What is ISO?

ISOs, or independent sales organizations, are companies who aren’t officially a part of the cardmember associations like VISA or MasterCard but have developed partnerships with acquiring member banks to supply merchant accounts or other merchant services to members.

Let’s break that down a touch.

These are businesses that typically have their own set of technologies and sales agents, some operate essentially independently and set their own processing rates, and that they act as a one-stop-shop for all things merchant services. ISOs make money by selling and leasing hardware/software alongside taking a percent of transaction revenues.

And the way they appear to supply everything a merchant need is by already having partnerships in situ to supply all parts of accepting credit cards — most significantly by having an immediate relationship with an acquiring bank.

An acquiring bank may be a bank that has the authority and skill to supply merchant accounts.

Merchant accounts are the official accounts that your business’s revenues are deposited in before they’re sent to your chosen business account. You can’t accept credit cards without them (although some third-party processors allow you to use their merchant account), in order that they are the foremost important partnership for an ISO to possess.

After that’s established, the competitive differentiators in ISOs come from differences in commission, technology, and rates. So if you’re wondering, do ISOs offer ISO Merchant Services? Then yes, absolutely yes.

Typical ISO merchant services include:

Credit card processing
Online gateways
Hardware (terminals, etc.)
Software (POS systems)
Analytics programs
Mobile readers and apps
And so on.

Where do ISOs fit into the payment ecosystem?
It’s easiest to consider the payment ecosystem as a pyramid, and ISOs sit within the middle

Below the ‘ISO agent’ chunk of the pyramid would be the merchants than the consumers themselves. consider ISOs as official service providers on behalf of the cardmember associations and acquiring banks.

We break that ecosystem down in additional detail here.

Are ISOs and banks equivalent thing?
No. Registered ISOs don’t provide merchant accounts or banking accounts of the kinds. While some ISOs do lend to businesses and supply breach coverage, they are doing not function or behave like banks.

Are ISOs and Merchant Service Providers an equivalent thing?
Essentially, counting on the definition. The definitions are often a touch confusing, but the way MasterCard talks about merchant service providers (MSPs) is that the same way VISA talks about ISOs — all you would like to understand is that both terms ask companies that sell a set of merchant services and typically have relationships with acquiring banks.

What are registered ISOs / MSPs?
Registered is simply a term meaning they need a politician partnership with a bank. Nothing weird or special.

How do ISOs affect my business?
The ISO or MSP you select to figure with can have a dramatic effect on your business (which again, may be why you’re here in the first place).

They handle almost everything payment related, so let’s cover what you ought to be trying to find.

How to observe decisions when evaluating ISOs and/or MSPs
Read this knowing that the key defining principles of excellent ISOs are transparency and innovation.

Make sure they need the hardware you would like.
Some ISOs lease other companies’ hardware, others create their own. Regardless, your ISO should be presenting you with the simplest hardware for your business. that would mean mobile terminals, that would be traditional registers — confirm they need the capacity and make an attempt to craft a singular hardware package for your business.

Make sure their online gateway and invoices are flexible and complicated.
Online sales are bigger than ever and can only rise. If you partner with an ISO with a restrictive gateway that appears terrible, it’ll affect your sales. See what they provide and if you don’t love it see how easy it’s to use third-party applications to raised the UX and UI of a given funnel. This goes for invoices too. Know your needs and look for a corporation that will make your workflow easier.

Know your average processing volume and costs going into negotiations.
This is negotiations 101. you would like to possess a mean processing volume idea by location and in total before walking into these conversations. By checking that number against what you’ve paid in fees, you’ll know exactly what you’ll be saving by switching. If a corporation offers to see the numbers for you, even better. allow them to walk you thru the numbers, double-check them yourself, then walk into fewer fees!

See if they need loyalty programs
Loyalty programs and gift cards are crucial thanks to continuing to grow your business. See what options they need and confirm the ISO ties that information right into your payment reports.

Pay special attention to hidden fees and contract lengths.
Some nefarious ISOs include really high cancellation fees and charge you for over or under transacting. this is often ridiculous, and you ought to double-check that you simply aren’t being taken advantage of. If an ISO or MSP offers you free hardware or some crazy low flat rate (like but 1.5%), then rest assured they’re making that cash up elsewhere. It’s like ordering mattresses online — yeah you get a free return but you’re already paying for everybody else’s returns!

Hopefully, this may assist you to be a touch more informed when considering whom to figure within the ISO/MSP world.

We’re an ISO ourselves, and that we work with smart, passionate business owners who are trying to find a partnership. We work day in and out to supply impeccable service and technology.

Merchants save to 35% once they switch to Tidal Commerce.

We work with retail, healthcare, professional services, eCommerce, nonprofits — you name it. And as long as you would like to grow your business and appreciate transparency and honesty, then you’ll fit right in.