While building a payment processing business requires technical expertise and resources, there’s no reason non-technical entrepreneurs can’t enter the payment processing industry. One of the best options for entrepreneurs interested in the payment space is to become a registered Independent Sales Organization (ISO). ISOs are responsible for reselling a payment processor’s services, such as merchant accounts, payment processing, virtual terminals, and more. In exchange for their services, ISOs receive commissions from the payment processing fees generated by their merchants. An ISO can build its own brand, sales process, merchant support platform, and more. It’s an entity that provides a great degree of flexibility to business owners. So, how can you start a registered ISO?
This guide explores merchant services ISO programs, how to become a registered ISO, whether it’s worthwhile to start an ISO, and other related topics. Read ahead if you’re searching for a step-by-step guide to entering the payment processing industry!
Key Takeaways:
- Always ask for an itemized list of pricing and fee percentages, read your merchant agreement before signing, and thoroughly check your merchant statement when it arrives.
- Be wary of companies that advertise on social media and through search engines but do not have an established reputation.
- Never sign a new contract or submit paperwork without first reviewing it carefully!
- Always do your research. Look for the provider’s website, customer reviews, and profiles with reputable sources like the Better Business Bureau.
What is an ISO?
ISO stands for Independent Sales Organization. In merchant services, an ISO is a company that resells payment processing services to merchants. While an ISO doesn’t handle the technical elements of processing payments, it provides merchant-facing services, such as onboarding, customer support, software, training, and more. Additionally, many ISOs create custom features and payment processing packages designed for specific types of businesses or sectors. In return, ISOs typically receive a commission from the merchant’s payment processing fees.
So, what is the purpose of an ISO, and how does it benefit payment processing providers? Many payment processors prefer to focus on the backend elements of settling payments. Processors outsource customer support, sales, and other tasks by allowing ISOs to resell their payment services. Likewise, as many ISOs offer custom features, payment processors benefit from a sales network that innovates for its merchants (without having to do any of the heavy lifting themselves).
Types of Services Provided by ISOs
As mentioned above, ISOs are responsible for many of the merchant-facing tasks associated with payment processing. Let’s explore the types of services provided by ISOs:
Sales
- An ISO is first and foremost responsible for selling payment processing services to merchants. ISOs may specialize in selling payment processing services to a specific industry or type of business.
Merchant Account Setup
- If a client’s merchant agreement includes access to a dedicated merchant account, their ISO will help them set up their account for payment processing.
Customer Onboarding
- When a customer signs up for payment processing, the ISO provides the onboarding experience. This may include training merchants on how to use payment software, helping merchants set up specific payment features for their business, and other onboarding processes.
Hardware
- Some ISOs provide payment hardware, such as card readers, POS machines, scanners, printers, and other payment tools. Merchants sometimes buy the hardware, but some ISOs also offer rental options
Software
- In addition to hardware, ISOs provide a range of payment software tools to ensure merchants have access to modern payment features. Whether it’s payment gateways, industry-specific POS systems, or any other type of software, it’s the ISO’s responsibility to ensure the merchant is well-equipped.
Merchant Support
- The ISO is responsible for providing merchant support to its clients. ISOs set up customer support channels to respond to any payment-related issues that arise.
How to Become a Registered ISO in Merchant Services
To build an ISO, you must follow the appropriate steps. Reselling payment processing services involves heavy regulation, making it essential that your business follows all the proper procedures, from registering your company to finding a bank sponsor. Below is a step-by-step guide to becoming a registered ISO in merchant services:
Created an ISO Merchant Business Plan
A business plan is the foundation of a profitable company. It outlines a business, its plans, resources, and other factors influencing its success. Not only do business plans help business owners outline their plans for building a company, but they’re also a requirement from lenders and investors if a business is seeking funding. Fortunately, plenty of online business plan templates can help you streamline the process. Make sure your ISO merchant business plan includes the following details:
| Executive summary (outlining the business, as well as its goals and resources) | Pricing |
| Business goals | Marketing |
| Details about what the business provides | Premises |
| Legal requirements | Suppliers |
| Competitor analysis | Finance |
| Profit and loss forecast | Cash flow forecast |
| Potential risks | Required staff members |
However, as an ISO, exploring sector-specific topics in your business plan is critical. For example, deciding what features you’ll offer your merchants is essential. The features you provide as an ISO will play a pivotal role in your expenses, so outline them early and determine viability.
2. Choose a Legal Structure
Choosing a legal structure [1] PaymentCloud “How to Determine Your Organization’s Business Structure”. Accessed August 29th, 2025. is one of the most essential components of starting a business. No matter what industry you enter, the correct legal structure can provide tax benefits, liability protection, and other advantages. Here are four primary options:
Corporation
Corporations are legal entities designed to shield business owners from commercial liability. Corporations tax the entity separately from its owners, so the business pays corporate tax on its profits. Profits are then distributed as dividends to shareholders. Two types of corporations are available to businesses (S-Corps and C-Corps). Speak with your accountant to determine which is best for your ISO.
