Regardless of the size of your merchant portfolio, your company will be measured against some standard metrics when viewed by outside companies. These metrics form the common ground of any independent sales organization or agent portfolio.
As with any business, the size of a merchant portfolio matters. The first major metric relates to how much profit the portfolio is throwing off every month. And of course, the monthly residual is compared to how many merchant accounts are processing every month.
Then we come to how many new accounts are being signed and activated each month. If the portfolio is static, meaning no new business is being brought in, this does not bode well for a high multiple for the valuation.
After that, we want to know what types of merchant accounts are in the portfolio, especially what MCC codes predominate. What market verticals do you specialize in?
And how do your merchant’s process? Are you big into “brick-and-mortar” retail or e-commerce?
A key metric for every portfolio is attrition. How many accounts did you lose last year? How much dollar processing did you lose last year?
How long have your merchants been on board with you? The longer they’ve been on board, the greater the chance they will get lured away – or so the thinking goes.
How do you get these merchants to sign on? What types of pipelines for new business do you use?
How many sales channels do you sell through? How productive are each of these for your merchant processing business?
What’s the strength of your overall product/service line to your merchant clients? How well do you cover the market needs of your prospects?
By providing these key ten metrics for your portfolio, you’re showing how you stack up against other ISOs and agents in the business.
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