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Shaw Merchant Group
Friday, June 02 2023
How to Sell Your Merchant Account Portfolio

Want to understand the process for selling a merchant account portfolio? Maybe you want to know the policies of credit card processing sales programs when it comes to deciding a merchant account residual buyout? Well, whatever your query is, this guide will definitely solve it.

We will discuss tons of useful things in this article which will help you have a solid and fully secure exit strategy if you are starting your career as a merchant services agent. You will also learn things that will help you sell your portfolio for a better price. So with that said, let's begin:

What is a Merchant Account Portfolio?

If you don't know, your merchant account portfolio is actually the product of your years or months of selling merchant accounts. This simply means that the number of accounts you have sold till now will be in your merchant account portfolio. However, these will only be the active merchant accounts and not the ones that canceled the services for any reason.

We will discuss the merchant account portfolio throughout this guide you need to understand that it is a set of all the merchant accounts that are currently active and earning you some merchant account commission on a monthly basis.

So with that said, we need to understand what goes into selling your merchant account portfolio if you decide to make an exit for any reason. So to know this, you will need to:

Ask These Four Key Questions:

Ask if You Own the Residuals:

To know if or how you can sell your merchant account portfolio, you need to reach out to your merchant services ISO program and ask them about it. You need to ask them that do you even own your portfolio or not.

There are some credit card processing agent programs that do not let the merchant services agent own the residuals in their portfolio. This means as long you keep working for them, you are getting the income, but as soon as you try to make an exit, the portfolio will be taken over by the company.

There will be no one offering you merchant account residual buyout if you decide you leave, and you cannot reach 3rd parties as well. This is what some merchant services reseller programs do, so you need to first ask yours if you can even sell your portfolio or not.

What Will Happen if Something Happens to Me?

If the ISO partner program says that 'yes you can sell the portfolio,' then it's good news, but your job is not over. You will have to further drill them down and ask a few very important questions to ensure you are fully secured and have a solid exit strategy in case you need an exit in the future. So the second question that you need to ask is what will happen to my residuals if something happens to me?

This means if a merchant gets into an accident and is not able to work for a long period of time, what will happen to their residuals? This is important because you do not want to work with someone who doesn't pay you your residuals if you are not maintaining a certain number of sales per month. There are many credit card processing sales programs that will not pay you the residuals if you are not fulfilling their monthly sales quota.

Also, some might even rip you off of your hard-earned residuals if you are not able to perform consistently throughout the months. In this case, you won't be able to sell your merchant account portfolio because the buyer needs surety of getting to keep all the residuals they are buying from you no matter how their sales numbers are.

If the processor says; yes, you will own your residuals whether you are working on more sales or not, then ask them to show it to you in the contract. Having this in writing inside the contract will help you safeguard your interests in the future, and you can show it to the potential buyers of your portfolio for their assurance.

What if The ISO Sells Out?

This is another very crucial thing to keep in mind because sometimes the people behind the ISO decide to make an exit and sell their company to a third party. Now, if this happens, you need to be sure that your own portfolio will not be affected by this. Most of the time, what companies do is that they will give you a very low multiple of the total amount you are making per month and give your portfolio to the company that they are doing business with.

In this case, you might get paid 10x to 15x of your total monthly income. So if you are making $10,000 a month and you sell it for the multiple of 10, then you just get $120,000. While the ISO might sell your portfolio for 20x to 25x to the company they are dealing with.

So this is something you need to keep in mind. You have to have it written in your contract that either you will get a good multiple like from 20-30X, or you will get to keep your portfolio even if they sell the company.

Can I Sell It To a 3rd Party?

Last but most important question to ask is whether you can even sell the portfolio to a 3rd party or not. Most of the processors would not allow you to sell your portfolio to a third party and would bound you to sell it to them instead. Now this kind of condition puts a limit to the potential of money you can get by selling your portfolio because getting 10 to 20 bids from people in your industry is better than just being bound to selling for a price that your processor agrees to.

Now we are not saying that you should not work with the processor that bounds you to sell your merchant account portfolio only to them. There are two key factors that you need to look for to ensure that even if you sell your portfolio to back to the processor, you will make a good amount of money.

