When you're new to selling merchant services, lots of things can get confusing, but one of the most confusing things that you will have to deal with is understanding all of the statements that affect your residuals, and especially the fee schedules that determine your costs. Many times, this can be so cryptic that your partner company may actually spend some time and effort explaining the fees to you. At the very least, they should provide you with some kind of written material that demystifies things. Even still, things might not always be totally clear.

In order for you to have a better idea of your Schedule A as a new Merchant Services Sales Agent, let's break down the various sections so that you're not completely in the dark:

Authorization and Capture / Settlement Per Item Fee - A key part of your Schedule A, you'll want to pay close attention to this section specifically. These fees are associated with the front-end platform. Should the processor that you work with offer more than one front-end, this section might look a bit different, as they may break everything down further and have different costs listed for different front-ends.

First and foremost, you need to have your Schedule A on hand, so make sure that you ask your payment processor or merchant services provider for a copy. After that, you're going to have to figure out whether these three fees are depicted as one entire line or if they are broken down. Depending on your provider, they may be expressed differently. For example, you might find an “Authorization” line with a fee listed as $0.02, and that might seem uncommonly generous, but then there will be a “Capture” line that lists a fee of $0.07, and then a “Settlement” fee of $0.01, bringing the fees up to a total of $0.10. Other times, things will be combined already; for another example, you might see a line that reads “Authorize and Capture” with a fee of $0.06, and below that a “Settlement” fee of $0.02, making the total front-end transaction cost $0.08.

Since this is kind of complicated, you usually won't bother to break things down for merchants. As you explain things to them, just tell them about the total transaction fee and don't have them worry about the details. For you personally, though, these broken down fees will mean a lot more because they can certainly affect your residuals. To illustrate how your fees can make a huge difference in your profit margin, let's say you have a portfolio of 100 merchants and, on average, they perform 500 transactions per month per merchant. Now, let's say that you charge $0.10 for your transaction fee. With 50,000 transactions, that means you are grossing $5,000 in revenue every month. How much of that will you keep? Well, if you're being charged $0.05 total per item by your processor, then your margins are 50%, and you take home $2,500. However, if your fees per item are $0.08, then you're only making $1,000 per month in profit. That's quite a difference. As you can see, your profit margins will depend largely on your fees, so you need to stay on top of them.

Settlement Fees and Batch Fees - If you think that your Schedule A gets less confusing after all that authorization and capture stuff, then you're in for an unpleasant surprise. You might find that in addition to a settlement fee per item, there is also a fee per “batch.” The point of this fee may not be immediately obvious, but it's basically like this:

For instance, maybe one of your merchants performs 100 transactions via credit card one day. You would be charged a settlement fee that applies “per item” for each of these individual transactions. When your merchant is closing up for the day, however, and they settle by sending the batch of daily transactions to the processor, then there will also be a “batch fee.”

More than likely, your processor will have this fee on the Schedule A. Almost all of them do, so be sure to look at this section for how much you are being charged and pass the cost onto your merchant accordingly. As another example, your processor might charge $0.07 per batch (your cost), and you might decide to charge your merchant $0.25 per batch (your revenue). In this case, you're making $0.18 in profit whenever that terminal is settled at the end of the day.

Bank Identification Number (BIN) Sponsorship - You might find this section expressed a few different ways. All this really means is that your processor is keeping a tiny percentage of the profits (measured usually in a few basis points) before they give you your share. In case you were wondering what a basis point is, it's just 1% of 1%, or 1/100th of 1/100th (1%) if you want to break it down. So for instance, let's say your merchant processes $20,000. If the BIN sponsorship fee is 5 basis points, then your processor is keeping $10.00 before giving you your share of the profit.

Now, there are definitely more items on your Schedule A than just these, but they're the key lines that you should keep a close eye on, and they're the basic items that you will find with most processors. For information about other sections that may appear on your Schedule A, you should ask your processor for an explanation. In essence, these three line items are important because they are what is going to determine how much you charge your merchant. As with any business, you're going to have to deal with costs compared to your revenue, which is what determines profit—and the fees are basically your cost. You're going to use your Schedule A as a detailed list of your costs, and from there you can come up with a fair and profitable fee schedule for your merchants. That difference between revenue (the fees your merchant pays) and cost (the fees your processor charges) every month is what will give you your merchant residuals.

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 for selling merchant accounts 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 merchant services as a merchant services agent 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 as a merchant services agent 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 merchant services 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.

