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  1. #1
    Join Date
    Mar 2004

    * What is Sponsoring


    I've got a question. I came across this definition of a MSP and ISOwant to know what "sponsoring" means...

    Member Service Provider - MasterCard term for a company that is sponsored by an acquiring bank to solicit and sometimes support merchants.

    Independent Sales Organization - Visa term for a company that is sponsored by an acquiring bank to solicit and sometimes support merchants.

    Also, Has someone heard of the term CIB - (Central Interchange BIN)? What is it and what's it for?


  2. #2
    Join Date
    Aug 2003
    Chesapeake, VA
    "Sponsoring" means that the Member Bank has conducted an FI (financial investigation) and a very extensive due diligence process and is willing to allow the ISO/MSP to setup merchant accounts under its umbrella as the acquiring bank.

    Ultimately, even when an ISO/MSP takes full risk on their merchant accounts, the bank is still held 100% liable at the end of the day if there ever were a circumstance where the ISO/MSP defaulted on covering chargeback losses or other liabilities.

    Even beyond risk or loss liability, the Member Bank is also responsible for ensuring that its ISO/MSP's comply with all Visa and MasterCard operating rules & regulations, that various portfolio-wide and BIN-wide metrics for chargebacks are not exceeded, etc.

    So it is a huge responsibility for a company to be an ISO/MSP with respect to their sponsoring bank and likewise, it is something that banks look at with a great deal of scrutiny due to the risks and processing volumes involved.

    With respect to the term "BIN" - it stands for Bank Identification Number. Issuers and acquirers have their own BIN and it identifies them as the bank behind a given transaction.

    When it comes to merchant processing, having access to your own BIN or BIN heirarchy is a significant advantage with respect to the merchant service and support capability it provides you with. (It is somewhat analgous to having your own Data Center if you are a Web hosting company.) - Trusted Merchant Account Solutions since 1998
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  3. #3
    So is this how some third party processors like paypal, 2checkout, are able to process credit cards for others.

    Because you can not do third party if you just go and get a regular merchant account.


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