Merchant account ISO programs

Merchant accounts are bank accounts for facilitating businesses to accept credit cards and debit cards for payments. The account is an agreement among the payment processor, merchant bank and retailer for settling debit card and credit card transactions. The other Merchant services are: e-benefits transfer, payroll tracking and age verification.

The methods that are used to market merchant accounts to the merchants are by the sponsoring bank/processor/bank’s authorized agent. Banks having merchant processing relationships with MasterCard and VISA has the authority to issue the accounts to merchants directly. For mitigating risk, banks approve the accounts for only those merchants who are within the same area geographically, those that have retail stores and those merchants who are in the business for more than two years.

For marketing merchant accounts, a bank must sponsor the MSP/ISO and the ISOs should register with MasterCard and VISA. ISO means Independent Sales Organization and MSP means Merchant services provider. The difference between MSP and ISO is that MSP is authorized by MasterCard while ISO is authorized by VISA. The independent sales organization provides numerous processing functions like selling merchant accounts and offering backroom services. The acquirer should register all the MSPs/ISOs with the card associations. You will come across ISOs in magazines and at conferences that are held every year. Some are part of

Some of the companies that offer merchant ISO program are quite reputed and they can be accessed by phone calls or visiting their websites and sending an inquiry. Always choose ISOs which are financially well off. Though banks are popular merchant account providers, other account providers are also famous; they have national and international operations. For providing merchant accounts to clients, the account providers need the assistance of an underwriter and the Independent Sales Organization. ISOs have the responsibility of calculating the risks associated with offering merchant accounts. For this, the ISOs check the applicant’s operation, assets and the entire history.

It is very common for ISOs to act as the account administrators and have the responsibility of liquidating the accounts when there is a reason. Underwriters are banks and their responsibilities include: reassessing websites, the operations of the merchants and the ISOs’ reports. The applicant is granted his merchant account by the underwriter. Underwriters have the authority to ask for changes in the websites of the merchants.

Though banks can implement the responsibilities assigned to the ISOs, normally they do not take those additional responsibilities; they restrict their work to acquiring transactions related to electronic payment and issuing the credit cards.

ISOs/MSPs need a sponsor bank and registering is not so easy; being financially sound is another requirement. The credit history of the principals will be scrutinized for proving good network. Some documents are needed – business plan, proof for tax paid and proof for the financial transactions. Once the plan is approved, registration fee must be paid and this is for every network related to credit cards. ISOs/MSPs do tie up with sales personnel for finding new merchants.