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Education

StreetSmarts SM

“Setting up your ISO for success”

WITH
AARON NASSEH

Should you register as an ISO?

By Aaron Nasseh you are often able to negotiate much better terms working
Finical Inc. with another ISO than you would by going direct to
the processor. I will discuss negotiating your pricing
ost independent sales agents, also known as agreement in another article.
merchant level salespeople (MLSs), enter the
merchant services industry with ambitious Going direct to the processor requires that you agree
M goals, and in many cases the path to fulfill- to heavy production commitments to obtain favorable
ing those goals involves becoming a registered ISO. I am pricing, so unless you already have an established sales
often asked by MLSs if they should start their own ISO team and you are assured of consistent production,
and go through the registration process. While becoming then that is something you must seriously take into
a registered ISO may be very gratifying, the answer is a consideration. In addition, registering directly with
little more complicated than a simple yes or no. one processor limits your business to that processor's
particular platform.
In this article I would like to share with you a few of the
pros and cons of registering as an ISO, so that you may Going direct also often means less support and more work
determine if registration is the right choice for you, or if on your part, which directly translates into more staff and
you're better off working as an agent for another ISO. For higher overhead for your company. Conversely, if you
the purposes of this article I'm going to focus on small instead partner with a good ISO, your ISO partner will
ISOs, and I will assume that you do not have millions of handle most of your servicing needs, thereby helping you
dollars in startup capital. run your business more efficiently. And you will be able
to place more of your attention and energy on growing
The first question I always ask those interested in starting your sales channel.
their own ISO is, "Why do you want to become a registered Branding
ISO?" Unfortunately, an overwhelming majority of the
answers I receive indicate the reasoning is flawed. The next most common reason for wanting to register as
an ISO I usually hear is, "I want to have my own brand."
Pricing
While this may seem like a more plausible rationale, it's
The most common response I hear is that the aspiring ISO also not a good enough reason to register unless you have
owner believes he or she will receive better pricing by sufficient capital to establish a brand and make a name for
simply becoming a registered ISO and working directly yourself in the market. It is often much easier to sell under
with the processor. While this may have been true some an established name that is recognized in today's market
years ago, it is no longer the case for small ISOs. In fact, than to market under an unknown brand. Depending on

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