Looking to Become a Credit Card Processing Agent?  Here are the Guidelines:

Are you excited to become a credit card processing agent? Do you want to start a credit card processing company? If your answer is YES, then you have come to the right place.

In this article, I am going to teach you ways to start a successful credit card processing reseller Services Company. I am also going to take you through the fine details of planning, setting up, and starting a credit card processing company.

You are going to learn about what it takes to become a successful credit card processing agent, how to conduct market and niche research, how to create a great business plan, how to get funding for your venture, and also tips to run a successful credit card processing company.

It is important to note that when you become a credit card processing reseller, you will be helping corporate and businesses to process payment for their customers.

Your credit card processing services will involve offering the platform and equipment to facilitate the sending, approval, and processing of payments and transactions between customer’s bank accounts and your clients' bank accounts.

What It Takes To Become a Credit Card Processing Agent:

The credit card processing industry is very dynamic, and the success of becoming a merchant services reseller is both easy and hard, as discussed in our previous post here.

There are a few things that you need to know; some of these include having a clear understanding of how credit card processing business works. You will also need to have deep knowledge of how credit cards work and what they do.

Another overly important thing that you will need to understand is your market and, most importantly, your niche market. This way, you will be able to connect with your customers on a personal level. In addition, you will also be able to create a solid relationship with banks for financial transactions and payment processing.

Market Feasibility and Niche Research

It is critical to note that any successful venture always starts with thorough research. When you want to become a credit card processing agent, you will need to do thorough market research.

Understand the type of services or products you will be offering and where your clients are and their needs.

Make sure that you look at the services offered by your competitors, their rates, and also how satisfied their customers are with the services they get.

The few steps you can take to become a merchant services reseller are to first create a survey on several businesses in your area, determine the most common services they use, and evaluate the satisfaction level of customers with their current payment providers.

Another important step that you need to take is to gather client information, such as phone numbers or email addresses. These details will help you when you start sending out pitches.

Crafting a Comprehensive Business Plan

For you to become a credit card processing agent and be successful in it, you will need to come up with a detailed business plan.

It is okay if you are not a seasoned writer, but you can hire one to do the work for you. Better still, there are several business plan templates available online that you can use.

There are several details that need to be included in your business plan; some of these details include:

• How you intend to run your venture
• The executive summary about your business
• How you intend to raise startup capital
• Products and services you will be offering
• Marketing and sales analysis
• SWOT analysis
• And more

Ideally, the business plan for a credit card processing company can serve as proof to investors and stakeholders that you are serious about with your venture as the document shows all the strategies.

A great business plan can help you win funding from various investors and banks.

How to Finance Your Credit Card Processing Business

Most business requires a startup capital; the same case applies to credit card processing companies.

To become a credit card processing agent, you need to consider where you are going to get funding to start your venture. You will also need to cater for all the operational costs until you start realizing some profits.

According to research, on average, a minimum of $51,000 is needed to start a credit card processing company.

There are options that you can use to get financing for your credit card processing company, some of these options include;

• Getting a loan from banks
• Approaching investors
• Getting funding from business partners
• Using your savings or selling assets to raise funds
• Sourcing some funds from friends and family members.

Launching Your Merchant Services Reseller Company

Once all the above are set up, you can go ahead and launch your credit card processing company. There are other finer details that you will need to consider before you do this. These include finding the appropriate location for your business, understanding the requirements which you must have beforehand, and understanding the manpower needed to run the business.

To become a merchant services reseller, you should fully implement your business plan. The best way is to strictly follow the plan without cutting corners.

Tip: Due to the competitive nature of the credit card processing business, it is critical to ensure that your business stands out.

Put more efforts to stand out among your competitions. The best way to do this is to have a business network. You can reach out to organizations and corporations to widen your reach and customer base. 

Marketing Plan for Your Credit Card Processing Company

• Just like any other business, a marketing plan is a must. You can do all the above work, but if you don’t come up with an effective marketing plan, you might fail.
• Take your marketing strategies seriously. The following are some effective marketing ideas that you can use.
• Use social media platforms to spread the word about your business
• Reach out to stakeholders, clients, and managers of big corporations
• Make sure that your business is listed in local directories
• Use TVs, magazines, newspapers, and radio to advertise your business
• Start bidding for available contracts

To further increase your reach to potential clients, you can create business cards, flyers, pamphlets, or business website.

Tips To Help You Run a Successful Credit Card Processing Business

In order to succeed in starting a credit card processing business, understand that you will not only be providing requirements and services to help process payment for customers BUT also, you will be selling yourself. As a credit card processor, you will need to clearly show potential clients why they need your services. Show them the benefits they will get from your services. Never seize to reach out to potential customers. In addition, ensure that you do a follow up on those pitches. To simplify the process of becoming a credit card processing agent, North American Bancard provides all the tools you need for a successful credit card processing business. Check out North American Bancard for more details and information on how to get started easily.

Credit cards are all the rage in the USA and have been for decades, and six out of ten Americans have at least one credit card. The number of credit card users has been growing each year exponentially. People use them as the primary mode of payment. Similarly, debit cards are widely used online payment substitutes, and the number of new users is rising worldwide. Today, debit card usage accounts for 25% of all purchase volume which was 13% in 2005.

Moreover, there were 45 billion dollars in credit card transactions in the year 2019. It means more volume of the transaction will increase demand for credit transaction processors. Payment processing companies act as a bridge between the merchant and the customers making the payments. This industry may be competitive, but it’s true that it can be very profitable. Do you want to become a merchant service agent, or wondering how to start your own payment processing company? If yes, then read on to learn how to become a credit card processor.

How to become a credit card processor in 4 simple steps?

You might think it’s simple to become a credit card processor, but it is not as simple as it sounds. In fact, it is more than project projection, payment terminal, and POS options to get things started. Follow these steps if you are on a mission to becoming a merchant service provider.

Conduct Market Research

Market research will not only help you better understand your target market but also uncover insights about your competitors. So don’t forget to invest some time to conduct market research to analyze your competitors and potential clients. Determine the viability of new selling merchant services and the niche of the local retailers. Don’t forget to monitor how your competitors are doing business, their services, and the average fee their customers are paying for credit card processing.

Come up with a great deal for your future clients. If you offer to deal with a lower amount than your competitors, you will likely get more profit. All you need to go to your local market and create a survey to gather comprehensive information from your targeted audience about the service they use the most. Ask them about their current merchant service provider and check how much they are satisfied with them. And most importantly, don’t forget to collect the contact information of your potential clients, like their phone numbers and email address.

Plan Out How You Will Operate Your Business

The second step is to create a profitable business plan. It will give you an idea of how your credit card processing company will work. Plan out what kind of services you will offer and their pricing. Moreover, your business plan should also cover how large your sales team will be. In other words, it is a guideline that will help to make business-related decisions. Also include other details like how much capital you need to start your own credit card processing company, how you will obtain this capital, and how you will market your new business.

There are two main options for those who are become a credit card processor, i.e., start your own company or franchise a credit card processing company. When you start your company independently, it offers various benefits. First of all, starting an independent business may cost less, and you earn more profit because there are no chances of getting your hand-tied in any contract or bad deal. In addition, it comes with downsides too. When you start a new company, no one recognizes you in the market, and you have to do a lot of hard work to beat your competitors around. Not only that, you should have good terms with banks to finance your company.

On the other hand, if you choose the second option, i.e., franchise an existing credit card processing company, forget about designing a winning business model, finding credit card terminals, machines, and other equipment, and build a relationship with finance resources like banks. However, if you choose this option, you will require big bucks to get started. Moreover, the parent company will also cut through some percentage of your profits.

Partner With The Bank

You need to partner with a bank to handle the interbank routing and get financing for operational costs. Initially, you need at least $50,000 capital to start a small credit card processing company with a physical office location. If a contingency plan fails and unexpected expenses arise, consider a secondary source.

Execute Your Business Plan

Now, it’s time to execute your business plan and launch your company. Having a killer marketing strategy helps you grow your business exponentially. Your ultimate goal should be to stay ahead of your competitors. To reach out to more clients, business networking can help you rack up new contacts. Provide the best services as promised to your customers. Referrals from merchants play a crucial role in the company’s growth.

How To Sell Merchant Services

Want to know how to sell merchant services? Just keep in mind that there is no secret formula to selling it; it starts with you. First off, you should know how this transaction processing procedure works. You should be an expert as a credit card payment processor that helps you get more profit than MSPs (Merchant Service Providers). Over time, when you see more trade growth, people will recognize your business assets. Prepare your business assets like yellow and white pages, business cards, website, business cards, and local directory for your company and market them to grow your business.

