Sell Your Merchant Portfolio

What is a Merchant Portfolio?

A “merchant portfolio” or bankcard portfolio is a collection of businesses accounts which are accepting credit or debit card card payments. Any business which accepts credit or debit payments, whether online payments or card payments in person are referred to as merchants, by payment processors and payment ISOs (wholesalers between the payment processor and the merchant). As a payment processor or ISO grows, it refers to its book of business, the collection of merchant accounts that process with them, as their merchant portfolio. Agents and others call the monthly revenue from their merchant portfolio a residual or merchant residual.

Looking to Sell?

Are you planning to sell your merchant portfolio? Whether you’re new to the business or a seasoned professional, we all have questions and could use guidance. Unfortunately, good advice can be hard to come by -- but 733Park is here to answer your questions and help maximize the potential gains of your merchant portfolio.

How much is my portfolio worth?

Generally speaking, the larger the portfolio, the higher the multiple paid. Merchant portfolios greater than $100k a month get a higher multiple than those significantly smaller, and merchant portfolios greater than $1M a month get even better multiples. 

Other factors that influence a valuation include:

●    Account attrition (loss of merchant accounts)

●    Revenue attrition

●    Portability (whether or not the payment company owns the merchant agreement and can repoint them to another processor or if they just have the merchant residual stream)

●    Type of merchant (MCC or SIC code)

●    Whether or not the transaction is ecommerce or card present

●    Whether or not future production of merchant accounts comes along with the purchase of the merchant portfolio

It’s a seller’s market right now -- there hasn’t been as active a market as the one we are in right now. Market activity is driven by the recent consolidation of companies within the payments industry; software companies trying to carve out market share in the payments space, or to upsell services into merchant accounts, and by processors seeking to pick up revenue through acquisitions. Buyers want to buy a merchant portfolio that is growing and is healthy. Additionally, there are record-low interest rates and record-amounts of private equity circulating in the market. 

I’m already talking with several buyers and I’ve sold merchant portfolios and residuals before. Why do I need 733Park?

Our track record speaks for itself -- we’ve sold hundreds of portfolios over the years and built many relationships on the way. We also have an up to the minute understanding of who is willing to pay the most for your portfolio at any given time, because it’s our business to do so. When we market your portfolio, buyers know they are competing with a top tier pool of hand selected financial, payments and outside industry buyers. We maximize your value.

I don’t know anything about the legal side of portfolio sales. What do I do?

We can give you business guidance on portfolio sales, and we are happy to connect you with payments industry attorneys for legal guidance. The typical portfolio sale involves triggering the processor or ISO’s first right of refusal. Typically, they have anywhere from 1-2 weeks to match the offer that’s on the table or to pass on the deal. You definitely don’t want to trigger a first right of refusal with an offer that’s too low, because the processor or ISO will just take the deal at that price.