DOWNLOAD PDF: Merchant Services Prospecting and Marketing 

For agents and resellers that work with merchants for their merchant services, it is known that the happier that you can make your client, the better. There are several ways that you can do so, but one of the most surefire ways to provide your merchants with as many benefits as possible when working with your merchant services company is to provide them with a cash discount program that helps to make the cost of accepting payments as inexpensive as possible. In addition to saving the merchant money on their transactions, you can also earn more as an agent by signing up your merchants for this program and earning incentives and bonuses that come along with it. If you’re looking for the best cash discount program from all perspectives, then you should set your sights on the North American Bancard EDGE Merchant Cash Discount Program. This innovative program contains plenty of benefits for the agent, merchant, and consumer.

What makes the EDGE Program the best?

There are a number of features that have helped to vault this cash discount program into the first position when you consider the best cash discount programs currently available to merchants around the world. Here are just some of the benefits that you and the merchant will enjoy when you decide to use this cash discount program.

No cost to the merchant

The main draw of this program is that it is going to help put more money in the pockets of the businesses that you are working with. Your merchants will be able to experience higher profits because the EDGE Cash Discount Program is designed to eliminate the processing fees for merchants to profit the same on credit and signature debit transactions that they do on cash transactions. If a merchantlooks at what they spend annually in order to process electronic payments, those savings will adsup.

With the EDGE cash discount program, merchants won’t have to worry about those expenses because they are being recouped in the higher price for signatue credit and debit puchases. This is a great selling point for your merchants because it enables them to recoup a cost that they would otherwise have to pay and saves thier business money. There is no cost to ebroll for the program, so they only have money to gain from enrolling in the program.

No contract

Another major benefit to the merchant is that there is no contract associated with the EDGE cash discount program. That means that even if merchants want to try it out for a few months to see the effects on their business, they can do this without fearing having to get locked into a long contract.

As an agent, this allows you to quickly and easily build trust with your merchants. You can show them the power that the EDGE cash discount program can have on their revenue without having to lock them into a contract or pressure them to do something they don’t want to do. With a free, no-cost, no-obligation program, your merchant will feel as comfortable with you as ever.

Free equipment

In addition to the no-obligation and no-cost contract with this trailblazing cash discount program, you'll also be able to offer your merchant free equipment to help make the transition easier for their business. This all begins at the POS system, which is the channel through which every transaction in the business flows. You'll be able to offer your merchant an updated POS system that has everything they need to make the switch to the EDGE cash discount program in a smooth and organized manner.

Apart from the POS system, you will also be able to offer signage and marketing materials to your merchants to help them advertise and raise awareness for the program. These materials help everyone to feel on the same team and help your merchants feel as if they have the resources that they need to succeed.

Easy to explain

One of the main challenges that merchants face when trying to change the way that they accept payments and charge their customers is the ease with which they can explain the change to their loyal customers. Merchants are not easily convinced to make a major change for fear of angering their long-term customers or confusing them. This giant hurdle is what holds many merchants back from moving forward or making productive changes.

With the EDGE program, you’ll have what you need to convince merchants that it won’t be a large leap when it comes to the trust and relationship between them and their customers. The EDGE program is a very simple, easy-to-understand program that won’t confuse buyers and will make merchants very happy.

How it works

To help our agents and merchants further understand the complete process of the EDGE cash discount program, here is a short guide of what you can expect to happen when the EDGE cash program is implemented.

Paying with cash

With the EDGE program, paying for an item with cash will be relatively unchanged. Customers will see the advertised price of the item, go to the register, hand the cashier their cash, and purchase their item. They will pay the lower price.

Paying with plastic

Paying with plastic will be a slightly different process than before. To encourage consumers to use cash and recoup expenses associated with electronic payment methods, a second, slightly higher price is charged on the item at checkout, increasing the cost of the purchase for the consumer. In this situation, the consumer is able to use the convenience of plastic and the merchant is able to recoup those expenses that are incurred when accepting cards to help their business and increase their margin.

One of the first things you are going to need to consider when you start your journey in the credit card processing business is what merchant services ISO program you are going to work with. Whether you are planning to become a merchant services agent or an ISO yourself working under a larger company, it's important to examine all of your options. If you're not cautious, you might find yourself signing up for a bad deal or even getting scammed out of your residuals.

So which is the best program to sign up with? Well, the short answer is that there is no “best” program for everyone. Each ISO is different, and so is each sales agent. Everyone has different goals, and so it's important to find a company that will be a good fit.

However, a lot of agents are seeing success working with North American Bancard. They offer some great commissions and residuals, and are a great choice if you're a beginner in this field. North American Bancard agent program has a diverse amount of products and services that you can offer to many kinds of businesses, so you don't have to worry about turning away merchants just because they work in a certain industry or are considered “high risk.”

North American Bancard agent program is one of the best in the country and has relationships with many different processing banks, which allows them to be versatile with the kinds of businesses that they accept.

