Electronic PaymentsBlog

September 15, 2025

Direct Processing is a Smart Move for Agents & ISOs—Here’s Why

Keith Ashcraft, Director of Business Development

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Want more control over pricing, funding, and your long-term income outlook? That’s the value of direct processing for agents and Independent Sales Organizations (ISOs). It’s a powerful model for growth, and it’s well worth your consideration if you want your efforts to produce more value.

This article will cover:

• What you need to know about direct vs. third-party processing
• How the features that distinguish direct processing translate to your success
• What the direct processor-agent relationship looks like in practice

What is Direct Processing?

Most payments partners you’ve encountered are likely third-party processors. This means that, while they may handle the sales relationship and support, the actual transaction processing (authorization, settlement, and funding) is routed through an external platform behind the scenes.

If you’ve chosen the right partner, third-party processing can be a great experience for agents. But even in the best circumstances, there are additional benefits you could be reaping with a direct processor. In direct processing, your merchant services partner performs all aspects of the payments process itself. Removing the middleman like this means you, as an agent, can expect faster movement, greater visibility, and more control over your business.

If you’re looking for a deeper refresher on your processor’s role, our merchant’s guide to payment processing provides more context  (and it’s a good resource for your prospects interested in the merchant benefits of direct processing).

Claim Residuals Faster

When you partner with a direct processor, you’re connected straight to the source. Not waiting on a third-party platform means residuals can be paid earlier in the month (for EPI, direct processing gets you the fastest residual payouts in the industry—on the 5th of the month).

When you get paid can make a big difference. Faster payouts improve your cash flow, allowing you to plan ahead, pay sub-agents on time, and reinvest in your business with confidence.

Target New, Underserved Verticals

Third-party processors often follow underwriting guidelines set by external platforms or authorities, which can limit your ability to write business in high-margin or fast-growing industries. Categories like CBD, vape, adult retail, and MOTO firearms are frequently blocked by legacy networks. Direct processors, by contrast, own the underwriting process, giving you the chance to grow in previously blocked verticals.

Boost Your Sales with New Merchant Perks

Merchants care about the bottom line, and when you’re selling with a direct processor behind you, you’re bringing a stronger value proposition to the table. Same-day funding and setup, lower processing fees, and fewer service delays are powerful sales tools that can help you stand out. For merchants, that translates to better cash flow and faster issue resolution. For you, it means more leverage to close deals and maintain strong relationships.

Take Control of Your Business

Direct processors can offer more transparent pricing structures and service agreements, giving you more control over pricing and your portfolio. Additionally, while some independent third-party processors can protect you against portfolio buyouts, residual cuts, and price hikes, many don’t. A direct processor offers you the means to control your own portfolio without outside interference.

Is Direct Processing Your Next Move?

A direct processing model might be a good fit for your business if:

• You’re ready to expand into higher-risk or underserved verticals
• You want more predictability in your cash flow and payouts
• You’ve experienced friction or delays due to underwriting or funding cutoffs
• You want more control over pricing and merchant support
• You’re looking to build a more secure, scalable portfolio

Not every agent needs to switch, and a third-party setup backed by strong partners can still serve you well. But if you’re looking for faster, more flexible ways to grow, direct processing gives you more options.

How It Works: Direct Processing with Cygma®

If you’re starting to think direct processing might be a better fit for how you work and where you’re headed, we can help you make the transition.

Cygma, EPI’s wholly-owned authorization network and clearing platform, is a direct processor that combines all of the benefits above with EPI’s robust partner advantages:

• Residuals paid early (5th of the month for Cygma accounts vs. 15th for others)
• Access to higher-risk verticals, including CBD, vape, adult retail and entertainment, and MOTO guns and ammo
• Same-day merchant funding in as little as 5 hours and late funding cutoff times (a great perk for West Coast merchants)
• Same-day underwriting, approval, and boarding for merchant accounts (in as little as six hours)
• Market-leading authorization processing speeds
• Lower fees for your merchants
• Protection from third-party buyouts and price hikes
• 24/7 U.S.-based, in-house tech support
• Marketing and branding assistance
• Free demos, trainings, and merchant statement analysis

Think direct processing sounds like a better option for your business? Explore Cygma and get started with EPI today.

FAQ: Direct Processing Benefits for Agents and ISOs.

Do I have to make any changes in order to process on Cygma?

No, you can board accounts onto Cygma when it makes sense for your business and merchants.

Is direct processing only for high-volume ISOs or top agents?

No. While some providers may have strict qualifications, Cygma is available to all Electronic Payments partners. ISOs of all sizes can benefit from increased vertical access, faster funding, and more control.

What changes for me when I switch to a direct processor?

If you’re already an EPI partner and starting with Cygma, you’ll still enjoy all the perks you have now, plus earlier residual payouts, unlocked higher-risk verticals, and more benefits for your merchants.

Will I need to change hardware or POS systems?

Probably not. Most direct processors, including Cygma, work with a wide range of POS devices and gateways.

Are residuals higher with direct processing?

Not necessarily higher in percentage, but they’re often paid earlier and with fewer deductions, improving cash flow and clarity.

How do I get started with direct processing?

Talk to your processing partner or rep. If you’re working with EPI, you can ask about transitioning to Cygma and whether it’s a good fit for your current book.

Electronic Payments, Inc. (EPI) is a privately-held payment processor, acquirer, and financial technology company that delivers innovative POS systems, merchant services, and integrated payment solutions to businesses nationwide. Backed by over 25 years of industry experience, EPI is known for its transparent partnerships, proprietary technologies—including Exatouch® POS, ProCharge®, and Cygma®—and exceptional 24/7 in-house U.S.-based support. EPI serves a wide range of industries, from retail and restaurants to service-based businesses and professional offices, and acquires new merchants through a national network of POS value-added resellers (VARs), agent banks, independent sales agents, and ISOs.

800-966-5520 | www.electronicpayments.com