Contract Details Make or Break ISO Agents

Apr 25, 2014

If you’re an agent in negotiations with an independent sales organization, the minute details of your contract is critical as that’s where the money is. If your understanding of the contract is minimal than you can expect your contract to provide you with minimal compensation. Sometimes it’s flat out batter to just hire a lawyer to help you navigate the jargon and complexity of your contract as it can save you money down the road.

The Importance of Residuals

One of the common aspects of a contract new ISO agents often overlook is residuals. Should you choose to leave the ISO or if you fail to make a set number of sales each month it could cost you residuals. The details and wording over residuals is a key area of interest in your contract with the ISO.

Illusions in Revenue Percentages

Revenue percentages can be a double-edged sword for agents. If an ISO is offering you a 100% split it’s important to understand what they’re offering a split of. An ISO can mark up costs and fees to lower the split yields. A 100% split of of a statement fee of $50 is less favorable to an ISO agent than an 80/20 split over a statement fee of $2. Crunching the math to figure out what percentages favor you will put you in a better position through your contract negotiations.

Build a Vesting Schedule

When residuals terminate at the end of a contract with an ISO, an agent can acquire residuals that have been accumulating value over time. A contract that offers 20% over two years with the same company and 40% over four years can build up residuals to offer a nice package when they leave the ISO.

Get Multiple Offers

The sheer volume of variables in a contract negotiation is staggering. As an independent agent, it’s important to field multiple offers. Many parts of your contract will be negotiable, so building a spreadsheet with multiple offers and varying factors can help you choose the best contract for you, the ISO agent. ISOs have been offering more generous terms over the last year than they have been over the last decade. The gap between the ISOs revenues and the ISO agent’s residuals is shrinking, and there’s no better time to field multiple offers than now.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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