," it's better to use something like "AcmePayments.com" and not have a URL that is different from your name, such as "AcmeSolutions.com."
The reason for proximity between your URL and your registered ISO name is that you want to avoid being accused of marketing under an unregistered name. Second, be sure that the name does not belong to someone else. The fact that a given URL is available does not mean that someone else might not have rights to the URL.
A good example would be "VisaMerchantServices.com." If you were to use such a URL, it would likely be interpreted as an infringement on the rights of Visa in its brand.
Also, try to avoid names that are strikingly similar to those of your competitors. Names that are the same, but in a domain ending in something other than .com (co, .net, .biz, etc.) are risky, because the first owner of the name used in the body of the URL could make a claim against you for trying to impersonate that owner's business.
Third, don't buy just one URL. This may seem to run counter to the first two points. The idea here is to take title in your name and names that are similar to it, but not owned by other people. For example, when you find a name that is not taken, it is a good idea to buy a handful of domains with differing suffixes so as to avoid others buying similar names and diluting your brand.
Remember that your e-mail signature is the primary place where people see your company name and contact information. The signature should therefore be consistent with your company name, business card, URL, letterhead, etc.
Some ISOs keep using an old Google or Yahoo! e-mail that they first used when they started out years ago. While one should hold on to those contact systems, it's best to migrate into an integrated brand - one that is properly registered with the payment networks.
Selling merchant services may be a secondary business for you. If this is the case, make a clear distinction between sales communications for merchant services endeavors and those of your other business, which is likely to be under a different brand. Do not co-brand offerings unless you have consent from your acquirer.
Hashtags are a cornerstone of promotion. While there is generally free reign on various key words, be careful not to confuse merchants into believing they are being serviced by someone other than who you really are. Merchants should not think that your tweets are those of a bank - when they are simply tweets of an ISO or MLS.
For example, you could say you offer a great #merchantaccount, but you would not want to say you offer the only direct #bigbankmerchant account, as that is likely untrue.
Twitter allows users to create multiple identities and even ones that are not necessarily authenticated. Don't abuse this anonymity to confuse merchants, as you may face a claim from the party whose name has been used.
Make sure your social media privacy settings are set so that competitors are not able to mine your friends for merchant leads. Social media creates opportunities for ISOs to solicit new merchants and also service them - but that should be done with careful monitoring of privacy settings.
Remember, the terms of your ISO agreement might state that the merchant relationship belongs to the acquiring bank. As such, that bank would probably not want its merchant list posted for all to see.
Since you deal in ISO information, such as contact information or more sensitive financial information, you need to have a privacy policy that is compliant with federal and state laws concerning privacy.
In short, you must be sure that private, personal information is not collected, stored, used or disclosed. The only exception is specific information the user of your services has given you clear permission to employ. Failure to take applicable law into consideration and obtain proper consents could be grounds for a Federal Trade Commission claim against your business - or worse, a class action by aggrieved plaintiffs.
A healthy dose of common sense is best in navigating ISO promotions online. The payment network rules are not completely clear on all marketing scenarios. For that reason, I recommend that you obtain written consent from your acquirer for any marketing material - in any format - prior to using it.
Most ISO agreements require that kind of approval anyway. But it's easy to mistakenly think that a Facebook page leveraged off of your personal profile is somehow outside of the application of the payment network rules when that is not the case.
In publishing The Green Sheet, neither the author nor the publisher is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, seek the services of a competent professional. For further information on this article, email Adam Atlas, Attorney at Law, at atlas@adamatlas.com or call him at 514-842-0886.
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