  At high luminosities black hole binaries show spectra with a strong disc
component accompanied by an equally strong tail where at least some of the
electrons are non-thermal. We reanalyze the simultaneous ASCA-RXTE-OSSE data
from the 1998 outburst of XTE J1550-564, which span 0.7-1000 keV and remain the
best data available of a black hole binary in this state. We reassess the
importance of electron-positron pair production using a realistically high
value of the source compactness for the first time. The lack of an observable
annihilation line together with the observed gamma-ray flux beyond 511 keV
constrains the maximum electron Lorentz factor to be leq 10 and the slope of
the injected electrons to leq 2.5. We also use the fast (10-50 Hz) variability
spectrum to constrain the spatial dependence of the electron heating and
acceleration. We find that the spectrum of the fast variability is consistent
with being fully thermal, so that the observed non-thermal emission is produced
from further out in the flow.
