Actually... an ISO and MSP is the very same thing. They don't have different definitions - they are the same thing with ISO simply being the Visa term for it and MSP being the MasterCard term for it.
As ECS mentioned above, ISO means "Independent Sales Organization" and MSP means "Member Service Provider."
An ISO/MSP is any organization that is registered respectively with Visa, MasterCard and a sponsoring Member Bank and who is charged with the duty of acquiring merchant contracts and supporting them on behalf of their sponsoring bank.
An ISO/MSP is not a financial institution but rather a business that provides services "on behalf of" a Member Bank. Only an actual financial institution can become a Member Bank with Visa/MasterCard.
Sometimes ISO/MSP's loosely refer to themselves as "ISO's" or "MSP's" instead of the full term but it all means the same thing - a company that works on behalf of a bank to setup and manage merchant accounts.