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As you look into a new merchant account, the easiest and most logical place to check is your local bank. They have your business checking account, your business credit card, maybe your savings and personal accounts as well. So of course they’re going to give you the best deal available! Well, often times, this isn’t the case. In fact, usually an Independent Sales Organization (ISO) is preferable to your local bank as your merchant account for many reasons.

A little secret that your bank doesn’t want you to know – in all likelihood, they don’t actually process your credit card transactions themselves. Out of the over 45,000 banks in the United States today, less than 1% process credit cards. Instead, they contract your credit card processing out to one of the main merchant account companies. These are the same companies that ISO’s work with! And since ISO’s represent larger groups of people than most banks, they’re able to negotiate rates and acceptance terms with which most banks can’t even begin to compete.

Is your business more than 50% based on the Internet? In the eyes of the banks, this makes your business a greater risk. You don’t have the customer and their card in front of you, so there’s a higher chance that the card information you receive doesn’t match your customer. Many local banks won’t even approve an Internet-based business for a merchant account. If they do, most local banks raise their processing fees at least 0.25% for Internet-based business, and often 0.5% or more. ISO’s, on the other hand, are well-versed in Internet-based businesses and allow more flexibility in rates and acceptance terms.

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Written by: gemanda
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