Tips On Selling Merchant Services

One of the best tips on selling merchant services is that give your clients the reason to choose you. Don’t offer the same thing that other hundreds of merchant service providers are offering. Let them know what benefits they will get because only special discounts are not enough. A high percentage of profit is probably is more attractive to sell your merchant services. Don’t focus on discount price offer only. Show your numbers and merchant testimonials as your company’s proof of growth. Moreover, don’t hesitate to build a good relationship with them which helps you increase sales.

Important Payment Dates

Whether you are already a merchant services sales rep or you are thinking of becoming one, one of the most important things that you would like to know is when you are going to get paid. As it turns out, being a merchant sales representative usually means that you have a pretty easy-to-understand payment schedule that allows you to know when to expect your commissions and residuals.

To make it easy, most merchant service companies pay out their representatives twice a month. There are two important dates that you will need to pay attention to as days that you are likely to get paid on. The first payment date for each month is on the 15th. The second most important date of the month that you will be paid on is the 25th. With these two dates in mind, you can always know when to expect a payment to come into your bank account.

If you are a merchant services sales rep, you often have the choice of getting your funds on the 15th of the month of the 25th of the month. For most, it is preferred to get your payments earlier. However, it is up to you how you wish to structure the payments.

Bonuses

In addition to regular salary and commissions that will hit your account twice a month, there are also two types of bonuses that you might expect to be paid out at various times throughout the month. As a salesman, it is important that you know how and when these bonuses are paid out because you work hard to get your bonuses.

The first type of bonus that you might experience is called an approval bonus, which kicks in when a business is approved for their merchant account. This bonus will usually payout within 24 hours of the merchant getting approved, and there is no set date per month that these are paid out.

Another type of bonus that you might be paid if you are making consistent sales and your accounts are having success is an activation bonus. This is a bonus that occurs when the merchant account that you have signed up has processed $300 of either Visa or Mastercard transactions on the account. This bonus should hit your bank account within 24 hours of the bonus requirements being met.

Finding Payment Information

If you are curious about how your income breaks down and what is being paid to you, then you can always consult your partner dashboard. Within this dashboard, you’ll be able to see the breakdown of your residuals, month-to-month comparisons, and even performance metrics. With this information, you will have everything you need to be informed about the status of your payments and your performance as a seller.

Though some people have trouble understanding how merchant services rep payments work, this breakdown should have made it easier for you to understand how you can expect to be paid out on a regular bonus for both residuals and bonus payments.

All around the world, there are thousands of businesses that use vital services that are referred to as merchant services. These are services such as payment processing, which is what allows businesses to accept and process payments so that they can make a profit on their product. Without these services, businesses would be unable to function in the modern world. You might think that the fact that these services are an absolute necessity to these businesses make them an easy target for selling, but that is now always the case. There are definitely some positives as well as some negatives when selling merchant services.

This guide will show you some of each and hopefully give you some insight as to whether a career selling merchant services is right for you.

Pros

Undoubtedly, there are some very positive aspects of selling merchant services for a living. If you have had a sales job that is similar in the past, you already have known some of these benefits. Here are some of the best things about selling merchant services.

There is always a market

One of the best things about working in the merchant services industry is that there is never a lack of demand for these services. There are always new businesses sprouting up as people chase their passion for owning their own business. And existing businesses are always evaluating their options and ensuring that they are getting the best deal on the market. For that reason, you won’t ever have to worry about the industry as a whole drying up. People will always need to spend digital money and businesses will always need to find a way to accept it.

Set your schedule

For many that are in a commission-based sales job, one of the greatest benefits of it is being able to get to the point where you are working when you want to work instead of punching a time clock when you get to work. When you are a partner in a merchant services sales program, you will be able to set your appointments on a schedule that works well for you.

Build passive income

Finding and signing clients to lucrative merchant processing contracts is hard work, nobody denies that. However, all of the hard work that you put into this process could end up paying out tenfold throughout the years. One of the greatest things about being a merchant services salesperson is that your accounts can earn you passive and residual income long after you have closed them to a contract. This could help you build passive income for years to come and eventually phase out the bulk of the labor that is involved in this career.

High commission rates

When you compare merchant services to other industries out there, you will find that it has a very competitive and comparatively high commission rate compared to those other industries. The high price of the contracts and the fact that they continue to pay out for years to come is what makes these sales so valuable and why some of the best salespeople in the world turn to merchant services when they want to increase their earning potential.

Cons

Just as there are many pros to selling merchant services, there are also some aspects that could prove difficult. You should watch out for these aspects and consider whether they are something that you are able to overcome and overlook.

Highly competitive industry

There is always a lot of demand for merchant services, but this fact also means that there is a lot of competition. One of the hardest aspects of selling merchant services is that you will always have competition breathing down your neck, waiting to provide your client with a better rate. This is really where your ability to create and nurture relationships will come in handy with client retention. This industry is not for those that don’t like competition and healthy capitalist tendencies.

Dependent on success to make money

When you are a merchant services representative in any industry, you know that your ability to make money is heavily dependent on the success that you have when selling your product or service. It’s no different in selling merchant accounts. If you want to have a good income, then you will need to become skilled at selling these products. If you don’t feel confident that you can do that, then it might not be the right choice for you.

Introducing PayAnywhere

Whether you are a merchant in need of services for processing payments or a representative looking to break into the industry and start off with a reputable solution to provide for your clients, the PayAnywhere suite of solutions is the ideal package for you. PayAnywhere’s suite of solutions is the latest in an industry full of innovation and forward progress. With our robust products, you’ll soar to new heights in the world of merchant services sales.

PayAnywhere POS Equipment

One of the greatest things about our PayAnywhere solutions is our POS equipment that runs on cutting-edge technology. We utilize robust construction, superior technology, and hyper-focused features that solve the problems of small businesses around the world.

Handheld Terminal

For those that are in need of a small and compact solution for their mobile needs, the PayAnywhere handheld terminal is the perfect solution. It features a 5.5” screen that makes it easy for staff to process payments with ease. The compact size makes it perfect for those that need to accept payments outside the store.

The payment processing options include a chip reader and stripe reader to accommodate all customers with varying types of cards. You’ll also find a receipt printer for maximum convenience and PIN capability. Scan barcodes with ease with front-facing and back cameras. The best thing about the handheld smart terminal is the fact that it all operates on our PayAnywhere software, which is designed to help your business be more efficient.

Countertop Smart Terminal

If you need something a bit larger for your store POS, try out our countertop smart terminal option. This larger, but still sleek and compact version of our payment processor gives you maximum functionality and features.

The countertop terminal features a 4.5” screen that interacts with the customers, card processing through chip and stripe, PIN capability, and a built-in receipt printer. It also carries two cameras to allow easy scanning of barcodes and can connect to either 4G networks or Wi-Fi.

The countertop smart terminal runs on the PayAnywhere app to give you control and insight into your payment processing and revenue reports. With this tool by your side, you'll be ready to process payments efficiently, effectively, and affordably.

The PayAnywhere App

The most important aspect of our PayAnywhere solutions is the PayAnywhere app, which is widely regarded as one of the most comprehensive merchant services and payment processing software solutions on the market.

The PayAnywhere portal will allow you to get a visual representation of the day’s activity, various modules to help you gain insight into what’s happening in your business, sales applications to monitor employees, and more.

The PayAnywhere app differentiates itself by also offering an inventory module to allow you an easy way to monitor stock levels and evaluate product viability. To gain even more insight into your business, use the robust report functionality to generate reports that are based on your sales data. If you’re ready to gain a business tool that will give you full control over the numbers that drive your business, then pairing a PayAnywhere terminal with the PayAnywhere app is the best possible combination.

As a merchant services agent, you know that one of the largest struggles is finding a way to organize your merchants, monitor their activity, and review your own performance. With a traditional merchant services company, this could fall to you to monitor. However, there is a better solution. The North American Bancard Sales Partner Portal is one of the most innovative partner portals in the industry and it has a robust set of features that allow you to do all of these things and more with ease. With this partner portal, you’ll be empowered to handle your merchant services business and gain full control over the metrics that drive your livelihood.

Feel at home with custom branding

One of the most interesting features of the partner portal is that you are able to brand the portal with your own logo and color to make it feel more personalized and specific to your brand. This feature allows your firm to gain all the reputation and legitimacy of a large corporation just for cooperating with North American Bancard.

