How to become an ISO Agent offering merchant services?

If your mind is brimming with aspirations to make it big in the merchant service sector, becoming an ISO can be your calling. Entrepreneurial enthusiasts with exceptional marketing and communication flair can bank upon their ability to start ISO merchant service ventures.  

As most of us are aware, ISOs or independent sales organizations deal in the sale of credit card processing and allied merchant services to various business entities. Are you among those many enterprising individuals who want to fuel their dreams to become successful merchant service providers? As part of the first step, you must get acquainted with the process of becoming an ISO entity. Before we proceed with the nuances of the legal procedures involved in the ISO registration, we must understand the basic types of ISOs operating in the merchant services industry. 

Types of ISO 

One can lay grounds for two kinds of ISOs- independent or registered. As an independent ISO, one needs to partner with another registered independent sales organization. You work as an agent under the wings of a bigger ISO. The legal conformities involved for such an independent ISO are pretty less than working as a registered ISO. One earns residual earnings as per the merchants they successfully rope in on behalf of their partner ISO entity. However, the registered ISO firm you collaborate with shall be finally providing the necessary merchant services. You cannot hire your own agents as an independent ISO.

When considering a registered ISO, you have to undergo a lengthy registration process before starting your operations. After registration, you can subsequently sub-contract your requirements to ISO agents and eventually create a macro-scale venture. Thus, working as a registered ISO can prove more gainful in the long run. 

The process to become a registered ISO.

The elaborate step by step procedure for the registration of your ISO is as follows:

Pick a suitable name

The foremost step in creating a unique identity of your ISO is in choosing a distinct business name. Before the final selection of the name cross-verify its availability with the Secretary of your state. 

Select the form of business entity you want to start

The structure of your organization is another key decision you have to make. You can establish any of the following structural forms for your proposed ISO.

Sole proprietorship

One of the most elementary kinds of business organization, you act as the sole owner of your ISO with more considerable independence to take your decisions. However, you remain legally accountable for all your business debts and liabilities


Are you are a bunch of spirited entrepreneurs wanting to start your ISO together? In such a case, functioning as a partnership can be a great choice. There are minimal legal compliances required to run a partnership firm. However, in this form of organization, again, each partner remains personally obligated to repay business liabilities.


If you feel hesitant about the risk of unlimited liability as a proprietor or partner in your organization, you can contemplate starting an LLC. It involves increased compliances than a partnership firm. However, the legal complexities related to running an LLC are lower than those of a corporation. 


A corporation refers to a form of entity that shareholders own. Such a corporate organization enjoys a distinct legal entity from the shareholders. If you want to start your ISO as a corporation, you must register with relevant state authorities and comply with periodic filing necessities. 

Register with respective state authorities and acquire licenses or permits

Now that you have chosen the ideal name and form of entity for your ISO, you must proceed with registering your ISO. Apply for registration with the Secretary of your state in the US. Apply for registration and pay the required fees. If you form an LLC, you have to submit an Articles of Organization and file the Articles of Incorporation in case of a corporation. Another legal imperative is to obtain essential licenses and permits. Check for the specific licensing needs applicable to your state. 

Complete tax registration process

Tax filing is an inevitable compliance need for every business. Thus, in the process of forming an ISO, you have to apply for tax registration. You have to get respective registrations for federal and state/local taxes—also, file for an EIN (Employer registration number) with the Internal Revenue

Create business policies to guide your team

You cannot run your registered independent sales organization without a proper set of rules to navigate your team. Corporations need to prepare their bylaws, while LLCs must create their operating agreement. The rules will govern aspects like the conduct of meetings or allocation of profits and losses in the case of multiple owners.

Draft a robust business plan

A business plan is a necessity when you apply to banks for sponsorships. You must draft an appropriate business plan that shall include elements such as:

  • Company overview
  • Executive summary
  • Financial plan
  • Competition analysis
  • Client analysis
  • Operations and management strategy

Secure an appropriate sponsor

While operating as an ISO, you have to function with a bank in association with the required card companies like Visa or Mastercard. File applications with banks requesting them to sponsor you. You can contact them online through their website or call their support team. 

File applications with relevant card companies

The next important step involves applying for registration with card companies like Mastercard and Visa. You also need to pay the required application fees for the registration. The approval of your application can be time-intensive and can take more than 6 months to complete. During this waiting period, you can work on your business strategies, setup, and marketing tactics. 

Unveil the world of immense opportunities by kick-starting as an ISO 

Whether you want to work as an ISO agent or register your own ISO, this merchant service segment offers ample avenues to the deserving. Beyond Bancard is one such merchant service provider known for high-quality and cost-effective payment services. We also provide a special ISO program for interested agents. Contact us to learn more about our offerings! 


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