The Payments Experts Podcast
Expert payments attorneys discuss the electronic payments industry from a legal perspective.
The Payments Experts Podcast
Why Processors Freeze Accounts (And How to Avoid It) | How Merchants Survive & Even Thrive | PEP107
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Stripe approved the merchant… then froze funds and refunded customers anyway. How do you protect your business when the processor owns the relationship?
One day your payments are flowing. The next day a platform decides it “doesn’t support your product,” freezes your balance, and refunds your customers while you’re left holding the shipping bill. That risk is closer than most merchants think, especially if you rely on a single merchant-of-record provider for credit card processing, recurring billing, and customer data.
James Huber, Jeremy Stock, and special guest, Allen Kopelman, of Nationwide Payment Systems (https://nationwidepaymentsystems.com/) unpack the real-world tension between card brand rules and the free market: credit card surcharging, dual pricing, disclosure requirements, and why extreme fees push customers to competitors. From Visa and MasterCard enforcement to the practical “show me the receipt and the signage” proof points, we talk about what compliant fee programs look like and why clarity matters more than cleverness.
Then we zoom out to the bigger payments trend: software beats rate quotes. We discuss why merchants want an “easy button” experience with payment links, invoicing, ACH payments, gateway tools, and a single dashboard that ties everything together across locations and merchant accounts. On the risk side, we cover chargebacks, friendly fraud, and how monitoring programs like VAMP can ripple from banks to merchants, even when you think you’re doing everything right.
We dig into why payment rules keep shifting and why “just pass the fee along” can backfire when customers have choices. We also break down how software, data control, and smart risk management keep merchants from getting trapped by chargebacks, VAMP pressure, or a sudden processor shutdown.
•Free market reality of surcharges and customer behavior
•Why clear rules beat surprise enforcement
•Software-first selling versus rate-first selling
•The NPS1 approach to bundling cards, ACH, gateway, invoicing, and payment links
•One dashboard visibility for multi-location merchants
•What dual pricing letters and compliance checks look like
•Why Ticketmaster-style fee stacks feel unavoidable
•How VAMP changes portfolio risk and merchant exposure
•Chargeback volume, friendly fraud, and faster dispute responses
•Aggregator risk: restricted products, MATCH list, held funds, and voided batches
•Merchant of record problems and why data ownership matters
•Using CRMs and subscription tools to avoid platform lock-in
The takeaway is simple and urgent: build for control. Own your data, protect your customer relationship with a CRM or subscription layer, and avoid putting 100% of your revenue through one processor. If this helped you rethink your payment processing strategy, subscribe, share the episode with a merchant friend, and leave a quick review telling us what topic you want next.
**Matters discussed are all opinions and do not constitute legal advice. All events or likeness to real people and events is a coincidence.**
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A payments podcast of Global Legal Law Firm
When Fees Push Customers Away
SPEAKER_01Just let the free market, like if I go to the dry cleaner and the jar dry cleaner's charging me money to take my credit card, right? Um maybe I go to the dry cleaner down the street. They're not charging me. And maybe that's where I'm gonna go. And I think the free market is more important than than than worrying about all this stuff with fees. I mean, I came across a merchant recently, they were charging a 10% fee to take your credit card to pay a bill. I was like, dude, I'm not giving you 10%. Like, that's first of all, you know, you could get reported the visa.
SPEAKER_03Welcome
Welcome And Why Payments Keep Shifting
SPEAKER_03to the Payments Experts Podcast. A podcast of global legal offer. We hope you enjoyed this episode.
SPEAKER_00I mean, that's a that's the hard that's always been the hardest thing, and one of the things that payments is so much fun to work at, particularly from our angle, is it's always a moving target. Things are always changing. And you know, when I did the the um the round table or whatever you call the presentation with Rob Johnson from Visa and I'm yelling at him about the surcharging rules, and he's going, hey, you know, the you know, we'll we've got it 3% because if it's higher, you know, the Congress is gonna start getting complaints and they're gonna put regulations on us, and we don't want regulations. And I looked out at the crowd of ISO and I'm going, we'd all love clear lines to know what we're doing. Yeah. So that we can then hire James and his team to teach us how to get around that stuff. But at least if I know where the line is, I can do something about it. But right now, you know, I had companies, you know, going, what we just got, we have to change everything we're doing.
