How can the Merchant account ISO help merchants acquire the Third party merchant accounts?

It is yet another feather to the cap of strongly ongoing trend of outsourcing!  If you own either a small or a medium –sized online business, and find the traditional merchant account providers to be more costly, but still need one desperately to avoid losing customers who are scattered across the globe and want to buy either your products or services online, with their credit cards; don’t lose hope on setting up a merchant account for your online business.  There is a solution to this. They are called third party merchant account companies.  Initially, both credit card issuing and processing services were extended by the banks. For this, they had to be member of either Visa or MasterCard associations.  With the integration of the businesses the banks started to outsource the processing services to ISOs (Independent Service Organizations).  This helped them reduce their processing costs marginally. TSYS, First Data and MSI are a few to name among the large players in this arena.  Even today, it is seen that some merchants can get their credit card processing services directly from the bank, but they get it through a third party (ISO). The traditional role of an ISO would be:

·          Selling  the processing service to the merchant

·          Providing  technical support

·         Processing  the transactions successfully

·         Customizing the pricing  for the merchants

·         Bearing the risk or any charge back fees

·         Providing the Point of Sale (POS) terminal to the retailer

·         Allow customers to purchase with cash back

·         Providing a secure means to carry out the transactions to those who do business online

·         Constantly put efforts to minimize the risk of fraud to both the client as well as to the customers

 An ISO is generally sponsored by a member bank to market merchant accounts.  The bank verifies the monetary status of that particular company. The ISOs’ use the copyrights of the Visa and MasterCard. Before tying up with any such ISO, it is very much recommended that you make sure that the company is registered with the merchant bank.

If your business is growing at a rapid rate, and you have already started getting bulk orders consistently, then it is recommended that you start thinking about getting a regular merchant account as soon as possible.

But there is an exception to the rule! It has been seen that many merchants who are in the e-commerce business for quiet sometime now, and have increased their sales over the period of time ,but they still prefer to stick to the third- party companies. The reasons being:

Ø  Suppose somebody bought something using a stolen credit-card, you are liable to return the money to your merchant account provider because they paid you. Many times you may not have that kind of money ready to pay it when they want it.

Ø  In case you fail to return the money, your account may even get freezed up to nine months!

Ø  You may even lose your merchant account!