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North American Bancard
Wednesday, March 25 2020

During these uncertain times, we will be reaching out to merchants offering the tips below, including:

 

Reminding them that their Virtual Terminal (accessible through Payments Hub) can be used to take over-the-phone payments.
   
Seeing if they’re set up for emailable invoices with AutoPay enabled.
   
Checking that they have the necessary solutions to accept mobile and ecommerce payments including mobile card readers and payment gateway access.
   
Giving them a "how-to" refresher on any payment solutions they already have in place.
   
Helping them set up any new solutions they may need to compete during this unprecedented time.
   
Encouraging them to clean their POS equipment (including PIN Pads) as often as possible with Center for Disease Control-approved cleaners.
Be on the lookout for an invitation to our Combating COVID-19 solutions webinar later this week.
Saturday, March 21 2020

With the rate at which the COVID-19 situation is changing, we wanted to provide you an important operational update, which includes our efforts to protect your income and maximize your bonus earnings.

We continue to be committed to you and your merchants and are fully operational across all departments of the organization. Our top priority remains supporting your existing portfolio and helping you board new clients.

We realize that merchants being forced to limit their hours of operation or close their doors completely will cause processing volume to suffer. We also realize this reduced volume will directly impact your 14x True Up Bonus earnings. That said, for any merchants whose first full month of processing is March or April, we will be extending the eligible True Up Bonus period until May!

For all activated merchants whose true up month is March or April, we will run the true up process as normal and pay you if earnings are greater than what your upfront bonus is. If the true up process generates a negative amount, we will not collect this with March or April True Up Bonuses.

Once May processing occurs, we will again run the true up process and pay you any additional funds earned based on May’s volume, which we are confident will represent all merchants’ proper processing activity. At this time we will process any due true downs for merchants activated in March, April, or May, if required.

To accommodate this change and limit upfront payments for merchants who have not activated due to the current situation, we will be temporarily suspending upfront bonuses paid on approval with merchants submitted 3.2.20 onward and instead, pay all upfront bonuses on activation. We expect this change to be temporary and will reassess it in 60 days.

We’re confident that these adjustments will provide you with the maximum bonus potential per MID, while preventing any underpayment due to reduced processing volumes in March and April.

Monday, March 09 2020

There are lots of reasons why building a merchant services business can be extremely lucrative, not the least of which is the fact that you can build a lasting asset (your residuals), which you can then sell. In fact, I spoke to someone in the industry today, and he was telling me all about his plan when he leaves the business and how he's planning to sell his residuals. What that conversation made me realize, though, is that lots of people underestimate the power of those residuals. The best thing you can do with this income is to use it as capital.

To be able to sell your business in the long-run, you need to make sure that you start the business the right way in the first place. There are some major things you're going to have to take into consideration so that your company is able to grow:

1) Own your portfolio's residuals. Maybe this seems very transparently obvious to you; after all, what's the point if you don't own your source of income? However, it's not uncommon that merchant services agents will lose their entire portfolio simply because they did not read the agreement that they made with their processor closely enough. You should always consider what might happen if you just decide to stop selling; if the answer is that you will lose your hard-earned residuals, then choose another partner.

2) Be able to sell your residuals. If you can't sell something, do you really own it, then? Sometimes processors will require you to have to consider an offer from them before selling to an outsider, and that's fine, but just make sure you are free to choose.

3) Find out if you can borrow cash against your residuals. A large merchant services ISO that isn't operating as a middle man should be able to lend you money. If they can't, this is a problem. Usually, you're going to want to exhaust several options before a buyout, and this includes borrowing.

So let's assume you have all of these issues squared away and are the proud owner of a growing portfolio of accounts. Now you can start to use that asset to raise some capital!

Before you do anything else, though, take a look at these general guidelines that will help you get a better picture of what is going on when the selling occurs:

Do you qualify? Don't bother trying to pump any cash from your portfolio before you have at least two dozen accounts or so. Make sure that your accounts are making at least $1000 every month as well. You will be hard pressed to find anyone who would want to buy residuals less than this.

Performing a buyout: When you perform an 100% upfront buyout, you'll get about 12 to 20 times the monthly worth of the accounts that you're selling. This is a rough estimate, but adjust your expectations accordingly.

Performing an earn-out: Basically, this is the same as a buyout, except you get less upfront. Some of the money is upfront, and the rest is sent to you in increments with the stipulation that your accounts don't get canceled and that they continue brining in a certain amount of money. This will yield you more than a buyout in the long run—about 20 to 24 times your monthly income.

Performing a secure buyout: Let's say you have a significantly-sized portfolio and you only want to sell some of your residuals. You can sell some of those accounts, and then use your others as collateral essentially to guarantee against any cancellations. This means less risk for the processor, so they are usually willing to pay more.

Getting a loan: Maybe you just need to borrow some liquid cash and use your residuals as a guarantee. Most ISOs can do this for you. Usually, you can borrow anywhere from a few months to up to a year's worth of residuals. The terms will vary depending on your partner company. Since of course your merchant services ISO will be interested in minimizing risk, just show that you are using the funds to grow, and you'll have a better chance at getting the deal you want. Your ISO will also usually offer better terms than outside lenders.

Did this article help you learn more about how to turn your portfolio into a machine that pumps out capital? Do you have a portfolio that you're looking to use right now for these sorts of purposes? Contact us and we'll show you the way.

Article by Shaw Merchant Group

Thursday, March 05 2020
Business management tools.
The new Payments Hub is here!

 

Let's take a look at the redesigned business management section.

 

Employees
Your merchants can add an employee and then the employee will get an email to create their login credentials. They will click on a current employee to edit their information or adjust their role down the line.
   
Hardware & Supplies
Merchants can order additional hardware, accessories, and supplies right from the portal.
   
Business Settings
Here merchants can manage their account and set preferences.
   
User Settings
Located just below the Business section is the User Settings tab seen above. Here merchants can control their contact information, update their email and password when needed, and enable two factor authentication for added account security.
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    © Shaw Merchant Group, LLC. Our goal is to gather accurate, updated information and assist you in your research. We recommended that you check with your service provider or financial institution directly and get independent financial advice before making any commitments or business decisions. 

    Company logos, names, and trademarks mentioned on this site belong to their respective owners.

    All merchant related services and products are referred to North American Bancard for first right of refusal. All information generated on this site is shared with NAB. North American Bancard is a registered ISO of Wells Fargo Bank N.A., Walnut Creek CA, of BMO Harris N.A., Chicage, IL and The Bancorp, Philadelphia, PA.