How to Become a Credit Card Processing Agent
So you’ve heard about the benefits of being a Credit Card Processing Agent or Merchant Account Sales Agent: residual income, the opportunity to work for yourself, the ability to choose your clients, and more.
While starting a credit card processing business can be lucrative, you need to approach it with intelligence. If you don’t have a sales background, you’ll need to spend time understanding what separates the successful credit card processing agents from the failures. If you don’t know much about credit card processing, then you’ll need to learn the ins and outs of the merchant services industry.
Your income will entirely depend on your ability to land new accounts and keep them with you, so once you jump in it’s up to you to make the most of it.
Sound exciting? Great. You’re in the right place.
Here are the steps to becoming a successful credit card processing agent:
- Pick a niche.
- Learn as much as you can about credit card processing.
- Compare ISO/MSP programs for ones that align with your goals and style.
- Apply to your chosen program.
- Collect and prepare your business assets.
- Start selling.
1. Pick a niche
Do not start a credit card processing company without a niche.
Part of landing accounts is understanding your client’s business environment and recommending a solution based on their unique situation. Imagine yourself as a merchant services consultant that also facilitates the merchant account transfer or initiation. You need to be servicing your client’s needs, and people often won’t trust a newcomer.
So how do you choose a niche? Start by thinking through your past experience and location. Did you work in restaurants for ten years and live just outside of Chicago? Perfect. Frame your entire operation around food services and use that knowledge to your advantage. Got your law degree but decided it wasn’t for you? Swing that to your advantage.
If you don’t have a specific industry you’d like to work in, take a look at your community and what businesses are doing well there. Are there a lot of B2B tech companies moving and growing in your community? Golf courses? Healthcare? Boutique clothing?
The beauty of merchant services is that everyone accepts payments, so take a look around and see where your expertise and the market intersect.
2. Become a credit card processing expert
If you don’t have a background in merchant services, start with the basics of credit card processing: how transactions are processed, what the relationship between issuing and acquiring banks is, typical hardware, etc.
If you aren’t familiar with Elon Musk’s strategy for deconstructing and learning new topics via a semantic tree, you should model your approach after his.
After you understand how the industry began, where it is now, and where it’s headed, you’ll need to understand the role that you will play and where you fit into the merchant services ecosystem.
In short, you will function as the middleman between a merchant and merchant services provider OR perform this same function under an official “independent sales organization” provider.
You and/or your ISO operate as resellers, so you’ll buy “wholesale” merchant processing rates (known as buy rates) and sell them to businesses. Your job is to explain why the merchant should switch to a different provider and help them set up their new account (assist with paperwork, applications, etc.).
The difference between the rate you can get from the MSPs and the rate you pitch to your merchant is where you make your money.
For example, let’s say your negotiated buy rate is 1.79% + $0.20 per transaction, but you pitch 2.25% + $0.25 to your clients — that means you’d get 0.46% + $0.05 on every sale.
That’s your residual! That’s what you make from now until forever, assuming the company doesn’t switch providers or go out of business.
That number can add up quickly, too. If you landed a merchant that processed $15,000/month across 25 transactions, you’d make $70.25/month in residuals. Land ten of those and you’re looking at over $8,000 per year off of residuals. And as these businesses grow, your residuals will grow, too.
After you understand the world you’ll be operating in, it’s time to fit those services, types of MSPs, and their offerings to YOUR niche. You need to understand what the best solutions are for your industry and have the relationships with the right ISOs and MSPs to properly equip your clients, which leads us to our next section:
3. Compare ISO/MSP programs
There is a multitude of ISO/MSP programs out there operating in every niche imaginable, and they all approach their relationships with merchants and merchant services agents differently.
You want to be really diligent here, so don’t cut corners. Here are some important criteria to consider when comparing sales programs:
- Make sure they have experience in your niche.
- Are they active in their community? Are they clear and their mission and have a good reputation? How well do they treat their merchants? Keep in mind, your reputation will be tied to theirs, and you’ll be working with them for years to come.
- Do they have the latest products? Think hardware, software, etc.
- Are they transparent? Clear? There are a lot of bad players in the merchant services industry, and you’ll need to be confident when defending your MSP to the merchants you’re helping.
- Research their partner program specifically. How’s the compensation/buy rate? Do they control any of your residuals? What resources do they offer partners? Make sure you know what you’re getting into.
- Avoid MSPs that charge setup fees and force you to carry a monthly minimum.
- How are their representatives? Give them a call and see if you get along/are impressed by them. That culture is the same culture you’ll be bringing your merchants into, so you want to examine them from both a partner and consumer perspective.
Side note: We have a powerful community of smart agents and ISOs working with us to change the landscape of merchant services for the better through modern innovation and complete transparency.
Make sure you put us on your list!
4. Apply to your ideal program(s)
So you know your niche, you understand the world of merchant services, and you’ve found the perfect MSP. Great!
Apply and see what happens. Assuming you’ve done your research correctly and fit into their mission and goals, you should be fine.
5. Collect and prepare your business assets
It can be tempting to just run off and start knocking on doors, but it’s important to have the business assets behind you to back up what you’re selling.
A good MSP program will provide a lot of these sales resources for you, but here are a few assets you’ll need to have on hand:
- White papers
- Personal website
- Social media profiles
- Business cards
- Account documentation procedures
Make sure these are professional and thorough. The better you prepare these, the easier your job will be!
6. Start selling
At this point in your credit card processing business, there’s nothing left to do but get out there and start signing merchants!
Always remember that businesses aren’t going to listen to what you have to say unless it’s legitimately a good business decision.
If you’re pitching a higher transaction rate, you need to have talking points prepared to justify that cost (better customer service, less downtime, more payment options, etc.).
If you’re pitching a lower rate, you can lead with that but need to sell around it to make it feel like they’re growing their business as a result of working with you.
Put yourselves in their shoes, and try to help your clients — that’s how you succeed in sales.
Partner with an MSP that has your back
As mentioned, part of being a good credit card processing agent is having the resources and connections to provide the best combination of services to fit your client’s needs.
At Tidal, we specialize in helping smart, driven agents or future agents like you offer better service for bigger and better clients — putting more money in your pocket and building revenue streams that will last you a lifetime.