Easy to use dashboard

If you have ever dealt with an unnecessarily complicated dashboard that is complicated to use and navigate, then you know the strain that it can put on your workflow. With this dashboard, you’ll never be held back from productivity. This dashboard is one of the easiest to use in the industry and provides you with an easy way to navigate and find the information that is important to your business.

Visualize your progress

When you are making progress and signing on new clients, it is always helpful to visualize your progress and see how far you have come from the beginning of your journey. If you are a visual person that values having these resources, then this portal is perfect for you. It contains visual aids to show you your progress and visualize the performance of your business.

Gain access to marketing materials

Within the portal, you’ll not only find payment information and performance metrics, but also the tools that you need to improve your performance as a representative. There are marketing materials located within the portal that will help you close more sales, connect with your clients, and save time throughout your day by giving you all of the information that you need in one central location. With the help of these marketing materials, you can quickly rise through the ranks to become a highly paid account representative.

Handle support tickets

When your merchants have issues or concerns, it can often be a hassle to try and communicate with them and organize their issues while also documenting them well. That is where the partners' dashboard comes in. The dashboard contains support capability to allow you to handle and facilitate product support inquiries from within the dashboard. There is also a knowledge base within the partner portal to help solve any minor issues and give your customers the care and attention that they deserve.

As you know, merchants need a comprehensive system for accepting payments. This not only includes a credit card processing POS, but also the software that powers these systems. Accepting payments is one of the most crucial aspects of running a business of any size, and you should never be held back by the processing solution that you select. If you truly want the best for your investment, then a processing package from NAB Velocity is the right choice for you or your merchant.

What is Velocity?

Velocity is a processing package offered by North American Bancard Agent Program that is a comprehensive and flexible suite of solutions for merchants in almost every industry. With NAB’s semi-integrated solution that is comprehensive enough to give a fast start and flexible enough to provide customization, merchants will have everything they need to process payments reliably, quickly, and with optimal performance.

For most merchants, Velocity is the only software solution that they will need to accept payments in the best way possible.

Ways to Use Velocity

Velocity is one of the most comprehensive payment processing solutions in the industry. There are a variety of ways that you can use velocity to your full advantage. Here are some of the best ways that Velocity can be used to extract maximum advantage for any merchant.

Integrate with Our Partners

One of the best ways to get the most value out of Velocity is to integrate it with one of our valued partners. For those that have multiple business assets in different industries, this method of using Velocity will fit the best. It allows you to create a scalable and replicable payments processing infrastructure that you can use within several different assets.

Velocity Virtual Terminal

Another possible way that merchants can use Velocity to its full potential is through the integration with the Velocity Virtual Terminal. With the virtual terminal, merchants will gain access to a comprehensive integration that maximizes processing potential and streamlines business operations. The virtual terminal is the ideal solution for mid-sized merchants that need a robust processing software and infrastructure to help their checkout process run more smoothly.

Custom Integration

For those that have their own developer and POS application that they prefer to bring to our solution, the third way that you can leverage the power of Velocity is to integrate your existing POS application with the Velocity merchant processing system. While many businesses don’t have these resources at their disposal, those that do find that the power of Velocity combined with the customization and freedom of their own POS system combine to form a very desirable solution that makes it easy to get the most out of their processing system.

Recap

Velocity is clearly one of the most powerful processing infrastructures on the market today and very enticing to merchants of all sizes and in all industries. The customization and flexibility that Velocity affords make it a desirable solution for any business that wants to get the most value out of their payment processing software.

We are always looking for talented merchant services sales reps. If you are interested please visit us here: North American Bancard Agent Program

If you ask any business owner about the costs of accepting payments, one of the first things that they will tell you is that they feel that the fee they pay to process credit cards and other plastic is unfair and high. Given the chance, any one of these business owners would eliminate the cost and charge their customers for it. Until now, there has never been an easy way to do this without angering the customer and causing strife in their business. Furthermore, consumers in the modern world are heavily incentivized to use their plastic to pay for products for many reasons. To defeat this, you need to be able to present your business clients with a program that is equally as lucrative for them and their customers. The EDGE Cash Discount program is this system.

The problem merchants face with credit card payments

As you know, processing companies make most of their revenue from charging a percentage of each transaction. Typically, merchants will absorb this cost and deal with it as a cost of doing business. There is not an easy way to explain having to raise prices for those that pay with plastic, so the transaction cost cuts into the margin for the merchant and makes it harder to do business with high margins. Accepting cash is preferable because it offers higher margins, but people are heavily leaning towards card payments and are even incentivized with rewards programs and signup bonuses to use plastic as opposed to having to carry around cash.

Traditionally, merchants would charge the same amount to both their cash-paying customers and their card-paying customers. This makes things rather unfair to those that are paying with cash, as they are paying the same as someone else who pays with cards, which costs the merchant a high percentage to process. This less-than-ideal situation is what has led many merchants to seek out a different option. The EDGE cash discount program allows merchants to charge the same sticker price to both customers, but keep the same margin, as well.

Selling the EDGE Cash Discount Program

Remember how we said earlier on that merchants would love to pass the credit card processing cost onto the customer? Well, it's now possible with the EDGE program. The EDGE Cash Discount Program is an easy way to allow business owners to keep equal margins for any payment method and make pricing products that much easier. With the EDGE program, merchants won't have to worry about which payment methods their customers use most because they will be achieving the same profit either way.

In short, this program allows merchants to essentially wipe out processing cost in their store for all card payments. The program is implemented in a way that advertises it as a rewards program for cash instead of simply charging more for those that choose to use their card. For merchants, getting over the hump of advertising this program is the biggest hurdle. Once merchants realize that it will have no noticeable effect on foot traffic and revenue, it becomes an easy jump to make.

What’s included in this program?

One of the largest concerns that business owners have when implementing this program is the procedure change that must occur and how that change is presented to their customers. Luckily, the materials that are included in the program make it an easy transition and results in minimal disruption.

For starters, this program includes EDGE cash discounting software, which is a program that will automate all of the repricings that have to occur at checkout depending on which payment method the customer decides to use. This reduces the amount of time and labor that the business owner will have to spend, streamlining operations and making the transition anything but a burden on the daily operations of the business.

To explain the slight change to their customers and advertise the cash discount program, there will also be signage and literature explaining the program and how the pricing works so that the business owner can adequately inform the customers about the changes and ensure that there is no confusion. The business owner benefits from this information and incentivization, which could drive more customers to use cash because of the perceived benefits.

Finally, all of the equipment that is needed to facilitate this change can be provided to the merchant in this program. This includes POS systems and other technical equipment that is needed to facilitate the repricing and restructuring of transactions and how totals are calculated.

With these tools, merchants will have everything that they need to implement the EDGE cash discount program and increase their margins without a noticeable disruption in the checkout flow. Merchants won't have many reasons to resist this change and with a trustworthy rep to walk them through the process, they should see only benefits from the new system.

Do you know if you really own your credit card processing residuals? The best way to find out is to ask your credit card processor if they want to buy you out—that is, purchase some of your future income steams. If you need fast cash, this is a great way to go. Let's look at some of the details:

For example, what if you closed twenty deals in October, and each of those yielded $50 in profit. If you have a 50% split, then your residuals would be $25 for each account per month. This makes for about $500 dollars a month total in residuals, which is $6,000 dollars per year. Not bad, right? Especially considering that your portfolio will only increase from there.

Just like any other asset, you can sell your merchant portfolio, though. If you need cash upfront, you can sell the right to this long-term passive income to your processor. How much would they pay? Well, typically, they will pay the same as about 15 months of your residuals, which in this case is $7,500. And then they would pay you another $4,500 throughout the year ($500 x 9), depending on the retention of your accounts. That's a pretty handsome amount for closing just 20 accounts.

There are some rules to consider when you're doing a buyout, though, so let's take a look at some individual guidelines:

1.) First, the residuals need to be from a merchant account that has been activated for awhile—at least a month, but more often around three months. Why? Consider this: your processor will decide what to pay you based on the average income generated over the past three months. You don't want one or two of those months to be a 0.

2.) Selling your residuals shouldn't affect your upfront payment for closing the deal.

3.) You're more likely to get that second payment if less accounts cancel, so sometimes it's better to sell more accounts to your processor to increase your chances. Another thing you can do is to get a buyout that is 100% upfront, though usually this isn't as lucrative in the long run.

