Independent Sales Organization (ISO)

An Independent Sales Organization, known universally as an ISO, is a company or individual that has been registered with a card network to resell payment processing products and services on behalf of acquiring banks and processors. ISOs act as intermediaries: they sign merchants to payment accounts, provide customer service and support, and earn ongoing residual income based on the processing volume their merchant portfolio generates.

ISOs do not process transactions themselves or hold merchant funds. Instead, they sign merchants to accounts with a sponsoring acquirer or processor, which handles the actual transaction processing and settlement. The ISO earns a share of the processing margin, typically a small percentage of transaction volume, as long as the merchant continues processing through the arrangement.

There are two main categories: retail ISOs that focus on signing and supporting individual merchants, and wholesale ISOs (sometimes called Master ISOs) that recruit and manage networks of smaller ISOs, creating layered distribution structures. ISOs range from solo agents working in specific geographies or verticals to large organizations with hundreds of employees and thousands of merchant accounts.

The ISO channel remains a significant distribution force in payments, particularly for small and medium-sized businesses. Despite the rise of self-serve platforms like Stripe and Square, approximately one in four US merchants still signs up for payment services through an ISO, valuing the personalized service and local expertise that direct platforms rarely offer.