n the Feb. 23, 2004 issue of The Green Sheet, Marcello Paladini called for honor and integrity in the processing industry ("How to Stop the Churn and Burn: A Call for Integrity in an Unregulated Industry," issue 04:02:02). He asked each of us to step up to the plate and assume responsibility for how we conduct our businesses.

To do that, I believe we have to pay attention to some of the promises we make. In the name of marketing, we don't always say what we mean or mean what we say. So here, for the benefit of our agents and our industry, I'd like to identify what I consider to be the leading misleading promises.

Armed with the falsehoods-and the truth-our agents should now be able to identify sales pitches that really are no more than sales pitches, and read between the lines to get to the fine print. When fact is separated from fiction, all of us will be forced to speak the truth. And the entire industry will benefit.

So the next time an acquirer makes one of the following promises, call him to task, and make sure you know what he really means.

1. The residuals lies:
   "We pay residuals."
   "We pay residuals on time."
   "We pay lifetime residuals."

   The truth is, you'd better check your contract carefully before you sign it. You have a right to residuals on your accounts for as long as the business is with the processor.

   Even if it is only one account, you are entitled to be paid on that account. No processor should make you chase them for the money you've earned and that they owe you. But the truth is, many will cut off your residuals the minute you stop sending them business.

2. The interchange lie:
   "We give you a true 50-50 split."

   The question is, a 50-50 split on what? All card types, or just one? Sometimes a processor will give you a very low rate on quals, but charge much steeper fees on mid- and non-quals. And then, without saying a word, the processor passes this on to merchants in the form of fees you never knew about. So make sure you know what your true 50-50 split applies to.

3. The ownership lie:
   "This is your account. You own it."

   The fact is there is a difference between owning an account and owning the income that the account generates. So read the fine print. Because if you don't own the rights, title and interests of the account, your processor really owns the account.

   And that means you can't move it or assign the rights to anyone else. In fact, it means the processor can sell it at any time-despite your so-called ownership.

4. The guaranteed approvals lie:
   "We approve every application."

   The bad news is, this might be true. And if it is, watch out. Every application should be reviewed individually and underwritten according to its risk. If all apps are being approved, there will most certainly be a price to pay. Funds will likely be held, delaying payment to the merchant. The frustrated merchant will turn to the ISO that, at that point, will have lost a good bit of its credibility, not to mention its residuals. Guaranteed approvals on all merchant types almost always guarantees bad processing.

5. The fastest approval process lie:
   "Your merchant is approved and ready to process in minutes."

   The issue is in the meaning of the word "approved." If it means, "we'll issue a merchant ID number," then it's true. But will the merchant be ready to process? Usually not. A lot of systems need to be turned on and coordinated for a merchant to truly be live. And that takes time. So make sure that when your merchant is "approved," he's ready and able to process transactions.

6. The benefits lie:
   "We give you health insurance."

   This can work in several ways. Some companies give you health insurance by giving you a telephone number to call. Whether that call translates into reasonable health insurance for you and/or your family is really up to you, and the deal you can negotiate. Some companies hook you up with their insurance company and then deduct the premiums-with a little padding-from your residuals.

7. The technology lie:
   "Our online system gives you complete access. It's so easy to use. You won't need training. It does it all."

   We spent many hours chasing that story down. And the fact is we could find no system that really gave agents the tools they needed at a price they could afford. All modesty aside, Cynergy raised the bar on that one. And we don't know of another system that truly gives real-time access and control with the breadth of features our Vimas system has. So don't commit to a system until you really see it, use it and know what it can do.

8. The customer service lie:
   "Our customer service is unmatched."

   I laugh sometimes when I see this promise in an ad, because often the company is saying it outsources its customer service. So how do they know how good it is? Do they get accurate measurement reports? Do they know how long their customers are on hold, or how accurate the responses are, or if their customers are truly satisfied with the service? In my experience, customer service has to be monitored and explored all the time in order to be sure your responses are what they should be.

9. The service lie:
   "We care about you. And we value your #1 customer: your merchant. So we give you everything you need to service that merchant 24/7 and in four languages."

   Translation: there is a 24/7 voice recording and a Spanish-speaking person in App Processing, but they'll get her only if you really need her. When it comes to service, you need to really use your head: Are the people who run the company honest, respectable people? Do they value service above profit? Ask around. We all talk to each other. And about each other. You should know the truth about service before you sign.

10. The trust me lie:
    "We are not for sale. Don't worry, it won't change anything."

    We suggest you have an exit strategy that protects you and your portfolio. Just in case. Better yet, you should give your business to acquirers with a proven history, with a demonstrated commitment to staying in the industry, with financial strength and with management committed to long-term growth and value.

    The bottom line: If it seems too good to be true, it probably is. Let's use our heads, spot the lies and stop propagating the myths. An industry based on the truth is a better industry-for all of us.

    Cynergy Data is a merchant acquirer that provides a wide array of electronic payment processing services while continually striving to develop new solutions that meet the needs of its agents and merchants. In addition to offering credit, debit, EBT and gift card processing, along with check conversion and guarantee programs, the company offers its ISOs the ability to borrow money against their residuals, to have Web sites designed and developed, to provide merchants with free terminals, and to benefit from state-of-the-art marketing, technology and business support.
    
    Founded in 1995 by Marcelo Paladini and John Martillo, Cynergy Data strives to be a new kind of acquirer with a unique mission: to constantly explore, understand and develop the products our ISOs and merchants need to be successful, and to back it up with honest, reliable, supportive service.