Measuring the ROI of Your Merchant Credit Card Processing Services

To provide the best credit card processing services, you have to identify and address your weaknesses.

Sounds simple, and many ISOs agree that this self-examination is a good idea. But when it comes time to evaluate their merchant credit card processing services, they settle for cursory reviews and come up with unhelpful findings. They don’t delve deep into the details of their business, and consequently, they gain little insight and might say something vague like, “Well, things are going alright, but I guess they could be better.”

Pinpointing areas for improvement takes a detailed examination of your business. Start by evaluating why your portfolio didn’t produce as much income as you thought. There are two primary reasons for lower returns: your practices and those of your credit card processor.

Your Practices
Identify the merchants who you priced below your minimum acceptable price. Then ask why they were priced so low. After all, there may be a good reason why they’re underpriced. For example, maybe you set their rate on a different average ticket than what is the norm for their business today. Or maybe you predicted higher volume. If the reason was a perceived promise of return, examine the merchant’s volume to determine if it panned out. If not, remember to reward merchants after you receive your desired return – not before.

Those of Your Credit Card Processor
Many ISOs don’t consider the practices of their credit card processor when evaluating their merchant credit card processing services. Credit card processors can impact your return more than you might think.

Consider these questions when evaluating your current partner:
1. Can I proof my residuals down to my costs?
If not, you may have a problem, but you’ll have no way of knowing it.

2. I thought my pricing was great when I first signed? But is it really that great?
One area may look great, but other areas like lower splits, high monthly costs and miscellaneous fees may offset it.  

3. Am I getting the support I need?
Your credit card processor should be a good partner, providing advice, supporting you when you need help, and being available to address questions or concerns.

Follow these tips when you evaluate your business and you’ll be on the way to finding your weaknesses and developing the best credit card processing service possible. Did you find these tips helpful? Do you have some of your own? Let us know below.

Jeff Fortney is Vice President of ISO Channel Management at Clearent™. His career includes over 35 years in financial services, with the last 17 focused on the debit and credit card processing industry. Clearent is a valuable partner to many ISOs and agents. If you’re looking to develop the best credit card processing services, Clearent will be sure to give you high quality merchants credit card processing services, competitive pricing and sought-after products and services.