Starting an ISO (Independent Sales Operator) or a Merchant Service Provider (MSP) business can be a lucrative source of income for those who have a clean background and who possess strong sales and management skills. Credit card usage reports also suggest that the credit card industry will remain strong even with the global economic slowdown and all the brouhaha surrounding the 2010 credit card reform act. According to the American Bankers Association in March 2009, credit cards are responsible for more than $2.5 trillion in transactions a year and are accepted at more than 24 million locations in more than 200 countries and territories.

But there is much confusion surrounding how to actually start a business in the credit card processing industry as an ISO or MSP. The following article explains what an ISO and MSP are and lays down the major steps and requirements to start such a venture.

What are Independent Sales Operators, Merchant Service Providers, and ISO Agents?

In order for a business to start accepting debit or credit cards it must first open up a merchant account. The bank that issues this account is referred to as the merchant bank. To minimize their risk, banks are picky when it comes to deciding whether or not to open a merchant account with a particular business. Some kinds of businesses, especially those that are new, small and/or home-based, are inherently more risky and susceptible to credit-card fraud than others. For such businesses, opening merchant accounts directly from a merchant bank can be extremely difficult.