PEP Episode 068 — Why “Set It and Forget It” Is Costing You in Merchant Processing | Guest Rob Hoblit of NMI

In this episode number 68 of The Payments Experts Podcast, we break down the silent killers of merchant profitability: compliance gaps, outdated integrations, and poorly configured gateway flows. Managing partner of Global Legal Law Firm, James Huber, is joined by NMI (https://www.nmi.com/) Chief Revenue Officer, Rob Hoblit, to discuss how payments professionals can future-proof their merchant portfolios in an ever-evolving regulatory and card brand environment.

We cover:

• The hidden costs of “set it and forget it” payment stacks
• Why Level 2 and Level 3 data optimizations are underutilized (and how to fix that)
• The realities of surcharging, dual pricing, and state-by-state compliance
• How interoperability—not vendor lock-in—is your best defense against constant rule changes
• What it actually takes to maintain high authorization rates while reducing chargebacks and support friction

If you’re an ISO, agent, processor, or fintech pro trying to reduce risk, improve interchange qualification, and stay ahead of card brand changes, this conversation is your playbook.

Listen to the full episode and explore more insights at
https://www.globallegallawfirm.com/po…

Subscribe for weekly episodes featuring actionable guidance for navigating high-risk merchant services, surcharging regulations, and the future of payments infrastructure.

*Matters discussed are all opinions and do not constitute legal advice.  All events or likeness to real people and events is a coincidence.*

Transcript

James Huber (00:00):

Nobody in the payment space knows where the business is going. Maybe in 2020, everybody thought it was all going to crypto. Jeremy still lives in his parents’ basement because he thought it was all going to crypto’s very nice basement.

Jeremy Stock  (00:18):

I won’t say how much James lost on crypto. We

James Huber (00:21):

Were just talking about this morning. My two worst investments of my life were buying all my crypto and then selling it.

Rob Hoblit (00:28):

Paper. Hands

James Huber (00:29):

In no order.

Rob Hoblit (00:30):

It’ll kill you. Yeah.

Jeremy Stock  (00:33):

Welcome to the Payments Experts podcast, a podcast of global legal law firm. We hope you enjoy this episode.

James Huber (00:47):

Nobody in the payment space knows where the business is going. Maybe in 2020, everybody thought it was all going to crypto. Jeremy still lives in his parents’ basement because he thought it was all going to crypto, very basement. I won’t

Jeremy Stock  (01:06):

Say how much James lost on crypto.

James Huber (01:08):

We were just talking about, he was talking about this morning. My two worst investments of my life were buying all my crypto and then selling it.

Rob Hoblit (01:15):

Paper hands

James Huber (01:16):

In no

Rob Hoblit (01:16):

Order. It’ll kill you. Yeah.

James Huber (01:18):

Anyways. Yeah, no, we don’t know where it’s going. I don’t want to say where is payments going, but what are the biggest threats to people operating in the payment space? Merchants, ISOs, agents, NMI mean NMI is so big. Nothing scares that, but

Rob Hoblit (01:41):

What do you think? Well, yeah, I mean, look, I kind of feel a little strange explaining this to you because I don’t need to point out to you guys that really the shifting regulatory environment is, in my view, that’s the biggest thing that people have to keep their eye on. And whether that’s things like vamp the rules around level two and level three, things like that. Even just staying up to date with PCI requirements, we’re in the process right now of working with a lot of our customers on two-factor authentication to make sure those kind of things are up to speed. And anytime you have those kind of factors impacting your business, it clearly is something that creates a risk. But it also payments interesting industry because there’s a lot of folks who are in payments who view it as a set it and forget it kind of a thing. And I’m going to set this up, I’m going to build up my business, and then it’s just going to be on autopilot. And in many respects, I’d say it is a lot more on autopilot than a lot of other businesses, but it’s not 100% on autopilot.

James Huber (02:52):

You

Rob Hoblit (02:53):

Need to be prepared for changes. And I’d say that my take on the kind of regulatory environment, which would be interesting if you guys agree with this, is you’re seeing kind of at the federal level, maybe things letting up a little bit, but then you’re seeing it being replaced by this state level patchwork that then patchwork. Yeah, you got to manage it by state, by state. And then you have the card schemes. You have the acquiring banks who kind of have their own kind of set of rules. And look, we’re in, I we love, we’re like Daniel Plainview and there will be blood. We love all religions equally. And this is a situation where we have to deal with all these different folks who we’re chatting with and working with in the industry. But as an iso, as a software company that’s trying to manage your business, you got to stay on top of that. I think we’re, our approach at NMI is to offer you tools that can help you with that. And certainly we try to drive awareness of potential things coming, but I think it takes not only companies like us, but also folks like yourself actually as well who can really get into the details on that. And when somebody does feel like they need help or maybe need a second opinion or somebody to take a look at something, they can call somebody and ask that question.