Do you feel like you're a bit more familiar with buyouts now? The above guidelines are good things to keep in mind, but how do you know when a buyout would be helpful?

1.) To break your fall when you're first getting started. Running a business can be a difficult challenge and sometimes this requires putting money upfront. It might be fine to work off savings and initial capital for a few months, but eventually you're going to have to start earning income from your business to be able to avoid running out of money. If expansion is happening slower that you thought and you need some money to put into savings or to invest in your business when you're brand new to the industry, a buyout may just help you find the liquid cash that you need without having to go into debt.

2) When you need stability. You might be tempted to go with a buyout as a way to pay for the cost of growing—for example, getting a fancy advertising campaign going, or moving to a bigger office—but don't do it. Selling your residuals is not a long-term strategy, so it should not be used to meet long-term goals like growth. You may have more money upfront, but it will obviously lower the amount of your monthly residuals. It is not worth it; the point of this business it to build your monthly income over time. Only perform a buyout when you really need liquid cash upfront to put out a fire and return your business to the status quo—not to add more complexities and growth.

When shouldn't you sell your merchant residuals? Well, there are a few situations where it's not recommended:

• When you want to slow your business down / take time off. The buyout is something of an emergency options—it's not meant to help you relax. In fact, it is taking monthly income away from your business!
• If you are tempted to sell more than how fast you are growing. You should always be able to replenish what you lost within a few months. If not, then don't do the buyout. Your goal should be to get those residuals coming in again. Still curious about how buyouts work? Leave a comment below.

In this industry, you will often hear the words “merchant services agents,” “Member Service Providers,” and “Independent Sales Organizations” used in a similar context, as if all three of these things are the same. The truth is that these terms actually refer to distinct roles in the credit card processing business. If this seems confusing to you, don't worry; all of these terms will be explained in this article, as well as their relationships to the credit card associations. We will also go over how you might go about becoming a merchant services ISO or an MSP.

After we've sorted all of that out, we'll go over what the advantages and disadvantages are of working in the industry as each of these roles. Getting an idea ahead of time of what each of these entails will hopefully save you from making a lot of mistakes early on in your business ventures.

What Every Term Means - First of all, let's get everything perfectly clear by defining the terms that we've mentioned so far:

ISO (Independent Sales Organization) – This is basically the credit card processor, the company that serves as the middle man between the credit card companies and the merchant. It will often provide terminals to the merchants, as well as tech support, training, and customer service. Another common term for this is “merchant service company.”

MSP (Member Service Provider) – ISO is a term often used by Visa, and so MSP is basically MasterCard's version of this. They both mean roughly the same thing. However, to make things a little more obscure, MasterCard also uses the term ISO, but it means something different. Basically, in their case, an ISO offers services that are not processing and transaction services, like customer service and lead generation. For our purposes, though, don't worry too much about these subtle distinctions. They are basically the same thing. For the sake of simplicity, let's just assume that we're including MSPs when we use the term “ISO” from now on.

Sales Agent – This role is completely different from the above mentioned roles. A merchant services agent is a third party that sells the services of merchant services ISOs and MSPs. Since merchant services companies often like to concentrate on processing credit cards and offering POS solutions, they will contract sales agents to find merchants to work with. A sales agent doesn't have to pay the high association fees like an merchant services ISO does, but he can't do business in his own name and have a merchant services ISO program with an ISO or MSP company.

What is the Relationship Between an ISO / MSP / Sales Agent and the Processing Banks? - You probably realize that merchant services ISOs are not banks, and that these organizations need banks to ultimately perform the transactions. Every merchant services ISO will need a sponsoring bank, one who is a member of Visa and MasterCard's respective associations. In practice, these banks will usually not take on small merchant service companies, and actually most merchant services ISOs use larger ISOs as intermediaries between them and the banks.

A merchant services ISO program can also have several sponsor banks. Though this can be extra costly, it also gives merchant services ISOs the advantage of being able to take on different kinds of merchants. For example, some banks might be averse to what they see as “high-risk” businesses, while others are not (though these usually charge higher fees).

By the way, these sponsoring banks don't really need merchant services ISOs at the end of the day. They could cut out the middle men and sell directly to merchants if they wished, but most of these companies prefer to focus their energies on processing transactions and don't want to bother with customer service and other issues.

If you're curious about what acquiring bank a given ISO uses, simply check out their website. They are actually required to make this information public, and it will usually be apparent in the footer of the page.

Now, how about sales agents? Well, agents are indeed registered with the credit card associations, but of course it is much less complex and expensive than it is for ISOs. Sales agents are basically contractors and the ISOs that they work with usually take care of the heavy lifting when it comes to paperwork.

How Do ISOs Go About Registering With Visa and MasterCard? - If you're an ISO, you'll have to swim through a rough sea of bureaucracy before your business can start processing credit cards. First, you need to find a bank that is a member of the credit card associations—usually both, but sometimes one—and you need to show the bank that you know what you're doing.

The banks will have to put you through a vetting process before the Associations are comfortable taking you on. You will usually have to submit all kinds of information on your business, and what type of business you are running, whether it is a “high risk” business, and what sort of services you provide to customers can all be a factor.

Usually, the bank and credit card companies will want to see:

• Your financial history
• Your business plan
• Incorporation documents
• Who your agents are
• Promotional material that you use to sell

After all of that is squared, you'd be required to pay $5,000 for each of the credit card associations. This is a yearly fee, by the way, and your application gets reevaluated every year as well. By contrast, an agent pays a bit of pocket change—maybe $50 once a year—to stay in business.

Should You Be an ISO or a Sales Agent? Which is Better? - Now, you might be curious about what path to take when it comes to your merchant services business. Should you become a merchant services ISO, or take the safer and cheaper route and become a merchant services agent? Really, it comes down to your revenue. Do you have the sufficient merchant volume to be able to afford all of the crazy fees that ISOs have to pay? Then maybe it would be worth the trouble for you. If not, you should probably stick to the path of a sales agent, at least until you have more capital.

Becoming an ISO might seem really expensive and complicated to you right now, so you might be wondering why you would even want to become one. Well, basically you have the potential to make way more money. As a merchant services ISO, you are working directly with the processing banks (or at least with a larger ISO that is working with the banks), so you get a very low price in terms of transaction costs because there are less middle men between you and the bank. Your profit margins are higher than that of a merchant services sales agent. Merchant services sales agents get less of a share and they also have higher fees to deal with. It's like the difference between wholesale and retail, to give a somewhat awkward analogy.

However, not everything is rainbows and sunshine when it comes to being a merchant services ISO. There is a lot of responsibility and a lot of bank fees to dodge, things that sales agents don't really worry about. For example, you would need to watch out for so-called minimum processing fees. Basically, these are fees that the bank will charge you if you don't make a certain amount of transaction fees. Even worse, some banks will increase these fees year after year, and you will lose your residuals if you can't keep up. In fact, you might even have to pay a penalty out of your own pocket!

In order to avoid these minimum fees, you need to have a substantial portfolio of merchants. The minimum threshold that you are required to meet may be thousands of dollars, and since you're making pennies per transaction, you're going to need a huge volume of transactions. This is why it's not very wise to become an ISO if you have no experience in the business and no clients yet. It is just too risky.

As mentioned, the bank can also decide to increase the minimum every year, so that you're constantly trying to catch-up. This can be bad news for you because you can lose everything that you worked for. It's hard to escape having minimum fees of some kind, but steer clear from the kind of agreement that increases it every year if you can.

There are also some companies that will require you to sign up a certain minimum amount of new merchants per month, or you could lose all of your residuals. Don't sign up for such a deal, either, or you could see all of your income disappear quickly through no real fault of your own.

What We Have Learned - What's the best way to get started, then? Well, like anything else, that really depends on you and where you are with your business. If you're starting from square one, it's advisable to avoid the risks of becoming an ISO, and to simply stick to being a sales agent until you have decent enough income. There's something to be said about gaining experience and learning the business as well. No matter what you do, make sure to read every single contract before you sign anything so that you can avoid being taken for a ride. Don't jump into anything until you are ready. If you're not confident enough to negotiate with sponsor banks, then don't become an ISO just yet and spend some time as a sales agent building up your portfolio. Take things slow and you will avoid costly mistakes.

