How Much Commission Can you Make Selling Merchant Services?

The one question I get asked more than any other by agents is, “How much commission can I make selling merchant services?” I have found several ways to answer that question.

First of all, you need to understand that there are several different types of compensation you can make in this industry. You have up front bonuses that can range from $100 to $600 paid on each sale. You also have other up front bonuses paid by some processors such as a $100 no free equipment provided bonus where the processor will pay an additional $100 in up front money if you do not need to provide a free terminal to the merchant. In addition to these two bonuses you have up front bonuses paid out for larger merchants based on volume which is often called a “Conversion Bonus” or based on profit such as an 8x profit true up bonus. So, what does all this mean for the agent? This means you are going to make an average of $275 to $325 per sale you make in up front compensation as long as you are direct with a processing company. (continue reading below)

If you are reading this article and you are currently making more than this, my guess is that you are selling leases. Most of the larger processors in the US market now provide a free loaner terminal to the merchant when they sign up, however there are still many processors who sell the terminal on a lease. A terminal lease means the merchant pays a monthly amount, usually between $29.99 and $69.99 to use the terminal over a period of time from 12 to 60 months and at the end of this period they either own the terminal or they have some sort of lump sum payment in order to own it.

Because leasing a credit card terminal is so profitable, the commissions paid out are usually high, but make sure you understand the value proposition for the merchant. Keep in mind that a new terminal costs between $225 and $600 depending on the type of terminal. This means that a lease at $59 per month for 48 months would cost the merchant $2,832 after which they still would not own the terminal that they could have purchased for a few hundred dollars. Some processors offer higher monthly savings to offset the cost of the lease in order to front load their profits but this can backfire so make sure you understand what you are selling. Many sales people in this industry sell for between 2 and 5 different processors and each processor has various programs which makes choosing the right program while standing in front of a merchant very complicated.

Most of the top sales people in the industry use a tool like our Instant Quote Tool to compare all of the programs they sell instantly to see which programs offers the right blend of up front bonus money, residual compensation and savings for the merchant. Go to instantquotetool.com to get a 30 Day Free Trial of our Instant Quote Tool.

The other way to look at up front commission in the merchant services industry is how much you will make by the hour. Just to be clear, this industry in general is 100% commission but, I have found that agents tend to make about $15.00 to $25.00 per hour that they spend doing three core activities. These activities are:

The mistake many agents make in this industry is thinking that because it is straight commission they can make a lot of money even if they don’t work a lot of hours. That is simply not true.  Don’t forget about residual!  Residual is the main reason that agents get into this industry in the first place, so let’s not leave that out. I recently wrote an article that talks in detail about residual income in the merchant services industry and how it adds up. “Can I make 100K per year selling merchant services?”

The average merchant account pays out $30.00 per month in residual, you should make sure you have this residual for the life of the account. If you would like to learn more about residual and how to figure out if you are getting a good deal on your residual read, “Understanding Your Residual Split.”

Here are the two most important points from this article:

#1 – You need to look at your merchant services career like any other job.  If you don’t show up for work, you will not get paid.  Make sure you are tracking your time and don’t let a week go by where you only work 10 or 15 hours if you want to make a full time income from this business.  As you will learn in the articles I mentioned above, it takes 6 to 18 months in order to build a large residual base and during that time, you need to be ready to put in the hours to build your business.

#2 – Merchant Services compensation is complicated and varies by processor.  Take a little time to set up your programs using the Instant Quote Tool so that you can make an informed decision on the spot about which program will save the merchant money while also providing the best return on your investment of time. Go to instantquotetool.com to get a 30 Day Free Trial of our Instant Quote Tool

I hope you enjoyed this article!е.  For more information about building your merchant services portfolio, DOWNLOAD OUR FREE EBOOK – “How to Sell Merchant Services in 6 Steps”

Make it a great day!

James Shepherd