The Green Sheet Online Edition

September 12, 2016 • Issue 16:09:01

Selecting the right ISO partner

By Aaron Nasseh
Finical Inc.

Over the course of my career in the payments industry, I've met and collaborated with thousands of merchant level salespeople (MLSs) who work with various ISO partners. I've also been privileged to work with many ISOs throughout the industry, both as an executive and as an agent. Regrettably, horror stories about MLSs losing their residuals have become all too common.

Despite this unfortunate reality, I'm still amazed at how quickly some MLSs will execute an agent agreement with an ISO prior to conducting any research on the ISO – or worse, before reviewing the agreement with a competent attorney.

I believe most MLSs have good intentions, which is why they often assume the same of their ISO counterparts. However, I've seen enough incidents to tell you it doesn't always work this way. While there are many good ISOs in our industry, there are some with less than ethical management. Buyer beware!

If you're serious about your career in the merchant services industry, it's critical that you protect your future income by vetting any potential ISO partner. You're in this business for residual income, so you must do everything possible to make sure you select the right ISO. The good news is that it's not as daunting a task as it may seem; it just takes effort and good judgment.

Five ways to protect your interests

Here are several tips to keep in mind as you seek a partnership with an ISO.

1. Don't assume bigger is better: A larger ISO may not be the best fit for you. Many larger ISOs are geared toward servicing bigger agents, so they are not always able to provide the high level of service and support a smaller agent requires. You usually won't find this out until you've already submitted deals, so it's essential to ask upfront what type of services and support they provide to their agents.
2. Conduct due diligence: Thanks to the Internet, you can be a private investigator. Research the potential company and learn as much as you can about its practices. Find out if it has a high management turnover, which is generally indicative of poor leadership at the top. That's the only reason I need to walk away from a company.

   If the company is public, be sure to review its financials; you'll be surprised to learn that some of the largest ISOs in payments are financially unstable. Review any past or pending lawsuits against the company, which can provide a quick peek at internal operations.

3. Get to know the CEO: The company is as good or as bad as its chief executive officer. Find the CEO online and learn as much as you can about him or her. Request a call to see what type of person you could be working with. If the CEO's ego supersedes his or her judgment, it would be wise to look elsewhere. If the CEO won't take your call, it's safe to assume this organization will not value your business.
4. Trust your intuition: Many MlSs fall in love with Schedule A, so they ignore their intuition or the signs of danger ahead. Don't let this happen to you: listen to your gut instincts.
5. Hire an attorney to review your agreement: When you find an ISO partner that you are comfortable with, find an attorney specializing in the payments industry to review your agreement. I cannot emphasis the importance of this step enough. Your entire financial future may depend on it. You must make sure that your interests are protected. The initial review of the agreement can tell you a lot about the company that you may be working with. Countless provisions in the agreement designed to take away your residuals may signal trouble ahead, so have your attorney negotiate terms that are fair for both sides.

I hope you utilize these tips, as it could mean the difference between a great partnership or one filled with disappointments.

Aaron Nasseh is the founder and Chief Executive Officer at Finical Inc. His extensive sales and management experience includes having previously served as the General Manager of CardPayment Solutions and Vice President of Sales at iPayment Inc. He may be reached at anasseh@finicalinc.com or at 818-330-4055.

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