In a previous blog, I covered the what, why, and how of becoming a registered retail ISO. Now I turn my attention to the details of becoming a registered wholesale ISO. You need to have a firm idea of the requirements and benefits to move on this opportunity.
Let me say at the outset, you’re going to need experience selling merchant services in order to qualify as a wholesale ISO. Ideally, you will want to be a registered retail ISO for some time – a few years is recommended – before making the move. Also, you need to be able to check several boxes before it makes sense.
Box 1 – You have the resources and are ready to invest the time, money, and effort it takes to run a million-dollar business. You may end up spending half a million to a million dollars during the ramp-up and first year. We know of several well-organized, experienced companies that have done it for less.
Box 2 – You have experienced guidance. You’ve hired a consultant who makes it their business to make sure you know what you’re getting into and who will get you started correctly. Also, you will need experienced operations and underwriting staff – they are paid well for making your ISO work.
Box 3 – You are willing to take the risk. You will be signing up many merchants processing hundreds of thousands of dollars a month and you will be on the hook for any losses or fines. It’s important that you have great guidance on risk issues.
Box 4 – You are not easily frustrated by significant compliance requirements, policies, and procedures. Some new wholesale ISOs take a year before they sign their first merchant. There are many hoops to jump through upfront and ongoing. We have helped ISOs cut the time it takes to get started.
Box 5 – You should be developing the sales engine with the pipeline of new accounts to make your investment get to break-even quicker.
Box 6 – You have reached limitations on your registered retail ISO that make it reasonable to seek more control over the process of getting merchants approved, boarded, priced correctly, processing and profitable for you. You need wider latitude in the types of merchants you can sign.
I have an extensive checklist of actions to get your registered wholesale ISO up and running. Rather than go through all of these, I’ll sum up:
Once again, this process typically takes 12 months or more. With our help, most of our clients move faster than that.
Why do our clients choose us to guide them through the process? What are the benefits that make becoming a wholesale ISO worth it?
I’m often asked how many merchant accounts do you need to have to make becoming a wholesale ISO worthwhile? It’s not so much a matter of how many accounts, as it is how much are you making from your merchant accounts each month. Consider that your monthly spend for running a wholesale ISO can easily be $50-100,000. How many months of growth and how many new accounts signed will it take you to cover those kinds of expenses?
If you’re a registered retail ISO and you’re doing well, you may want to consider staying there for a while longer. But if you’re ready to make the move to a registered wholesale ISO, please contact Field Guide Enterprises, LLC.