  • Merchant Account Residual Buyout Multiple: The way that selling the merchant account portfolio works is by multiplying the total income you are getting per month to a specific number, which can range anywhere from 15x to 30x or even more. It depends upon the quality of your merchant accounts and the monthly income. So if the company offers you a very handsome multiple like anywhere between 20x to 30x if you agree to sell your portfolio to them, have it written in your contract so there are no surprises at the end.
  • Meeting 3rd Party Cost: Sometimes, the processor might not allow you to sell the portfolio to a 3rd party, but they may give you an option to get bids on it from the 3rd parties. Now once you are done getting the bids, you will have a number that will be higher than all other bids. The ISO will then try to meet or beat that number to get your portfolio. In this case, there is nothing to worry about as your future is pretty much safe with them. Regardless of how favorable the terms are for you, make sure to get everything in writing so that there are no problems towards the end.

Understanding the Merchant Account Pricing and Attrition Guarantee:

As mentioned above, the price of the portfolio is decided by looking at different factors like the age of portfolio, the number of merchants, the size of merchants, consistency of income, attrition rate, and so on. So if the portfolio is old, let's say 2 years old, the size of merchants is big, the income is consistent, and the attrition rate is 10 percent then you will get a better price than the portfolio having 1 year age, varying income, and 20 percent attrition rate.

Now when you sell your merchant portfolio to someone, you are selling the future residual payments that portfolio will yield, which you don't know about. So the price will be decided on the current income. A multiple of current income will be offered to you, and you can get paid that amount if you sell.

As for the Attrition Guarantee, it is a guarantee that the merchants in your portfolio won't leave a few months after you sell it. This makes sense because if the buyer gets the portfolio and then most of the merchants cancel, they will suffer huge losses.

So what many buyers do is that they get an attrition guarantee, which means that they will pay a part of income multiple upfront, and spread the remaining over the months or years. So if the attrition rate is under the decided percentage, you will get your remaining multiples.

Over to You:

The things we have discussed above are not covered in almost any of the merchant services sales training, which is why it is imperative that you remember these things from the start.

Whether you are aiming to sell your portfolio later for a good merchant account residual buyout or not, you need to have an exit strategy from the beginning because who knows, plans change all the time.

Posted by: North American Bancard Agent Program AT 10:14 pm   |  Permalink   |  Email
ISO Agent Program

Become a payment service provider today and take your business to the next level. If you are a sales-oriented individual with vast experience in the world of payment processing or you are a driven and motivated professional looking for a new challenge, the SMG ISO agent program might be a great fit for you. With the highest paying commission structure in the industry, superior products, and sales support, our program will see to it that you are rewarded for your efforts.

For anyone with a sales background or a passion for the payments industry, SMG is the ideal partnership. There are dozens of reasons to become a sales partner with Shaw Merchant Group, but don’t just take our word for it. Here are some of the top reasons that we were given when we asked our ISO agent participants why they chose us and why they continue to work with our highly lucrative program.

Sales Partner Portal

With our industry leading partner portal, you’ll have access to online enrollment, training sessions, marketing materials, and you’ll always be ahead of the game with the latest news and promotions.


Stay up-to-date on merchant issues and their resolutions via automated emails and text messages that include a detailed ticket number describing what the merchant’s concern was and how it was resolved.

Registered DBA (White Label)

With our program, you’ll be able to market under your own brand, without paying costly fees! Your brand will be seen on the partner portal, marketing communications, merchant statements, and more.

Free Equipment for Your Merchants

Selling businesses on a new processing plan is much easier when you are able to effortlessly jump over the hurdle of the cost of the equipment. With this program, you can offer your clients free equipment that they will need for their processing provider change. This lowers the barrier to switching and creates a higher conversion rate for you.

Lifetime Passive Income

You will recieve 50–70% of residual income based on the pay structure you select. You will share income on every available revenue stream. With SMG, you get a True Interchange Revenue Split. Unlike other ISO agent programs, there is no basis points off the top for BIN sponsorship or for what they call hidden losses. Our sales partners earn more residual income with our 50/50 partner program than you would with our competition who claim to offer a higher percentage because thier interchange cost (buy rate) is higher.

$20K Performance Bonus

We offer a performance-based fast start bonus that is payable for anyone that onboards more than the standard threshold of clients in the first 4 months. This program is designed to reward those experienced sales members that join our team and quickly learn how to sell this product. The bonus can reach up to $20,000, making it one of the most lucrative and competitive in the industry.

