Can I Sign Maryland Banking Work Order

Industry sign banking maryland agreement now

ladies and gentlemen boys and girls it's your boy jaron rice founder and ceo of magathy payments maryland's highest rated merchant services provider back for another episode of whatever this is haven't quite figured it out yet but got a lot of good information that you the people the small business community need to know and need to understand so today i wanted to talk to you about maryland's house bill 777 which is now signed into law and what it does to protect you the small business owner from the predators in our industry whether it's the banks or the merchant services provider so when i got into this industry a little over six years ago i noticed a huge huge problem i would meet with a business owner who wanted to switch their payment processing over to us we were saving them you know a couple hundred dollars a month and then when they went to go cancel the service with their previous provider their previous provider attempted to levy fines upwards of thousands of dollars for switching their services so what happens here is oftentimes a merchant services provider or bank on their agreement for merchant services on the signature page there's a line that says by signing this document you are agreeing to our terms and services which can be located here and on the piece of paper there is a written out url that has a link to an often 75 to 100 page document which is their terms and services and buried in the middle of that huge document and six point font there is a clause that says this agreement is good for three years and if you cancel before three years we will charge a cancellation fee of 499 dollars and liquidated damages penalties of 100 200 300 a month for all of the remaining months left on the agreement so in essence the merchant services provider is saying by you taking your business elsewhere you are causing us financial harm and so we are going to bill you for our lost profit well of course they're causing you financial harm because you suck and if you didn't suck they wouldn't leave but that's a huge problem that we were dealing with so merchants were getting stuck in these agreements and the merchant services providers would give them literally a 30-day window that they were allowed to cancel that agreement or it would automatically renew right so i am a mission driven type of person i it's in my nature i cannot see a wrong being done and just be quiet and be silent about it so providentially i ran into a gentleman who was a referral he owned a cigar shop and i was telling him stories that things that i had seen in the industry about you know big banks and merchant services providers ripping off small businesses you know we were kind of trading horror stories and things that he had seen and i jokingly said to him i wish i could make that illegal right or i wish i could write a law to make that illegal something to that effect and he looked at me and he said did i mention to you that i'm a state delegate and i said no you did not but that would be useful so it's delegate seth howard here in anne arundel county and he invited me down to annapolis i met with his legislative team we hammered out a bill and it took us three years three legislative sessions to get this bill passed but basically what it does is if you are a small business in maryland you have less than 50 employees and you are processing less than two million dollars in credit card volume a year this is designed to protect you that's the majority of our clients are those small businesses so what it does is it caps all of the fees fines penalties liquidated damages um that a company can charge you at 500 so it kind of levels the playing field and makes uh it more competitive in our industry so that if you are a small business owner and you're not happy with the service that your merchant services provider is providing you can then shop elsewhere without fear of a huge financial retribution uh being levied on you for for taking your business somewhere else um it also makes it so that if your agreements automatically renew once it automatically renews there can be no fees fines or penalties levied once you're in the renewal period the information about your cancellation fees it has to be in 12 point bold font on the actual agreement that you sign and the renewal date um the the penalty for cancellation the contact information of the merchant services provider all of those have to be on the actual agreement that you sign in 12 point bold font and each individual clause has to be initialed by the merchant so this was huge in bringing transparency to our industry which is obviously not known for for being transparent um and the first couple of years we had a lot of opposition you know first data and the maryland bankers association and all of these big huge corporations that didn't want us to go forward with this legislation even though i work in the industry my industry hates me because this legislation in maryland affects how merchant services providers can compensate their sales agents because they know that they can no longer slam a merchant for thousands of dollars so they can't afford to pay this merchant sales rep you know several hundred dollars a thousand dollars in upfront bonuses knowing that they can recoup the money if they if the business takes their business elsewhere so it really ruffled some feathers and pissed off a lot of people but frankly i don't care i i believe that this is the right thing to do i am a free market capitalist i believe in the less government the better but the payments processing industry is like the wild west and these merchant services providers and big banks were running roughshod all over the small business community and i think that merchant services providers banks and their clients the actual small businesses that we should be on the same side of the table we have a vested interest in the long-term growth and success of their business why are you trying to violate the people that are your customers right i don't get that i don't understand that so you know we we took steps to change that so if you are a business owner in maryland um again you have less than 50 employees and you're processing less than two million dollars a year this applies to you this was signed in april of 2019 it went into effect october of 2019 so as of this recording this is the last day of november 2020 it is in effect and it is protecting you right now so if you have any other questions about that legislation uh you can visit www.mdhb777.com marylandhousebill777.com um and there's more information about that and how you can file a claim if you have a merchant services provider that's violating that uh regulation right so i hope that information was helpful and um we're continuing to commit to bring you some useful content hope you guys are having a great day