What a buyer weighs in a merchant portfolio
- Residuals
- Monthly residual income over two or three years, by processor and by merchant group.
- Attrition
- How many merchants leave each year and how much residual leaves with them.
- Processor contracts
- Who owns the merchants, how residuals are protected and whether the contract allows a sale.
- Merchant mix
- Industries, average volume and how much the largest merchants carry.
- Risk
- Chargebacks, reserves and any high risk accounts.
The Contract Decides What You Own
Before anything else, a buyer reads your agreements with your processors. They decide whether you own the merchant relationships, whether residuals are vested and paid for life, and whether you can sell or assign the portfolio at all.
Some contracts give the processor a right of first refusal or require consent.
Have your attorney review these early. A portfolio with clear, portable rights is worth a great deal more than one the processor can claw back.
Attrition Is the Discount
Merchants close, switch providers or get poached. A buyer will measure how fast your residuals shrink each year without new sales, then price the portfolio on what is likely to remain. Low attrition, long tenured merchants and steady volume push the value up.
Agency Versus Portfolio
Some owners sell only the residual stream. Others sell the whole agency: the sales team, sub agents, software, support and the ability to keep signing merchants.
A going agency is valued on its earnings, recast like any other business. See business valuation before you sell.
If sub agents bring in much of your business, buyers will read those agreements closely too. Who keeps the merchants if a sub agent leaves?
Concentration and Risk
A few large merchants or one industry carrying the portfolio is a concentration risk, the same as in any company.
So is a processor that pays most of your residuals. Chargeback history and reserves get checked, and high risk accounts lower the price or get carved out.
Records Buyers Ask For
Expect requests for residual statements for every month going back two or three years, merchant counts by month, lists of merchants with volume and tenure, and every processor and sub agent agreement.
Statements that tie to your bank deposits make the review quick.
Clear books for the agency itself matter too. Separate your personal costs so the buyer can see what the business earns.
Who Buys and How
Buyers include processors, larger ISOs and investors who buy residual portfolios. Many deals pay part of the price later, tied to how the portfolio holds up.
The selling process page explains how offers are compared, and our Georgia tax and filings guides cover the state steps at closing.
For a private read on value, send the short form or call (404) 555-0139.