Credit Card ISO: What Is An Independent Sales Organization ?

Credit Card ISO: What Is An Independent Sales Organization ? ISO is basically a middle man or third party organization that stands between a business and credit card company. Once any organization is signed up with ISO they can accept credit cards.

When you begin your business venture, you may start small and not pay heed to merchant services. Merchant services are nothing but a way of processing payments. However, as your venture scales, it may come across to you that adding payment options and perks such as cashback for credit cards can accelerate your growth. For this, you will have to go through an independent sales organization. 

An independent sales organization will help you with various credit card payments and also help you create a credit card of your own. A sequence like this comes with plenty of benefits to your shoppers. They will patronize your shop over others and earn lots of discounts and rewards for shopping with you. 

This article will help all the readers dive deeper to understand the definition of an independent sales organization, its benefits, and some case studies of biggies who have opted for the independent sales organization.

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What Exactly Is An Independent Sales Organization?

First things first. Let us broadly define and understand the term ISO. 

An Credit Card ISO or an Independent Sales Organization is usually a third-party organization tied up with companies to provide credit card processing services independently from a bank or a financial firm.  In simpler words, an ISO is a third-party company or firm that can sign up your businesses so that they are able to accept credit card payments. 

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What Are the Services That An ISO Merchant Provides?

This is a fundamental question that we must address. Although ISOs offer a wide range of services,  including but not limited to the following:

1. Credit Card Processing
2. Software like POS Systems
3. Hardware like terminals
4. Mobile readers and applications
5. Online gateways
6. Analytics Programs

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What is A Registered ISO of A Bank?

A registered ISO of a bank is an independent organization or company that sells for a much bigger ISO. These bigger ISOs include Electronic Merchant Systems. These registered Credit Card ISOs of the bank can have sub-agents who function similarly. 

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Are PayPal and Square ISOs?

Both Square and PayPal are aggregators. To make it clearer, aggregators are an option for those businesses that want to associate themselves with credit card payments but want to eliminate the need for a Credit Card ISO, MSP, or processor. In short, they want to eliminate the need for multiple merchant accounts. 

Companies like Square and PayPal are renowned aggregators. They process payments of thousands of credit card holders under a single merchant roof. 

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How Does PayPal Work?

In the case of aggregators, here are the steps that occur sequentially. 

1. The customer pays the aggregator (in this case, PayPal or Square) for whatever goods or services the merchant has provided. The payment, in this case, could either be done using a credit card, or the money can be debited from a stored resource in the aggregator. 
2. The aggregator then does the business by being the business. It has an account with an acquiring bank responsible for depositing money for every transaction in that account. 
3. Now, the aggregator passes on that payment to the actual business, including some fee deductions. 

Aggregators are an excellent choice for small businesses or businesses that find it difficult to establish a merchant account with acquiring banks. 

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Benefits of ISO Credit Card Processing

This section of the article helps in highlighting some of the best advantages of using an ISO credit card processing system from a business owner’s perspective.

• Cost-effective

ISOs are usually a much cheaper option than third-party processors that include Square and PayPal. They do charge a nominal transaction fee. However, they are more cost-effective than third-party payment options. 

In the case of an ISO, every merchant has an individual account and bargaining power in terms of negotiations. This advantage is lacking in third-party processors as they pool all the merchants under the same space regardless of their reputations. 

• Greater flexibility

Credit Card ISOs are much smaller when compared to single entities like PayPal and Square. Hence, they can provide customized or personalized services to merchants that are flexible. Moreover, this flexibility is offered at no compromise regarding security and protection offered by acquiring banks. 

Merchants will receive a much better and more responsive approach from ISOs. ISOs believe in keeping the interests of their merchants alive for as long as possible so that they have a strong portfolio. They have an edge here because they offer personalized services, negotiable rates, and PCI compliance. 

• ISOs are highly selective when it comes to banks.

Credit card payment processing carries extremely high-security risks and threats. The vulnerability factor comes hand-in-hand with credit card payment processing. Hence, you can rest assured that ISOs have tie-ups with reliable and highly trusted banks. 

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How to Decide Which ISO to Partner With ? How Credit Card ISO Works !

There are several ISOs present in the market. Hence, deciding which ISO you must partner with can become challenging for easier credit card payment processing. So, to make it convenient for our readers, we have jotted some points that will help you decide which ISO is the best for you.

1. Ensure that your chosen ISO has robust technical capabilities.
2. Ensure that your chosen ISO has a strong network of industry connections. 
3. Ensure that the ISO you tie up with has dedicated team members who work consistently with complete dedication. 
4. Ensure that the ISO you decide to pursue has your business’s best interest at its heart.

Further, here are some factors that you must evaluate from the business’ point of view:

1. Determine if they have the hardware as per your requirements or not.
2. Understand and finalize the average processing fees. 
3. Ensure that the ISO provides flexible software.
4. Ensure you are aware of the timelines and contract terms. 
5. Do not miss out on hidden fees. 

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Final Words !

To sum it up, ISOs are the new in-thing. They are cost-effective, reliable, safe, and secure when credit card payments and their processing. We hope that this article on ISO and its advantages has helped shed some light on ISOs and the related questions that arise with them.