SPEAKER_01Well, just think what's gonna happen when the penny goes away. All these companies that have PO hundreds and hundreds of POS systems are gonna have to figure out how to, you know, round down or round to the nearest nickel, and how are they gonna do it? And you know, are you gonna round up, round down? Obviously, consumers might get mad if you round up instead of round down. And how are how's how's that gonna affect bookkeeping? There's a lot of stuff coming down the pike that touches touches payments, you know. There's
Software Wins Over Rate Quotes
SPEAKER_01so many things. I mean, we we're working like on our new project, the NPS1 gateway, which gives people payment links very similar to what people are doing with Stripe. So we're getting a lot of merchants using that product. It also has ACH, that's our big thing for 2026, and it also has another component you can add on that does full-blown invoicing and more different types of payment links, and that's what's exciting about this business is technology. Because I tell people every day that, and you guys have quoted me on the podcast before, Chris has quoted me a couple of times.
SPEAKER_02Several times.
SPEAKER_01If you're not selling software, you need to figure out how to sell software. Because software is what's driving business today. You can't look and look at Square, Stripe, Post, QuickBooks, all these different fintech companies. That's that's all software driven. Nobody's looking at the price of those, what those companies are charging. They're looking at the tech that is helping them run their business. And then the pricing, you know, if they're doing enough volume, they can maybe get better pricing down the road. But that's, you know, I think technology is one of the things like you anybody that's out there selling credit card machines and selling on rate, somebody walks in and has the right type of point of sale or the right SaaS product for that merchant, you're gonna lose that merch.
SPEAKER_00Yep. 100%. Well, you started
The Gap NPS1 Tries To Fix
SPEAKER_00to talk about what NPS is doing and you listed off the products, but what was the, you know, you've been doing this long enough that you're going, look, you know, there's a hole that needs to be filled. What was the gap that you saw on what's out there that encouraged you to, you know, roll out this new product?
SPEAKER_01So we worked with our main ISO that we do business with. And what we told them is, you know, when you try to put credit card, ACH, and a gateway together, and then let's say you want to add in the QuickBooks component to it, you have to go to four different vendors. So they put it all together. So now it's one vendor, and then we have our white label NPS1. So it's one vendor. You have a problem, you call one phone number up, boom, they're dealing with the whole thing. So you don't have to go get your merchant account from Allen, and then I get you an ACH company with ACH whatever, and then I have to put you on authnet, and then I got to give you a QuickBooks product. So you got all these four products, and you got to tie them all together. So we tied it all together, and then we're offering it as SaaS. So it's one monthly price, boom, you're done. And then you can choose you want to pass the fee or you don't want to pass the fee, and then and then we can do dual price, surcharge, a service fee, a convenience fee, whatever kind of fee that you want, we can we can program in there. And all this when you look at your dashboard, you're gonna see your credit card and your ACH in the same dashboard. So you don't have to log in here to see your credit card transactions, then go to another company and go look at your ACH transactions, and then go look at your gateway, and then go look at some other third-party software. This is all boom in one spot. Log in, everything is there. And that's what that's what you need. You need the easy, you know to press the easy button. You know, that's what Stripe did. They put the easy button out there. I don't have Stripe's money, but we're gonna get, we don't also we don't need to get 5,000 merchants a month. We just need 10 or 20, and we'll and we'll be kicking butt.
SPEAKER_00Yeah, yeah. I mean, it's uh certainly because you're you know, we've we had a guest on, but that says you need every business needs a C payO, you know, a certified uh, you know, C-level payments person. But with technology like yours, now maybe that's not a full-time person, or you know, the I know the way you do your business is a little more white glove um with the merchants. Like you said, you're not bringing in, you know, 5,000, you're bringing in 10, and then you're holding their hands and making sure that they're taken care of really well. Uh, but you know, if you have all of this in one place, yeah, you you know, otherwise, yeah, you do need somebody going, okay, I've got this system, this system, this system, this system. Let's tie it all together. Now, how do I get down to my PL? And oh, geez, I've spent five hours on this and I charge them 40 bucks an hour. So now the, you know, the margin's going down. Um, so I think that that's a great solution for people.
