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Why ISOs Should Reconsider this High Risk Industry

If you haven't already noticed, multi-level marketing, or MLM, has hit the streets running, and now you can buy just about anything from your favorite cosmetics to custom handbags using a network of MLM vendors. Those who succeed in MLM are reportedly raking in enough money to justify quitting their jobs and traveling the country to attend conferences. So where do ISOs and payment processors fall in this hierarchy? 

Why ISOs are Missing Out on MLM

Currently, many ISOs are missing out on the MLM niche because direct sellers simply don't fit into the traditional ISO image of what an ideal customer looks like. They don't have a place of business, they don't require a big POS terminal to take payments, and they can be hard to track down if you are trying to make door-to-door sales.

However, MLM customers are ripe for the picking for ISOs who are willing to go the extra mile. Part of the problem with the fluidity of the MLM trend is that payment processing can be iffy at best. Direct sellers often struggle to manage payments in an orderly fashion, or they are overpaying for payment processing services because they can't qualify for traditional merchant accounts. 

How ISOs can Capture the MLM Market

ISOs have a unique opportunity to meet direct sellers on their own turf. In order to make conversions in this arena, ISOs will have to prove that they can provide fast processing using simple technologies, mostly mobile. They will also have to show that their fees can be comparable to other app-based payment solutions that are currently dominating the market.

On the plus side, ISOs can demonstrate a strong track record for payment security and can help legitimize MLMs by providing more accessible banking options. 

Of course, there are some risks associated with MLMs as well. A handful of companies have been charged with running Ponzi schemes that masqueraded as real business opportunities. The best way to see the difference in determining whether the product for sale is actually how the company makes money, or if the company makes their money only on membership dues from associates.

Once you determine which companies are legitimate, you can find dozens of agents in your area needing ISO help. 


John Hughes

John is currently the Senior Vice President & Head of GlobalOnePay leading business development and partner teams. John has over over 20 years experience in the electronic payments industry, with roles including co-founding a successful businesses in the financial services and merchant acquiring space. John has held senior management positions with multiple top tier acquirers and was CEO/Co-founder of Base Commerce.