The Guide to being a Merchant Services Agent / ISO

As more and more businesses transition to cashless payment methods and businesses themselves shift operations online or over mobile smartphones, one of the key beneficiaries will be the merchant account providers of these trends.

Merchant Services Agent / ISO selling merchant services will be at the forefront of capitalizing on these trends. This career line will be rewarding financially, set them up for professional growth, and have a sense of accomplishment in an innovative and rapidly growing sector.

Let’s look at why being a Merchant Services Agent / ISO can be an excellent opportunity as the industry quickly shifts from being cut-throat and mendacious to constantly evolving innovation and high-tech.

Let’s start with what does a Merchant Services Agent/ ISO do

A Merchant Services Agent, a Member Service Provider (MSP), also known as Independent Sales Organization (ISO), is used interchangeably within the payment processing industry. As a merchant services agent, you are representing an issuing bank to sell their payment processing services. However, it is essential to be aware that you would be required to have upfront investment to be a part of the bank’s reseller program. The perks include low buy rates (the cost of the payment processing service which the ISO/MSP sells to merchants) and ongoing support to help effectively market and provide merchant account services.

The drawback of this ISO/MSP arrangement is the upfront investment required to set up this relationship. Often, the issuing bank may not even consider an individual merchant service agent for the program, instead of requiring them to become a part of an already existing ISO/MSP.

What about working with a Merchant Service Provider rather than being one?

An alternative to being a merchant services agent / ISO is to work for one. Granted, the buy rates will be higher since the MSP will keep their commission to get a return on their investment of being a part of the issuer bank’s reseller program. Still, the proposition is lucrative enough to make a profit and get you started in an industry, with additional resources for learning, guidance, and potential leads. All this without upfront costs and creating other opportunities to improve your understanding and get you out earning that much faster.

The details of the Merchant Service Provider Reseller Program

It all starts with a buy rate. As the name suggests, the buy rate is the rate at which you buy the payment processing service from the ISO/MSP. This amount includes what the ISO/MSP gets and what the issuing bank gets. You will then add your own commission to derive the payment processing rate that is offered to the merchant for the merchant account services.

For example, the buy rate of the merchant services provider’s reseller program that you are a part of is 1.9% + $0.10, and you can offer it to merchants for 2.1% + $0.20. In this scenario, your commission will be 0.2% + $0.10.

This might not seem much, but you earn on every card transaction a merchant processes. If a merchant processes 200 transactions of an average of $10 each, so $2,500, you earn 0.2% * $2500 = $5 + $0.10 * 200 = $20, so a total of $25. That’s $250 of monthly recurring income if you sign up ten such merchants.

You will continue to work on your leads and look to build that number to account for your growth projections and merchants leaving. The beauty of this industry is that more and more businesses are starting to adopt cashless transactions and mobile payment options for ease of use and speed. It’s just what the mobile device-native consumers demand today.

What is a Merchant Services Agent / ISO responsible for?

So what do you have to do? What are you responsible for as a Merchant Services Agent? Primarily, you’ll Always Be Closing! Well, that’s the end goal. How you accomplish that is by doing the following;

Take the valued partner approach: You listen to their needs, their pain points, what they want to do, why they’ve even accepted an appointment with you. Look to address that so that they can work without any hassle or friction with the service you’re offering.

Learn quickly! And as much as possible about the industry: What are the different products? What are the different types of merchants? Who are the major payment networks? What’s Cash Discounting? Is it legal? Will my existing POS system integrate seamlessly with your merchant account? What’s an MCA? How’s that different from ACH? What paperwork do I need to fill out? What support options are available? The answers to those questions should come as second nature. That’s how you build trust and become their trusted advisor rather than some vendor.

Persistence: You have to be proactive in searching for merchants. You may be ignored initially, but that’s okay. You have to take the long view; it’s not a sprint but a marathon. Keep dropping by and checking in. Share advice and educate them on the changes impacting the industry. Be honest with yourself that what you have to offer is indeed a better option for their business. It may not always be, but at least you’ve invested in a relationship that may pay dividends in the future.

How can you choose the best Merchant Service Provider Reseller Program?

The merchant service provider’s reseller program you partner with determines how much you earn and learn. It’s important to understand that building a business on trust and loyalty is much more effective than long-term locked-in contracts threatening merchants with legal non-recourse.

You want to highlight all that the ISO/MSP has to offer without any long-term contracts. Can the MSP offer 24/7 support? Do they easily integrate merchants’ prior POS equipment and offer additional tertiary services? Having the ability to do all that with transparent pricing without any gimmicks makes your job as a merchant service agent that much easier. 

Being a Merchant Services Agent / ISO has the potential to lead to tremendous growth, both financially and professionally. Demographic trends, the subsequent impact on the payment processing industry’s development, and attaining an independent, high-growth career are all factors just too glaring and rewarding to ignore. If building meaningful relationships and developing transferable skills while being rewarded for it in a secular growth industry sounds of interest to you, then carefully consider being a Merchant Services Agent / ISO.

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