SPEAKER_01The other thing is too, is if you have multiple merchant accounts, it's all in the dashboard. So we had one of our first customers using it that eight locations, boom. They have one dashboard, they can see all eight, what's going on with all eight locations inside the dashboard? Excellent. What do you see switched from one to the other, you know, in the order?
Dual Pricing Compliance In Practice
SPEAKER_01I love it.
SPEAKER_00What do you see happening? You brought up you guys can surcharge and dual price, and I'm sure you're doing it in a compliant manner. What do you see happening with dual pricing? You know, I've I think that the the Visa hunters seem to have calmed down a little bit, uh, you know, issuing these fines, or people just aren't bugging me about it because, you know, the the rule of the land seems to have stuck that, you know, Visa's gonna get to keep doing this as long as they want for now until some people, you know, really start complaining.
SPEAKER_01We've had a couple merchants that got letters and they were doing it correctly. And we were like, okay, send a picture of a receipt, send a picture of the send a picture of your shelf, and we sent it back to Visa. And so we don't know where the disconnect was on those cases. We sent the merchant. We had one was one was a restaurant. We're like, here's the menu. It's very clearly described, it's on the receipt, says credit price, cash price, all the items are the credit price, so there's no, there's no, you know, there's no game being played. And they didn't charge the merchant the fee. One merchant did get charged, but they end up getting their money back.
SPEAKER_00Oh, that's good. Yeah, I mean, do you see this changing, moving, or is this gonna stay written in stone for the time being? I don't think anything's written in stone.
SPEAKER_01MasterCard says 4%, Visa says 3%, MasterCard's obviously not doing anything, Visa's out hammering people.
When The Free Market Breaks Down
SPEAKER_01But the other thing is it's kind of silly. Just let the free market, like if I go to the dry cleaner and the jar dry cleaner's charging me money to take my credit card, right? Um maybe I go to the dry cleaner down the street, they're not charging me. And maybe that's where I'm gonna go. And I think the free market is more important than than worrying about all this stuff with fees. I mean, I came across a merchant recently, they were charging a 10% fee to take your credit card to pay a bill. I was like, dude, I'm not giving you 10%. Like, that's first of all, you know, you could get reported to visa. I'm not gonna report you, but I'll send you an ACH and you can get an ACH from me. And they didn't really want it. And I was like, well, I'm not gonna do business with you, we're gonna go somewhere else. But we're not giving you 10% for a credit card. But it also irks me like how much money, you know, every time I buy a concert ticket from Ticketmaster, I'm like, oh, the ticket was a hundred bucks, and then by the time I'm checking out the door, I'm checking out for like 250, 260. I'm like, where did that come from? 60 bucks of taxes and ticketmaster fees and a venue fee. Well, you said it you said it.
SPEAKER_00Free market should drive it. And with Ticketmaster, you don't have a choice. They're the only ones selling tickets when you're going to your you know, Adam Sandler show. You know, you gotta see the Sandman. Yeah, exactly.
SPEAKER_01I went to see, I had to go see Sandman, he's my man, the Sandman. So I didn't go see Rob Schneider last week, loved it. He was awesome.
SPEAKER_00So, but yeah, in most places you have a choice. You know, our you know, our firm does a uh a surcharge on our fees, and they're going, just send us an ACH then. And they're going, no, I you know, I want the points. And I'm going, okay, well, you know, there you go. So yeah, that's been my whole thing is you know, we want the points. And we, you know, we sued Visa and it didn't work because they're saying, you know, we they're saying we we didn't find, we sued them by half of an ISO and said, we didn't find you, we find the bank. That's between you and the bank and the processor if you ended up getting our fine and there's some case law on point and they got it through, but they even argued in there because we're going fine, you know, but this is anti-competitive because they're steering the markets and all of this. They even said, we don't even have a surcharge or cash discount policy. That doesn't even acknowledge it. Well, so yeah, when you said it's written in stone, and I'm going, you don't have a policy, but you're out there fining people on it. Kind of sounds like what's going on in Minnesota right there. It's like, yeah, there's no policy, but we're gonna pepper spray your face.
SPEAKER_01Yeah, but they that's a little crazy what's going on there with all the fraud. I mean, it's insane how much money just poured out of the government and went down the tube somewhere.
