ISO/MSP payment challenges: how to make things easier
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ISO/MSP payment challenges: how to make things easier

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The payment industry is now booming, arousing genuine interest from startuppers to enter this niche. But what could be a simple start to providing payment processing solutions to customers? Many will answer ISO/MSP and be quite right. Hovewer, as with any merchant services business, the ISO/MSP path can be littered with obstacles.

Before we will dive into the all-important topic of pitfalls and challenges that any beginner or seasoned ISO/MSP can run into, let's brush up on the meaning of these acronyms.

ISO (Independent Sales Organisation) and MSP (Member Service Provider) are third-party companies that resell financial services to merchants on behalf of acquiring banks.

You can find out more about what these organisations are and what they do in our previous article on ISO/MSP. As a logical follow-up, this article will focus on dealing with major issues of launching and running an ISO/MSP business. Here we go!

What does it take to become an ISO/MSP?

If all budding ISO/MSPs were aware of the challenges they might face along the way, they could make far fewer mistakes, saving time, money, and nerves. Of course, there’s no magic wand to eliminate all these issues, but a competent approach and a couple of handy tools can make things much easier.

So, get to know the major challenges for ISO/MSP and the solutions we can offer.

Challenge 1: Building processing solution

ISO/MSPs are not just sellers. There are plenty of functions they can perform:

If you want to provide value-added services to your merchants and stay competitive, you’ll need robust technological infrastructure. But have you wondered how much time and resources it will take to build a payment processing software? Seasoned industry players know that it will take no less than three years. Add to this the huge costs for the development team and infrastructure maintenance.

If you want to access the building blocks of a payment infrastructure without significant investment and software development, you can rely on a white label model. Using this solution, you have the opportunity to provide payment services to merchants under your brand based on a ready-made infrastructure of another payment company. For instance, ours.

Realising how cumbersome it is to develop the processing software on your own, we provide a white label solution for ISO/MSP businesses. It’s an out-of-the-box scalable platform that doesn’t require any development effort from your side. By launching your own-branded ISO/MSP on a white label model, you can start providing a huge range of processing services to your clients in a month or even less. It’s faster, cheaper, and cost-efficient.

Denys Kyrychenko

Corefy CEO & Co-founder

Challenge 2: Hiring and maintaining an IT team

If you’re determined to develop and maintain your own processing anyway, you’ll have to enlist the support of a skilled development team. The people you hire will be the driving force behind your ISO/MSP, covering technical issues, dealing with possible processing accidents, and upgrading the system in line with rapidly changing merchant needs.

And it's about time again: searching, hiring, and onboarding employees is not a quick matter. Plus, knowledgeable fintech specialists should be paid well for their work. Not every ISO/MSP can afford such expenses.

Payment team as a service may be a great option for ISO/MSP business. By leaving all the technical matters to our dedicated specialists, you can focus on your business development. Our white label solution with professional support and technical maintenance will cost you about one developer's salary per month. Upgrades and updates are also on us.

Challenge 3: Registrations and audits

Each ISO/MSP must register with credit card associations (Visa, Mastercard) to handle payment processing duties and open merchant accounts.

This is a time-consuming and painstaking procedure, which includes a thorough examination of all the applicant’s documentation. Experts suggest allocating for no less than six months to become a registered ISO/MSP.

A few words on ISO/MSP registration fees

Becoming a registered ISO/MSP is a costly affair. You will have to shell out a $10,000 registration fee out of your pocket for signing up with each card network. Every year thereafter, you will pay a $5,000 fee per network to stay certified. Unfortunately, such upfront costs stop many ISO/MSPs from starting up, although paying this amount isn't a big problem for up-and-running organisations.

Although there’s a great deal of work to be done by yourself (like a business plan, registering a trademark, brand assets, etc.), submitting to a white label solution requires a minimum of paperwork and time from your side. Plus, you protect yourself against the risk of costly mistakes by enlisting the support of our Account Managers, who will be there at any time to answer all your questions.

💡 MORE: How we onboard our clients: all steps explained

Challenge 4: Managing financial flows and risks

Having a processing solution alone is not enough for your ISO/MSP to stay afloat. The more merchants you have on board, the more difficult it is to manage transaction flows and identify payment risks. It’s equally important to track the key metrics of your business to understand where you are moving and whether you’re on the right track. Thus, the lack of analytics and management tools here may cost you clients and your carefully-crafted reputation.

Our Analytics solution puts all the performance metrics in front of your eyes, keeping you aware of the health and performance of your business. You can track transaction statuses, merchant account balances, storefront conversion rates, and many other valuable metrics with auto-generated reports at your fingertips.

Challenge 5: Signing contracts with new partners and clients

The highly-competitive payment industry makes each ISO/MSP literally fight for every client. It’s extremely challenging for newcomers to get their first clients on board, especially without an impressive base of partner banks and payment service providers. No one knows how much time and effort you will have to spend to build a client base and start making a profit.

Understanding the needs of ISO/MSP businesses, we provide our clients with access to our global merchants network, empowering them to diversify and grow their portfolio of partners and clients. More than 150+ integrations are already established for you, so you can provide processing services right from the start.

Final thoughts

Decided to become a registered ISO/MSP? Well, that's a big step! You’ve seen how bumpy the road can be, but of the best ways to gain an immediate competitive edge is to use the latest technology and advanced tools capable of assisting the each merchant's unique processing needs. If you're looking for an easy and cost-effective way to get into the ISO/MSP business and profit right from the start, Corefy's white label ISO/MSP solution is a great option. Book a demo with us to see it with your very eyes.

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