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The Green Sheet Online Edition

December 27, 2021 • Issue 21:12:02

10 things to look for in an ISO

By Dustin Magaziner

Agents often ask what separates ISO A from ISO B. It can be daunting to decipher the pros and cons of merchant processors and their programs. To bring clarity to the process, first determine what you're looking for and then go into discussions with purpose.

Not all ISOs are created equal. Some are large; some are small. Some provide top-level support; others believe in a hands-off approach. Having a wish list with priorities or must-haves is key. If you aren't sure, do your homework first. Some agents are looking for high-risk, others are looking for top-tier residuals, still others may need a program that offers health insurance.

Knowing what you need will make your search much more successful. You wouldn't walk into the first car dealership you see and buy the first car that catches your eye, would you? Invest the time to understand the differences that exist among ISOs, and you will be on your way to finding the right fit.

Choosing the right one for you

Here are 10 crucial things to look for in your new or current ISO. Your ISO should:

  1. Provide high level partner support—with humans: Working closely with your merchants, you might find you need to speak with partner support immediately. Does the partner support team pick up when you call, or do they make you wait on hold—or worse, do they tell you to send an email? Whether you are new to the industry or you have years of experience, it's good to know you're not just a number and that the ISO you work with will go out of its way to solve your issues immediately. Partner support is a must and cannot be overlooked.
  2. Provides access to the ISO's decision makers: Further to the point of choosing an ISO with immediate, real-time partner support, also consider one that provides access to senior management when necessary. Can you get the CEO, president or other leaders on a call if you need them? This can be extremely important when solving an unusual issue or working with a merchant with unique or complex needs. Having direct access to the top can mean winning—or retaining—a big customer.
  3. Values your relationships with merchants: The ISO you choose needs to be flexible enough to understand your relationships with your customers and provide the same level of attention to all your customers regardless of size.

    As such, raising rates and charging high termination fees are surefire ways to destroy relationships you've worked so hard to build. It's critical to work with an ISO who not only sees eye to eye with you and your merchants, but also treats your merchants the way you need them to be treated. Also, if an ISO doesn't treat its merchants properly (fair terms, rates, etc.) what makes you think they will treat their partners any better?

  4. Focuses on innovation: Every ISO claims to have the most innovative products and services, but how many of them actually do? Or if they do, how would they benefit your merchants? Work with an ISO that offers free equipment, and not just a basic countertop terminal. Having access to a full product line of POS and free equipment will drive growth and sales. In today's ever-changing landscape, free equipment is an absolute must if you truly want to compete with newer players like Square and Toast. Play the long game and maximize your residuals.
  5. Offers the best commissions: Where do you want the bulk of your compensation to come from: residuals or upfront bonuses? Do you want to work hard to make someone else a small fortune or do you want to make a small fortune for yourself? The latter is obviously a better fit, so it's generally a good idea to find an ISO that will offer you top-tier residual splits. Bonuses are great, but residuals are where the real money is. Make sure you understand your Schedule A and residual splits.
  6. Offers add-on products: Value-added products make your merchants stickier and keep them with you longer. They can also be a source of additional revenue. Gift cards, loyalty systems, POS, and merchant financing are things all ISOs/agents should be offering in today's landscape.
  7. Allows you to build your own team: Would you like to build your own team and train new agents or recruit agents to make an override on? This isn't MLM, and you should not necessarily hire/recruit everyone you know. However, if this industry has changed your and your family's lives, why not help do this for others? Taking your time and energy to train a new agent can provide value, and you should consider working with an ISO that encourages team building, setting you and your team up for success. Some ISOs allow you to sign sub-agents and will pay them directly so that you can focus on sales, training and building your team without worrying about legal, accounting and tax issues.
  8. Can handle merchant accounts in all verticals: Far too often ISOs can't work with certain verticals or industries, so they tell their agents to avoid them. This could mean turning away valuable business in industries such as CBD, MLM, travel, credit repair and others. Instead, look for an ISO that can compete in virtually all verticals.

    Even if you aren't regularly working with high-risk merchants, it's important to know that the ISO with whom you work is able to provide everything under one roof and handle such types of accounts should these business opportunities present themselves. Oftentimes, if the opportunity presents itself and you don't have a home for it, it could be too late.

  9. Offers cash discount and/or surcharge programs: The industry is changing—quickly. More merchants are signing up for these programs by the day, and more agents are selling them successfully. Profit margins are higher than ever, and merchants actually want to sign up for these programs. If you aren't selling these programs because your ISO doesn't offer them, or doesn't offer them well, you are almost certainly losing out on a small fortune.
  10. Assists with lead generation: You are a relationship builder and a skilled salesperson. But who doesn't like having some leads and/or appointments provided to them by their ISO? Most processors compete with their agents and provide their leads to their inside sales team. However, some ISOs will offer leads and appointments to their team. It's worth exploring whether your ISO has a leads program that can help you win more business and drive growth. If they don't, others certainly do.

In a hyper-competitive market riddled with uncertainty, small businesses know they need to rely on professional services providers who have what they require in their time of need. When vetting an ISO with whom to work, ask the hard questions and choose one that gives you—and your customers—the best chance to succeed. Ultimately, your success and growth is tied to the support, programs and flexibility of the ISO you pick. end of article

Dustin Magaziner is CEO of PayBright, a company focused on saving merchants money through fair pricing, no contracts and free terminals. Feel free to reach out to Dustin with any questions at dustin@gopaybright.com.

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