ISO’s are an important part of the network connecting merchants to financial services companies. They manage electronic payment processing for credit cards, debit cards, and ACH payments. So if you’re still wondering what an ISO is in credit card processing, read on.
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An Independent Sales Organization (ISO) is a company that acts as an intermediary between merchants and the acquiring banks. An ISO is useful in several ways, as they can find new merchant clients on behalf of the bank or major payment processor, process transactions put through by small businesses and provide support for them throughout their relationship with an ISO.
An ISO also serves as a buffer when dealing with millions of businesses around the world that need payment processing.
Registered ISOs can use their logos and brands on merchant agreements, but only if they have a direct agreement with each other. Super ISOs may have sub-ISOs nested beneath them because they directly agree with their member bank to process payments.
Large businesses that transact high credit card volume can benefit from processing with ISOs. These companies provide various rate plans for account holders, allowing them to pay less overall than if they were processed through payment facilitators who typically offer flat-rate pricing. Additionally, these businesses can assess the financial risk up front. This means they don't have to face the risk of funds being held for a long time.
While partnering with an ISO comes at a cost, the benefits include reduced processing costs and faster access to funds. In addition, ISOs typically offer more boutique customer service experiences that ensure your needs are met quickly for you to get back on track as soon as possible.
If you have a strong business history and client base, switching to ISOs allows for cost-effective tiered or interchange-plus plans. It also gives high-quality support that matters most when your company has grown big enough to need it.
Your current credit card processing provider might be willing to match the rates of your new ISO for you to transition from one company’s services to another smoothly. Thus, you can start using an ISO’s payment platform alongside your existing solution and break even over time since doing so won't cost anything extra while allowing you to try out a different system without any risk or hassle.
There are many payment gateways out there to integrate with ISO. Learn more from Processing Card’s blog on how much PayPal charges for credit card processing.
Florence Carpenter is passionate about ensuring that the process of opening merchant accounts is as straightforward as possible. She graduated from the University of Michigan with a bachelor’s degree in Marketing.
