Merchant Account For Sales
When you open a new business it is very important for you to learn about merchant accounts. A merchant account is what is used to process credit cards through your location and receive deposits of these transactions in your bank account.
Merchant accounts for sale can be a very profitable venture. Selling merchants accounts is not an easy task by any means. It takes hours of work a strong knowledge of the payment processing industry, dedication and the ability to be told ‘NO’ many times and still keeping at it.
Merchant accounts for sale is often first done successfully as a part-time job, because it takes a long time to build up a residual stream large enough to live off of. In truth, more than 50% of all people that start out to sell merchant accounts, never make it and maybe 10% are profitable enough to stick with it. Once a person has found the ability to sell merchant accounts they can make a very good living from it.
How Much Can Be Made
Statistically, an average merchant account will give a sales agent about $30 per month in residual income. If that sales agent can sign 10 accounts per month, they will be making $3600 per month at the end of the first year or $36,000 per year. At the within of the second year $72,000 per year and at the end of the third year $108,000 per year. $108,000 per year is a very decent salary. As long as the agent keeps signing accounts, their income will keep growing. But 10 accounts per month is not an easy task especially for someone new to the merchant services industry. Also, over time attrition shows up and the average number of accounts a person can setup goes down.Some merchants may need high risk offshore credit card processing accounts. If the volume is tremendous then most domestic sponsor banks may decline the application.
A Simple Overview Of How A Merchant Account Sales Works:
A sales agent signs a contract with an ISO (Independent Service Operator) who is registered with well-known card brand. The agent signs up businesses for merchant accounts and the ISO provides the business with the merchant account technical support and some customer support depending on what the agent is capable of themselves. The ISO splits any processing fees with the sales agent above their cost. The more a business processes credit cards, the more the ISO and agent make.
Merchant Account For Sale Common Pitfalls:
- High Pressure Sales
- Free Terminals
- Upfront Cash Programs
- Price Wars
While the merchant services industry has cleaned up a lot in the past five years, there are still many ISO’s that use high pressure sales and other ‘Gray Area’ tactics to gain more business. Find an ISO with a good reputation that is willing to work to meet your needs.
Not signing a contract: If a sales agent doesn’t sign a legal contract with the ISO, They are at the risk of getting their income cut off with no recourse. Always make sure to sign and agree to a contract with an ISO before sending them a single account.
Free terminal programs often sound like the instant fix to selling merchant accounts, but they aren’t. Free terminal programs are OK for signing existing businesses, but they often come with many strings and can cost an agent a lot of money if things don’t go as planned.
Upfront cash programs can be a great way to get some instant return on a merchant account. But, like free terminal programs, make sure you understand the conditions of getting the upfront cash. Normally you are exchanging upfront money for future residuals.
One of the biggest mistakes an agent or ISO can make is getting into price wars with other companies. The problem is that by getting into the bidding war the service quality is devalued. Agents Should set a competitive price and should hold steady at that price. While it may be necessary to lower the price for an occasional larger business, constantly getting into the lowest price game gets nothing nut customers that will leave as soon as another lower price comes along. Agents should provide personal service to their customers making a value that has exceeds any price.