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Merchant Business Funding

Merchant Portfolio

At Merchant Data Systems (MDS) our primary business is providing companies with machines and solutions that enable them to accept credit cards, the most widely used method of payment in the United States today. But we do much else as well. We have a variety of partnering programs. Some of these are joint ventures. Others are "residual buyout programs" that we have tailored to your specific needs. You may be an ISO already in partnership with us, or one who needs cash to grow your budding business, or simply want to take some cash from the table, we have the solution for you. We will provide money for your merchant portfolio as soon as you need it (merchant portfolios consist of the entire clientele of a credit card processing company). We also offer merchant portfolios for sale; so if you tell us, "I would like to sell my merchant portfolio," we will be glad to assist you. Additionally, we have "residual buy - back programs" so you may use the funds however you need them.

Having us as your merchant acquirer can bring you a great many benefits. Among them are:

  • We have the capital and are presently funding.
  • We become true business partners by working together to enhance portfolio values.
  • You remain in the game, and continue to grow your portfolio while you receive assistance from us with back- office support and "joint venture pricing."
  • Same day merchant accounts are available along with our ISO program products and services.

MDS has a merchant ISO (International Organization Standards) program for its sales partners, and once you enroll in it, a whole package is open you, including competitive prices, solution- based customer support, payment products, same day merchant and credit approval and implementations, and merchant services sales. The structures of our deals will be customized specially to meet your own business needs, and there are no minimums or penalties involved. We also have an agent portal, easy to navigate and loaded with support materials; an writable merchant application; "dedicated relationship management;" a proprietary gift card program; and monthly opportunities to be trained in our many programs and solutions. For accounts that have been classified as "high risk," we have a tier two program. You can even sell your ISO portfolio for a good profit with us (for more on that see below). From the time that your account with us is opened, you will find yourself being treated like a VIP.

When selling a portfolio, you want to get the best price from it. Buyers consider three factors when making their evaluation - IRR (internal rate of return), attrition, and risk. IRR refers to the discount rate equal to the current value of the cash flows to an investment. Almost all buyers of portfolios are looking for returns of at least 20 percent. The attrition level cannot be too high or it will effectively destroy your portfolio's value. As to the subject of risk - buyers are going to look into the history of your portfolio, and if they find too many losses they will not be willing to take the chance. Credit percentage, chargeback, and "top heaviness" are also major factors affecting risk; generally, as the first two figures go up, your portfolio value goes down. You should also guarantee the buyer that you will reimburse him for any major losses that may be incurred by the sale.

There are many other pitfalls involved in the sale of portfolios that you should be careful to avoid. When making the sale agreement, you should give yourself the right to sell either or both of two things - the merchants or the "residual stream" - to a third party. Also speak to more than one buyer before you make your final sale decision. and avoid revealing the truly important facts about your portfolio until you receive an offer. Better yet, do not reveal anything at all to a potential buyer unless you have first obtained permission from your ISO, even if that person does not have first right of refusal on sales.

MDS is your best resources for merchant business funding.


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