What is an Independent Sales Organization (ISO)?
An independent sales organization (ISO) is a third-party company that engages merchants to accept credit card payments on behalf of one or more acquiring banks. In fact, this is a sales department that can be hired by a bank that does not want to expand its own staff but wants to attract more clients to service merchant accounts. As a rule, ISO sales representatives receive a commission for each company that signs a contract on acquiring services with a partner bank.
Acquiring banks are quite selective in the choice of merchants who open trading accounts. So, bookmakers, casinos, adult sites, and small businesses working in some other similar areas are more exposed to risk and fraud. Getting a merchant account directly from the acquiring bank can be very difficult for such companies. Independent sales organizations can open merchant accounts on behalf of the acquirer's bank, including for high-risk businesses, while charging a higher fee on the merchant's revenue. It is important to understand that in this case, ISOs take on most of the risks and responsibilities, along with the acquiring bank. Such sales organizations can also be called MSPs (merchant service providers) if they offer financial transaction processing services.