James Huber (04:21):

Yep. Okay. Side note, their NMI is not going to let you talk about vamp. Probably

Rob Hoblit (04:28):

They’re not. I

James Huber (04:30):

I’m on cut right now.

Rob Hoblit (04:30):

Yeah, yeah. Okay.

James Huber (04:32):

I don’t know. We’ve only had one person agree to get on here on Vamp because they don’t want to get on Visa’s radar about it.

Rob Hoblit (04:38):

Okay. Well we talked about it this morning. I mean,

James Huber (04:40):

Okay. No, I’m fine if you want it, but I actually would rather talk about level two and level three because we haven’t covered that yet. Do you want to go into that? Will they get pissed? That one? I don’t think they will vamp. I love talking about it, but

Jeremy Stock  (04:53):

It’s fascinating.

Rob Hoblit (04:55):

Level two, level three. I know. Lemme just

James Huber (04:58):

Do one thing

Rob Hoblit (04:59):

Quick, slightly less than to be dangerous on that

James Huber (05:01):

One. Okay. Okay. So maybe we just shouldn’t go there. Well, I was going to just be like, what did you mean by level two, level three? What do you mean? Okay, let’s do that. You brought up level two, level three. What did you mean by that?

Rob Hoblit (05:14):

So use of level two and level three. I think if you’re watching this show, you probably know what that means, right? It’s adding additional fields to a transaction in order to take advantage of things like corporate card interchange rates that are different than if you’re a consumer. There’s a lot of detail here, and I’m a caveman sales guy, so don’t take it from me. Call an expert. But the card schemes especially are looking at how people are presenting those transactions and saying, we want you to do it in a specific way, or we’re going to start to maybe do some things that you might not like,

James Huber (06:04):

Charge you more declines.

Rob Hoblit (06:06):

Exactly. That kind of a thing. So I think on that one, if that’s something that you are taking advantage of and in particular if you’re in a situation right now where you’re using those and you’re dealing with declines, I think that would be a situation where I would certainly call and get some advice there on how to deal with that and whether you need to make some changes if you’re passing these through and not having a problem with it. I can’t say whether you will or will not have an issue, but it is something where changes are coming down the pike. And like I said, this is something that if your business does do it, get some advice there and figure out if you need to do something different with the change in how that’s being approached.

James Huber (06:53):

You brought up the biggest threat to the space and threat and opportunity at the same time is deregulation regulation. Our firm, we thrive in increased regulation and we really thrive and decrease regulation. And then when it stays status quo, that’s where I see people in the payment space kind of starting to get cagey. And then we all start freaking out when the status quo is happening and Visa comes in and says, we got new surcharge rules all of a sudden and that throws everybody in a tizzy. It’s almost like the payment space likes the drama because I’m going, when surcharge and dual pricing and every stuff came in, everyone’s like, what’s your opinion? How does this work? And I’m going, this is really simple guys. I can break it down to three sentences over here and four sentences over here, but I’m getting flown out to North Carolina to give a presentation on how to do it correctly and it’s a riot because I’m going, who thinks they’re doing it correctly? And everybody raises their hand. I’m going, tell me about that. And I’m going, well, that’s wrong. And they’re going well, flat 4% on everything. That’s fine, even cash. And I’m like, no, that’s not. But anyways, it’s the payment space. It loves change. It thrives on change. It grows on change. So when you see things happening that are shaking things up, I’m going, this is where payments really outshine a lot of other industries.

Rob Hoblit (08:34):

Well, I think that’s a great point. And this is one where go USA, I think our country has decided to let a lot of that innovation play out and that has created a ton of value in this space for people who do what we do. But also I think for customers who have a lot of different options, a lot of different ways that they can make payments. I think if you look at a lot of other developed countries in the world, it’s fairly directive on here’s what you will do, here’s what you won’t do. And that’s all I’m going to say about that. And so I think you’re right. I think it does thrive on a lot of change. New things happening, and there will always be something. It’s not going to be a situation where we get to, oh, well, we’re now done,

James Huber (09:35):

Set it and forget it. We’re

Rob Hoblit (09:36):

Now done. There’s no more change. You can just forget it. You will always need to keep an eye on that and be ready to be flexible, be modular, have choice. That’s kind of what we try to offer.

