The business model for a successful ISO in today's merchant services industry is complex. To be competitive, ISOs must not only track an enormous amount of daily information and keep current with technologies and trends, but they also have to crunch that data to strengthen their operations and profits.
Until fairly recently, few applications catered to the ISO business model. This was partially due to the number of payment processors. Each processor's application process is different, and most processors have distinct online entry tools, which can make managing the sales pipeline, applications and merchant boarding cumbersome for ISOs.
Tom Waters, Director of Sales at Bank Associates Merchant Services and IRIS CRM customer, told The Green Sheet, "The processor tools are a little bit archaic and difficult to navigate, and there are so many of them, so it made it somewhat frustrating for our operational staff."
This common situation led some industry professionals to create better solutions. Certain enterprising ISOs with healthy capital reserves or in-house technical staff began developing proprietary systems. And the concept of boxed ISO management tools emerged. At first, the focus was on simplifying the boarding process and gathering merchant transaction details. Today, many solutions track and manage every step in an ISO's back office, provide sales pipeline reports and import third-party application data.
"We started out being a new merchant on-boarding and transaction reporting tool," said Dimitri Akhrin, President of IRIS CRM, which is PCI Level 1 certified. "The CRM came separately, but I wouldn't call us a CRM as much as I'd call us an ERP, or a complete enterprise level management solution tailored to the ISO business model."
Josh Johnstone, Corporate Marketing Director at POS Portal, said many dedicated ISO management tools also offer integrations with most major processors. However, what makes them different from each other is how they work within an ISO's office management environment. For example, his company's product, P2, was built on the SalesForce.com open source backbone.
"We are an authorized third-party ISO management software developer on the SalesForce.com platform," Johnstone said. "We've created a custom solution for ISOs utilizing all the SalesForce.com features, tools and plug-ins, but re-designed and simplified it for the merchant acquiring model."
POS Portal's Manager of Software Sales, John-Paul Sansone, added, "One client might be selling through one processor today, but they could move their portfolio to another processor later, so portability of data and a single system of record is important."
While this model works best for ISOs that, in Johnstone's words, "have used SalesForce previously or are purchasing it for the first time," many ISOs cannot invest in the robust SalesForce.com platform. This is where other ISO management tools come to into play. Yet only a handful of off-the-shelf ISO management solutions are available. And they aren't always offered at a price smaller ISOs can afford.
Robert Hendrix, Chief Executive Officer of Bankcard Pros CRM software, found his sweet-spot in this market. "We support small to midsized ISOs and offer them an affordable 'no user fee' flat rate for an unlimited number of users."
Looks like there is plenty of ISO market share to go around.
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