Lead-generation is the heart of any business and importantly credit card processing leads. No matter what kind of line of work you're in, you're going to need some sort of plan or sales funnel that will allow you to capture leads and hopefully turn them into paying customers. Since you surely have competitors, you're going to have to have some kind of edge to make these customers yours, and usually that edge is a solid marketing strategy. Most good marketing plans that capture worthwhile leads cost money, though, so you have to be prepared to invest in your business first and foremost.

Just spending money isn't enough, either. You need to spend it in the right places and know what tactics work best for your specific business. You also need to know when not to waste your time and money on someone who is likely never to grab the bait. The ROI of your marketing efforts really depends largely on whether you are targeting people who are actually interested. This is why I recommend creating relationships first and understanding your customer's problems before you try to help them.

Here are a few different techniques you can use to get potential quality clients in front of you:

Pay Per Click (PPC) - Nowadays, when people need something, they search for it on the Internet. This is great for them because it gives them what they want, but it's also great for you because you can grab their attention on a search engine results page or on someone else's website by buying ads. You might be thinking: Why would I use PPC ads that run when people search for my business on Google, when I can simply practice good SEO on my website and rise to the top of the results for my chosen keywords?

This is a legitimate argument, but there are two main reasons you would choose PPC anyway, either alongside aggressive SEO tactics or instead of them: 1) hiring an SEO expert to rank your business website for your chosen keywords costs money, possibly more than simply buying the ad space; and 2) your competitors are probably running PPC ads on the major search engines, so even if you rank high organically, their ads will be all over the place when people search for the keywords that you are targeting. Ideally, you would use both good SEO and a PPC campaign to target leads.

The nice thing about PPC compared to other methods where you pay for traffic is that the conversion rate is usually pretty good because your lead is already interested in what you're offering. Unlike more traditional methods, you have a lot of analytics to work with so you can learn about your audience. It also tends to be more cost-effective than other common lead-generation approaches.

Social Media - People mostly go on social media to hang out and not buy, but you should have a presence here anyway because there is a good chance that some percentage of people who are interested would rather contact you via Facebook or a similar medium rather than via phone, especially if they just have general questions.

Call Like a Madman - Part of being a merchant services sales rep is being able to persuade people in a variety of context, and that includes over the phone. You can buy a list of prospects or look online for businesses that seem like they might be needing your services. It really is a numbers game because you will have to call a lot of places before you get any results. However, if you're willing to deal with rejection and having people hang up on you every once in awhile, this can be a great method, especially if you're just starting out and your capital is somewhat limited. It may seem cumbersome, but if you call dozens of people per day, 5 days per week, someone is bound to use your services at some point.

Go in Person - If you have the courage, then meet your prospects in person. You can do this by either paying other companies to arrange meetings between you and prospective merchant processing leads, or you can simply look up businesses in your area and visit the owner at their location unsolicited. This of course takes social skills and a certain amount of courage, but if you've been in sales for awhile, you probably have both. If you feel like this is too much of an intrusion, you can also call ahead of time and warm up your lead before you meet them in person.

The main thing to consider of course, is to play off your strengths, so if you're too awkward over the phone, meeting in person might just be the ticket. On the other hand, remember to challenge yourself to learn other methods of lead-generation, even ones that may make you feel uncomfortable at first. Always expand your horizons.

Focus on the Funnel - What do you do after you have used one of the methods above and you have an interested party? They might not always be interested in buying right away. Though you should do what you can to close the lead in the moment while it is “hot,” not all is lost.

One thing that you can do is use “bait” to create or keep your leads, by offering them free information or a newsletter via email. This is your “list,” and it will allow you to simply keep collecting prospects and remind them every once in awhile that you exist and that you want to help them. How you find these prospects in the first place depends, but you can use any of the methods above potentially.

The fastest way to build up a list is probably PPC, though. People are already at their computer, so it's not hard for them to go check their email and confirm when they sign up, and you are targeting people who are already in the “information-gathering” phase of their quest to find a credit card processor.

Using these tactics, it shouldn't be too hard to find some leads. All that you have to do from there is solve the client's problem consistently, and you will have a stream of income potentially for a long time. If you're still confused or curious about any aspect of selling merchant services, check out the Shaw Merchant group website and be enlightened.

If you have past sales experience, that's often a plus, but a lot of the time there can be aspects of your past that will give you a disadvantage. For example, if you used to sell mortgages, you didn't have to worry too much about creating a sense of urgency, since people were already a little desperate because their new house was on the line. It's not too different if you're selling the actual houses either; if someone has sought out a real estate agent, they're looking to buy. The same goes with selling cars, since many of the people who are coming to you really need a new one and can't go very long without transportation. Your job would be a lot harder if you had to go up to random people on the street—or worse, random people getting out of their cars in a parking garage—and ask them if they needed a new car. Sounds ridiculous? Well, this is basically what your life is like when you're selling merchant services. This is why the mindset is completely different in this field.

Obviously, there are positive and negative aspects to this. Once you have convinced a merchant that he'd do better to change to your plan, making the actual deal is usually smooth. Just don't mess up, and you'll have a good closing rate. Another great aspect of this business is that once you convince a merchant that they need to change their processor, they will probably buy those services from you and not another random merchant services agent. This is all great, but unfortunately creating the sense of urgency that will get them to make a change is one of your biggest challenges.

Let's take a look at these guidelines that will help you create more urgency in your prospects:

1) More prospects = more sales. You are going to have to accept that you will have to deal with a much higher volume of prospects than in other fields to close a decent amount of deals. If you used to sell mortgages, for instance, your conversion rate is probably high—maybe as high as 1/3 of your prospects. A big reason as to why this is comes down to the fact that your clients already have decided what they want to buy and are coming to you for help.

If you find a quality lead, the conversion rate is actually about the same when you're in merchant services, but the problem is that you will have to go through many people to find quality leads. You might walk into two dozen stores, but only find yourself able to talk to 20% of the owners, and only 10% of the stores you walked into had genuinely good prospects. A good prospect is someone who realizes that they could use your services and is eager to explore the options. This is why you shouldn't get discouraged if you find that you're having to visit tons of businesses just to make some progress. This is how the game is played.

2) Take it a step at a time. When you first make your pitch, you want them to reach a point of understanding that they need to make a change; don't rush them into make the full decision just yet. Your job at first is just to convince them that they would be better off with another service. Yes, you might be able to convince them of this and close the deal in the same session after you've had some practice, but these are still distinct steps. Just make sure that you don't make the assumption that the merchant wants a different processor—at the moment, they're probably not even thinking about it. You will have to convince them. The problem of course is that most merchants don't even think of this as a problem. They already put together their processing solution and they don't need to worry about it anymore, as far as they are concerned. They would rather put their attention elsewhere.

How can you overcome that default resistance and make them open to the possibility of switching? Well, you should show them that you're not trying to throw a wrench in their plans or rip them off. Let them know that you are only showing them how much they could save if they reconsider, and that they can use your service if they want to. Try to focus on convincing them that they need to switch more than that they need to go with you specifically. Tell the client straight up that you are not interested in signing them up that day. They should be under the impression that you are interested in getting to know their needs better, and that you are merely opening them up to the cost-saving possibilities of finding a better credit card processing agent program.

3) Have some kind of bonus or offer. People like being just in time for “special” deals, and this can create a huge sense of urgency if it is available only for a limited time. Since you will have to get them out of that “analysis paralysis” mode and into a decision, it will help them to focus on closing the deal if you have some kind of time limit like that. As soon as you convince them that they need to make a change, you can start discussing your various juicy offers. Let's look at a few different routes that you could take:

Give them a Free Cash Gift – They may be a business owner, but chances are that they're pouring all of their personal resources into the business. It may not seem like much, but offering them something like a gift card or cash back when they make their account will certainly entice them. Make sure to start out letting them know that they won't have to pay any fees upfront if you work with a free terminal program or something similar, and then throw the free money on top of that to sweeten the deal. It doesn't have to be a huge amount of money—just 100 dollars will suffice—and you can easily take this out of your upfront signing bonus. Make it a point to mention this deal in your advertising. Basically, the merchant has nothing to lose here, and will actually make money upfront from the deal.

Give them a free terminal – Believe it or not, there are still merchant services ISOs out there that do not offer free terminals with their deals. This can be for a number of reasons, but generally-speaking you want to steer clear of these companies when you're choosing a partner. Make sure that there is an option to offer a free terminal to the merchant, since this removes a major upfront cost. Much of the resistance that you will encounter has to do with these upfront costs and whether or not the merchant has the liquid cash to cover them. Bring a terminal in personally if you can to show them an example of what they can have for free. Tell them you're offering it temporarily. Guarantee Them Monthly Savings – You need to first consult with them and look at how much they pay in fees to pull this one off. Tell them that you can save them a certain amount of basis points per month of the competitors. Find out how much processing they do, and multiply it by however many basis points you are claiming to save them. Just make sure that you don't work with very large merchants here, or else it could cost you too much money.

