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Education

Five things every professional payments

agent should have – Part 1

C. If you get a good offer for your residual stream,
the buyer may want to include some shares of stock
in the buyer's company as one form of payment.
These shares may pay dividends or you may be able
to sell these shares at a later date after they have
vested. But be sure to carefully evaluate this oppor-
tunity with outside help.

For a potential buyer to know what your residual is
worth, you will need proper accounting statements
By Mark Dunn based on good residual information and tracking of
Field Guide Enterprises LLC your expenses. You need an accountant. (I'll tell you
more about selling your residual in a later article.)
s payments professionals, all agents need to
treat their work as a serious business. It may Attorney
have started as a side hustle or a part-time gig You will need a payments industry attorney. Your agent
A for you, but with dedicated effort and persis- agreement will determine all the rules, all the value, es-
tence, it will turn into a serious source of income. In this sentially all the outcomes you can expect from your ISO
two-part series, I will present five things every profession- relationship. Take your time, and get help negotiating
al payments agent should have to manage their business. your agent agreement. Most attorneys don't understand
the intricacies of payments. You don't want to pay your at-
Clarification of my usage of terms: If your payments busi- torney to learn that fact. There are a number of very good
ness is registered with the card brands through a formal payments industry attorneys. Their expertise is not inex-
registration, you are an ISO. If your business is registered pensive, but it will save you time, money and heartache in
with an ISO through an agent or independent contractor the long run. (Check The Green Sheet Resources page or
agreement, you are an agent. contact me for more information.)
No. 1–Team Tech resource
You need a team. No one succeeds alone in the payment You need help for times when your smartphone, tablet or
business. Also, running a business means accountability. laptop freezes up. This can be a person or a service. But
You should have people to whom you are accountable and you need a real resource person you can talk to. There are
on whom you rely for good counsel. Here are the people many local computer resource companies in every state.
that should be on your team. Do your homework.
Accountant Second in command
How will you know the value of what you've created if
you don't have good financial records? How will any- In the Navy they call this person the XO, for executive of-
one who wants to buy what you've created know what ficer. Selecting an XO will be one of the more important
it's worth? There are at least two, and possibly three things you do for yourself. You need someone who can
paydays in the agent business. step in and keep the business running when you're tem-
A. The first payday is your monthly residual check. porarily out of action. "Out of action" could mean on vaca-
You should receive these checks every month as tion, sick or in the hospital, or having to focus on other
long as the merchants you signed continue to pro- business for an extended period of time. Ultimately, this
cess (subject to the terms and conditions of your is a position of trust. You will need someone who is re-
agent agreement). liable, responsible and trustworthy. This person may be
your spouse or significant other. You may have a protégé
B. The second payday is the big check you get when you are bringing up in the business. Or, you may need to
you sell the residual stream from your portfolio. hire a part-time admin. Do a background check. Realize
Note that I said you sell your residual stream, not this is someone to whom you are handing the keys to your
your portfolio. The residual stream is what you own, business.
not the merchant accounts. Also, note that when you
sell your residual stream, the monthly payday No. 1 Also, if your XO does a great job, put a plan in place that
above ends. rewards them in the long run for their fidelity and respon-
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