There are a lot of upsides to becoming a wholesale ISO. Not only do wholesale ISOs make more, but they also enjoy additional flexibility and control, higher valuations, and more. But, the choice to become a wholesale ISO may not be as straightforward as it seems. It isn’t right for every retail ISO, and for all the benefits going wholesale can bring, making the transition at the wrong time can be a costly mistake.

The following is an overview of the primary reasons your retail ISO might want to consider making the jump to wholesale ISO, the important factors you should consider to ensure it’s the right fit at the right time, and how payments technology can ensure the transition is a success. 

Five Reasons to Become a Wholesale ISO

There are a variety of reasons registered ISOs opt to transition from retail to wholesale, ranging from supercharged growth to more control to better exit valuations, and beyond. The following are five of the most important reasons you might consider becoming a wholesale ISO, along with a quick rundown of how each benefits our business.

1) Your ISO Can Get Out of a Growth Rut

The retail game is full of opportunities and is enough for many ISOs, but the heavy dependence on processors and acquiring banks comes with some significant limitations that can frustrate and hinder ISOs with bigger goals. It isn’t uncommon for highly successful retail ISOs to get to a point where their portfolio starts to stagnate, their processes become handcuffed, and retail arrangements can no longer keep up with their desire and capacity for growth. 

If that sounds like your company, becoming a wholesale ISO may be the most logical next step in your business evolution. For wholesale ISOs, growth isn’t just an opportunity; it’s something processing partners will expect. Not only does going wholesale mean more merchants, it also means a requirement for more staff, more technology, more organizational complexity, and, of course, more revenue. If boosting growth is the goal, there are few better catalysts than becoming a wholesale ISO.

2) Your ISO Can Earn More on Each Merchant

One of the most attractive benefits of becoming a wholesale ISO is higher margins on processing services. As a wholesale ISO, you’ll get more favorable rates from your processing partners, enabling you to either pass those savings on to merchants to help attract more business or to increase your markup while still maintaining competitive pricing.

The extra margin available is the primary reward wholesale ISOs enjoy for the additional work and risk involved in taking on the underwriting process. While there are potentially significant costs involved with both, the ability to generate a larger slice of transaction fees across a larger portfolio of merchants makes going wholesale one of the most lucrative moves a well-prepared ISO can make.

3) Your ISO Can Close Merchants Faster

If your ISO has its merchant recruiting and onboarding processes down to a science, you may find yourself running into a bottleneck with your processing partners. No matter how well-oiled a machine you build, if your partners are slow with approval, there’s nothing you can do but wait. That can cause all kinds of issues, from antsy merchants to a delayed start to processing (and residuals) to a backed-up sales funnel, and more. 

As a wholesale ISO, you are responsible for underwriting your new merchants. As a result, you have the opportunity to significantly speed up your time-to-processing (assuming you can get your underwriting to the same level of efficiency as your onboarding.) Luckily, today’s automated underwriting tools make establishing a fast, thorough, and consistent underwriting process easier than ever.

4) Your ISO Can Gain More Control

Wholesale ISOs don’t just enjoy faster approvals and time-to-processing; they also gain significantly more control over the entire sales and service process than any retail ISO can even dream of. As a wholesale ISO, you’ll enjoy expanded control over your service offerings, your pricing, and – potentially most importantly – the merchants you work with. 

While retail ISOs have no choice but to accept the approval or denial decisions that come down from their processing partners, as a wholesale ISO, you have far more say in that decision. Often, it’ll be yours to make outright. As a result, you’ll have access to higher-risk-higher-reward merchants that may have been off-limits to you as a retail ISO, depending on your processing partners’ risk appetites. With the right risk management strategy in place, that expanded pool of potential merchants can have an extremely positive impact on your residuals.

5) Your ISO’s Value Will Increase

When it comes time to exit, the price your company will demand depends on a variety of factors. Your portfolio’s monthly value is the biggest determinant, but potential sale value also takes into account your attrition rate, your new account onboarding, the size and quality of your merchants, your assets and technology stack, and much more. 

Simply put, the bigger, more well-established, diversified, and mature your ISO is, the more it’ll demand should you decide to move on. As a wholesale ISO, you’ll be able to maximize all of those factors in a way retail ISOs can’t, ensuring that you’ll not only enjoy better residuals while you’re operating, but a healthier payout at the end of your payments journey, as well.