Once you have established how much they are going to save with you per month, make sure to zoom out and show them the big picture. Tell them how much they are going to save over the course of a year or two years. Discuss these big, long-term numbers instead of the tiny savings of 10 or 20 dollars that you might be able to pull off every month. These bigger numbers are certainly more motivating, and will get them to consider your offer much more readily, especially if some of the other offers above are included.

Hopefully, these tips have enlightened you at least a little bit as to how you can create urgency in your prospects. Do you still have questions? Let us know! Contact us anytime and we will be happy to help you.

No matter what business you're in, you're not going to get very far without going out there and finding prospective customers. Whether you do this in person or via the Internet, you're going to have to find a strategy to funnel new customers into your business. There are lots of different ways to do this, but the most important thing to keep in mind is that you don't have to come up with everything on your own. There are already proven marketing strategies that exist, and you can simply use those models and apply them to your own business. Especially if you are new to this field, don't waste your time trying a million things that might not work, when you can employ time-tested techniques.

The key is to keep things simple. No matter what specific tactics you go with, your strategy should involve finding your niche or market, finding out what they need, delivering that need, and then spreading the word about your services. At its core, that is basically it, but let's take a more detailed look at these various aspects:

Finding Your Market - Ask yourself a few questions. For example, who would use your services? In your mind, who is the ideal customer and who do you envision yourself working with? What kind of merchants have the sorts of problems that you know for a fact that you can solve? If you're already selling, what kinds of businesses seem to buy from you the most?

From these questions, you can begin to narrow down where the money is. Let's say for instance that you are selling POS services that come with a free terminal and a low monthly fee. You might find that small startups and coffee shops gravitate to your product more than larger warehouse stores. If you focus on the people who are truly interested in your product because you actually solve their problems efficiently, then you won't have to do much persuading. The best ROI when it comes to marketing happens when people already want to be sold to, so it's important to identify who that is and not waste your time trying to seduce people who would be less interested.

Finding Out What They Need - Of course, as trends in technology and in the market change, your clients' needs will be changing, too, so you should make sure that your concept of their needs is constantly evolving. However, you will want to have a general idea of what your clients are looking for at any given moment.

Think to yourself: Why would they want to buy from me? If you can't answer that question, then you have not catered your products to their needs enough and you may not know how to truly solve their problems. The cure for this is to listen. What products do your current clients give you good feedback about? What do they complain about? If you've lost clients before, why did you lose them? If a client chose you over a competitor, why was that?

Delivering What They Need - Once you know what they want, you have to have the ability to deliver it of course. This is why you shouldn't marry yourself to a single merchant service company. First and foremost, you need to deliver what your market wants, and the company that you choose as a partner needs to cater to that need. This is why you should keep your options open and always be on the lookout for new and better solutions to your customers' problems.

Spreading the Word - In other words, you must market your services, or else few people will know that you even exist. When people recommend you to their colleagues, this is of course the best kind of marketing, but before you've built up a reputation, you're going to have to tell people about yourself. There are several ways you can do this. For example, you can attempt to pay for leads that you meet in person, you can go the telemarketing route, you can pay for leads online, or you can even run pay per click (PPC) campaigns to draw new customers in. They all have their virtues, and you should choose a tactic that plays on your strengths.

Now that you know about your audience and can deliver on their needs, as well as spread the word about your services, how do you turn your prospects into customers and continue growing your business? That is the age-old sales question, indeed. Follow these general steps, and you can begin to see growth:

Step 1) Find Prospects the Right Way - This happens before you even begin persuading the prospect of anything. The first step to converting people is to find the right people so you're not wasting your time! Don't cast a net so wide that you find yourself talking to people who are completely uninterested in what you have, or even people who are only partial matches who need lots of convincing. Especially when your business is young, you don't have time to waste. Put effort into prospects that have shown a previous interest in buying your kind of merchant services. You can do this by buying highly targeted leads or by getting referrals from other customers and businesses. You can also try hanging out where business owners do, for example at local entrepreneur or business meet-ups.

Another great way to do this is to keep an eye out for new businesses as they open. If you sell POS systems for liquor stores for instance, look up who has purchased a license lately. You can even start by servicing people that you know personally who are in your professional network.

Step 2) Give Them What They Need - Solve people's problems, and they will sing your praises. Testimonials from other business owners can be very powerful when drawing in more business. Make sure that your existing customers have nothing but good things to say about you, and the rest will often take care of itself.

Step 3) Make Friends - Referrals are some of the best sources of sales. Partner up with others who are in business-to-business fields, but who are not direct competitors and have them refer their customers to you. For example, you can work with CPA's, printing companies, or even web designers. Basically, if you know someone who would be working with new businesses constantly, offer to trade leads with them if the customer genuinely needs the service (and they often will). Using these techniques, you will find that getting prospects and converting them into paying customers is a lot easier. Above all, always remember to deliver good service and you will always have an eager customer base.

There are lots of reasons why starting 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 sales 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 merchant account 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 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 merchant services ISO program 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.

After I released a post about finding leads, I had a sales agent come to me and ask me about paying for leads. He asked where he could go to get some decent prospects. I responded that he had a few options, such as using a professional lead-generating service or hiring someone to be a telemarketer for his company.

Well, he mentioned that he had used an online lead-providing service before, but that it had just been a waste of money since the quality of the leads were very poor and the conversion rate was awful. So I sat there trying to think of something else that he could try, but my mind just stayed blank. It's not like I'm a newbie in this industry. I've been around for years, and I've networked with many other professionals in that time, and yet I couldn't think of a single source of paid leads that would be worth it. That just goes to show how low-quality most paid leads are.

Few jobs are perfect. And though I love my job very much, there are a few annoyances that I am faced with now and again. One of those consistent annoyances is exactly this problem when I'm trying to teach salespeople how to succeed. You see, I know that they can do it. I've been around long enough that I know that just about anyone can make something of themselves in this field with the right strategy. I even know what that strategy is!

See, this is the annoying part: I might tell 10 sales agents about my methods, and only 5 of them will agree to use the strategy. Out of those, maybe 1 will follow through. The funny thing is, that one agent will have great success and tell me all about how my strategy works, but I can't help but wonder what I'm doing wrong that I can't induce the rest of this hypothetical group of sales agents to follow suit.

My point is that getting paid leads is a bad strategy. I'm not saying that my strategy is the end-all, be-all, but it's one that works. You can make much better leads yourself than relying on a potentially shady company to generate them for you. In fact, let me see if I can show you how my strategy works by presenting it to you as a job offer. Take a look:

Looking for a highly independent sales agent who can really put in the time to find quality leads and follow through with them. About four hours a day spent looking for new merchants and three or four hours spent following up with prospective and current customers. Pay starts at $4000 to $6000, but increases incrementally by $500 every month. After spending about a year working the job, you can keep growing your income, opt for a 6-figure severance package, or just keep working with your current customers and receive about $3000 every month for about five or six hours of work per week. Must be willing to:

• Visit 20 new merchants per day.
• Work from 9 to 5 every day, and no more.

Now, does this sound like a job you could do? If so, then go ahead and do it; the position is open!

Don't waste your time trying to find out where you can get the best paid leads. That is what the rest of your newbie competitors are doing, and they're not seeing any results. The best leads are the ones that come from you.

Some of the best strategies are the “dumbest” ones that require no special “secret.” Honestly, the key to creating quality leads is to walk around and look for them! Forget about trolling through online lists. Take to the streets and show your face. Meet merchants in person and learn about their problems. You don't have to close the deal every time you meet a merchant. Even just getting them interested and inserting them into your sales funnel—for example, via an email campaign—can yield a great amount of quality leads.

Another way that you can do this is to build an online presence and get leads from your website. This is also valuable because your lead has already shown basic interest in your product, so your conversion rate is bound to be higher than a paid lead. Generating leads from your website is a whole other concern that we can discuss another time, though. For now, just know that nothing beats meeting people face-to-face and vetting the leads yourself!

