What is a Buy Rate in the context of ISO services?

In the context of ISO (Independent Sales Organization) services, the Buy Rate refers to the cost at which an ISO purchases services from a payment processor or provider. This rate is crucial for ISOs as it forms the baseline for their financial calculations and ultimately influences their pricing strategies for merchants.

Understanding the Buy Rate is essential because it directly impacts the profitability of the ISO. Essentially, this rate dictates what the ISO pays for the services they will later resell to their clients, typically at a markup. The difference between what the ISO charges their clients and what they pay to the processor constitutes their revenue.

This concept is fundamental in the competitive landscape of payment processing, where ISOs need to manage their relationships with processors and understand their costs to create attractive offers for merchants. Thus, knowing the Buy Rate allows ISOs to maintain healthy profit margins while effectively serving their clients.