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Being an ISO - Is it possible to be an ISO/MSP member of multiple banks in order to provide more payment solutions?

  • Let's say I want to become an ISO/MSP of a bank within the Visa/MC's EU region, but they only offer Visa/Mastercard. In order to provide more payment solutions to the merchants, I will need more solutions. Is it possible to get a few solutions from bank A (Visa,Mastercard), and a few from bank B (Amex,UnionPay, Discover, Carte Bleue) ? (Both banks are in Europe) *I've enough capital for this job, I think approx $500.000 is enough for this startup. In addition, we won't be offering 3rd party payment processing, we will be offering a service like paymill and stripe. An API will be provided to the merchants and they will integrate it, so our merchants' customers will never leave their website. I am gonna talk the details to the representative of the bank when I go to the bank, of course. At least, are we on the right path ?

  • Answer:

    This is a rather complex question.  But it reduces down to the agreements you have structured with acquiring banks.  Each region of the world also has a specific requirement for representing payment card companies. More to your exact question, in general you will have no challenges if you choose “bank A” for Visa, MasterCard and  “bank B”  for Amex, UnionPay, Discover, Carte Blanc/Dinner’s Club.  I would create an addendum that presents the details of each relationship to all contracts with the acquiring banks.   In addtion, you may be able to create direct relationships with Amex.  With Discover you can also create a direct relationship and this may bring in UnionPay and Carte Blanc as in many markets Discover is repenting UnionPay and Carte Blanc/Dinner’s Club is a Discover product.  There are other relationships that I would suggest but it is based upon your target merchants and regions.   These additional relationships in my view could be equally as important if not more so.

Brian Roemmele at Quora Visit the source

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There is nothing technically stopping you. Unless you have legal issues.

Sainath Gupta

As someone who has worked in the space for more than a decade, I can say without a doubt say it's possible but does it make financial sense? No. ISO relationships can be as simple as a standard agreement but your long term revenue is directly tied to the volume of transactions and merchants you bring in. You are more better suited to get higher revenue numbers by contracting a portfolio of 10k merchants with 1 company then you would 5k merchants with 2 companies. Also, having a larger portfolio with a single company allows you to negotiate better options, terms and approval rates. The one exception I have seen many times is that companies with higher revenue rates often don't have the highest approvals, as such, it's not uncommon to have one relationship as your standard and one to deal with high risk merchants.

Alejandro Corral

Thanks for the A2A.I'm not as familiar with the European side of payment processing but a few things: 1) Stripe is not an ISO. They're an aggregator. If you're looking to be an ISO, that's essentially a 3rd party processor.2) In the US, at least, yes, you can be an ISO for multiple banks. A lot of ISOs are, because different banks partner with different back-end processors, and sometimes it can be beneficial to have the ability to set up a merchant with one processor over another. For example, if one backend processor doesn't support certain types of businesses but another does, or if your customer has proprietary equipment that they want to use. (Like with First Data. If someone has a First Data machine and doesn't want to buy another one, they'll need to work with an ISO of a bank that works with First Data. If you're not an ISO of a First Data bank, you're not going to be able to help that customer.) Many ISOs have their primary bank that they run most businesses through, but still have relationships with others in order to give themselves more options for taking on customers.

Ellen Cunningham

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