Becoming a registered ISO is a long-term goal for many independent agents that enter the payment processing game. Registered ISOs have the capability to grow and earn in ways their unregistered counterparts just can’t match, making registration extremely appealing. But what goes into the process? The following is an outline of the high-level steps you can expect to go through if you choose to apply to become a registered ISO. It’s a long, daunting process, but as with most hard things, it’s generally more than worth it in the long run. 


Step 1) Create and Register a Business

This first step might seem obvious, but it’s worth touching on anyways. To become a registered ISO, you need to actually have a business. That means taking care of all the important details involved in starting any business — details like determining your structure, registering with the relevant state or federal agencies, getting your tax information set up, and much more. All of this can be done on your own, but if any of the i’s aren’t dotted or the t’s aren’t crossed, your application to become a registered ISO could fail before it even gets off the ground, so it’s a good idea to work with a lawyer who can ensure everything is done by the book. 


Step 2) Create a Detailed Business Plan

When it comes time to begin looking for partners, they’re going to want to know you’re serious, trustworthy, and minimally risky. Those factors will all be evaluated through due diligence, and one of the first things you’ll need to present is your business plan. Without a rock-solid business plan clearly outlining how you plan to operate as a registered ISO, no payment processor or member bank is going to touch you with a ten-foot pole, so it’s important to ensure your business plan is well-thought-out, thorough, properly forecasted, and professionally presented. That might sound daunting, especially if you’ve never put together a real business plan before, but there are myriad free resources online that give extremely detailed, step-by-step instructions on creating great business plans. Whatever you do, just don’t mail it in on this step. 


Step 3) Find a Sponsoring Payment Processor or Member Bank

Once you’re ready to begin the actual registration process, you’ll need to find a payment processor, member bank, or super-ISO to sponsor you. You can always work with more down the road, but to start, this initial sponsor effectively vouches for you with Visa and Mastercard and ensures the card companies that you’ve actually secured a partner to resell for should they accept your application to become a registered ISO. You can choose to go with one of the major payment processors that serve merchants across the country and all over the world, or you can choose to look for an acquiring bank more locally to work with directly. In either case, you’ll need to make a strong case for why a sponsor should want to work with you as a new registered ISO, and expect to have potential sponsors do a decent amount of initial due diligence on you and your business to ensure they know who they’re working with. 


Step 4) Ready Your Paperwork

Once you have a sponsor on board, you need to get ready for the hard part — the vetting process that comes along with applying to be a registered ISO with Visa and Mastercard. To the card companies, your business represents an unknown and, therefore, a risk. To mitigate that risk, they’re going to do some serious due diligence, and you need to be ready to provide them with all of the information they need if you want to avoid making an already-long registration process even longer.

Some of the documents you can expect Visa and Mastercard to ask for before granting you registered ISO status include personal tax statements and credit histories for all owners, business financial statements and detailed histories, your business plan, all of your legal registration documentation, your existing sales materials, and likely even more. 


Step 5) Apply for Registration with the Major Card Companies

Once you have everything in order, you’re ready to apply to be a registered ISO with Visa and Mastercard. With Visa, you’ll be applying to be a registered ISO, but with Mastercard, you’ll technically be applying to be a registered MSP, or member service provider. While the name is different, a registered ISO and a registered MSP do exactly the same work. 

The application process itself will likely be facilitated by your sponsor, who will collect and forward the documentation and can assist you throughout the process as needed. However, it’s important to remember that you represent as much risk to the sponsor as you do to Visa and Mastercard, so don’t expect them to carry any water for you if your application isn’t up to the required level. Registration is a difficult, time-consuming, and often frustrating process. But the payoff for succeeding is significant, so ensure you give your sponsor and the card companies no reason to hesitate. 


Step 6) Pay Your Registration Fees

One of the biggest hurdles to becoming a registered ISO is the cost. Brand new registered ISOs have to pay a $10,000 registration fee upfront — to each card company. Every year after, each company requires a $5,000 fee to keep operating as a registered ISO. Forking out $10,000 per year to Visa and Mastercard isn’t a big deal for most registered ISOs once they’re up and running, but the initial $20,000 outlay during the registration process stops many would-be registered ISO in their tracks. 


Step 7) Hurry Up and Wait

Once everything is in, the waiting begins, and it can be excruciating. Expect your registered ISO application to take at least a few months to be reviewed, vetted, and signed off on by Visa and Mastercard, but it isn’t unheard of for applications to take half a year or even more. That means there will be a significant period of time between the submission of your application and the day you can actually start doing business, and you’ll need to plan and budget for that downtime (and uncertainty) accordingly. 


Step 8) Get Down to Business

If the process has sounded daunting up to this point, it’s because it is. But, once complete, the rewards for becoming a registered ISO — rewards like the ability to hire as many independent agents as you need, to do business under your own name and build your own brand, and the ability to grow significantly — are substantial.

With the approval process complete, the fees paid, and your status as a new registered ISO cemented, it might seem like the biggest hurdles are behind you, but the payment processing industry is highly competitive, and margins are tight, meaning you’ll need to be ready to jump in and carve out market share any way you can to stay afloat.

One of the best ways you can generate an immediate competitive advantage as a brand new registered ISO is by making better use of technology than your competitors — technology like IRIS CRM. IRIS CRM is the payments industry’s top customer resource management platform, and one of the most powerful tools available to help you immediately improve your merchant recruiting, ongoing service, residuals management, productivity, administration, and more. 

To find out more about IRIS CRM’s complete suite of sales and productivity tools — designed specifically to meet the unique needs of ISOs and MSPs — schedule a free guided demonstration of the platform today.