Sub-ISO Definition

Merchant Account Sub-ISO Explained:

What is a Sub-ISO? The term “sub-ISO” is somewhat of a loose term in credit card processing that can be used to refer to merchant account providers that are subsidiaries, affiliates, partners and/or resellers of an actual Independent Sales Organization (ISO). Sub-ISOs are generally sales organizations that resell the services of either larger ISOs or direct processors. Often times, sub-ISOs will not identify themselves as such and will simply call themselves ISOs.

Obtaining a merchant account through a sub-ISO does not necessarily raise the cost of a merchant account over obtaining one from a larger ISO or direct processor. Although, in some cases, sub-ISOs can adjust contract terms, pricing, and fees at their own discretion, which may result in higher fees for the merchant.

One advantage that many sub-ISOs have over larger organizations is being able to supply better customer service since they have fewer accounts to manage and, therefore, fewer problems to resolve. Other sub-ISOs may outsource their customer service to a larger parent company or direct processor, which often results in reduced customer satisfaction. Generally speaking, small businesses (less than $5 million in annual processing) are better served by small sub-ISOs and larger businesses by large ISOs and direct processors.

Before signing with any provider, be sure to read the merchant account agreement thoroughly to understand if you are signing directly with the company with which you are dealing or if it is acting as a sub-ISO of another company. If you are working with a sub-ISO, ask which company will be handling the customer service of your account and be sure to research all companies involved.

Also see: Reseller

Phillip Parker is a former merchant services sales agent who believes the industry has been overrun by people who engage in fraud and deception in order to steal from hard working business owners. He created this website to help you avoid the bad players, save money on fees, and to get peace of mind with your merchant account. If you would like to help support his work, learn more about our cost reduction service. We can evaluate your statement, tell you exactly how much you're overpaying, and then help you dramatically reduce your fees with your current credit card processor. Looking to switch instead? See our list of the best merchant account providers.

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