Sunday, July 15, 2012

Non-US Merchant Services for American Merchants

In order to provide small business merchant accounts to American businesses, credit card processing companies must be registered as Independent Sales Organizations (ISO) and Member Service Providers (MSP). The former designation is provided by Visa USA and the latter - by MasterCard. Both authorizations are given solely to US-based businesses, after the applicants to provide credit card payment processing service have been thoroughly evaluated and have paid the registration fees.

Similarly, a US-based credit card merchant processor cannot provide merchant account processing services to non-US organizations. All applicants must have their businesses based in the US, maintain an American office and have a checking account with a US bank.

It is very easy to check if a credit card processing account provider is based in the US. The Credit Card Associations have mandated that ISOs and MSPs display the name of their sponsoring bank on each page in their website and on all marketing and promotional materials. A sponsor bank is a bank that is a member of the American branches of Visa and MasterCard and can, therefore, operate as an acquiring bank in the US. Acquirers, also called merchant banks, authorize, clear and settle merchant's card payment processing transactions. Usually acquiring banks also are credit card issuing banks as well.

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