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Feature

Sales Compensation Among
U.S. Merchant Acquirers

First Annapolis conducted a sales compensation survey for Regional Field Sales Representatives
who focus on the SMB segment. Our survey included 11 acquirers in total. Nine of the survey
respondents are among the 25 largest U.S. acquirers, and four are in the top 10.

Incentive Compensation Drivers

Acquirers typically utilize two types of incentive compensation: Upfront and Ongoing

Drivers of Number of completed applications Acquirers typically use 1 to 3
Upfront Number of approvals drivers when calculating
Commission Number of activations upfront commissions
Number of ancillary products sold
Percent of signed volume
Percent of expected net revenue

25% There is a great deal Examples of Ongoing
of variation in the Commission Structures
Drivers of % of Metric combination of the
Ongoing drivers of on-going 25% of net revenue for 1 year; after
Commission 1 year, the rep must meet a monthly
commission as well as gross margin quota to receive 100%
0% the percentage and of ongoing commission
Year 1 Timeframe Year 5 the timeframe for 20% of DIA 1 for year 1; 10% of DIA
payments that is paid for years 2 and 3; 5% of DIA for
years 4 and 5
to Sales Reps 8.15% of net revenue for 1 year

Compensation Components Sales Compensation Strategy

Regional Field Sales Representatives typically The compensation components should work
receive a base salary and some form of incentive together to create a comprehensive plan.

compensation. Each point represents a surveyed merchant acquirer benchmark

Low Average High One Compensation Components Four
$24,000 $43,000 $77,000
Annual Base
Salary 100% Salary Base to Incentive Ratio 100% Bonus

Annual Incentive $0 $37,000 $393,000 Up-Front Compensation Timing Ongoing
Compensation

Annual Total $26,000 $77,000 $453,000 0% Residual Rate 100%
Compensation*

* The listed compensation component metrics reference varying benchmarks, One Year Residual Duration Perpetuity
therefore total compensation is not the sum of the components listed.

Although too early to tell, we think Wells Fargo’s recent troubles with its per new account
e among merchant acquirers,

especially among bank acquirers.

1 Discount-related revenue (excludes interchange, assessments and other card network fees and acquirer fee revenue)
All information included within this document is based on public statements, documents, and disclosures.

For more information, please contact:

U.S. Headquarters Three Park Place, Suite 200 l Annapolis, Maryland 21401 Keizersgracht 313-I l 1016 EE Amsterdam l The Netherlands
P:+31 (0)20 530 0360

Sales Compensation Among U.S. Merchant Acquirers © 2016 First Annapolis Consulting, Inc. Reprinted with permission.

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