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Insights and Expertise
StreetSmarts SM
Recommended reading:
Your residual report
By Allen Kopelman The ISO apologized and promptly transmitted the
Nationwide Payment Systems Inc. overdue funds. Ever since then, we have thoroughly
checked our residual reports, because you don't know
n statistics, the word "residuals" means the differ- what you don't know.
ence between an observed data value and predicted • Monthly minimum: I recall an acquirer debiting our
data value and could also mean an error. I find
I this hilarious because in our business of merchant account by $100 for each of our merchants that fell be-
low their monthly processing minimum.
acquiring, there are plenty of residual errors going
around. We called and asked them why we would be billed
when they bill our merchants directly. They looked
As any payments pro will tell you, residual reports can up our agreement and admitted that it didn't specify
be complicated, but reading them is worth the effort. who would be billed for a monthly minimum charge
Accounting is an inexact science, especially when your and sent us a refund for the fees that they deducted.
paycheck is made up of tiny little splits from millions of
transactions – what could possibly go wrong? • Automated billing errors: An ISO partner we had
worked with for over 15 years was changing to a new
Have you ever been short paid by an ISO or contested a billing platform and left four or five of our new clients
residual payment? If you can't think of a single example, behind, and we were not getting paid on them. This
you may need to pay closer attention to your monthly was a good partner, and it was awkward to open a
residual report. I hear from merchant level salespeople new service ticket every month and request our over-
(MLSs) who have escalated issues regarding commis- due residuals.
sions, residuals and referral fees.
Finally, after four months of appeals, they sent us a
These experiences are part of the job, and believe it or not, corrected report that showed overdue commissions
they can create deeper bonds between MLSs and ISOs had been paid for each account.
when managed in a calm, professional manner. Here are
a few memorable examples. Chargeback revenues: We once asked a partner why
we weren't getting paid for chargebacks and were told
• Short payment: We had an ongoing situation with that "there weren't that many." We countered by say-
an ISO partner. Each month we'd find discrepancies ing our records showed 50 chargebacks the previous
between the amounts shown as paid on our residual month, and we were due a percentage of chargeback
report and our bank deposits, which were coming up fees.
short.
Two days later, the ISO acknowledged the error and
We addressed this issue with calls and in an overnight paid us accordingly.
letter that showed screenshots of our bank deposits.
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