ISO, MSP, VAR, MPA, EMV, POS – the payments industry has no shortage of acronyms, and keeping up can be difficult, especially for new entrants. ISO and MSP – short for independent sales organization and merchant service provider, respectively – are two of the most common acronyms both merchants and professionals within the industry come upon, but just what are ISOs/MSPs, and what role do they serve in the overall payments ecosystem?


What do ISOs Do?

Independent sales organizations are a key part of the payments industry. They find and recruit new merchants and sell them processing and various services on behalf of major payment processors like TSYS, Worldpay, and BAMS.

ISOs Resell Merchant Services

An ISO’s primary job is to resell merchant services for one or more payment processors. ISOs recruit and provide ongoing support, but they don’t handle transactions or any of a merchant’s money themselves. In the vast majority of cases, they onboard their merchants directly to the processor, who in turn pays the ISO a small commission, or “residual” on each card transaction the merchant makes. ISOs can also resell additional value-added services like payment gateways, fraud protection, software, and hardware, both from their processing partners and third-party companies. 

ISOs Connect Merchants with Payment Processors

While wholesale ISOs sometimes take responsibility for underwriting and risk management, the vast majority of ISOs act entirely as go-betweens. That doesn’t make them unimportant, however. ISOs are a key part of the payments ecosystem because they help connect millions of merchants around the globe with only a small handful of payment processors. By acting as resellers, ISOs reduce the load on the processors, enabling them to serve far more merchants than they could if they had to handle recruiting and service delivery themselves.


What is the Difference Between an ISO and an MSP?

If it seems like the terms independent sales organization and merchant service provider are used interchangeably, it’s because they both refer to exactly the same type of company. ISO is Visa’s term of choice for their resale partners, and MSP is Mastercard’s preferred term. While ISO is used more generically across the industry, any company reselling both Visa and Mastercard services is technically both an ISO and MSP.


Why Would a Merchant Choose to Partner with an ISO/MSP?

ISOs and MSPs provide major value to their payment processing partners, but there are a number of important benefits they provide to merchants as well. This makes an ISO the ideal entry path to card payments for the vast majority of businesses.

ISOs Offer a Variety of Products and Rates

Working with an ISO opens merchants up to a larger pool of products and services than they’d have access to working directly with a payment processor (assuming they’re big enough for that to be an option in the first place.) Because ISOs have multiple processing partners, they can pair their merchants with the processor whose services best meet the merchant’s needs, no matter how unique they may be. More options also mean better access to the lowest possible fees, as ISOs often have access to different rates from different processors. 

ISOs Offer More Personalized Service

Payment processors that have direct relationships with large merchants have to prioritize service for those large accounts, and the average merchant would probably find themselves lost in the noise as a result. Working with an ISO, especially a smaller one, gives merchants access to a payment partner that can offer them more attentive ongoing service and faster, more personalized support when issues arise. 

Another way ISOs provide better service and additional value to merchants is through the use of a payments CRM. A good customer resource management platform provides advanced merchant reporting and analytics, enabling ISOs/MSPs to maintain a higher level of awareness over each of their merchants’ operations, successes, and failures. Certain platforms, like IRIS CRM, the industry’s leading payments CRM, also include private-label merchant support portals that make it fast and easy for merchants to ask for and receive help. By knowing more about how each merchant is doing and removing friction from the support process, IRIS CRM makes the ISO’s job easier and ensures merchants enjoy healthy sales and uninterrupted service. 

To find out more about everything IRIS CRM can do for ISOs and their merchants, schedule a free guided demonstration of the platform today.