What is PayNet Merchant Services Inc.?

PayNet Merchant Services Inc., founded in 1995, is an independent sales organization/merchant services provider (ISO/MSP) registered with Mastercard and Visa as an agent of Harris Trust & Savings Bank, of Chicago. We're also an agent of Card Payment Systems, of New York, and American Express. We facilitate the acceptance of all forms of credit and debit cards by a wide range of merchants nationally. About one-fourth of our clients are new merchants, while three-fourths are established merchants who turn to us for enhanced services and/or competitive pricing.

What makes PayNet different?

Focus: Credit card processing is our only business. We don't loan money, maintain deposit accounts or spread ourselves thin selling vaguely related products and services.

Expertise: When you call us, you'll reach a well-trained professional. Rely on us for expert advice on:

• Shopping for a merchant account.
• The right processing solutions for your business.
• Card acceptance rules and regulations, which can expose you to risk, but which can also protect you from risk.

Service: Our clients get fast, accurate answers to their questions and problems. PayNet's sales and customer service staff members are supplemented by 24-hour, 7-day help desks, not replaced by them.

Integrity: In an industry rife with abuse, PayNet stands out. Our extensive knowledge and service is backed by competitive and fair pricing. We don't hide fees, and we don't engage in abusive business practices such as equipment leasing. The extraordinary loyalty of our customers is proof of our winning formula.

What exactly are Mastercard and Visa?

Mastercard and Visa are associations of member banks. The associations, large organizations in their own right, set the rules and regulations under which member banks and their agents must operate. They also develop, promote and manage the Mastercard and Visa brands, and operate the systems through which member banks clear and settle transactions.

How is the bankcard processing industry structured,
and where does PayNet fit in?

The bankcard industry has two sides: the card-issuing side, and the merchant processing (or "acquiring") side. PayNet is on the processing side, where member banks, their registered agents and other registered third parties make it possible for merchants to accept credit cards. The various functions involved include sales, service, so-called "front-end" processing (providing merchants with the means to authorize, capture and submit data), and so-called "back-office" processing (which includes settlement of funds and bookkeeping). PayNet sells and services its merchant accounts, and outsources other functions through its relationships with numerous vendors.

What does it mean to be "registered," and why is it
important to deal only with member banks or
registered ISO/MSPs?

Regulation and control are paramount concerns in the banking industry. Registration of agents is the means by which Mastercard, Visa and their member banks, under supervision of the Comptroller of the Currency, maintain control of the credit card processing industry and the integrity of the Mastercard and Visa brands. Registered agents are required to disclose their bank affiliation(s) -- and freely and proudly do so -- on all sales or marketing materials that contain the Mastercard or Visa trademarks. To the detriment of the industry -- and to many merchants -- a significant number of unregistered operators exists. Unregistered operators tend to be less informed, less accountable, more prone to make false representations regarding merchant account terms and conditions, less diligent in providing important training to merchants, less able to perform crucial service functions and less likely to maintain close merchant relationships. Merchants who deal with member banks and their registered agents will be better informed, receive better service and are more likely to develop long-term, mutually rewarding relationships.