Cutter LLC founder and President David Daily began purchasing residual streams in 2006, when he perceived a growing need for alternative financing resources to help build ISO and merchant level salesperson (MLS) businesses. Combining his payments industry knowledge with asset-valuation expertise he had gained in the mergers and acquisitions sphere, Daily initially focused on acquiring portfolios with less than $5,000 in monthly residuals.
Since then, Cutter has broadened its scope by tackling larger acquisitions and targeting areas of emerging growth. "We have expanded our acquisition footprint to include residuals from all types of electronic payments," Daily said. "While most deals are still from credit card portfolios, we are seeing increased activity from gift/loyalty, ATM, check and ACH portfolios." He added that most of Cutter's business comes through referrals.
Recognizing the dedicated hard work that goes into building merchant relationships, Cutter's selling strategies are designed to help ensure the merchant portfolio transfer process is smooth. And an experienced relationship management team is involved to support each stage.
Many members of the Cutter team have been with the company from the beginning. Following the 2006 acquisition of a Pennsylvania-based ISO, Cutter retained a majority of the ISO's account services staff, including payments industry veteran Denise Shomo, who now manages Cutter's operations and acquisitions. As Chief Operating Officer, Shomo said, "We find that servicing the merchants in a purchased portfolio is crucial to maximizing the portfolio performance."
According to Shomo, building relationships with an ISO's support staff is critical to establishing trust, as is doing everything with a sense of urgency. "We can't be high maintenance and expect them to want to work with us," she said. "We want to be a 'partner with the ISO,' so they are assured that they are referring their agent to a trusted source for working capital."
One aspect sellers can determine is their level of participation with merchants during the process. "Since most purchases include an attrition guarantee followed by payments to the seller at milestones based on performance, we offer the seller an option for how much they want to be involved with the merchants after closing," Shomo said, noting that Cutter can offer minimum support or manage merchants upfront, so ISOs and MLSs can focus on generating new sales.
Because sellers have differing needs and objectives, Cutter provides flexible options for structuring payments to sellers as well. One example is the partial residual purchase as opposed to a full sale. "The multiple paid is based on a percentage of the residual stream up to 75 percent," Shomo said. "The seller receives a monthly residual on the portion that is over the purchased amount. This scenario allows the seller to receive a cash infusion and continue to collect a residual stream."
In December 2012, Cutter appointed Mark Wilson the company's Senior Vice President of Business Development. Tasked with engaging ISOs in the development of strategic funding options, Wilson has introduced programs that enable ISOs to fund signing bonuses and buyout programs.
"ISOs can use these programs to their advantage as a recruiting tool and enjoy a financial benefit by being able to focus their marketing dollars in other areas of their company, since they are not funding these upfront programs," Wilson said.
For ISOs that may have inactive agents, the company offers a solution. "Cutter offers buyout programs to ISOs with smaller residual streams being paid to inactive agents so they can streamline their residual payouts," Wilson said. "Residuals are paid to one source as opposed to hundreds of inactive agents. Typically, when an agent is no longer boarding accounts, their merchants are not getting the attention or are simply ignored." Cutter can step in and fill the gap, he noted.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
ISO/MLS contact:
ISO/MLS contact:
Denise Shomo
Chief Operating Officer
484-638-6804
denises@cutterfinancial.com
www.cutterfinancial.com
Company Profile originally appeared in
The Green Sheet Issue 130902
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180501 - Merchant e-Solutions Inc.
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160801 - DigiPay: Solutions Inc
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140601 - Total Merchant Services
140501 - Nationwide Payment Solutions
140501 - BPC Banking Technologies
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131102 - Evo Payments International LLC
131001 - Live Reps Call Center
130901 - Regal Payment Systems LLC
130901 - The Merchant Solutions
130802 - North American Bancard LLC
130801 - Payment Logistics LLC
130702 - Plug n Pay Technologies Inc.
130601 - U.S. Merchant Systems LLC
130402 - National Processing Co.
130202 - Charge Card Systems Inc.
130202 - Layered Technologies Inc.
121202 - American Microloan LLC
121102 - Keep in Touch Systems Inc.
121102 - Merchants Choice Payment Solutions
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120902 - Central Payment Co. LLC
120802 - Royal Merchant Holdings LLC
120801 - National Benefit Programs LLC
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120601 - Veritrans Merchant Services LLC
120502 - ExecuTech Lease Group
120502 - The Small Business Authority
120402 - Chargeback Guardian Inc.
120401 - Electronic Payment Exchange
120301 - Complete Merchant Solutions LLC
120201 - CSR - Compliance Solutions and Resources
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111001 - First Annapolis Consulting Inc.
110902 - Point of Sale System Services Inc.
110901 - Sage Payment Solutions
110801 - Century Payments Inc.
110702 - Creative Vision Studio LLC
110702 - Network Merchants Inc.
110701 - Capital Access Network Inc.
110602 - eProcessing Network LLC
110602 - Moneris Solutions Inc.
110502 - Paragon Application Systems Inc.
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100401 - Elite Merchant Solutions
100302 - Retail Decisions Inc.
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091101 - Merchant e-Solutions Inc.
091002 - Whitehall Capital Advisors LLC
090901 - CoCard Marketing Group LLC
090801 - First National Merchant Solutions
090701 - checXchange Money Transfer Systems Inc.
090601 - Sterling Payment Technologies
090502 - Infinity Payment Systems
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090401 - UseMyBank Services Inc.
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081201 - On-line Strategies Inc.
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080501 - BCC Merchant Solutions
080402 - U.S. Merchant Systems
080401 - Greystone Business Resources Corp.
080302 - Transmedia Payment Services Ltd.
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071001 - Sage Payment Solutions
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070901 - Nxgen Payment Services
070802 - All card Processing-AAMonte-USA
070801 - Money Movers of America Inc.
070602 - Central Point Resources Inc.
070601 - Positive Feedback Software LLC
070502 - Premier Payment Systems
070501 - Amacai Information Corp.