ISO (Independent Sales Organization)
A third-party company authorized to sell or lease payment processing services on behalf of a sponsoring bank or processor.
Full definition
An ISO is the sales and account-management layer between merchants and the payment processor or sponsor bank. ISOs onboard merchants, set their pricing, handle support, and earn ongoing residual income from the processing margin. In an M&A context, ISOs are bought and sold based on the residual stream they generate, their merchant attrition rate, their portfolio quality, and their growth trajectory.
Related terms
The collection of merchant accounts a payments company processes for, valued for sale based on the income stream they generate.
The ongoing income an ISO or agent earns from each merchant they have boarded, paid as a percentage of processing margin.
A company that aggregates sub-merchants under its own master merchant account, taking on underwriting and compliance to enable instant onboarding.
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