Types of Credit Card Processing Companies

Acquirers

Acquirers, also known as Processors, are distinguished by their ability to process sales transactions. A Processor has the technical capability and high level security protocols to receive the transaction data, communicate with the appropriate financial institution, approve or decline the specific transaction, settle the completed transactions with the financial institution and deposit the funds into the merchants account. In short, they are the ones that actually process the sale, charging a discount rate and/or processing fee for handling the transactions. Acquirers are registered members of the Visa and MasterCard Associations, soliciting, screening and accepting merchants in their processing programs.

Processors acquire their merchant base through direct marketing to merchants, independent sales agents and utilizing resellers. For example, EPS 90 is an Acquirer (Processor) which provides merchant payment processing solutions and value-added programs to merchants directly through a direct sales force in addition to Independent Sales Organization partnerships (resellers).

Resellers

Resellers, also known as Independent Sales Organizations (ISO’s), resell the products and services of one or multiple Processors. They are “Third-Party Processors” in addition to sometimes owning their own value-added products. There are basically two types of ISO’s: banks and non-banks. Banks – banks of all kinds, local community banks, large regional banks, national banks and credit unions have entered into the merchant service provider business as it seemed like an easy vertical expansion to give them another way to increase revenue of their customers. Most banks are ISO’s although they usually private label their services so that it is difficult to tell whether or not they are the actual the Processor.

Non-banks – this group of ISO’s ranges greatly from top-notch, competent and capable providers to less than honorable people just out to make a quick buck. As there is not any regulatory agency enforcing acceptable and ethical business practices in the industry, the most serious problems merchants encounter are usually from dealing with an unscrupulous, rogue sales agent rather than the Processor. Unfortunately, this has given the industry as a whole a bad reputation.

Both Processors and ISO’s offer payment and processing solutions such as credit, debit, prepaid credit card processing, check verification, conversion and guarantee services, online transactions, gift & loyalty cards, and cash advances with very little, if any, difference in pricing.