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The Green Sheet Online Edition

August 28, 2023 • Issue 23:08:02

Five things every professional payments agent should have – Part 1

By Mark Dunn
Field Guide Enterprises LLC

As payments professionals, all agents need to treat their work as a serious business. It may have started as a side hustle or a part-time gig for you, but with dedicated effort and persistence, it will turn into a serious source of income. In this two-part series, I will present five things every professional payments agent should have to manage their business.

Clarification of my usage of terms: If your payments business is registered with the card brands through a formal registration, you are an ISO. If your business is registered with an ISO through an agent or independent contractor agreement, you are an agent.

No. 1–Team

You need a team. No one succeeds alone in the payment business. Also, running a business means accountability. You should have people to whom you are accountable and on whom you rely for good counsel. Here are the people that should be on your team.


How will you know the value of what you've created if you don't have good financial records? How will anyone who wants to buy what you've created know what it's worth? There are at least two, and possibly three paydays in the agent business.

A. The first payday is your monthly residual check. You should receive these checks every month as long as the merchants you signed continue to process (subject to the terms and conditions of your agent agreement).

B. The second payday is the big check you get when you sell the residual stream from your portfolio. Note that I said you sell your residual stream, not your portfolio. The residual stream is what you own, not the merchant accounts. Also, note that when you sell your residual stream, the monthly payday No. 1 above ends.

C. If you get a good offer for your residual stream, the buyer may want to include some shares of stock in the buyer's company as one form of payment. These shares may pay dividends or you may be able to sell these shares at a later date after they have vested. But be sure to carefully evaluate this opportunity with outside help.

For a potential buyer to know what your residual is worth, you will need proper accounting statements based on good residual information and tracking of your expenses. You need an accountant. (I'll tell you more about selling your residual in a later article.)


You will need a payments industry attorney. Your agent agreement will determine all the rules, all the value, essentially all the outcomes you can expect from your ISO relationship. Take your time, and get help negotiating your agent agreement. Most attorneys don't understand the intricacies of payments. You don't want to pay your attorney to learn that fact. There are a number of very good payments industry attorneys. Their expertise is not inexpensive, but it will save you time, money and heartache in the long run. (Check The Green Sheet Resources page or contact me for more information.)

Tech resource

You need help for times when your smartphone, tablet or laptop freezes up. This can be a person or a service. But you need a real resource person you can talk to. There are many local computer resource companies in every state. Do your homework.

Second in command

In the Navy they call this person the XO, for executive officer. Selecting an XO will be one of the more important things you do for yourself. You need someone who can step in and keep the business running when you're temporarily out of action. "Out of action" could mean on vacation, sick or in the hospital, or having to focus on other business for an extended period of time. Ultimately, this is a position of trust. You will need someone who is reliable, responsible and trustworthy. This person may be your spouse or significant other. You may have a protégé you are bringing up in the business. Or, you may need to hire a part-time admin. Do a background check. Realize this is someone to whom you are handing the keys to your business.

Also, if your XO does a great job, put a plan in place that rewards them in the long run for their fidelity and responsibility. Perhaps a piece of the business?

Coach or mentor

You will need a coach. Everyone does their best work when they are being coached. The most capable, highest paid athletes in the world work with coaches. A coach can see what you're not seeing. A coach will hold you accountable for your performance. Without a coach it's too easy to let things slip.

A great coach will not be inexpensive. Two questions for you: What are you willing to invest to become a top sales performer? What will it feel like to be a star?

Backers, investors or a banker

Eventually, you will need financial backing. You may not need funds now, but as your business grows, you will. Most people tap their immediate circle of contacts (what some people have cynically called "friends, family and fools."). Anyone who invests in your company will probably want a seat on your board and a say in how the company is run. You will need an agreement that spells out what their investment gets them and how they may participate.

Your board of directors

Taken together, this team of people should function as a board of directors for your business. You should pledge to be fully transparent to your board and have regular board meetings.

No. 2–System

Every business requires a system to succeed long term. Here are components you'll need for yours.