Partnership
A partnership is a business entity that allows two or more partners to share ownership. Partnerships provide some basic liability protections, but partners are much more exposed to liability than corporations. All partners are equally liable for the management of the business and for the business’s debts.
Limited Liability Company (LLC)
A Limited Liability Company, or LLC, is a business structure with a range of tax and liability protection benefits. Firstly, it’s a pass-through business entity, meaning the LLC’s profits and losses carry through to the owner’s personal tax return (there’s no need to pay any corporate tax if you own an LLC). Next, an LLC provides its owner with protection against some liabilities. LLCs can have multiple owners or individual owners.
Sole Proprietor
Lastly, business owners in the United States don’t need to create a formal structure to conduct business — a sole proprietorship is also an option. With a sole proprietorship, profits and losses are reported on your personal tax return. However, this is a limiting business structure type as it doesn’t allow you to employ other people or expand your business. Likewise, it doesn’t offer liability protection. It’s not an appropriate business structure for an ISO.
3. Establish Your Business Name
Once you decide which business structure is most suitable for your ISO, it’s time to decide on a name for your new company. Choosing the wrong name can make it challenging to scale your business. While there are no set rules for choosing a name, let’s explore some tips for choosing the perfect name for your ISO:
Keep It Short
- There’s no need for a long, complicated business name.
- Keeping your business name short makes it much easier to develop a commercial brand. Don’t overcomplicate your name.
Make It Memorable
- Next, your business name must be memorable.
- If you want potential customers to remember your business name without having to write it down, it can’t be too generic.
Avoid Strange Spellings or Abbreviations
- While using creative spelling or abbreviations when choosing a business name can be tempting, it can do more harm than good.
- If a customer is trying to locate your business after hearing your name, using an alternative spelling may make it challenging for them to find.
Check It’s Available
- Lastly, it’s time to check if your business name is available.
- In most states, the government provides business name checkers to ensure you don’t use another company’s name. However, you should also search Google to see if anyone else is using your name before registering.
4. File with Your State
Now it’s time to officially register your business. Most business registration occurs at the state level, so you won’t need to worry about filing any Articles of Incorporation with the Federal Government. The business registration process and cost vary depending on the state where your business is located, but in most cases, it will resemble the following steps:
- Obtain a registered agent (in many states, you can’t act as your own registered agent)
- File a Certificate of Formation with your Secretary of State
- Register for business licenses with any state or local authorities that require them
5. Acquire Permits and Licenses
Next, it’s time to acquire permits and licenses to ensure you conduct business legally in your area. Again, this process varies significantly depending on your state and local municipality. Some regions have extensive permitting requirements, while others don’t require formal licensing. Check with state and local authorities to find a complete list of permits and licenses before you begin selling payment processing services.
6. Register for Taxes
After you register your business with your state and acquire any necessary permits and licenses, it’s time to register your business for taxes. This is one part of the ISO formation process that involves the Federal Government. Unless you are a sole proprietorship, your business must apply for an Employer Identification Number (EIN). This number acts as a unique identifier for your business in the same way a Social Security Number (SSN) acts as a unique identifier for individual taxpayers.
Did you know…
If you’re a sole proprietor, you don’t need an EIN. However, you can apply for an EIN if you want to have a separate tax identifier from your SSN.
Applying for an EIN is relatively straightforward. The easiest application option is via the IRS website — you can find the application portal here. Alternatively, mail, phone, and fax applications are available.
7. Document Your Business Rules
Before contacting payment processors to resell their services, creating internal business rules is critical so the ownership group is on the same page. Here are business rules to consider for your ISO:
- Determine when meetings can be called.
- Determine how profits will be distributed amongst the owners or partners.
- Document information about your business’s financial planning, such as budgets, accounting standards, and more.
- Establish roles and responsibilities for the directors and key employees.
- Establish clear business rules to help prevent misunderstandings and conflicts by setting clear expectations for employees, stakeholders, and partners.
8. Find a Merchant Acquirer to be Your Bank Sponsor
Up to this point in the process, starting an ISO resembles the steps for starting any type of business. Now that you have built the foundations of a new business, it’s time to explore some sector-specific steps you need to take to establish an ISO.
You can find a merchant acquirer to sponsor your bank before you go to the card associations for registration. While you can get multiple sponsors in the future, you must focus on choosing one during the initial setup process. You can also approach merchant acquirers and outline your case for becoming an ISO. You’ll need to present evidence that you can run an ISO and resell their merchant services. If it’s challenging to find a sponsor bank, consider the following tips:
Approach Sponsor Banks with ISO Program
Prioritize working with sponsor banks that advertise an existing ISO program. Banks with publicized ISO programs are much more approachable and have experience working with individuals building new ISOs.
Attend Payment Processing Events
Networking with payment processors, merchant acquirers, and other payment stakeholders can help you find a sponsor bank. Consider attending payment processing events and conferences to build your network.
