Ten years ago, Justin Milmeister didn’t know that bankcard attorneys existed. Today, he couldn’t imagine life without them.
Milmeister is CEO of Elite Merchant Solutions, an ISO based in Van Nuys, Calif., that in the past decade has grown to a four-city operation with 60 employees. But when the company was just starting out, not having a specialized attorney almost cost Milmeister his business.
Upon reaching the one-year mark as a registered ISO, Milmeister’s sponsor bank notified him that he was supposed to start meeting a monthly quota for merchant applications. For every application he fell short, the bank would deduct $100 from his residuals each month. So if he was short 40 applications, he would owe $4,000 that month.
The news blindsided Milmeister. When he signed the ISO contract a year earlier, a salesperson had verbally explained the agreement and made no mention of any quotas. The contract terms said otherwise, but Milmeister didn’t catch the discrepancy.
“The way it was written was ambiguous at best,” he says.
With a young company that was still establishing its portfolio, Milmeister thought he would have to leave the business. Ultimately, he lucked out and got an extension from the bank that gave him some time to ramp up his sales. But his harrowing experience was an eye opener on the importance of hiring a lawyer versed in merchant acquiring.
“This is a highly specialized industry, and a lot of the terminology would not be recognized by an attorney that does not have bank card experience,” Milmeister says.
Armed with technical expertise, bankcard attorneys have carved out a small, yet powerful niche for themselves. ISOs, agents and processors have come to rely on them to draw up agreements, settle disputes in and out of court, and handle mergers and acquisitions when it comes time to buy or sell portfolios.
And at a time when thinning profit margins and increased competition has set the stage for disputes, these attorneys are in demand.
ISO & Agent caught up with five of the industry’s leading attorneys to find out where they fit into the processing realm and why ISOs, agents and other payments companies depend on them.
Below, we describe who they are and what makes them important to the acquiring industry.
Bankcard attorneys tend to deal mostly in three areas — drawing up agreements, litigation, and mergers and acquisitions.
Irvine, Calif.-based Paul A. Rianda handles all of the above, although he sees himself more as a business adviser because many of his clients come to him for his specialized knowledge and awareness of who’s doing what in the industry.
Another ISO attorney, Holli Targan, is considered one of the architects of the acquiring industry.
In her 27-year career, she has watched her clients start as tiny businesses, build robust portfolios and then sell their companies for huge profits. As their attorney, Targan guides them through the process.
She’s a partner in the Southfield, Mich., office of Jaffe Raitt Heuer & Weiss PC.
Another partner in that office, Jill Miller, makes her living keeping up with the industry’s legal cases and regulatory developments play by play, so that her clients don’t have to.
With her mentor, Targan, Miller is part of the firm’s six-member Electronic Payments Practice Group, which works to keep abreast of laws, regulations and card association developments.
In an industry where attorneys tend to fall into one of two camps — those who counsel clients, and those who litigate, Stephen Aschettino is a rare hybrid.
As a partner in New York-based Aschettino Struhs LLP, Aschettino negotiates his share of contracts.
But he can also litigate any disputes that arise, a combined set of skills that has been an asset in an increasingly competitive market.
From time to time, veteran attorneys who advise merchant acquirers can find themselves back in the courtroom, but not where you might expect. That’s how attorney Adam Atlas ends up on the witness stand.
Because he has immersed himself in industry issues, Atlas occasionally provides expert testimony in trials related to the industry.
Most of the time, however, he’s reviewing ISO agreements in his Montreal office or addressing trade-show audiences.
(An expanded version of this article is scheduled to appear in the March print issue of ISO&Agent.)