Saturday , October 24, 2020

In This Mega Merger Landscape, Is Your ISO with a Processor or a Partner? What To Ask and Why It Matters

By: John Newton, Vice President of Sales, Strategic Partner Channel, First American

Mega mergers have created enormous financial technology companies with scope and reach that far exceed the needs of a traditional ISO channel. As a result, ISOs are now just one of many drivers of new merchant acquisition and profit to the processor.

This leaves ISOs with many lingering questions, including the newly merged entity’s commitment to the channel, how the merger will impact service levels, long-term philosophy and direction, and how the merger will affect the ISO’s ability to compete.

The complexity and scale of these mergers will inevitably cause change to the business operations, support and solutions currently available – some may be positive while others may not. And it may take some time for the impact to be felt.

As a result, these market conditions provide a natural opportunity for ISOs to take the time to explore their options and make sure they have access to more than a processor. Instead, ISOs should seek a business technology partner that provides access to products and solutions that fit their needs.

When evaluating a prospective partnership, ISOs should focus on four key criteria:

  • Support: How is the ISO channel supported?
  • Quality of Merchant Solutions & Products: What merchant solutions do they offer, and are these table stakes quality or technology forward?
  • Business Philosophy: What is their business philosophy? Is there a match?
  • Past Performance: What does their track record look like? How have they worked with ISOs in the past? A key indicator of a successful ISO/provider relationship is portfolio growth.

Taking into account the four criteria above, you can accurately assess potential providers and begin laying the groundwork for a fruitful partnership.


Before you begin any introductory partnership conversation, start with your non-negotiables; identify them and be unwilling to compromise on them. You can save yourself and your business a lot of unnecessary heartache by identifying upfront what you expect from a partner. Level set expectations from the outset and ensure your contract and service level requirements reinforce it.

Quality of Merchant Solutions & Products

Look at your go-to-market strategy and desires. What products, services and technology do you need, and what does the provider have available today? Do they have an integrated solutions strategy, APIs and the necessary support to leverage in today’s rapidly evolving marketplace? Do the solutions fit your business needs and plans? Equally important, do the solutions fit the market and needs of the customers you are trying to serve?

What about future product needs? You want to have a clear understanding of the product roadmap, and their disposition on product collaboration. Having a partner in your corner that can help you create tailored, go to market solutions on a nimble timeframe can be a major game changer. You also want to ensure that the partner is willing and able to devote development resources toward significant opportunities you bring to the table.

Business Philosophy

What is this prospective partner truly good at providing? Ask yourself if your ISO’s business model and growth strategy fit that model. If they do not align, you cannot expect to be successful. ISOs need to find a partner that has similar culture and business philosophies. If you want to be known for excellent service, align with a provider that runs its business this way.

Past Performance

It is equally important that the provider has a track record of successfully serving partnership channels. This is where the rubber meets the road. Do your due diligence and ask fellow ISOs about their experience with specific providers. Are calls returned on time? Are issues resolved promptly? Does the partnership help or hinder portfolio growth? The answers to these questions can help you make the right choice in selecting a true partner.

Bottom line, while it is important not to fear the M&A activity in today’s market, it is prudent to use these market conditions to your advantage. Now is the time to assess your ISO’s situation and ensure you have the right partner to usher in the rapidly changing technology landscape within payments.

Making the tough, but correct, decision now can pay dividends down the road.

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