Three Important Things to Consider Before Becoming a Wholesale ISO

Becoming a wholesale ISO represents a huge opportunity to push growth to new levels and maximize residuals, but it isn’t the right opportunity for every retail ISO. There are a number of factors that make going wholesale a potentially difficult and risky proposition, as well, so it’s important that you carefully analyze our ISO’s current position, resources, and readiness before beginning the process.

1) You Need Significant Resources to Make the Jump

Becoming a wholesale ISO is a big change. It isn’t as simple as accepting underwriting responsibility and making more money. First and foremost, underwriting is a serious and complex task that requires specialized knowledge and technology. At a minimum, that will likely require your ISO to staff a new department. You’ll also be introducing new compliance issues, new responsibilities for infrastructure, and the growth in your volume will almost certainly require your company to grow significantly as a whole. 

Countless companies have fallen into the trap of growing too much, too fast – an often fatal mistake. Before you decide to go wholesale, make sure you have the liquidity and the guidance necessary to make the transition a success. It could easily cost a million dollars or more to facilitate the expansion. If you succeed, the rewards over time will make that amount seem insignificant, but you need to make sure you don’t run out of money before you get there.

2) Your Risk Exposure and Business Complexity Will Increase

Wholesale ISOs make more because they accept significantly more risk than their retail counterparts. As a wholesale ISO, you’ll be working with larger, more complex merchants, doing significant sales. If something goes wrong with a big merchant your ISO underwrote and approved, any potential liability will be on you. At the same time, the rapid expansion of your company is going to make your organizational structure more complex and dense than it’s ever been, adding another potential source of confusion to an already-new business environment. 

To ensure success, you need to ensure you have the right people in place to manage risk and complexity before you underwrite a single merchant. That’ll probably mean a consultant up front, but filling new upper and middle management positions with capable, knowledgeable people could also represent a big challenge in an industry as competitive as payments.

3) Your Technology Needs Will Change

As a retail ISO, you have a lot of flexibility in how you handle merchants. Your processing partners likely provide all the infrastructure and technology you need to operate – albeit at an unoptimized pace. As a wholesale ISO, your partners will expect you to up your game in order to facilitate your new responsibilities and the higher volume of merchants and sales you’ll be handling. 

At a minimum, you’ll need a frictionless onboarding system, since your ISO will now be responsible for approval decisions and getting merchants fully ready to start accepting payments. You’ll also likely need a high-quality automated underwriting system, because manually underwriting each and every new merchant you recruit will create a huge bottleneck that makes it impractical at best. Luckily, today there are payments technology systems designed specifically to synthesize all of your tech needs – systems like IRIS CRM.


Adopting the Right CRM to Drive Your New Wholesale ISO Operations

A modern payments CRM has the potential to integrate all the tools your ISO will need to thrive in the wholesale environment. IRIS CRM – the payments industry’s top customer resource management platform – offers a full suite of sales, productivity, and operations tools designed specifically to enable ISOs like yours to maximize residuals and minimize waste by working smarter, instead of just harder.

Improve Lead Management, Onboarding, and Underwriting with One Platform

One of the most powerful aspects of IRIS CRM is that it centralizes all of the most important parts of wholesale ISO operations, providing you with a mission control center for your entire business. 

IRIS CRM includes a full suite of lead collection and management tools, putting lead and customer data at the center of your ISO’s operations and enabling your agents to recruit and close merchants faster, and with less effort. 

The TurboApp automated boarding system enables you to get rid of paper forms and reduce the time it takes to create, submit, and approve new merchant applications from 30 minutes or more to five minutes or less. You can even onboard low-risk merchants instantly with a single click. 

Integration with Agreement Express also allows you to connect a top automated underwriting system directly to the CRM, bringing the entire sales process – from initial lead collection through recruiting through underwriting through onboarding – into a single, easy-to-use point of control.

Streamline Workflows, Boost Productivity, and Enable Organizational Growth

IRIS CRM also provides a full suite of productivity and reporting tools designed to enhance all areas of your business, at all levels of your organization, from the C-suite down to the front desk. Just a few of the additional tools IRIS CRM offers your ISO include:

  • Complete residuals management including fully automated residuals calculations
  • An intuitive, easy-to-use analytics suite providing deeper business insights 
  • Advanced chargeback and dispute management
  • A built-in power dialer to enhance sales calling and eliminate monthly phone bills
  • Fully integrated email and scheduling through Gmail and Outlook
  • Mass email marketing
  • A private-label merchant portal and helpdesk
  • Unlimited users, leads, and storage


To find out more about how a payments CRM can help you successfully transition from retail to wholesale ISO and maximize your ongoing growth, schedule a free guided demonstration of IRIS CRM now.