The value of working with an established merchant services processor.
Accepting credit cards and other forms of non-cash payments is a must-have for most businesses. To make that possible, you need a reliable party to process those transactions — an organization that is a member of the major credit card associations.
Some established banks have long histories as card processors, acting as the direct link between your business and the card networks. In addition to processing payments, banks often provide the essential setup and ongoing customer support services you need to accept cards smoothly, resolve issues in a timely manner, and manage day-to-day operations.
However, other banks choose to outsource these services to third-party companies known as Independent Sales Organizations (ISOs). While this approach may not seem to have an upfront impact on your business, there are many important differences to consider when deciding what type of business you want handling your merchant services.
What is an ISO?
An ISO is a company that sells card processing services independently. Most ISOs contract with individual agents who may represent multiple ISOs or financial institutions. Their primary role is to solicit new business and act as a middleman between you and the actual processing bank. ISOs typically don’t perform the actual card processing themselves. Instead, they arrange for other institutions to handle that function on their behalf.
Why work directly with a merchant processor?
While ISOs can handle some aspects of payments processing, and may even provide basic customer service, there are far more advantages to working directly with an established merchant processor — especially when it comes to service, reliability and value.
- Integrated customer support: An ISO may offer you lower transaction fees, but those savings typically come with limited customer service. If your point of sale system malfunctions during a busy sales period or an online transaction triggers a dispute, you’ll want immediate and knowledgeable support. Some established financial institutions, such as Commerce Bank, provide integrated in-house customer service with direct access to representatives who understand both your processing setup and your business needs. This means faster resolution times and more consistent support.
- Security and compliance: Payment security is more important than ever. Established banks have the resources to invest in cutting-edge fraud detection and encryption technology. They are also well-versed in compliance requirements and industry best practices, helping to mitigate exposure to data breaches and fraudulent activity. ISOs, on the other hand, may outsource security functions or follow inconsistent standards, depending on the processing organization handling their services.
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Consistency and accountability: When you work with a bank for both processing and customer support, there’s no finger-pointing if something goes wrong. The bank is directly responsible for the service you receive, which means greater accountability and more consistent service. With an ISO, you may find yourself bouncing between the ISO and the processing bank when issues arise, with each party blaming the other.
- Holistic business support: Banks that offer merchant processing in-house can also provide strategic insights and business solutions beyond payments processing. They might suggest adjustments to your payment options based on customer behavior or offer additional banking solutions that complement your payments system. ISOs are primarily focused on new sales and may not have the same breadth of resources or insights to help your business grow.
Working directly with an established bank for merchant processing gives you more than just a transaction service — it provides a trusted relationship. When evaluating your options, look beyond the headline rates. Whether you process thousands of transactions a day or just a dozen a year, choose a credible institution that delivers not only competitive pricing but also reliable support, strong security and strategic value for your business.
If you’d like a free consultation of your credit card processing structure, let’s get in touch opens in a new window.