Improve Your Documentation
Lastly, if you are still struggling to find a sponsor bank, you may need to improve your documentation. This means your business plan and pitch may need an upgrade — make sure potential sponsors understand your professionalism and industry experience.
9. Register with card associations
Next, it’s time to register with all the prominent card associations. Your sponsor bank acts as a referral to the card associations, but you’ll still need to submit an application and undergo a vetting process. Registering with card associations isn’t cheap. Most major card associations, such as Visa and Mastercard, charge around $5,000 to register, as well as $5,000 for annual renewals [2] Visa “Third Party Agent Registration Program Frequently Asked Questions“. Accessed August 29th, 2025. .
Fortunately, your sponsor bank will help you during the card association registration process. They may provide guidance and help you communicate with the card associations. However, if the card associations are uncomfortable proceeding with your application, your sponsor bank may choose not to register your ISO. Just because you’ve found a sponsor bank doesn’t mean your registration with card associations will run smoothly.
10. Gather Business Information & Review Contract
Now that you’ve submitted your application, it’s time to wait for a response from the card associations and your sponsoring bank. Gather all your business information — you may need to provide it to your bank sponsor or the card associations if they have any additional questions.
If approved, you will receive a contract to sign. Read it carefully and consult an attorney if you have any questions about its contents. The contract will be the foundation of your ISO’s ability to earn money reselling merchant services, so you must ensure it’s viable for your new business. Once you sign it, it’s too late to make changes!
11. Register with Your Bank Sponsor
Last but not least: it’s time to officially register. If the card associations and your bank sponsor inform you that you’ve passed the vetting process, it’s time to pay your registration fees and begin reselling merchant services. While registering an ISO can sometimes feel like an insurmountable challenge, you can still earn exceptional commissions by reselling merchant services to business owners!
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What to Consider When Choosing a Bank Sponsor or Processor Partner
One of the most significant factors determining an ISO’s success is its bank sponsor or processing partner. If you don’t have the correct partner, you may struggle to attract customers or run into support issues once your ISO is up and running. Here are factors to consider when choosing a processor partner or bank sponsor:
1. Reputation
First and foremost, only work with a bank sponsor or processing partner with a longstanding, positive reputation. As you resell your partner’s services, they must maintain a trustworthy reputation.
If your partner has a reputation for poor quality services or hidden fees, these problems may be passed on to your merchants, leading to unhappy customers. You are an extension of your processing partner, so only associate with processors you can trust.
How do you determine if your processor partner or bank sponsor is trustworthy? Search for stories online, read reviews on consumer watchdog groups, and confide in your trusted industry colleagues.
2. Innovation
Next, it’s time to consider the rules imposed by your processor partner or sponsoring bank.
Ask yourself: does my processor restrict specific industries or types of transactions?
If you answered “yes” to the question posed above, know that this will impact the type of merchants you can partner with, so it’s essential to avoid sponsoring banks with strict industry policies.
3. Support
Another essential factor to consider is the support options available with your sponsoring bank or processor partner.
While it’s an ISO’s responsibility to provide customer support and engagement to merchants, the ISO must be able to rely on its processor partner to resolve technical issues or answer essential questions. In situations like these, you can never be too prepared.
If you don’t have immediate access to your processor partner, you may let down your merchants should major issues arise. Our advice: always prioritize sponsoring banks with 24/7 ISO support. In the long run, you’ll be glad that you did.
4. Features
It’s critical to work with processor partners or sponsoring banks with innovative features for your merchants. So, what are some examples of features to look for?
- Payment Flexibility: Work with processor partners with access to a range of payment options, including all major card brands, digital wallets, and more.
- Payment Security: With fraud being a serious issue for many merchants, having a processor partner that focuses on payment security is essential. Around 60% of Americans have been victims of credit card fraud, and around 45% have experienced multiple fraud cases [3] Security.org “62 Million Americans Experienced Credit Card Fraud Last Year”. . The solution? Prioritizing fraud protection.
- Next-Day Funding: Allowing merchants to access next-day funds will make managing cash flow easier. Prioritize ISOs with quick funding timeframes.
Agent Opportunities with Kurv ISO Program
Are you seeking an introduction to the world of ISOs? At Kurv, our ISO Agent Program is the perfect route for ambitious individuals wanting to enter the payment processing industry. Our Kurv ISO Agents sell payment processing services to merchants nationwide, ensuring businesses stay connected to the industry’s most advanced payment tools. Our ISO Agent Framework allows individuals to sell payment processing services without setting up a separate ISO.
As an industry leader in payments, Open a Merchant Account, we’re the perfect partner if you want to provide world-class payment solutions to your clients. Our merchant services ISO program offers quick approvals, white-label agent portals, sponsored registration, innovative point-of-sale solutions, and other assorted benefits. So, what are you waiting for? Contact us today to take your first step into the payment processing industry!
