Ask HN: what is the difference between IPSP and ISO?
What is the difference between an Internet payment service provider and independent sales organization? Could you forward some links or give examples of IPSPs and ISOs?
Visa and Mastercard are the usual parties when it comes to giving out merchant accounts. An ISO is an institution created by a bank or a consortium of banks to allow merchants to accept various cards, but without having a merchant account with either Visa or Mastercard, instead they have their merchant account with the ISO or 'MSP' as it is also called.
http://www.mastercard.com/au/merchant/en/acquirers/communica...
It is unlikely that you will find yourself in the position of a MSP or that you will be dealing with one, banks normally use these only for groups of merchants for which it makes no sense to have a direct merchant account with the large card companies.
They are an instrument for 'vertical' markets. An example of a member service provider is for instance PaySquare, positioned to accept point-of-sale transactions.