VAMP And The Chargeback Squeeze
SPEAKER_01But, you know, the the pro you know, we just see all kinds of things going on in our business. We have issues with chargebacks, you have issues with the vamp going on right now. Banks are going over their limit, and then that's flashing back onto the merchants.
SPEAKER_00Right.
SPEAKER_01We had a big we had a big merchant, thank goodness we have two banks, so we had to shift some of their volume from bank A over to bank B because bank A was having a Vamp issue. And we don't want the merchant to get fined because that's what's gonna happen. The banks are gonna get fined, and then that's gonna trickle down to the merchants whether they're um violating VAMP themselves or not. And that's a that's another whole issue that I don't that I don't we could talk for an hour about that.
SPEAKER_00Yeah, we could talk. We've we've brought talked about it a lot of times on the podcast is real high level is you know, Vamp is saying, hey, you can only have this much, you know, fraud or chargebacks in your entire portfolio. You know, the whole the whole thing, bank, your whole thing. Before it was you could have a little here, a little here, a little here. And like you said, just spread it out. But now they're looking at the whole thing. So if you have, and everybody has chargebacks, every single business out there has had Jeremy's even said we had one. We we've had two in six years, James. We've had two. So, you know, lookout vamp, here comes global. So the you know, everybody's got them, but yeah, you know, this online businesses, you know, friendly fraud was the name of the game. I think Melissa McCarthy had a joke like a joke about it in her thing. She's got, you know, I in one of her movies, she's got, you know, like I just charge that back. I do it all the time. No worries, because it used to just be automatic. You just get it. Now it's getting a little harder to do that, but it's still not all that hard. No, you know, I went in charge.
SPEAKER_01Merchants have to spend but merchants have to spend a lot of time defending chargebacks, and sometimes it's ridiculous. It's a chargeback in a restaurant or a bar, and they can see that the person used their EMV chip there or did an Apple peg, and still these chargebacks come in. I have bars that get every weekend three, four, five chargebacks. It's crazy. And then we help them. I built uh I actually built on Chat GBT a chargeback uh fighter letter. So I just upload the chargeback and then chat GBT spits out the letter. Perfect. It's
Stripe And PayPal Risk Horror Stories
SPEAKER_01great. So, but I'll tell you, this is one of my biggest beefs in payments, okay? Is that and this is with Stripe, Square, PayPal, um, QuickBooks, pretty much those four. This is my beef with them. They board a merchant, they don't check what the person is selling. And let's say I'm selling uh peptides. I talked to a guy yesterday, said he was selling peptides on strike for three months. Then he gets put on the match list. That's messed up. I had another guy that came to me, he was selling adult novelties on PayPal for four years. Four years. Okay. Jeremy sent them to me. Okay and I got him a we got him a merchant account because we proved to the bank the guy was processing with no chargeback for four years. Why is he on the match list? Because it's an unapproved product. Why aren't Visa and MasterCard or somebody forcing them to say, hey, what is your business type? And if you're on this restricted prohibited list, we're not gonna even process your application. But yet they process the application, and then they go hit the merchant over the head. We we had another guy who came to us recently, 80 grand held, and Stripe's answer was we don't support your product, sorry. And they refunded all the 80 grand back to the card holders. Ah, wow. Then they have no merchant account, and they're like, hey, we shipped all the product the product. Right. So now, like, they come to me and we're like, okay, you gotta call all your customers, let them know they're getting a refund, and you're gonna recharge them and make sure that they're okay with it, and blah, blah, blah, blah, blah. And we worked them through like the whole thing. And it was a pain in the butt because they had to call they had to call a couple hundred people, you know, and and do all this, and they're a brand new company. Oh, we're not supporting your product. That's it. Boom. They didn't put them on the match list, thank goodness. But they did not, they didn't even process the batch. The cards were authorized and they just voided it all out.
Cosmetics, Compliance, And Chargeback Prevention
SPEAKER_00Yeah, I mean, it's one of these things that terrifies me. My wife is starting a skincare line. She's convinced, and she has people saying that, yeah, the stuff that she whipped up is the best stuff out there. And I'm thrilled, one, because you know, she's making her own goods, so you know, that's saving it, but she's getting ready to roll this out. And I'm going, this is terrifying. Do you realize you can get charge you're gonna get chargebacks for a bunch of these? And I think she's selling them for 60, 70 bucks a bottle. And I'm like, it's not just that, you know, you've lost the product and you're not getting paid. Like, let's hope. Yeah, I can't. I don't know what processor they sell.
