All applications for a merchant account go through an underwriting process to gauge the level of risk for that particular business and business type. Some of these processors are directly affiliated with the member bank and in some cases owned by the member bank. All of these processors must be “registered” as an Independent Sales Office (or ISO) with a member or acquiring bank. Member Banks need ISO’s in order to generate and approve as many merchant accounts as possible. The Payment Card Industry strictly monitors activity at all levels in order to provide retailers and their customers the highest level of privacy and security.

The Independent Sales Office, or ISO, is not only focused on generating merchant accounts for the Processor they are registered with, but are responsible for maintaining their relationships with the merchants that are accepting and processing credit cards through them. An ISO can be anywhere is size from a few people to hundreds and can offer everything from merchant accounts and customer service to technical support and credit card terminals.

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One would be hard pressed to find anyone in the United States or around the world that doesn’t have at least one credit card in their wallet. Whether you have one or ten credit cards, chances are you have used it to purchase something recently. I can only speak for myself, but I am still amazed (and sometimes annoyed) when I go to pay for something with my credit card just to be told “We don’t accept credit cards” or “Sorry cash only.” The first words out of my mouth are always “Why don’t you accept credit cards?” and I have noticed time and time again that the reasons these merchants give never make any sense to me.

The majority of merchants seem to have no idea just how beneficial accepting credit cards can be for their business. If they just took a little time to learn how the Payment Card Industry works, I am sure I would hear a lot fewer negative comments. There is a common misperception that accepting credit cards or opening a merchant account is expensive, time consuming and just not really worth it. For every merchant that has turned away a paying customer because they wanted to pay with a credit card I ask, “Can you afford not to take credit cards?” More often than not I find myself spending some time with the merchant to let them know what the benefits to their business could be and also explaining the simple process of getting a merchant account.

Continue reading "Merchant Accounts and the Payment Card Industry (PCI)"