Is Your Merchant High-Risk? No Problem! - Competition is a great thing for customers in a free market, but it certainly reduces profit margins for providers. One way that credit card processors can stand to increase their profits is to expand their range of customers and get into the so-called “high-risk” arena. Indeed, working with overseas customers or customers who run businesses in tobacco, alcohol, or adult industries can be a bit riskier, but the revenue can also be substantially higher. Many times, merchants who are seeking a high-risk account have already been rejected when applying for normal merchant accounts, and they will be more than happy to work with you. Signing up with North American Bancard, you don't have to turn away merchants in this extremely lucrative niche!

How Much Can I Make? - North American Bancard offers residuals and splits that are similar to what you might encounter if you approach a large ISO directly. The draw here, though, is that North American Bancard allows you to work with many different processors, and greatly simplifies the processes of becoming a merchant services agent. You won't have to sign up with a dozen different merchant services ISO programs just to have a decent amount of options.

Here are some of the great advantages of using North American Bancard's program:

• Give your clients tons of options when it comes to payment methods
• Get up to $5K for every new account
• Get a large startup bonus
• Get residuals of up to 70%
• Keep track of your accounts with apps and analytics
• Get free training on the services you will be selling

Contact North American Bancard today and get started!

Download PDF: Best Credit Card Processing Company to Work For

Have you already analyzed all of your costs and you're ready to come to the merchant with your offer? Have you been wondering how to present it in the best way possible? It's important to keep a few guidelines in mind when you are making the presentation:

1. Assume that the “yes” was already said. The point of your presentation is to show the merchant all the details, not to make a close. Why? They are listening to you, so they are probably already sold. Make that assumption, and you'll be less prone to pushy sales tactics that will turn them off. After all, why wouldn't they buy from you if you're giving them the best deal?

2. While you are going over the fees with the merchant, keep things simple. They really don't need to know all the dirty details, and honestly they probably don't care and will just get confused. Point to some of the main critical items and discuss those, but don't get long-winded unless they ask. When comparing yourself to your competitors, by the way, it will seem suspicious and dishonest to the merchant if you don't throw in one or two negative things about your plan—just make it obvious that the good things overwhelm them.

3. Show your merchant their long-term savings. Avoid focusing on what they will save per month, and instead bring up the big picture, such as what they will save in a year or two years. These big numbers are not only more impressive, they are also the ones that matter to their business ultimately.

Explain your reasoning step by step as well, and how much you think they will save over the lifetime of the account. Bring up examples of what they could in turn invest that money in instead of credit card processing fees. Make the savings very concrete.

Finally, when you close, ask if they have any questions. This puts the ball in their court and makes them feel like there is transparency and obviousness in the interaction. If they have no questions, it also lets you know that you have done what you need to do.

4. Now you're ready to get to the paperwork. This is one of the most critical periods in the presentation, since you are changing modes and making the deal into a reality. Because of this, you need to use something that won't intimidate the prospect. If you very obviously ruffle around for paperwork and contracts and the like, the merchant could start to over-think things because the situation is getting “official.” Instead, make a smooth, quick transition to the paperwork. In fact, have the paperwork already out (under the cost analysis material that you were presenting), and you don't have to worry about this transition at all.

Once you quickly have laid out the paperwork, start immediately helping them to work through it. Ask some simple questions, like what the official name of their business is, what their legal name is, their address, and other details that make it obvious what you are doing. If they have a problem or object to your moving forward, don't worry, they will voice it! Otherwise, go until they say “no.”

5. Where you are more likely to meet resistance, of course, is when you have to input private information. Obviously, you don't know the merchant's bank account number or their SSN, and they probably don't want you to know it, either. In this case, give the merchant a pen and slide the paper towards them. Clearly indicate the section and have them fill it out, and always look away while they are writing the numbers. Don't make a show of it—just check your phone or something, or have some other polite excuse to not look at them until they are done. This private information is “inside” material, and people feel intimidated when “outsiders” get too close, so make it obvious that you're giving them space, or they may become hesitant, which is the last thing that you need.

6. Remember the follow up. When you successfully get them to sign, that's not the end of the story. You shouldn't suddenly abandon them just because you got what you wanted. Tell them that you're happy to work with them and ask them if they have any other questions. Stay with them for a bit to reassure them that their decision was the right one.

Merchant services are quickly becoming the hottest field in the technology and commerce industry as more and more businesses realize the importance of having a robust and functional payments solution that works well for their business. As a new agent or ISO in this space, you are probably extremely excited to begin and start making a name for yourself in merchant services. If you are new to merchant services, there is some advice that you must have if you want to have success and avoid some of the errors that many must make early on. With this knowledge in hand, you'll be a step ahead of the competition and well-poised to earn a good income as a merchant services agent.

