Visa requires change to merchant agreements

By Theodore F. Monroe isa U.S.A. has again changed its rules for acquirers and ISOs, thereby necessitating an immediate change in all merchant agreements. This sets the stage for sanctions by Visa and/or civil litigation for those who fail to comply. All tri-party merchant agreements (between an acquirer, an ISO and a merchant) must now include a separate, stand-alone disclosure page clearly informing the merchant that the acquirer has primary responsibility for the merchant relationship. This development is part of the Acquirer Risk Program, which Visa initiated in January 2004 to reduce the risk associated with acquirers' increasing dependence on ISOs and other agents in managing merchant relationships. The program seeks to clarify acquirers' obligations and accountability in exercising appropriate control over all aspects of operations. The disclosure page must clearly apprise the merchant of the following member bank responsibilities: A Visa member is the only entity approved to extend acceptance of Visa products directly to a merchant. A Visa member must be a principal (signer) to the merchant agreement. The Visa member is responsible for educating merchants on pertinent Visa operating regulations with which merchants must comply. The Visa member, not the ISO, must provide, administer and control settlement funds for the merchant. The Visa Member, not the ISO, must hold, administer and control all reserve funds that are derived from settlement. The disclosure page must contain the member bank's address and phone number; it must also disclose that the member is primarily responsible for the merchant relationship and may be contacted at any time for any reason. Merchant responsibilities The disclosure page must clearly inform the merchant that he or she is primarily responsible for: Complying with cardholder data security and storage requirements Maintaining fraud and chargebacks below established thresholds Reviewing and understanding the merchant agreement Complying with Visa's operating regulations. The disclosure page must include the following: Merchant's name, business address & phone number Title of the individual signing the document on behalf of the merchant Agent/salesperson's name. The page must be dated and signed by the merchant's principal owner or authorized officer to confirm that he/she has reviewed the document. A copy must be provided to the merchant at the time of signing, and the merchant must retain it. The member must also maintain a copy in the merchant's file....for more of the story from the GreenSheet