Anatomy of an ISO agent agreement

First, define the parties and the role

Identify the contracting entity, sponsoring/processing relationships where relevant, the agent's obligations, and the division of customer service, underwriting, marketing, and technical support. Titles such as 'partner' can be informal unless the contract defines them.

Core commercial terms

Residual language should specify the calculation base, excluded revenue, deductions, reporting cadence, adjustments, and any chargeback or loss allocations. '60%' means little unless the denominator and permitted deductions are defined.

• Commission and residual calculation base
• Merchant attribution, accepted leads and conflicts
• Payment timing and audit/reconciliation access
• Vesting, survival, portability and transfer rights
• Termination events, notice and cure periods
• Exclusivity, non-solicitation and non-compete restrictions
• Ownership of independently developed intellectual property and client data

What happens at exit?

Ask what remains payable when the agreement ends, when a merchant leaves, when an agent is incapacitated, or if the processor is sold. Identify clawback, reserve, offset, assignment, estate and portfolio transfer provisions.

A portfolio can appear economically valuable but be difficult to transfer if the contract does not provide enforceable rights.

Separate services from residuals

Independent consulting, audits, automation, intelligence and software work should have separate written scope and compensation when not included in the actual agent contract.