On Becoming Registered
We receive a number of calls from ISOs inquiring about how to become registered with Visa and MasterCard. While the two companies are not exaclty forthcoming with the data, we have been able to obtain information that will enlighten you to their rules and get you on your way to becoming registered with Visa and/or MasterCard.
Visa Regulations
Any Third-Party Servicer that only provides services on behalf of its affiliate (including parent and subsidiaries) and whose affiliates, which are also members of Visa USA, own and control at least 25 percent of the Third-Party Servicer, is exempt from the registration requirements and associated fees specified in this section.
1. The member makes certain that the principals of the ISO are financially responsible.
2. The Member performs a background investigation and site inspection of the ISO.
3. The Member identifies the ISO and designates the activities they are authorized to perform.
4. A Participant-type Member may not use an ISO unless authorized by its Sponsor.
5. All ISOs (and their independent contractors) must be registered with Visa prior to beginning services. (Registration is accomplished by sending an "ISO Contractor Registration" to Visa via certified mail.)
- A $5,000 initial registration fee for each ISO and an initial registration fee of $1 000 for each independent contractor managed by the ISO shall be paid to Visa. Additionally, a $2500 annual fee for each new or existing ISO shall be paid by the member to Visa.
- The annual fee for each Independent Contractor managed by a member or ISO is calculated by taking the average number of Independent Contractors employed per month by the ISO and multiplying by $500
6. Members must submit any change in ISO principals in three days and any change in control of ISO to Visa in three days.
7. Members must submit a detailed report regarding activity of each ISO on a quarterly basis within 45 days of the end of the quarter or a fine is assessed. Visa is actively pursuing ISOs who are unregistered or improperly registered. Additionally, ISOs receive a Visa publication keeping them informed of Visa developments and are invited to training sessions and acquirer workshops.
MasterCard Regulations
MasterCard classifies its members' third party agents as being either 1) an independent sales organization Member Service Provider (MSP) or 2) a third party processor MSP (TPP). An MSP is usually a non-member of MasterCard that provides services (whether ISO or TPP) to a MasterCard member's card issuing and/or merchant acquiring programs.
Independent contractors are allowed to work for a MSP registered with MasterCard provided they are receiving payment from the MSP and are doing business in the name of the MSP.
Registration requirements for ISO and TPP MSPs include the following:
1. ISOs must be individually registered with MasterCard by each member using the ISO's services
2. TPPs must register directly wth MasterCard
3. For both ISOs and TPPs MasterCard reviews the application materials and determines whether MSP registration can occur.
4. Upon registration, the member and the MSP will be notified by MasterCard; Members will be charged $5,000 to register each ISO relationship and $1,500 each year thereafter to maintain each ISO's MSP registration status.
Members look to both ISO and TPP MSPs to outsource certain bankcard functions. It is when the members outsource that members must ensure that ISOs and TPP are properly registered with MasterCard as an MSP.
An independent contractor must do business in the name of a registered MSP and must be paid by the MSP; otherwise the independent contractor must be registered with Mastercard as an MSP.
An MSP is rarely a member. ISOs have the right to sell for MasterCard members when they are registered as MSPs. Independent contractors who want to work alone must also be registered as a MSP.
