Back to Blog

Understanding What Registered ISO/MSP’s Are

July 21, 2021 • by jclarknationalprocessing-com

Estimated reading time: 2 minutes

When you initially applied for your merchant account or the bank account that enabled you to accept credit and debit cards as payment for your products or services, you may have noticed that there was a credit card processor, ISO, or MSP that was a party in the agreement. Most business owners today are familiar with what a credit card processor is since they provide their customers with the option to pay by credit or debit card. But what exactly is an ISO or an MSP and what roles do they play in your merchant account agreement.

ISO Defined

ISO is the abbreviation for Independent Sales Organization and is a term that describes an individual or organization that is not a bank (credit card industry association member). However, they do have an established card relationship with the different member banks. An MSP or Member Service Provider is not a credit card association member but is registered by a credit card corporation (MasterCard, VISA, etc.) and can provide program services to other members. Just remember that ISO’s and MSP’s are not banks.

ISO’s and MSP’s do not handle a merchant’s funds. Only the processing banks that the ISO or MSP has contracted with can do this. If an ISO/MSP is going to be registered by a credit card association, only a processing bank that is a MasterCard and/or VISA member can sponsor them. In most cases, these banks are association members and are registered with MasterCard and VISA associations from the very beginning. Additionally, multiple member banks can sponsor the ISO/MSP.

Sponsorship by a Member Bank

When the ISO/MSP is sponsored by a member bank, they are allowed to market different merchant accounts. The member bank has to verify that the company is financially stable before they will be allowed to do any marketing on their behalf. In order to register with MasterCard and VISA, they have to comply with all regulations regarding the marketing of the product and pay a fee as well.

ISO/MSP Compliance

You can easily check if the ISO/MSP is in compliance by reading their marketing materials or visiting their website. There should be a disclosure stating that the company is a bank registered, FDIC insured ISO/MSP of a particular city and state. This is required by the two major credit card companies and if the disclosure is not visible, the ISO/MSP could be fined up to $25,000. When you are applying for your merchant account, make sure that this disclosure is pointed out to you.

Blog Search
Most Read Blog Articles
The Key Disadvantages of POS Systems Every Business Owner Should Know The Key Disadvantages of POS Systems Every Business Owner Should Know July 21, 2021
High-Risk Check Processing High-Risk Check Processing July 20, 2021
Voice Authorization Basics Voice Authorization Basics July 20, 2021
Understanding What Registered ISO/MSP’s Are Understanding What Registered ISO/MSP’s Are July 21, 2021
Reddit Small Business: 4 Subreddits That Are Perfect for SMB Owners to Join Reddit Small Business: 4 Subreddits That Are Perfect for SMB Owners to Join July 21, 2021
Blog Categories
All posts 147
ACH 27
Cash Discount 11
Chargebacks 6
Clover 1
Credit Card Processing 119
Credit Card Reader 9
Educational Resources 8
EFT Payment 18
Featured 4
Fees 3
Funding 4
Interchange-Plus Pricing 2
Other 17
Recurring Payments 1
Regulation 1
Security 11

    Step 1/2

    Start Processing Payments Now

    No pushy sales.Transparent, straightforward pricing.

    What Can We Help You With?
    Credit Card Processing
    ACH Processing
    POS Solution
    Cash Discount
    Monthly Processing Volume
    $50,000 or Less
    $51,000 to $250,000
    $250,000 or More
    Amusement & Entertainment
    Business Services
    Car Sales
    Clothing & Accessories
    Contracted Services
    Debt Consolidation
    Direct Marketing
    Firearms & Ammunition
    Government Services
    Home & Garden
    Liquor Stores
    Miscellaneous Stores
    Personal Services
    Professional Services
    Tax Services
    Rent/Real Estate
    Retail Store
    Required Field
    Required Field
    Required Field
    Required Field
    Required Field
    Required Field

    Thank you!

    Your inquiry has been sent

    We will contact you ASAP!