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.