If you work in the payment technology space, chances are you’ve heard the term, Wholesale ISO. That said, you might still be wondering what exactly a Wholesale ISO is, and have questions about their specific role in today’s payments space.
Well, if you want to find out a whole lot about Wholesale ISOs, you’ve come to the right place …
At North, we offer both Retail ISO and Wholesale ISO Programs, as well as other partnership programs for full-service providers (FSPs) and payment facilitators.
For purposes of this blog, we will mostly be focusing on Wholesale ISOs. We’ll take a look at their overall role in the payments industry, their relationship with merchant services providers, the solutions and services they provide to businesses, and so forth.
An Independent Sales Organization (ISO) is a vital component of modern credit card processing, connecting card brands like Visa and Mastercard to payment processors and their merchants.
Unlike Retail ISOs, Wholesale ISOs have direct relationships with the card brands, a model which allows them to set their own pricing, assume their own risk, and more.
Independent Sales Organizations (ISOs) are third-party merchant services entities that register with a payment processor to help businesses get approved for merchant accounts, get set up with payment technology, and more.
How an ISO operates specifically depends on whether they are a Wholesale ISO or a Retail ISO.
While there are of course similarities between the two models, the main difference between a Wholesale ISO and a Retail ISO lies in the specific services they offer within the payments industry.
While Retail ISOs focus on selling merchant services directly to businesses in the market, Wholesale ISOs typically partner directly with payment processors.
This gives Wholesale ISOs more control over operations including pricing, underwriting, risk management, customer care, and so forth.
Both Retail and Wholesale ISOs help businesses get approved for merchant accounts and streamline their operations with back-office solutions to simplify inventory, employee, customer, and chargeback management.
Under the Wholesale ISO model, you as an independent sales organization would typically purchase payment processing services at a discounted rate that you then offer to your merchants.
In this example, you would assume more risk but have the chance to set your own profit margins. Under the Retail ISO model, you would sell merchant services and help business owners process payments through your partnership with a merchant acquirer or payment processor.
You would then be paid residuals by your employer.
Wholesale ISOs perform a number of critical functions in today’s payment processing landscape. For example, they can recruit and onboard merchants in the marketplace, providing them the merchant accounts they’ll need to accept payments.
As mentioned above, Wholesale ISOs can also set pricing, perform their own underwriting and risk management, and provide their own customer care and technical support.
In exchange, they take on the financial risk for their merchants and must therefore ensure compliance with payment industry standards, including PCI DSS requirements.
The main role of Wholesale ISOs is to act as an intermediary between merchants and the merchant services providers who process payments.
As a Wholesale ISO, you act as your merchant’s primary point of contact from application, risk assessment, and underwriting to payment hardware placement and ongoing customer support.
While helping merchants accept payments in person, online, and on the go is a huge part of what Wholesale ISOs do, that’s just really just the beginning.
You can also offer additional solutions like in-depth reporting, fraud detection, and other tools to help merchants simplify their payments and optimize their back-office operations.
Once you do, you’ll go a long way towards establishing trust, and forming a longer-lasting partnership with those merchants. By doing so, you’ll be establishing yourself as a trusted payments industry professional merchants can continue to rely on.
Wholesale ISOs, payment facilitators, and payment processors all play distinct roles in today’s payments marketplace. As covered above, Wholesale ISOs act as intermediaries between merchants and payment processors like North.
Payment facilitators are third-party merchant services providers that allow small businesses to get started processing payments in mere hours without getting approved for their own traditional merchant accounts.
At North, our Payment Facilitator Program allows you to market branded, scalable payment solutions with white-labeled, customizable workflows. All while taking advantage of advanced onboarding tools, plus flexible APIs or easy integration.
As a Wholesale ISOs, you can also form relationships with independent software vendors (ISVs) and merchant services providers (MSP).
That way you can go to market with fully integrated or embedded payment solutions like industry-specific hardware and/or software for retailers, restaurateurs, healthcare, beauty and fitness merchants, and more.
That level of niche service is a great way to take your business to a whole new level.
Wholesale ISOs can turn to a number of partners in the market from payment processors and acquiring banks to sub-Agents and ISVs.
By forming these partnerships, ISOs can break into different industries, offering customized, all-in-one solutions to merchants while maintaining control over pricing, branding, onboarding, and more.
Before you decide to take the leap and start operating as a Wholesale ISO, there are a few things you’ll want to consider. Do you have a clear understanding of underwriting, risk mitigation, and PCI compliance?
Do you have strong payment processor relationships? Do you have the right infrastructure in place to assess risk, close and underwrite deals, and provide merchant support on an ongoing basis?
There are all kinds of partnerships you can form and industries you can tap into as a Wholesale ISO. You can partner with an ISV who specializes in retail or restaurant POS systems and sell solutions to those types of merchants.
Or, you can join forces with a payment solutions provider who specializes in hard-to-place industries like CBD, Telehealth, and more.
These are just a few examples of the ways you can start to build your own business as a Wholesale ISO.
Get ready to enjoy competitive pricing models designed to boost your margins and fuel sustainable growth for your organization. Interested in becoming a Wholesale ISO with North, or learning more about our other partnership programs?
Visit partners.north.com/wholesale-iso today.