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Insights and Expertise

Note that a processor can be retained for the limited Unregistered ISO
purpose of only administering transactions between the
merchant, the acquirer, the issuer and the ISO, without In very general terms, an unregistered ISO is an ISO that is
carrying the risk of chargebacks and unauthorized not registered with the payment networks. Note, however,
transactions. that the term ISO is used very loosely in the industry.
Many ISOs refer to themselves as an ISO and even use
Registered ISO their own names in sales and marketing without actually
being registered with the payment networks.
An ISO is an independent sales organization, sometimes
called an MSP or member service provider, and the role Agent
is essentially to sell merchant services (processing) of an
acquiring bank and a processor. An agent is really just another term for an unregistered
ISO, but it usually refers to an individual or smaller
An ISO is registered when a sponsoring bank (acquiring business that refers merchants to an ISO for processing in
bank) has sponsored (that is. supported) the ISO to exchange for residuals.
become registered as an ISO with the payment networks.
This process takes time and involves fees. The key benefit There are many more terms than those I've discussed here,
to being a registered ISO is that the ISO can then sell but these are key players, and it's helpful to understand
merchant services (of the acquirer) under its own name them at any stage in the payment processing business.
and brand.
In publishing The Green Sheet, neither the author nor the publisher are
The registration requirement to using one’s own company engaged in rendering legal, accounting, or other professional services.
name helps add accountability in the system. If a given If legal advice or other expert assistance is required, the services of a
bank has a hundred ISOs, and one of them misled a competent professional should be sought. For further information on
merchant or group of merchants, the fact of the ISO's name this article, please contact Adam Atlas, Attorney at Law email: atlas@
being registered with the networks and the acquiring adamatlas.com, Tel. 514-842-0886.
bank helps the networks and acquiring banks identify and
render the correct ISO responsible for the wrongdoing.

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