This rundown of who you should sell to and how will give you knowledge that has been passed down from many merchant services agents in the hope that new merchant services agent will follow the advice and make the industry a better place to work. The earnings potential for a merchant services agent is high, but you can raise the bar even higher if you follow these actionable tips that will show you exactly how to interact with businesses and which businesses you should be reaching out to.

Know which businesses to leave alone for now

One of the most important skills that you are going to learn when you are a merchant services agent is which businesses need your services that you should target. However, an equally important skill is to learn which ones you shouldn’t even bother talking to at the moment. Knowing which businesses to target could get you some nice results, but knowing which ones to wait on could be the accounts that end up feeding you residual income for life. That’s because these businesses are often larger and more established than the typical startup small shop that you might target right out of the gate.

One way to know if you should not even bother with a business is if you walk into the business and you see a POS system. Unlike a standard terminal, these are complicated systems that are difficult for the beginner agent to comprehend and speak knowledgeably about. Typically, these belong to businesses that have been around for a while and if you even get a meeting with them, they are going to want references. You likely won’t be able to provide them with any, since you are just starting out. They also will want you to understand their current system, which you probably don’t, because again, you are new. Once these things happen, you can pretty much forget about this sale forever.

However, if you make a list of these businesses and target them at a time that you are more established on the business and can actually guide them, then you might have found yourself a client for life. So, don’t waste your time and resources going for a big client like this right out of the gate. Get your feet wet with some smaller clients and come back to these ones later.

Stay local when targeting businesses

If you are just starting out, then you might be tempted to track down a friend or family member that has a business that operates out of state or online and try to sell them on a merchant services package. This is not recommended. Not only because you should never mix business and family, but also because walking these types of businesses through the setup process is much more difficult and requires much more attention and care. Failure to complete the setup process could prove disastrous for your relationship and your confidence. Don’t try to set up these businesses with a merchant services contract unless they are local. It will save you time, money, and hassle.

Always be networking

When you think of being a merchant service agent, you might think of the traditional method of reeling in clients like cold calls and cold emails. However, the world has changed since credit card processing first came out and there are new ways to build relationships. One of the best ways to do this is by always networking. Networking is a valuable skill to learn and it can be done in a variety of ways. Networking could mean that you simply start meeting and talking with the people in your professional circle about whether they know any businesses that need to evaluate their merchant services needs. It could mean speaking with past clients about any business colleagues they have that have merchant services needs.

One of the most popular ways to network for new business connections in the modern world is to join professional apps and platforms such as LinkedIn. With these platforms, you’ll be able to find business owners and managers in your area that could need merchant services or might be interested in what you have to say. If you are going to be successful in being a merchant services agent, then you need to establish a consistent pipeline from a variety of sources that makes it easy to continue bringing in the customers without having to rely completely on cold-calling and cold emailing. Building a network through online or in-person networking can help to establish this for you.

Be selective of client type

Though you might be eager to make any sale that you can get your hands on, sometimes it really is better to take the cautious approach. Just like clients are selective in who they partner with to handle their processing, you also should be selective of the client that you work with. There are many industries that you might not want to touch or simply are a bad fit for what you offer as a merchant services agent. There is such a thing as a bad fit in this industry, and you would be well-served to recognize it before it happens because it just creates more hassle than the short-lived sale will be worth.

As a merchant services agent, you need to be able to know when it is best to walk away from a potential deal due to compatibility issues between you and the client. One example of a business that you should avoid is anyone that is doing all online sales. Most merchant services solutions are just not designed to handle these transactions well and you should avoid them.

Evaluate profit before jumping in

One of the most important things that you can do as a merchant services agent is trying to evaluate and estimate the profit that you'll be making from the sale before you actually commit to it. Too many young merchant services reps are too eager to get started that they lose sight of the risk to reward ratio and don't track the time that they will actually be spending on the setup, support, and other time commitments that it takes to onboard and maintain a merchant.

If you have an account that is only making you $25/month, then you probably already know that it’s just not worth the hassle for that small amount of residual income. For many merchant services agents, it is advised that you walk away from any deal that makes less than $30/month. We know that it’s difficult to walk away from any amount of money, but the time that you spend maintaining that account could be much better spent on landing a client that could bring in hundreds of dollars per month.

Go easy on the discounts

If you’ve been trying to make a sale for a while or you want to get out to a fast start, you might be very tempted to make some very bold pricing promises to your client to get them to sign on. You are encouraged to help make them feel more comfortable, but you should be careful with what you offer to close a sale. While you can estimate all you want, you will never truly know how much a merchant services contract for any particular business is going to bring in. You don’t want to spend more than 6 months of the profit from an account to close it, and you should always estimate on the very conservative side.

Even if you are desperate for a sale, you should always be very cautious in offering discounts because it could cause you to lose all profit that you make on the sale. In addition, your client might expect these large discounts every time they purchase going forward. That isn’t a precedent that you want to set.