What Is Member Service Provider (MSP)?

Member Service Provider (MSP) is a company that is authorized by MasterCard to provide merchants with merchant services. Companies authorized by Visa to provide the same service are called Independent Sales Organizations (ISOs). Typically, companies are licensed as both ISOs and MSPs.

In order to get authorized, a merchant card processing applicant has to go through a rigorous process. It starts with finding a sponsor bank to serve as an acquirer. Acquirers do the authorization, clearance and settlement of merchant credit card payment processing transactions. They are members of both Visa and MasterCard and guide the applicant through the process. The application requirements include a detailed business plan and marketing plan, a check of the applicant business financial statements and its principals' tax returns, personal financial statements and credit files. If the results are satisfactory, the applicant must pay registration fees of $5,000 to both Association. The registration to provide credit card transaction processing services is up for review once a year and, upon approval, a fee of $2,500 per Association is charged.

Merchant account service providers, sponsored by US-based acquiring banks, are authorized to provide credit card processing accounts to US-based businesses only and settlement is done in US dollars. Both MSPs and ISOs are required to display the name on their acquiring bank on each page of their websites and on every form of advertisement or a marketing material.