James Huber (09:50):

Yeah, that’s one of the reasons that you partner with someone like NMI or you partner with somebody like Global Legal Law firm because you are having people that have their ears to the track, they’re seeing what’s happening and they know what’s coming. They hope they know what’s coming and they think about, here are the three ways to go. I better talk to those guys so that I can plan my business. When we talk to people coming in and they want our advice on whether it’s litigation, contracts or anything like that, my first question usually, and I get there, I try to, because if you ask this question to some people, they’re going, huh, what’s your exit plan? You try and get there because I’m trying to get out of work at five and get my kids and all this. And I’m going, no, you try. And we massage in there and figure out what these people’s values are, what they care about, what really their exit plan is. Everybody says, billion, I want to sell for a billion dollars. Okay, that’s a pretend number for most of us. Actually. I’m probably going to win the Powerball tonight or whenever it is.

James Huber (11:01):

But for most people, that’s not a real number. It’s where do you want to go and let’s help you get there. And a company like NMI and I was excited to meet you is doing the same thing of let’s help you get there. We’re operating behind the scenes. Sometimes we’re out front quite a bit, but let’s help you get to where you need to go. And we’re doing a lot of the work for you. Chris always says, my partner, he says, these salespeople who are a lot of our listeners, you’re really good at selling the rest of the stuff. Let somebody else do it.

Rob Hoblit (11:38):

I would just put it this way. You don’t necessarily need to have a plan on where you want to be in five years or 10 years. The question you should be asking yourself is, if you make a choice, are you comfortable with that being the way things are going to be five years or 10 years from now? Or do you want to leave your options open?

James Huber (12:00):

Yeah, that’s a good point.

Rob Hoblit (12:02):

Which would you prefer? If you’re absolutely positive that working with this specific set of partners is exactly what you want to do? Well then great. And maybe that, but I would say that a hundred percent of our customers, that’s not how they’re thinking about it. They’re thinking about it. We want to leave. We want to have choice. We want to be able to figure out where we want to be. And that might change based on the way the industry unfolds and the way our business unfolds.

James Huber (12:33):

I might want to just go out and do some crimes and make money that way. But I like you saying you don’t have to have your exit plan. My wife for years has been going, it doesn’t work unless you have a plan. You write it down, you execute on it. So I’m like, I’ve got this plan. Chris and I met on it seven, eight years ago, and I have a reminder every once in a while to do the meeting. But then I heard Oprah say, I don’t have a plan at all. I just execute. Go away. And she was talking to somebody on her podcast. Somebody else told me this. It’s not like I listened to everything Oprah says, but she said, Steven Colbert, same thing. I don’t have a plan. You execute and you adjust and you do the best thing in the moment. And that’s why you would partner with people like NMI or sales pitch global Legal law firm.

Rob Hoblit (13:28):

Crazy. Make em ups.

James Huber (13:30):

I

Rob Hoblit (13:31):

Think what Chris and often does. Yeah, I like that.

James Huber (13:33):

Yeah. Alright, well closing words. Rob, you get to shut us down. Anything you want to let our avid viewership listeners know about?

Rob Hoblit (13:44):

Yeah, I think just a reflection. So I’m actually not a payments industry lifer, so I’ve been in the industry now for, this is my fourth year officially as a payments person.

James Huber (14:00):

Maybe rest of your lifer though.

Rob Hoblit (14:02):

It’s possible. Yes. And I have done payments my entire life,

Rob Hoblit (14:04):

So I’ve been on the consumer side. This is really an industry though, where a lot of having tech that can talk to other pieces of that tech stack is really important. And so I think what we’re trying to do at NMI is create a platform that obviously we have our tech and I talked about kind of the different pieces of it. We have gateway, we have extensions, we have MRM, which is the Merchant Central piece. We have the integrated payment solution, but we also integrate with our customers and we try to work interoperate with them. And that’s a lot of what we do is figuring out how those things work together. And I contrast that with, actually, I’m kind of a reformed cybersecurity person. So I worked in cyber for 10 years and that was an industry where people did say we want things integrated.

Rob Hoblit (15:05):

And then when they had the opportunity to show their revealed preference, they always went with best of breed and picked some point kind of solution. And having been in payments now, it’s clear to me that things that work can work with others. That’s where a lot of the value is here, folks, is that getting a solution that is not a closed system, but actually is very open. So of course I would say that I work at NMI, but I actually truly believe it. And if I think about, I’ve worked at companies who have been going after that, okay, we’re going to integrate everything. And it’s a challenge. I think if you can find somebody you can do it with, there’s a lot of value there. So thank you for having me on and I’ll see you around the neighborhood, I guess.

James Huber (16:02):

Sounds good. On the pickleball court.

Rob Hoblit (16:04):

Yeah, absolutely. But make sure you’re registered on no non-residents

James Huber (16:07):

And don’t get too close to the wake. Don’t get too close to the Swans.

Jeremy Stock  (16:12):

Thank you for listening to this episode of the Payments Experts podcast, a podcast of global legal law firm. Visit us online today at global legal law firm.com. Matters discussed are all opinions that do not constitute legal advice. All events or likeness to real people and events is a coincidence.