So, you want to be an ISO agent?

Written by Jereme on

For businesses with the resources, expertise, and reach, this strategic move can lead to much more growth than a sales agent is capable of achieving. 

“Leveling up” has become a well-known concept in culture. People who play video games understand why you start at level 1, but they also know higher levels have more power and more benefits. Likewise, business owners look for opportunities to level up – to gain the revenue-generating power and greater benefits than lower “levels” of businesses in their industry. An example of this is the evolution from a sales agent to an Independent Sales Organization (ISO) agent.

What is an ISO agent?

In the world of merchant services, an ISO agent can be described as a go-between dealing with the merchant on one side and Visa, Mastercard, and the other card brands on the other. Some call an ISO agent a “merchant services company” or use the two terms interchangeably. For example, merchants dial up ISO agents when they need hardware like point of sale (POS) terminals, as well as all of the support, training, and troubleshooting that go along with them.

So then, what does an ISO do that a sales agent doesn’t? A sales agent falls a few rungs lower on the ladder than someone who sells an ISO agent’s services, pounding the pavement to find prospective merchants who might convert into the ISO agent’s clients.

Risk and reward.

If you’ve gone as far as you can go as a sales agent, you may be thinking of evolving your business into an ISO agent. There’s a saying you have probably heard: The greater the risk, the greater the reward. This tradeoff comes into play in your decision to become an ISO agent.

For starters, ISO agents typically need a lot more financial firepower when getting their business off the ground. These 1099 business owners are required to have a sponsoring relationship with a bank that is a member of Visa’s or Mastercard’s associations. The cost of entry to these organizations? A cool $5,000, give or take—every single year. Having said that, at NAB we offer both a traditional Registered ISO Program, plus, a Registered DBA Program that eliminates these costly fees. 

Naturally, an ISO agent investing more money upfront results in better profits and more appealing margins than a sales agent. But ISO agents also have a bigger responsibility to juggle, namely fees. ISO agents have to amass a pretty sizable volume of clients whose pennies-on-the-dollar transaction fees add up to meet a preset threshold. If these fees fall short, ISO agents are on the hook for what’s known in the industry as minimum processing fees, which a bank might decide to raise annually. That’s why ISO agents need to be able to stomach the risks of staying afloat in a challenging industry. A lowly sales agent is unlikely to have an adequate pool of merchants to generate enough business to avoid going under.

How does an ISO agent rise to the top?

The idea of being your own boss in an independent job with uncapped earning potential may sound appealing to just about everyone, but not all who try their hand at ISO agency are guaranteed to succeed.

It’s vital to stay laser-focused on the goals you set. You also need to learn how to forge relationships—they’re the key to getting business done. Additionally, technology is always advancing, so be sure you’re adapting along with it. An interest in keeping up with industry trends certainly helps, while drilling down into a niche will enhance your appeal to merchants looking for experts attuned to their particular problems, not generalists who can’t speak to and solve their pain points.

Opportunity awaits.

If you have what it takes, and you’re ready to move forward with evolving your business into an ISO agent, you’ll find plenty of merchants who need your services and expertise. If you have the drive and resources, leveling up from a sales agent to an ISO agent could be the best business decision you’ve ever made.

To hear more about NAB’s Registered ISO and DBA Programs, contact us today!