What is the difference between an ISO and an introducer in payments?
An ISO is registered with the card schemes by an acquirer and sells, and often services, that acquirer’s merchant accounts. An introducer only refers potential merchants to an acquirer or PSP for a commission. The introducer does not contract, onboard, process or support, and it never touches funds or card data.
In detail
An ISO and an introducer both bring merchants to an acquirer, but their roles stop at very different points.
ISO
An independent sales organization is registered with the card schemes by a sponsoring acquirer. It markets the acquirer’s services, signs up merchants and often provides first-line support and terminals. Under Visa’s rules, ISOs operate as agents on behalf of acquirers and do not process transactions or receive settlement funds. The merchant’s contract is with the acquirer. The ISO earns residuals, a share of the fees on its portfolio.
Introducer
An introducer, or referral partner, only passes on a lead. It does not contract with the merchant, does not onboard or support it, and never sees card data or funds. It is paid a commission or a revenue share on referred business.
Why choose one or the other
- An introducer has almost no obligations, and little control or revenue.
- An ISO has more duties and earns more, with a lasting merchant relationship.
See PayFac vs ISO, What Is a Payment Gateway? and the page on launching a new branded PSP.