How to Become a Registered ISO?


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An Independent Sales Organization (ISO), also sometimes referred to as a Member Service Provider (MSP), is an organization authorized to provide merchant services to businesses. A merchant service ISO acts as the middle man between different acquiring banks and the merchants when it comes to providing payment processing services. Being a registered ISO is an appealing undertaking as you get to become your own boss. You also get to scale up your business compared to unregistered payment processing agents.

Wondering how to become an ISO for merchant services? You aren’t alone. We get a lot of questions from businesses on how to become an ISO and what does ISO mean when selling.

In this article, we shed light on how and what you need to become a registered ISO. So, read on and get to know what to expect from the ISO registration process.

What Is a Registered ISO?

Independent Sales Organizations (ISOs) are important members of the payment processing ecosystem as they act as the link between acquirers and merchants. A registered ISO is a company that is authorized to handle and sell merchant accounts to merchants. The registered ISO sells merchant accounts to businesses on behalf of larger banks that are members of credit card associations. This means that ISOs act as the middlemen between acquiring banks and the businesses that are looking for electronic payment processing solutions.

As a registered ISO, in addition to providing your customers with merchant account services, you’re also expected to assist them to manage the day-to-day activities of the accounts while also providing prompt customer service support. An ISO business is also in charge of any sales agents they may have contracted to market their services.

Essentially, ISOs are merchant account providers that resell merchant services and provide enhanced customer support on behalf of the organizations they represent in exchange for a commission. In the past, if businesses wanted to start accepting e-payments, they needed to partner directly with acquirers. And although some businesses still prefer to deal with an acquiring bank directly when it comes to payment processing services, partnering with an ISO is becoming a popular alternative.

Why? Because banks are more costly and less flexible compared to ISOs. ISOs also maintain the same quality standards when it comes to the provision of payment processing services as acquiring banks. Besides, most ISOs provide customized payment solutions that fit most business needs. What’s more, MSPs provide value-added services plus enhanced customer support.

Notably, not every organization can become an MSP. So, what do you need to do to become a registered ISO or MSP?

Steps to Become a Registered ISO

steps to become an iso

The payment processing industry covers a broad spectrum and provides multiple opportunities for aspiring companies to be creative and bring something better to the table.

As a registered merchant service ISO, you get the opportunity to provide value and build solid relationships with your customers while also getting an additional income stream in the process. In the US, ISO-registered companies are different from their unregistered counterparts. As a registered ISO company, you get to be your own boss as you’re authorized to hire sub-agents to promote your products, something that isn’t allowed for unregistered ISO companies.

However, to get registered as an ISO, you need to go through a thorough vetting and certification process, as explained below.

Write A Business Plan

Write A Business Plan

Most acquirers will want to see a business plan before they partner with you. That is why you need to create a detailed business plan explaining your plan to become a successful registered ISO. A business plan will show the acquiring banks that you aren’t a risk to them but a valuable investment. A well-thought-out business plan is also beneficial to you as it acts as a guide and also informs your business decisions.

If you have never written a business plan before, you don’t have to worry as you can always find a standard template online that you can use.

Choose a Legal Structure

Choose a Legal Business Structure

Once you have your business plan ready, it’s time to choose the right legal structure for your business. Your business legal structure is important as it details your tax rates, paperwork, and quality management principles, and it can also affect your ability to get a payment processor partner. Most ISOs are often corporations and partnerships, but it doesn’t mean that if your business is a sole proprietorship, you can’t get ISO registered. The best thing you can do at this point is to seek the services of a lawyer so they can advise you on the best legal structure for your business.

Check Name Availability

Check Business Name Availability

Of course, you’ll need to name your business. When coming up with a name for your business, it’s important to choose a name that is relatable to your business. A name is also the first thing that your customers notice, so be sure to come up with something unique and easy to remember. Once you have a name in mind for your business check with your secretary of state to ensure the name isn’t already taken by another business.

Find a Payment Processor

Find a Business Payment Processor

Finding a payment processor who is willing to partner with you may be the most important and daunting step in this whole process. Notably, before seeking a payment processor, ensure they’re MasterCard and Visa association members.

Most of this information, ISO standards, and instructions you need to follow to partner with acquiring banks as an ISO can be found on their websites. So, check your potential payment partner’s website or call them to request sponsorship. You can always work with more than one payment processor, member banks, or Super ISOs, but it’s advisable to start with one.

Ensure you’re prepared to make a strong case on why the sponsor should partner with you. It’s also advisable to choose a sponsor that has similar business goals and values as you. Other factors to consider when looking for an acquirer include:

  • Affordable rates – Look for a payment provider who offers a fair price for their merchant services. Although this will mean a lower commission for you, it also means that you won’t lose your customers to competitors offering lower rates
  • Innovative solutions – Partner with a payment provider with innovative technologies and features that can provide additional value to your customers. For instance, a provider who offers innovative payment processing reporting with their merchant accounts may be a plus for merchants who want to keep tabs on their payment performance.
  • 24/7 support – You want a partner who can provide prompt support when your customers need it.
  • Online reviews – Check the potential partner’s reviews, ratings, and past customer testimonials. The company needs to have a good reputation among customers as this shows that you’ll have an easy time working with them.

Your sponsor should facilitate your application with the card companies. With Visa, you’ll be applying to be a registered ISO and a registered MSP with Mastercard. Both of these two service providers perform the same roles, only the name is different.

Notably, the card application process is stringent and often takes a long period of time. Thus, ensure you have the required documentation ready for the application to be successful.

Some of the documents you may be required to provide include:

  • Credit reports for the business owners
  • Business and personal tax statements
  • Past personal and business financial statements
  • Business registration documents
  • Personal identification documents
  • Sales statements
  • Business plan

Once your application goes through, you’ll need to pay the required registration fees. The registration fee is $5,000 for Visa and the same for Mastercard. The providers of credit cards also expect you to renew your registration with the same amount of money annually.

Is It Worthy my Time to Become a Registered ISO?

Is It Worthy my Time to Become a Registered ISO

Becoming a registered ISO comes with multiple benefits. For starters, once you become a registered ISO, you’ll be allowed to hire independent agents to help you promote your business to merchants. Besides, you’ll be able to offer merchant account services under your name, which will help build your brand and grow your business.

Despite these notable benefits, not all businesses are willing to go through the rigorous process to become ISO registered. One of the hindrances is the high initial registration fees. The stringent vetting process during the ISO registration also discourages many businesses from even trying.


In closing, becoming a registered merchant service ISO does have its benefits. However, the process isn’t easy. Hopefully, after reading this article, you have an idea of where to start and what to expect during the ISO registration process.