ISO (Independent Service Organization)

In the payment systems industry, an Independent Service Organization (ISO) is a third-party entity that acts as an intermediary between merchants and acquiring banks. ISOs facilitate the process of merchant registration, helping businesses acquire the ability to accept credit and charge card payments. These organizations play a crucial role in the expansion of payment processing capabilities, especially for small to medium-sized enterprises that may not have direct relationships with large financial institutions.

Key functions of an ISO include:

ISOs are compensated by acquiring banks or processors based on the volume or value of transactions processed by the merchants they have signed up. This model motivates ISOs to maintain a large, active merchant base and provide services that enhance transaction volumes.

For many businesses, partnering with an ISO can simplify the complexities associated with entering the card payment ecosystem, providing expertise and resources that might otherwise be inaccessible or economically unfeasible for individual merchants to obtain on their own.