Simplifying Your Residual Reporting
As electronic payment options evolve, it's almost impossible to run a profitable business without the ability to accept credit, debit and even gift cards. This means there are good, profitable opportunities out there right now for people interested in marketing credit card processing services to businesses. Accurate and transparent residual reporting should be the number one priority for those marketing credit card processing.
Understanding Residual Income
When a credit card transaction takes place, a number of entities receive a portion of that payment for services that make the transaction possible. These include the issuing and acquiring banks, the processor, and the merchant services provider.
As a merchant services sales agent or agency, your job is to sell a credit card processing system to a merchant at a markup that covers the expenses involved in providing the service and the necessary equipment, generally for a monthly fee and a transaction fee.
The beauty of the industry is that you a get a percentage of the profit generated from the monthly credit card sales of the business you sold the service to. This is your commission or residual. You will receive it as long as the business you signed continues to use the service you sold. Over time you can build up a large portfolio of residuals that belong to you.
How do you know that your residual payment is correct?
If you already work in the payment card industry, you know that residual reporting is complicated and time-consuming. Time is money. Wouldn't you rather be using it helping current customers and signing new accounts instead of wondering if you're receiving the correct amount of residual income? Here are three things you can do to make sure your residuals are correct.
1. Know how your processor or organization figures your residual.
Typically, a processor will split profit with the ISO. If you are a merchant level sales agent, your deal will differ depending on the company you work for. Get it in writing. Not all ISO's are created equal. Be sure that you have access to timely and clear monthly reports.
2. Always review your monthly merchant transaction reports.
Look at the volume of sales generated by your merchants monthly. Be aware of sudden drops or spikes in the volume of sales. Contact the merchants whose reports you have questions about to verify their accuracy and solve any problems your merchants might have.
Take note of the total residual, average the volume of your merchants' sales and multiply by your average percentage. Ask your processor or agency about discrepancies you may find.
3. Get customer relationship management software to streamline the process.
Depending on the fees associated with the types of cards and transactions, and how many merchant accounts you have, accurately monitoring all those reports and figuring to the penny is a task that requires more than a calculator.
Contact us at IRIS CRM for a 30 day free trial of our CRM software specifically designed for the payment processing industry. For one user or many, we have all the tools you need to manage reports, help customers, track residual reporting, and increase your productivity.