Profitability Based Bonuses

We will look at how much profit is generated on the account after they have been processing for one month and you earn 14 times of the total profit. Example: If we retain $100 in residuals in that month, the bonus would be 14 x $100 or $1,400. You would have already been paid $600, so we would pay you an additional $800 on that account. This bonus is capped at a max of $10,000 per merchant per location. With our dual pricing program it is easier than ever to earn huge bonuses with a 14x profitability bonus. This dual pricing model enables you to maximize your bonus at $10,000 on almost every merchant processing over $90k.

Dual Pricing Program

When you are selling merchant services, one of the best assets of any partner program is more rewards and incentive programs that save your client money. The Edge dual pricing program is one of the hottest new commodities in credit card processing, as it is designed to save the client thousands of dollars in credit card processing cost, instead passing on the fee to the consumer in a way that isn’t damaging to their own conversion rate and revenue. We offer this program to our clients and make it easy to understand and present for our sales partners.

Medical Benefits

With some sales jobs, you don’t even have the option for medical coverage. With the SMG ISO agent program, you’ll have the resources that you need to provide healthcare coverage to you and your family at an affordable rate. We take care of our own, and when you are in our program you will have access to these benefits.

White Label ISO Program

Grow Your Merchant Services ISO with White-Label Payment Solutions

As an independent sales organization (ISO), you can upgrade your business by providing merchant processing services under your own brand. You may dismiss the idea at first, probably thinking that you don’t have the infrastructure or expertise to become a payment processing company. However, with white label payment processing, all you really need is a good ISO partner.

How a White Label ISO Program Works

To offer payment processing services under your own brand, your ISO partner will provide you with an online application page that doesn’t identify their company. This “white label” solution is ready for your brand and includes your logo, colors, and contact information, so your merchants only identify the payment solutions with your company. It eliminates any confusion among your merchant customers about who their service provider and primary contact should be. Your brand is the only thing the merchant will see on your website, merchant portal, and marketing materials. 

Your payments ISO partner becomes a silent partner, providing technology, payments functionality, and services. This puts you in more control, allowing you to deliver seamless, consistent customer experiences in all interactions – and enhance your brand’s reputation. With this white label payment solution, you won’t need to overcome negative perceptions a prospect may have about the company your working with. This is because you are creating a unique customer experience. Better still, you don't have to fall in line with another company's existing customer experience. 

Once you start providing white label payment processing services, you will also find that you build stronger, longer lasting relationships with your merchants. They'll begin to view you as a payments expert and an expert in the other solutions you provide. You may even find you are able to grow your customer base, as merchants in every vertical or niche can benefit from accepting payments, enabling you to market to more types of businesses.

Remember: white label payment processing enables you to earn huge residual income.

Our White Label Program Will Save You Thousands in Fees

Put your brand on merchant statements and applications — build your brand with your sub-agents and merchants. Full white label payment solution with your logo and branding on applications, statements, online enrollment, merchant and partner portals.

We at Shaw Merchant Group have an awesome white label solution. There is no huge package of documents for you to fill out, no approval process by Visa and Mastercard and the sponsor banks, and best of all no annual dues. Here are some details on the “White Label ISO” program:

  • Roughly 4–5 weeks to fully set up once we get the signed license document back.
  • Executed addendum from you saying it’s OK for us to use your brand too.
  • This program can run on our standard schedule A’s with bonus and free equipment and has no other obligations. from you other than the standard agent agreement.
  • When we set up the DBA you will have access to EPX/BMO Harris for submitting merchants under your brand.

What do we brand?

  • Paper Applications
  • Online Applications (Simplified Enrollment)
  • Partner.PaymentsHub for your back office.
  • PaymentsHub for your merchants — It’s generic when your merchant logs in and then show your brand once inside.
  • Merchant Support Email — TMS (ticket management system) which emails you and your merchant each time we speak with your merchant and shows the proper brand in the notice and as the from address on the email.
  • Merchant Support Phone — Our call centers answer with a generic “merchant services” then once they have the MID identified, they represent your brand.
  • Deployment Packages — Generic boxes and welcome docs inside with proper brand.

What we need:

  1. A letter authorizing EPX to register your DBA on your company letterhead.
  2. A high resolution image of your company logo.
  3. A certificate of good standing from the state you are registered in. It may not be called a certificate of 'good standing' in some states.
  4. The ISO Branding request form.

    ©2023 Shaw Merchant Group is a registered DBA of EPX, a registered ISO of BMO Harris Bank N.A., Chicago, IL, Fresno First Bank, Fresno, CA, and Citizens Bank N.A., Providence, RI.