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The Role of ISOs in Leaving the Check Behind

When we think about Leaving the Check Behind, many people do not realize what a critical role Independent Sales Organizations (ISOs) play. Card payments, and in particular single use virtual card payments, continue to be a highly viable alternative to paper checks for accounts payable payments. With Business to Business payments accelerating, and with Buyers realizing more than ever that there is an opportunity to transform A/P from a cost center to a profit center, ISOs are in a unique position to capitalize on the increased volumes of accounts payable payments coming to the electronic channel. Many organizations, both small and large, who would be open to accepting card payments just are not able to because they have not been enabled. In other cases, these merchants believe that the cost of accepting cards, namely the interchange fees that they will pay, are too high to justify taking card payments. Both of these are classic  opportunities for ISOs to shine. 

So what are 3 things that ISOs can do? 

1. Create packaged offerings to merchants that lower interchange fees:  It’s clear in the market today that customers are looking for solutions, not products. ISOs can package end-to-end solutions that leverage today’s technology to lower interchange fees. Whether it’s equipping vendors for push payments, helping them to pass Level III data, and/or working with their Buyers, ISOs can help merchants reduce their overall interchange exposure through packaged solution offerings.

2. Mitigate PCI-DSS risks and requirements on the merchants:
Bring up PCI-DSS with any merchant at a dinner table, and they will lose their appetite. The mention of PCI-DSS generally illicits a response of anger, fear, or confusion from many merchants.  ISOs can be consultative to merchants on walking them through how to mitigate PCI-DSS risks. ISOs can also develop creative solutions to move the PCI-DSS risk from the merchant to the ISO thereby adding additional value to the merchant.

3. Educate merchants on the actual costs of processing check payments:
Many merchants only look at the cost of card interchange when considering taking card payments. What merchants don’t look at is the cost of check processing.  Checks are expensive. The costs include:  Lockbox fees, image fees, clearance time, AR posting cost, and fraud control costs. ISOs can educate merchants on how all of these are either done away with or are reduced by substituting check payments for card payments.  

Card payments are truly the quickest, easiest, and most secure form of electronic payment available today. The card networks have invested millions of dollars into the infrastructure to support these transactions.  As volumes of Business to Business payments continue to grow, ISOs are in a unique position to help enable the migration of checks to electronic payments.  Doing this will accomplish the goals we all have, namely, Leaving the Check Behind. 

I look forward to hearing your thoughts on this topic.


Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 14 October, 2011, 18:53Be the first to give this comment the thumbs up 0 likes

The runaway success of Square has proved that the biggest hurdle faced by merchants in cards acceptance is getting a merchant account. ISOs and acquiring banks are - ahem - 'squarely' to blame for creating so much friction in this process. 

Mike Kresse

Mike Kresse

SVP Payment Services


Member since

02 Aug 2011



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Innovation in Financial Services

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