Choosing a Provider

When looking for a service provider for your merchant account a number of questions can come up and one of the most important is; Which provider do I choose?  Below you'll find some best practices and questions to ask yourself as you research the best provider to use for your specific business.

Independent Sales Organizations (ISO):  ISO services are organizations that represent banks. Each ISO acts as a "middle man" and will have an agreement with a bank to sell services to them. ISO services are usually allowed to mark up fees when they sign up merchants which is how they make a profit--ISO services are very popular and are widely used.


Business Banks:  You can use the bank in which you do regular business as a potential merchant account provider. Keep in mind that most banks do not do this type of processing themselves, but are able to farm it out to a third party entity. In fact, in many cases, your bank may offer merchant account services in conjunction with a business account package. When you approach a bank to do general business services, ask if this service is included when opening your account. You may wish to consider a registered credit card broker since they are typically less expensive and provide expertise in that important area of your business.


Credit Card Associations:  Each brand, Visa, MasterCard, Discover and American Express handles credit card merchant account services differently. For example, Visa, MasterCard and Discover will require you to have an established account through another intermediary organization before offering you credit card processing for your business. Conversely, American Express will work with you directly to set up an account. However, this may be a viable option for a major business (monthly volumes in excess of 250 million) looking to establish a processing relationship.


International Merchant Account Company:  Also known as an offshore merchant account, this may be the riskiest option. Most businesses that opt to have credit card processing done through an international merchant account provider are usually those with little or poor credit history, odd location, business type or another reason that doesn’t allow them access to companies located in the United States. Keep in mind that most of these companies are not regulated in the same manner as those in the United States, making them a risky investment for your merchant account provider choice.


Registered Credit Card Broker:  These also are known as independent sales organizations and usually represent several ISO processors at any given time. Similar to banks, they do not actually process the transactions themselves, but set up accounts with those that do. These are usually more specialized expensive services and offer the smaller merchant an advocate which larger merchants are accustomed. All organizations are required to be registered with VISA MasterCard and are sponsored by ISOs. This may be a viable option for the small to mid size merchant that wants personalized service.


For each of these categories there are a myriad of services providers all vying for your business, so make sure you do your homework and choose one that not only fits your needs, but will provide you the approproate level of support.



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