SCOTTSDALE, Ariz. — The Federal Trade Commission should take more steps to police the acquiring industry and halt fraudulent practices, says Robert Carr, longtime CEO of Heartland Payment Systems Inc.

Independent sales organizations boost their profits by falsifying interchange rates on merchant statements, Carr said in a presentation at the Electronic Transactions Association Strategic Leadership Conference this week. ISOs also mislead processors by boarding high-risk businesses for transaction services and then camouflaging the clients' true nature, he said.

"The FTC should put a stop to it," he said.

He also chided ISOs for inserting shady provisions into the fine print of merchant contracts. In one example, a proviso gives clients 30 days to withdraw from the agreement after a rate increase, but the ISO makes certain the merchants don't know about the hike until 45 days after it takes effect.

Carr made predictions, too.

While a number of other speakers at the conference seemed puzzled over the slow adoption of mobile payments, he expressed confidence that the transition would occur soon.

Meanwhile, merchants are tiring of funding loyalty rewards, he warned.

At the same time, authentication in the cloud is overtaking Near Field Communication as a technology for mobile payments, Carr said.

"NFC has no advantage," he maintained.

Decoupled debit will quickly increase in importance, and automated clearinghouse transactions will become nearly instantaneous, Carr predicted.

Some tech companies will fail because they neglect to figure out how their handiwork will turn a profit, he said.

In conclusion, Carr urged the ETA to adopt guidelines for acquirers, offering Heartland's list of principles as a model. The principles include a "bill of rights" for merchants and another for salespeople.

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