SPEAKER_01I have some cosmetic companies, and one of the things you know, we make sure with these types of companies is we make sure we show the bank where this stuff is being made. It's not whipped up in somebody's kitchen, right? And the product label is shown on the website and has the FDA disclosure on there, and they have clear terms and conditions that when they're checking out, there's check boxes and all that. And there's a way for the person to track the packages. And if it's reoccurring, you're sending out an email going, Hey, your next delivery is coming. If you don't want it, click here to cancel. Yeah. And you're managing your business correctly. Because in those businesses, if you don't manage it correctly, all of a sudden, you know, somebody's got six bottles of cosmetics sitting on their counter, and they're like, Man, I have too much of this stuff. They're calling the phone number, nobody's answering. They're sending an email, nobody's answering them. And then bam, it's not one chargeback, it could be four, five, six chargebacks. Right. Across a bunch. So you have to so you have to be really careful in this type of business that it that you're handling it in a compliant manner, and that you're not, you know, you're not getting caught. But I hate when I get these merchants and they come to me from Stripe or PayPal or whatever, and they're like, these shouldn't even have been approved. Like, merchants don't even look at the the list of of restricted and restricted and uh excluded businesses. They don't even look at it, they just board themselves in there quick and easy. Boom. Oh, I'm approved. And sometimes they don't even have a website, the website goes up later.
SPEAKER_00Well, I think my wife's actually come into the office in about five minutes, so you're gonna have to uh stay on and give her a little lecture.
SPEAKER_02Absolutely. I was gonna note, uh, Alan, James has a very nice kitchen, though, by the way.
SPEAKER_01Okay.
SPEAKER_02If the products are made in that kitchen, it's a very nice kitchen.
SPEAKER_01Well, you know, I used to be a chef, so you know, I'll come over and cook. All right, we'll get well.
SPEAKER_00Alan, we got into about this deep of the stuff that's coming, but we are hitting my my buzzer is going off. What uh you get the last word. What's the biggest takeaway that people should be thinking about, whether it's with uh your business or payment processing ecosystem?
The Real Takeaway: Tech And Data
SPEAKER_01With payment, I think people need to think about today is if you're a merchant, think about your technology and think and also think about your data. This is one of the things that I find merchants get into a big hole with is when you're using a company like Stripe or Square, they own your data. You do not own that data. They own your customers. If you're using rec recurring transactions in your business or one-time transactions, you need to have a little CRM or a third-party subscription service running those so that you can not only control how much goes through one of those companies, maybe you want to send some of that traffic to another company down the road as you're growing. And you know, you could load balance your business better using something like ChargeBee, Recurly, there's a bunch of them, and have and and not be dependent on this, on these companies because they're the merchant of record. You're not the merchant. If they shut you off, and I believe me, I've talked to merchants doing a million, two million, five million, thirteen million a month, all of a sudden, boom, all their customer base is gone. And I think merchants really need to think about this before they run to Stripe. Stripe is not the only answer. You can come to nationwide payment systems, you can go to other companies, make sure that it's somebody you can talk to and they understand your business. We get big businesses that come to us and I'll tell them, like, listen, we're gonna, you know, we want you to have a comfort level. We're gonna get the president of the ISO on this Zoom call, and there we're gonna talk talk through this whole thing so that you have this comfort level of who's handling your money for your business. Because you, if you want to grow, that's the only way you're gonna grow. Because, you know, if you think you're gonna depend on Stripe, one day they pull the plug, your whole customer list is gone. That's it, you're done. Yep. So I want people to really think about that when they're you know signing up their businesses, because that's one of the biggest things that I see going on in the last year or two with that. And if you're a if you're in a sales agent, technology, technology, technology. Not selling technology, a terminal can be replaced every day.
SPEAKER_03And you can quote, we'll quote you on that one.
Wrap Up And Where To Learn More
SPEAKER_03Thank you for listening to this episode of the Payments Experts Podcast, a podcast of Global Legal Law Firm. Visit us online today at Global Legalaw.com. Matters discussed are all opinions that do not constitute legal advice. All events or likeness to real people, and events is a coincidence.