One of the most lucrative fields that you can get into as a salesperson is selling to other businesses. Unlike most end consumers, business owners keenly understand the value of investing wisely in long-term solutions, and not merely throwing away their money on something cheap. If you want to truly contribute value to other business owners, while making a decent paycheck every month yourself, one of the best ways to do that is to offer quality merchant services. You will be invaluable to your clients, and if you serve them well, they will continue to look to you for ways to make their business more efficient.

Why start selling on your own, though? Isn't that a lot more work? What are the benefits if you're already working in a commission-based kind of job? Well, here are a few of the major ones:

More Control - Even if you're working in a field where you get a relative amount of independence, like in sales, you still don't have complete control, and your whole work life revolves around satisfying someone else's numbers. You may have your own personal selling style, but the overall strategy that the company follows—the direction in which “the ship” is being steered—is not determined by you, but by someone else. This may not be such a bad thing for some people, but it also means that your livelihood is ultimately in someone else's hands. What if the owners of the company that you work for make a dumb decision that spells the end of the business? You will have to suffer the consequences anyway, even though it wasn't your fault.

More Cash - Of course, if you own your own merchant services business, you have the potential to make a lot more money than someone who doesn't. If you're an independent contractor, at the end of the day, the people above you are raking in the most money. Sure, as a salesperson, you might make a hefty percentage of that, but the fact of the matter is that your potential for financial growth is stunted. If you have a business that you control yourself, it is basically up to you how much money you want to make, and you keep more of the fruits of your hard work.

The Potential for Scale - The thing about a normal job, even a sales job, where you're working for someone else, is that you rarely have the possibility to scale things up. In other words, you can't “replicate” yourself by hiring someone else to do some of your tasks, and this can greatly reduce your long-term income potential. When you start a merchant services business, you can choose to run it in many different ways, but one way is to outsource the work slowly until your business can practically run on its own. For true residual, passive income, this is the kind of situation that you will want to be in. This is what makes it possible for you to work because you want to, and to make money even in your sleep. You just can't do this when you work for someone else.

Now, you may be thinking: How do I start a merchant service business? Maybe you've been a salesperson for awhile—maybe you've even been selling POS equipment and other important retail tools—but you're not sure how to make that leap into selling for yourself.

Well, unless you've invented and designed your own solutions, you're going to have to start by forming a partnership with a merchant services agent program that you believe in. They're going to have to make a product that you can really get behind because, if you're building a business for yourself, most of your money is ultimately going to come from the back-end, from repeat customers. This is why it is so important to take a step back and think about quality above anything else. By all means, find a program that is lucrative, but don't ever sell a product that you wouldn't feel enthusiastic about using yourself. In the end, this is what is really going to create repeat business.

What traits do you look for in a merchant services agent program, then? Don't be taken in by any fancy bells and whistles. Basically, these are the things you are going to want to see:

A History of Reliability - Again, there's no sense in selling shoddy services or products. Look up reviews of the company and decide if they are any good. Research their products and make sure that they are user-friendly. Find a way to use them if you can. The easiest products to sell are the ones that are actually good because they basically sell themselves time and time again.

Generous Revenue - Share Since this is going to be the core of your business, you are going to want to find a merchant services partner program that gives you a good cut of the sales. If you're doing all the work of finding and maintaining leads, then you need a fair percentage of what that customer is paying.

Residual Income - Part of what makes selling POS services so lucrative is that there is often a monthly fee involved or else the merchant services agent program takes a percentage of the user's sales. As a partner, make sure that you have access to a significant portion of that long-term income as well. This is what is going to pay you month after month, even long after you have made the initial sale. This is where most of your money is, really.

Lots of Options and Flexibility - The company you work with should have lots of different options when it comes to revenue sharing, that way you will be able to build a strategy out of the one that best suits your business.

So, what specific company can you go with that will fulfill all of these needs? There are a few, but one of the best and most reliable is North American Bancard. We provide real value to their clients, so you should have no trouble working with them and building a stream of residual income from their products. Ultimately, though, just focus on solving your customers' problems and finding a company that can help you do that, and you should be able to start building your own merchant services business.

In the past, there has been a charge to use USAePay transactions with EPX. However, due to a new merchant services partnership with USAePay, EPX is now able to process transactions at a rate of $0 per item! This amazing new development not only means more affordability for merchants, but also opens doors that were previously closed for partners and agents looking to expand their horizons. Per item transaction fees are a nuisance and a profit-killer. Through the hard work of these two organizations, that problem is now solved, helping merchants and merchant services agents everywhere achieve more.

Benefits to the merchant

Of all parties involved, this new development perhaps benefits the merchants the most. While merchants have not always had fees passed down to them, they still feel the effects of having to increase processing fees and tack on per item fees to transactions. With less affordable payment solutions and higher processing bills, merchants are having a harder time succeeding. That is, until now. This partnership provides a flurry of benefits to the merchant that allows them to go with the payment processor that best meets their needs, not just one that doesn’t carry per item fees for USAePay transactions.

Benefits to the agent

In addition to helping the merchant be more successful and find a better solution that meets their needs, this partnership also opens up countless doors to the agent. Merchant Services Agents have long been somewhat restricted by who they can partner with based on their status with USAePay. Merchants with this shopping cart solution often avoided solutions like what NAB has to offer because of the extra fees that are often involved. With this partnership, that struggle is a thing of the past.

More merchants

With USAePay transactions now $0 per item, the world of merchants opens up to agents all over the globe. No longer do unnecessary fees stand in the way of gaining partnership with a merchant that needs your services. With processing more affordable than ever, merchants can get the outstanding value that our payment processing software, solutions, and other infrastructure has to offer. You can start exploring which merchants you were previously unable to serve because of fees and now show them the benefits of using EPX with USAePay.

Serve your merchants better

Along with being able to serve a wider range of merchants, merchant services agents will also be able to serve their existing merchants better. With more margin to work with on each transaction, merchants can explore which solutions they can invest in that they otherwise wouldn’t have been able to. This strengthens the bond between merchant and agent and helps agents build trust.

What fees are involved?

As you know, it is now $0 per item to process a fee with USAePay on EPX. However, there is a small, monthly charge of $6 to use the service. Any merchant doing even small volume should look at this as an incredible deal and an opportunity to work with a payment processing provider that is more suitable and attentive to their needs.

Though you might hear the term ISO (Independent Sales Organization) used a lot in the merchant services business, people don't always use it accurately. Let's take a look at what this term actually means according to credit card companies and banks.

What is an ISO? - Basically, a merchant services ISO program is an entity (a company or a person) who is not a MasterCard or Visa member bank—also known in general as Association members—yet they have a relationship with these banks. This can mean many things. For example, they may find new customers, offer customer service to the merchants, or sell terminals to them.

What is an MSP? - An MSP (Member Service Provider) is more or less similar to a credit card processing ISO program, though this isn't always exactly the case. An MSP is more of a “middle man” usually, a company that is often not an Association member, but who provides services to members.

What Do ISOs and MSPs Do For Their Banks? - First of all, remember that neither MSPs nor merchant services ISOs are actually banks. The MSP / ISO will contract a processing bank to do this, and each MSP / ISO must have this kind of relationship with a bank to be able to process credit cards.

Under normal circumstances, the acquiring bank will be an Association member with both Visa and Mastercard, and they usually register for both at the same time. ISOs in turn can have relationships with more than one bank. By the way, these processing banks can also engage in vertical integration and become their own ISOs. This isn't common, though, and normally they will just specialize in processing credit cards, since it takes a lot of resources to draw in leads all the time.

An ISO is required to disclose their processing bank on their brochures, website, and other material. Usually, these are somewhere inconspicuous, like the bottom of a page.

How Does an ISO / MSP Register with the Credit Card Companies? - It's not exactly easy. First, the merchant services ISO needs to find a processing bank that will serve as a sponsor. Next, the merchant services ISO has to demonstrate to the companies that they have the means to perform their duties. Afterwards, there's lots of paperwork to do. For example, a merchant services ISO program might have to provide:

• Financial statements / tax returns
• Incorporation documents
• Their business plan
• Their sales material
• A list of their sales agents

On top of all of that, the owners of the companies will also have their credit checked.

What Kind of Fees Does an ISO / MSP Have to Pay For Registration? Once they are actually approved, the fees are $10,000 upfront. These fees are paid every year as well, as part of a review process.

