Payment processors are essential for any business that accepts customer payments or makes payments to their vendors. They are particularly beneficial to Processing ISOs and Retail ISOs who own merchant portfolios. Because payment processors come in all shapes and sizes, it can be challenging to decide what size processor will best support the ISO's goals.
What is a Payment Processor?
A payment processor facilitates the movement of money between merchants and financial institutions, any way payments are accepted (in-person, online, over the phone, etc.). They are responsible for assessing applicable fees and ensuring the security of all payment data that flows through a business.
From large legacy processors to newer up-and-comers and everyone in between, finding the right fit can make all the difference for ISOs.
Here we cover what to look for when partnering with a payments processor.
Technology
Payment technology has evolved at lightning speed in recent years. While some processors have failed to keep up, others are setting the pace by implementing modern and secure modalities.
Larger processors who have been around for several decades have the experience to adapt to new technology and the resources to implement them. All ISO types can benefit from payment advances by offering modern solutions to their merchants and accessing robust platforms for better portfolio management.
On the other hand, smaller processors can sometimes lack the latest payment technology. They have smaller teams with limited resources, preventing them from offering the solutions ISOs need to manage their merchant portfolios.
Service and Support
Large legacy processors may have the most solutions to offer but can come at the expense of service. When an ISO’s goal is to build a healthy long-term residual portfolio, they need an always-available partner who can assist them when things don’t go as planned or consult with sponsor banks on their behalf.
While smaller processors can fill the service-level support gaps, they may not have the experience or expertise ISOs require.
Onboarding new merchants and facilitating conversions and implementations can be complicated. Experienced processors with dedicated ISO support teams help ISOs find a middle ground. They can simplify conversions and implementations through custom boarding and maintenance APIs or online portals, solutions many smaller processors do not offer.
Implementation Timeframes
The last key component an ISO should consider regarding processor size is the time it takes to implement its ISO program. Different program types can impact implementation times.
Retail ISOs require card brand registration but rely on their processor for sponsor bank relationships and liability, risk, underwriting, and more. Processing ISOs have more flexibility and responsibility in managing their program but may need to transition their BIN or bring their own front-end processor.
Considering both ISO types, because of the size of legacy processors and the lack of dedicated support, new program implementation can take well over a year and disrupt the ISO’s business and merchant’s processing during the process. Smaller processors may not have the experience to assist an ISO during the process.
Conclusion
There are pros and cons to all-size payment processors regarding how they can serve their ISO partners. Each ISO must evaluate and prioritize its portfolio needs.
REPAY is a happy medium, offering a “boutique” approach to partnerships with any ISO type. Through 15+ of experience and expertise, a proprietary clearing and settlement platform, and modern, highly integrated payment technology, we can customize a program or help ISOs transition their portfolio without interrupting their day-to-day or negatively impacting their merchant relationships.
Access next-gen technology and superior support today!