Business development plan

What's your vision for your business? How will it develop this year and in the next three years? How will you accomplish your goals? You need to articulate your business plan. You also need a pipeline of prospects. How will you fill the pipeline? The biggest challenge to most payments sales agents is finding and qualifying merchant prospects. You need new approaches because many of the old methods don't work anymore. It would be wise to put together a proforma on a spreadsheet that shows the following projections by month:

A. Sales by product/service type

B. New merchant deals

C. Basis points profitability goal

D. Merchant attrition

E. Gross revenues

F. Residual revenues

G. Other revenues

H. Residuals and commissions paid out to sub-agents

I. Expenses by type

J. Profit/Loss

Business continuity plan

This plan addresses the unthinkable. How will your business continue if disaster strikes? Wildfires, tornadoes, blackouts, civil unrest, pandemics—if you watch the news, you see these things happen to other people. Could they happen to you? Quite possibly. What is your plan for your business to continue working when you can't continue working?

Business continuity plans are an iterative process. They need to be reviewed and refreshed each year. Every business continuation plan contains at least the following:

A. Planning and prevention – Risk analysis and risk mitigation

B. Preparations – Analysis of key business activities and how they could be impacted

C. Actions – Plans for how to immediately respond to threats and incidents

D. Recovery – How to recover from an incident to resume service

The important part of business continuity planning is that you put it in place now and keep it updated. If you put it off and a crisis occurs, it may be too late.

Customer relationship management tool

When you are looking at ISOs to sign up with, investigate the tools the ISO provides you to manage your business. Many ISOs have a customer relationship management (CRM) tool you can use, such as IrisCRM. Or you could use HubSpot, Salesforce or another CRM. In any case, you should be able to enter data or update accounts easily from your smartphone, tablet or laptop.

A CRM is critical to managing your pipeline of merchant prospects and your contacts with existing merchant clients.

Backup system

Backing up the CRM and your business data is critical. Store your data securely in a cloud-based backup system that is very secure. Your tech resource person (see Team above) should be able to design a regular backup plan for your data files.


I covered this, but it bears repeating. Don't think you can ever sell what you're building unless you can produce good financials.

Agreements, documents vault

I have taken to scanning all my documents using iScanner and storing them in a secure, cloud-based repository. You should be able to find one easily with an online search. Store originals in a fire-proof safe or safe deposit box.

No. 3. –Documentation

Get it in writing! Handshake deals might work in a highly interdependent, agrarian business community, but they don't work in the payments industry. Memorialize all your agreements on paper with signatures.

Agent agreement

Take your time with this agreement. DO NOT RUSH. You may be living with this agreement and its effect on the value of your portfolio for years. In my experience, most agent agreements are written pretty one-sided. Make sure an industry attorney on your team (see above) reviews it for the legal stuff. Also, have an unbiased industry expert review it for the deal points. It's OK to have an expert negotiate it for you.

Vendor agreements

The same guidelines that apply for agent agreements also apply for agreements with vendors, such as equipment suppliers, loyalty programs, etc.

Financial statements

You should be able to produce an income statement and a balance sheet for your business. Most agents don't have many assets aside from their merchant portfolio.

Business insurance

If you visit a merchant's premises, you will need general liability insurance for your business. Some business partners require this for you to work with them. Some business owners are very litigious today. Be sure you have your insurance agent spell out exactly what is covered and what is excluded. You may also need errors and omissions (E&O) coverage if you do any professional consulting or custom development.

The first three

To review, as a professional payments sales agent, the first three things you will need are:

1. Team: A team of people who contribute to your success

2. System: A sales and support system with all files backed up

3. Documents: Written agreements with your partners, ISOs, vendors and all others.

In the second installment of this series, I'll cover the fourth and fifth requirements to complete the "Five things every professional payments agent should have." end of article

Mark Dunn is an independent consultant and president of Field Guide Enterprises LLC. He has been in the payments industry for 34 years. Contact him at mark@gofieldguide.com.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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