ISOs and Innovation: The Evolution of Independent Sales Organizations in the U.S.

Nonbanks have long been active in enabling card acceptance for merchants, whether through sales and service, processing, or equipment. The rapidly aging new millennium has seen many ISOs decline in prominence or become absorbed by competing firms, while those still able to corner a niche have thrived on the competition. Survivors of recent market consolidation and encroachment by disruptive outsiders have done so through superior firepower, launching salvos into the space of value-added resellers and independent software vendors, and causing disruptions of their own. Three such firms are profiled here to illustrate winning strategies in the core of merchant services just as the market shifts in some sectors from commodity payment services to innovative technology and other disruptive plays.