The key to ISOs’ success in the payments industry: adopting FinTech solutions
Independent Sales Organizations (ISOs) are crucial players in the payments industry, responsible for procuring new merchant relationships. To succeed in this competitive market, ISOs must keep up with the latest technological advancements. FinTech has been transforming the payments industry with its innovative solutions. In this blog post, we will highlight the benefits of using FinTech solutions for ISOs.
ISOs are (third-party) companies that work with an (acquirer) bank to sign up new merchants for payment processing. There are two types: retail and wholesale. Retail ISOs focus on certain types of merchants and take no risk, while wholesale ISOs work with many partners and take more risk. They handle approvals, risk mitigation, and chargeback reporting. Wholesale ISOs charge higher fees to their riskier merchants, while retail ISOs usually leave technical support to other companies. Being a wholesale ISO can be profitable, especially for high-risk merchants.
In short, ISOs have established partnerships that allow them to provide merchants with all the necessary components to accept credit cards, including a direct relationship with an acquiring bank.
Typical ISO merchant services include:
- credit and debit card processing
- hardware (POS terminals)
- Software (POS systems)
- payment gateways
- fraud prevention / security solutions
- customer service / technical support.
- ISOs may also offer value-added services such as loyalty programs, gift cards, and mobile payment solutions.
Tech up or fall behind
Staying current with the latest technologies is crucial for businesses to remain competitive and successful. Failing to adopt new technologies can result in falling behind the competition, losing market share, and missing out on new revenue opportunities. On the other hand, keeping up with the latest technologies helps businesses improve their operations, increase productivity, reduce costs, and enhance customer experiences. It also provides opportunities to create innovative products and services, enter new markets, and mitigate risks. Therefore, staying current with the latest technologies is essential for businesses to thrive in today’s fast-paced and ever-changing business environment. Especially for ISOs, who work in a highly competitive and constantly evolving market, adopting new FinTech solutions is crucial.
Unleashing the power of FinTech
ISOs face several challenges in today’s payments industry. One of the main pain points is the increasing competition, which requires ISOs to constantly adapt and innovate to remain relevant. Another challenge is keeping up with the rapid pace of technological advancements, which can be costly to implement and may require additional training for staff. Additionally, regulatory compliance and security concerns can also pose challenges for ISOs, as they are responsible for ensuring that their merchant clients adhere to industry standards and regulations. Finally, the evolving payment preferences of consumers also require ISOs to stay up-to-date with the latest payment options and technologies.
By embracing FinTech solutions, ISOs can enhance their operations, reduce costs, and provide an improved customer experience. They can stay ahead of the competition, create new revenue opportunities, and achieve long-term success in the payments industry.
- Automation of manual processes
- Streamlined onboarding and underwriting
- Faster settlement times
- Real-time reporting and analytics
- Lower costs:
- Reduction of manual labour costs
- Elimination of paper-based processes
- Lower transaction fees through alternative payment methods
- Reduced risk of fraud and chargebacks
- Improved customer experience:
- Faster payment processing times
- Multiple payment options and methods
- Secure and reliable payment processing
- Personalized and customizable payment experiences
Challenges when adopting FinTech solutions
As with any new technology, ISOs may face some challenges when adopting FinTech solutions. Here are some of the potential challenges:
- Implementation costs: Implementing FinTech solutions can be expensive, requiring significant investment in new hardware, software, and training. ISOs must carefully evaluate the potential costs and benefits of each solution before deciding to adopt it
- Security concerns: FinTech solutions often involve the use of sensitive customer data, which must be protected against cyber threats and data breaches. ISOs must ensure that their systems are secure and compliant with data protection regulations.
- Regulatory compliance: The payments industry is highly regulated, and ISOs must comply with a range of regulations and standards, such as PCI-DSS, KYC, and AML. Adopting new FinTech solutions can bring new regulatory challenges, which must be carefully managed.
- Integration with existing systems: Implementing new FinTech solutions can be complicated by the need to integrate them with existing systems and processes. ISOs must ensure that new solutions work seamlessly with their existing systems, to avoid disruption to their operations.
- Staff training: New technology solutions often require staff training to ensure that they are used effectively. ISOs must provide sufficient training to their staff to ensure that they can use new FinTech solutions efficiently and effectively.
FinTech providers & payment orchestration platforms
Partnering with a reliable and experienced FinTech provider can be the best solution for ISOs to overcome the challenges of adopting new technologies, such as implementation costs, security concerns, regulatory compliance, and staff training. FinTech providers can offer solutions that are already compliant with regulations and standards, while also providing security and integration with existing systems. Additionally, they can help with staff training and provide ongoing support to ensure that the technology is used effectively.
Integrating into a payment orchestration platform is another way ISOs can benefit from FinTech solutions in the payments industry. Payment orchestration platforms enable businesses to manage multiple payment methods and providers through a single API integration. This can be especially useful for ISOs, who may have multiple merchant customers with different payment needs.
ISOs can strategically enhance their payment processing capabilities and revenue streams by integrating with payment orchestration platforms. The advanced analytics and reporting capabilities of payment orchestration platforms further enable ISOs to optimize their payment processing, thus making it an intelligent move for ISOs in the payments industry to adopt this strategy.
Boosting competitive advantage and revenue
By embracing FinTech solutions, ISOs can attain a competitive edge, enhance operations, and boost revenue. These solutions are characterized by streamlined payment processes, improved customer experiences, and the potential to earn revenue through transaction fees. The integration of advanced analytics can provide ISOs with valuable insights into customer behavior, which can then be utilized to offer targeted products and services, ultimately resulting in increased revenue. The integration of mobile payments can offer a more innovative and convenient experience, attracting and retaining customers, ultimately leading to greater success in the marketplace.
Introducing the all-in-one Android Starter Pack by Aevi
If you are an ISO searching for ways to reduce friction with an Android-based payment solution, we have a future-proof payment solution that your merchants will love. Our entry-level, ready-to-go merchant solutions combine payment acceptance and light business enablement in a highly integrated, compact way, providing a convenient and efficient experience for your merchants.
Furthermore, read our most recent press release about the successful launch of the initial pilot merchant. This achievement is a significant milestone for Aevi as it aims to introduce its cutting-edge digital payment solutions to a broader range of ISOs. Also, our partnership announcement with XAC and our Android Starter Pack solution is a great fit for ISOs and their SMB merchants.