first of all... Hello all, I'm new to this forum I'm working now on the tech side of the payment industry for a few years, but now I would like to start reselling (high risk) merchant accounts. I have a offer from a merchant gateway that is at 0.2% lifetime. Unfortunately I don't know if that is a good offer or not. I found an article in your forum: http://forums.digitalpoint.com/showthread.php?t=48516 ...according to it, a 50/50 share of the gateway's percentage is common practive. That let's me think 0.2% is very low. Can anybody please tell me what is a common life time percentage? Thank you very much in advance, Lynky
Is that .2% or $.20? Reselling for a merchant service provider is entirely different from reselling for a payment gateway. With a MSP, your percentage or bonus will typically be based on how much work you are doing, and what type of MSP you are referring businesses to. If you are going to be signing up customers yourself as an outside agent, then you should be looking for something like a 50/50 split over interchange, or a buy-rate where you keep everything above a certain percentage. If you are just providing referrals, I would expect something like a flat rate per referral or per account. Payment gateway's also typically have a flat referral fee. Since payment gateways usually don't make any percentage, getting residual payments from one is typically a waste of time. Are you US based? As far as your original idea, reselling to high-risk businesses is very difficult. Reselling domestic is significantly easier even though there is a ton of competition. Either can be done, and can become a full-time income source, but it takes a lot of hard work, and a very good understanding of the industry.
From experience, payment gateways usually pay residuals based on a fixed amount per transaction and/or per account. The MSP will usually pay based on a percentage such as a 50/50 split of profit. If you are setting up the merchant with a gateway and a MSP, you should be able to get both income lines. The gateway isn't as profitable as the MSP, but money is money. Also, why the interest in only high risk accounts? These are the most difficult to place and have the highest risk of causing the MSP to lose money. It wouldn't be bad to have these types of merchant accounts in your portfolio, as long as they are not the only types of accounts that you have. I've had good experience with BankCard Central's agent program. They handle high risk accounts in addition to the more traditional accounts.
Hi guys, first of all, I appreciate your fast responses and would like to apologize for my very slow response... very busy at the moment and trying to handle 10 things at once @jestep: That would have been $0.20 per approved transaction. The percent was a typo of mine. The company is at the moment still MSP, but they might be trying to become PSP soon (that's what you are referring to as payment gateway, i think). However - in the meanwhile we made a new agreement in which they give me the percentage they would charge and I put on top whatever percentage I would like to charge and forward the quote to the client. I think that's what you are referring to as "buy-rate where you keep everything above a certain percentage.". I guess, that's the best you can get as you can choose your rate youself. Am I right? I'm not US-based, so getting local business is very difficult, however you both seem to think that a certain mixture of "high-risk" and "low-risk" would be adequate - which I agree to. I just think that my MSP might only takes high risk clients on as he only offers online merchant account. Please understand that I don't know much about it, I don't know what would be needed for a local retailer/restaurant to go with them (technically). Maybe a Virtual Terminal would do the job, maybe an interface for their POS would have to be written, I really can't judge that. However - the idea sounds interesting, I guess I'd do it, if I'd know how yes, I can see that... unfortunately that's what I'm struggling with most. Any good links would be highly appreciated. Especially the "Dicount Rate" causes a lot confusion for me... Authorize.net for example offer a discount rate of 2.14%, but that seems to be very low. It makes me think this is the rate they put ON TOP of the percentage what they get charged from the gateway. I might be completely wrong here I just had a look at that program, it looks promissing. Thanks for the hint! Thanks again for your help, I really appreciate it. Lynky
Hi Lynky, Are you specifically interested in high risk or was it what was just readily available at first? Either way, take a look at EC Suite, we're an ISO and IPSP with a referral program for merchant accounts, both standard and high risk. Working with resellers isn't my area of expertise but if you like I can get you in touch with the right person, let me know if you're interested and I'll shoot you a pm. http://www.ecsuite.com/reseller.php
Hallo RedXer, thanks for the offer... for the moment I'll stick to the ones I've got, I simply don't have the time for integration/research. I rather wrote this post in order to get some general tips rather than offers at this stage However - it is noted and I might come back to you at a later point of time. Cheers, Lynky