ISOs and Merchant Acquirers: Two Sides of the Same Coin
Report Summary
ISOs and Merchant Acquirers: Two Sides of the Same Coin
ISOs and merchant acquirers have as many differences as they do similarities, but the differences dictate unique strategies, tactics and vision of the market.
Boston, MA, November 30, 2009 – A new report from Aite Group, LLC discusses the similarities between ISOs and merchant acquirers, as well as the many differences that shape their distinctive approaches to the market. Based on Aite Group interviews with 17 bank acquirers and 28 ISOs spanning the top 100 merchant acquiring entities in the United States, the report also explores each group's views on the merchant acquiring market, and their unique perceptions of events in the payments industry.
Many in the payments industry confuse independent sales organizations (ISOs) with merchant acquirers. Beyond the strict definitions of the card networks, ISOs and merchant acquirers have as many differences as they do similarities. These differences lead ISOs and acquiring banks to have different views of where the market is headed in 2010, and differing demands from merchants. Consequently, each entity must take an individual strategy in order to compete for the acquisition of new merchants, individual approaches in their investments for 2010, and individual sets of internal initiatives to work on.
"While an acquirer's business is impacted and influenced by the bank's entire operations and the banking industry's regulatory framework, ISOs only have to deal with the merchant processing side," says Adil Moussa, analyst with Aite Group and author of this report. "The nature of their respective businesses, and their exposure (or lack thereof) to other elements in the payment ecosystem makes each entity view the world differently, therefore, taking very different routes toward finding and keeping merchants in their portfolio."
This 25-page Impact Note contains 16 figures. Clients of Aite Group's Retail Banking service can download the report.