What is an Independent Sales Organization?
When creating a business, unfortunately, not everyone pays enough attention to setting up payment processing. As the company grows, merchants may need the ability to add different payment solutions.
An independent merchant can assist with the provision of additional payment methods. Besides, you can also create your own plastic cards.
Such an opportunity will provide significant convenience for customers, who, thanks to the cards, will be able to make purchases much faster and receive various bonuses and discounts.
In this article, we will try to understand the main aspects associated with an independent sales organization, as well as its components. We will also try to consider methods for optimizing business processes with the help of independent sales organizations.
After all of the questions are clarified, you will be able to better understand the online payments industry and could improve methods of how your business interacts with customers.
The definition of Independent Sales Organization
The Independent Sales Organization (ISO) is one of the key players in the online payment processing industry. ISO acts as an intermediary between merchants and financial processors for credit, debit cards, and ACH payments. The company provides its services independently of financial institutions or banks, and thus received its name.
Let’s consider how ISO works, what role they play, and what benefits they provide for merchants.
What issue does the Independent Sales Organization solve?
An independent sales organization is a separate financial structure that is not directly related to the bank. They are an intermediary and accept credit cards on behalf of the merchant. ISO partners with banks therefore their activities are completely legal.
Moreover, on behalf of the partner financial institution, ISO provides support and customer service, therefore financial institutions are interested in the quality operation of ISO.
It should be noted that independent sales organizations help with payment processing, and assist in determination the size of commissions and additional margins.
Also, they help merchants to purchase sales equipment, including POS terminals for processing payments in offline sales.
If customers have disputed credit cards or other issues, ISO is also responsible for handling such tickets on merchants’ behalf.
How do Independent Sales Organizations make money?
Of course, independent sales organizations offer various services, but the main source of income is a percentage of the funds that the merchant earns.
Thus, for every successful transaction, the merchant also pays the payment processor and ISO.
ISOs typically employ independent contractors as their sales agents, and these contractors receive a portion of their ISO earnings in exchange for their services.
The role of the credit card processor
Independent sales organizations are responsible for obtaining merchant accounts for merchants.
After a merchant receives the merchant account, a credit card processor enters the game, which, in turn, will do the actual activities of processing the transactions.
The solutions that payment processors provide:
- Management of the transaction process, acting as an intermediary between the merchant and the bank. Authorize transactions;
- Provides a secure platform for organizing payments on the site;
- Ensures the security of transactions;
- Assists in challenging chargebacks;
- Offers additional solutions: invoicing, bulk payments, subscription payments, etc.
The main aim of ISO, in turn, is to register customers and receive a merchant account, further assistance in setting up and organizing the ecosystem of accepting payments, attracting potential customers, advertising, issuing cards.
Who are sales agents?
Sales agent is an individual or a company that enters into a contract for the sale of ISO services. The sales agent does not need to register with Visa / Mastercard, which allows not to pay the corresponding commissions. Although the sales agent cannot sell services on their own behalf, they provide services from the ISO partner and receive profit as commissions for each client reached.
Should merchants look for independent sales organizations or sales agents?
For a simple opening of a merchant account, you will undoubtedly have both options. However, if you plan to organize acceptance of payments on the site, then in this case the best solution would be to contact a company that will provide a full range of processing services – PayOp.
Payment processing with PayOp
PayOp is an international payment processor for various types of businesses.
Moreover, being a third-party payment processor, the company provides an opportunity for merchants who do not have a merchant account yet to accept payments as well.
Among the advantages of the company:
- More than 300 payment methods in 170 countries worldwide;
- Transaction security. PCI DSS certification, modern anti-fraud techniques, data encryption;
- Payment gateway integration is absolutely free and takes up to 5 business days;
- The acceptance of high-risk industries;
- Fees for processing and money withdrawals are below the market;
- More than 10 options for withdrawing funds;
- Currency conversion in real time;
- Mass payments.