What Are So-Called Sales Agents? - Many times it's helpful for merchant services ISOs to have an independent sales team, so they will hire sales agents to find interested merchants. According to MasterCard, a sales agent is someone who provides services to a member, but isn't an MSP. In other words, sales agents don't have to be Association members, since the merchant services ISO program is the one that takes care of the processing. Sales agents have to be registered, however, though the fee is quite negligible—something like $50 every year. Sales agents, though functioning somewhat independently, can't advertise as a service provider and have to use the name of their merchant services company.

What Option Works Best? - Is it enough to be a merchant services sales agent? Or should you consider becoming a merchant services ISO or MSP, even though it requires going through all that bureaucratic process? Like anything else, this really depends. How much processing volume do you have? Obviously, you get a better price per transaction as a merchant services ISO, so you'll need to make some calculations and decide for yourself whether the increased profit margin is worth the overhead costs.

Be cautious, though, when looking at proposals from processing banks. There might be some fine print in there that can come back to haunt you. Specifically, look for fees that might cut into your profit, such as minimum processing fees. Minimum processing fees are charged when transaction fees during a certain period don't reach a minimum threshold.

These minimum processing fees can sometimes be really exorbitant, so watch out for them. Sometimes they can run into tens of thousands of dollars per month, and if you can't come up with the transaction fees, you'll be paying the difference yourself.

If you don't have a large portfolio yet, this can really harm you. Let's say the minimum processing fee for you is $6,000 every month. Let's say that, like many ISO's, you make an average of between $0.07 to $0.09 for every transaction. You would basically need to make 66,600 to 85,700 transactions on a monthly basis just to reach the minimum, which is unfeasible if you are a brand new company.

Usually, your processing bank will give you a period of time to build up your clientèle, however. If you think you can manage to reach a volume that surpasses the minimum processing fees by this time, then go right ahead and become a merchant services ISO. However, make sure that you calculate everything very carefully.

By the way, since you're kind of expected to increase volume over time, the whole minimum processing fee can increase as well. That's right, a bank can progressively charge you more and more. For example, they may have given you a minimum fee of $4,000 in year 1, but every year that your contract renews, they might increase it by a lot—maybe even by the original amount, so that you're paying $4,000 more every subsequent year.

You can probably see why this would be a problem. Your fees are growing linearly, but your portfolio might not be. In fact, it is unlikely that your business would be able to support that amount of growth every year, unless your company is just so great that people are abandoning their merchant service agreements just to work with you. Either way, never sign an agreement that has fine print like this. Fees that increase like this are not very sustainable and you may get ripped off in the end.

Another (Not Great) Alternative - One thing you can do is to try to find a small bank that doesn't have any minimum fees at all. The problem here, though, is that their pricing might not be as good of a deal as larger processing banks, and their service might not be as reliable.

Besides, these smaller processors often have their own version of a minimum fee requirement—instead of transactions, they require you to bring in a certain number of new clients per month. If you don't comply, then you could stand to lose your residuals. In other words, you could have worked for years to build up a portfolio of dozens of merchants, and you could be bringing in a huge volume for your bank. You might have built up to tens of thousands of dollars per month for yourself, but your bank requires you to bring in five new merchants, and you only brought in four.

What happens? You lose all of your income, just like that. Does that sound fair to you? Your processor still has all of those accounts, but you are left in the dust. It's not really “passive income” if you have to keep adding a certain arbitrary amount of merchants per month, is it?

Conclusions - All of this can be confusing if you are new, but you can probably draw a few conclusions from it and get an idea of your game plan. To put it simply, if I had to start in this business over again knowing what I know now, I would just pick a large ISO and become a merchant services agent for them. This would help me learn about the industry and build up some income, and I wouldn't be risking falling victim to some fine print from my processing banks, or having to pay huge fees just to stay in business. I would work with several merchant services ISOs until I had decided which one was the best fit for me long-term.

After that, I would stop working with all of the other merchant services ISOs and concentrate on the best one exclusively until my volume had increased substantially. Once I thought I could pay all of the entry fees, I would consider becoming a merchant services ISO myself. I would speak with my merchant services ISO and see if they have a sponsorship program. Either way, I would shop around and be a hard negotiator, and not settle with a sponsor until I had a fair deal that I could actually work with.

Last, I'd hire an attorney to look over the paperwork. Yes, attorneys can be expensive, but in a business like this they are worth their weight in gold. You don't want to sign something without understanding all of the ramifications. Once that was settled and the deal seemed right, only then would I sign the agreement.

In any business, it is extremely important to find a specific niche to work in, especially if you're starting out, and this isn't any less true when you're in merchant services. You are practically guaranteed to be swamped with competitors if you try to be too general in your approach. So the first thing you should do when deciding the direction of your business is to figure out what will make you different from the rest.

When I went to a conference for Merchant Services ISOs and sales agents recently, I couldn't help but make the observation that most of the companies did not see themselves as broadly-focused. Instead, the majority of the merchant services ISOs and sales agents set their focus towards a single niche of merchants that they concentrated on.

What do I mean by “niche”? Well, in this context, it basically means choosing a micro-market where your skills and talents would be best suited, and where you will meet fewer competitors. Instead of trying to please everyone (and likely failing), you will just please a handful of customers very well.

Now, what kind of niches can a merchant services sales agent exploit? There are actually many of them. For example, I met one individual at the conference who was looking to focus on POS systems. He wants to concentrate on getting the right kind of terminal to his clients, and of course also selling them the merchant account. Another businessman created a rewards program for his current clients for finding him new merchants, and this helped grow his enterprise. Yet another company was putting its energy into creating the actual POS software, so that its user base would get used to the interface and not want to switch to another.

Every one of these methods may be different, but they are all performed within their own niche, which makes them powerful. In any field that is very competitive, this is the best strategy to use.

What can you do to leverage your specific talents?

How can you find your own niche as a merchant services provider? Here are some ways that you can differentiate yourself:

• By business type. For example, by focusing on selling to dentists, coffee shops, food trucks, etc.
• By type of terminal. For example, selling tablet-based deals.
• By area. In smaller communities, there may be less competition.
• By language and culture. Maybe you speak Mandarin in a largely English-speaking area. This gives you the keys to an insular community.

If you're having trouble figuring out what niche would work well, then consider a few things:

• So far, which businesses seem to bring in new leads for you via word of mouth?
• What kind of merchants seem happiest with your services?
• What sort of talents do you have that few other people do? Are you bilingual?
• What kinds of merchants do you personally enjoy working with?

These can all give you clues that will lead you in the right direction. Finding a niche that you can fit into will make your ROI better and even your work life more enjoyable.

Have you decided on a niche yet? Let us know.

Knowing how to navigate the partner portal is extremely important if you are going to be a successful agent. The partner portal has all of the resources, information, and other tools that you will need and reference on a daily basis. One of the most important places inside the portal is the prohibited and restricted list. Naturally, you probably have a lot of questions about this list. It is one of the most common questions that we get with regards to the partner portal and the information contained within. In this short overview, we are going to answer some of the questions that you undoubtedly have about the prohibited and restricted list that is located inside the partner portal for maximum convenience.

Navigating to the list

The first step is navigating to the list itself. To do this, the first thing you need to do is go to the Tools section of the partner portal. At the bottom right there is a list of documents that is entitled Sales Partner Resources. In this list, you will find important resources related to your relationship as a sales partner. One of those documents is the restricted & prohibited list, which you can click to easily access.

If you are not able to locate the list for some reason, then you can also use the search function at the top of the page to search for the restricted and prohibited list and find it in a matter of seconds.

What is the restricted and prohibited list

As you can image, the restricted and prohibited list is a list that dictates what merchants are restricted and what activities are prohibited. This list is a great resource for you as a partner so that you don’t waste time on a merchant that you won’t be able to end up providing services to. You should consult this list any time you have a question about whether you are going to be able to provide services to any given merchant.

In this document, you will find a well-organized chart that tells you exactly which businesses are prohibited from using your suite of processing solutions. In addition, the sheet breaks it down by which banks prohibit which businesses, because different banks have different requirements for merchants. This quick reference sheet will save you time and frustration by allowing you to quickly reference it anytime you need to confirm whether you can provide services to a merchant.

There is also a remarks section in the document that will give you clarity on the requirements and industries that are allowed or prohibited. For merchants that require a certain additional documentation or submission, you will find those requirements on this sheet.

Benefit to agents

Not only does this sheet help save you time and prevent you from having to consult a complicated resources center to find the answers that you are looking for, but it also helps you to build trust and credibility with the merchants that you are working with. Being knowledgeable on which merchants you are able to provide processing for will make the sales process more smooth and successful.