Q & A – How Do I Become My Own ISO?

The question today comes from an agent who has returned to the industry after a few years break.  He disagrees with the direction of his current company and asks, “How can I break with my company and launch out independently?”

James first explains the various levels of the payments industry and terminology used to describe the levels.

•       Acquiring Banks.  These are the huge companies on the top tier, such as First Data and Tsys.
•       “Super” ISO.  This tier is next and describes a big organization with many agents.  There may even be some sub-ISOs in a Super ISO.  These do their own customer service, tech support, and sometimes handle their own risk. 
•       Independent Sales Organizations (ISO).  This is the next tier.  Many of the terms in our industry are very similar in meaning, making some confusion.  
•       The bottom tier is a merchant level salesperson.  The agent asking today’s question belongs to this tier.  This simply means an individual salesperson who sells.

One great thing about our industry right now is minimal regulation and no required certification to build your own company.  All you need to do to launch independently is leave your current situation and find a company where you can be a 1099 independent contractor!  You will always be working for a company in this industry, but you can climb up the big ladder to another rung.  

Find a company with whom you agree and from whom you’ll get maximum compensation.  However, BEWARE!  In your search for the best compensation, don’t forget you must also have good support and plenty of equipment options.  Without those, you won’t get as many sales.  Instead, you’ll spend your time putting out fires and working with your merchants.  You want a company who will service your accounts, so you have freedom to make more sales.  

If you need help finding the right company, go to CCSalesPro.com and click on “find a processor.”  I’ll schedule a private conversation with you.

After you find the right processor, you may want to create a limited liability company or corporation.  That company can be the agent; you make your agreement with that company.  You can grow a lot with that one processor.  Usually, you can bring on sub-agents and build a sales team later.

Registration is the one restriction that still exists.  You’ll be asked if you’re a “registered” ISO.  All that means is that you’ve registered your company name with Visa and MasterCard.  They do a deep dive into your financials, background, and criminal background.  Then they give you a registered brand.  That allows you to call yourself a credit card processing company.

EXAMPLES:

Suppose you create LA Business Solutions, LLC.  That entity can sell for another company.  You can become an agent of First Data.  When you present yourself on your website or business cards, you can’t say, “LA Business Solutions processes credit cards.”  Rather, you must say, “LA Business Solutions, an agent of XYZ Processing Company.”

Another example is on the merchant agreement.  Unless you get a registered brand, your logo will not appear on the agreement.  The logo of the company with whom you work will be there instead. 

To get a registered brand takes about six months and $30,000 to $40,000.  Thus, you probably have no reason to do that; it won’t help you make many more sales anyway.  For now, you just want to become your own independent sales organization or merchant level salesperson.

You do want to be a 1099 contractor because of tax implications.  Consult your CPA concerning the time or desire to start a limited liability company.

In summary, if you already have a processing company chosen, go ahead and break from your current company.  If not, go to CCSalesPro.com and click on “find a processor.”  I’ll help you get started in the right direction.