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lgordon

lgordon

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Home page: http://www.merchantportfolios.com

Posts by lgordon

The Buyers are Back

You can say what you want about the economy and we can all speculate as to the positive and negative effects it will have on consumer spending and merchant processing accounts, but one thing is for sure- the number of active buyers of merchant portfolios and residuals is rising again.  There are a significant amount of buyers who are in the marketplace because they feel that they can finally obtain value.  There are also buyers who have entered the scene because their funding sources that were on the sidelines for the past few months have now given the green light for funding future acquisitions subject to tightened underwriting standards.  The availability of portfolios and residuals for sale has also increased significantly.  We’ve seen the shift from 12-24 months ago when there was not much of an inventory of ISO’s or portfolios for sale and, for all intents and purposes, it was a sellers’ market.  More recently, there appeared to be more available deals than potential buyers in the market.  The supply and demand now appears to be closer to an equilibrium point as there appears to be significant numbers of both buyers and sellers in the portfolio acquisition market. Read more...

Selling First Data, TSYS and Global Portfolios

With a 33% minimum increase in the capital gains tax effective January 1, 2011, now is the time to consider selling your ISO or portfolio.

Now IS the time to sell your First Data, TSYS or Global ISO or merchant portfolio.

Contact us today at:  lane@merchantportfolios.com

The Economy and Your Merchant Portfolio

Overview

In the build-to-sell world of merchant processing ISOs, I’m sure the question ‘how will the current state of the economy impact the value of my ISO or portfolio’ has been something that most ISOs have been contemplating lately.  In recessions in the past, the merchant processing industry has always taken pride in what it believes is a recession proof business.  Many ISOs believe that when times get tight, consumers shift from cash to credit cards and consequently merchant processing volumes tend to be stable,  sometimes even growing  during recessionary periods.  However, this recession may be unlike any we’ve seen before.  In prior recessions, there was varying degrees of commercial credit available and there was the ability for people to take out home equity lines against their home.  In the current recession, credit is extremely tight, and many people’s homes are worth less money than the value of their mortgage – so there is no possibility to take out a home equity line. Read more...

Micro Deals: Small Residual Transactions

Overview

In the present financial environment where we witness wild daily swings in the Dow Jones, one area of portfolio and residual sales is particularly active- “micro deals”.  Residual transactions involving net monthly processing revenue between $1k and $20k are numerous.  There are plenty of sellers, and contrary to what many people would like you to believe, plenty of buyers. Read more...

eCommerce Merchant Processing, Direct Debit and SEPA

Overview

I’m hearing mixed comments from US and foreign ISOs and PSPs.  Some claim that they are signing more merchant accounts than ever.  Others tell me that they are adding accounts but the average ticket and gross consumer dollars processed are down.  Of course in this industry, asking an ISO for a true picture of what’s going on in their business is analogous to talking with the guy who just got back from Vegas and is happy to tell you how much he “won”.  They never tell you how much they lost up until that point at which they win.  One thing which is apparent is that there are some growth areas both domestically and worldwide which need to be looked at if you are someone interested in long term growth and are broad minded enough to think outside of the traditional brick-and-mortar model. Read more...

The Residual Buying Game

Overview

One of the most interesting areas and perhaps one of the most profitable within the merchant processing industry is the purchasing of residual streams.  For anyone outside of the industry looking in, it is hard to fathom that agents and ISOs can sell their revenue streams.  In most industries, you can’t decide one day that you want to monetize your future cash flows and effectively sell them in a secondary marketplace to a buyer who is going to pay you a lump sum today.  Other than folks who sell their future lottery payments or insurance settlement payments, it is practically unheard of. Thus the merchant processing business offers yet another unique opportunity for savvy buyers and investors to profit. Read more...

Go Vertical, Young ISO

This year’s  ETA meeting was very interesting—of the many new and emerging angles we encountered in terms of what were the most sought after acquisitions, there appeared to be one common theme amongst acquisitive ISO’s – niche specialization.  Being an industry insider and dealing with buyers and sellers every day, I have been accustomed to seeing a merchant portfolio’s value enhanced through a broad spectrum of diversified SIC codes, geographic locations, and a large component of traditional  brick and mortar businesses.  Well, times are changing. Welcome to the dawn of enhanced value through NON-diversification, specialization and ancillary products. Read more...

Choosing a Growth Strategy for Your ISO

There are two primary ways to grow your ISO- organically, through your existing sales efforts, and through acquisition.    There is a trade-off between the two strategies: on the one hand you could ratchet up your existing marketing efforts with additional financial investment, and on the other hand you could appropriate additional funds towards an outright ISO or portfolio acquisition.  In contemplating an acquisition, you need to do a significant amount of evaluation, not the least of which is your internal client acquisition costs.  You need to know how much it presently costs your firm to acquire an individual merchant account including all marketing efforts and overhead.  With this information, you can begin to evaluate the trade-offs between expanding your existing sales operation and purchasing an ISO or portfolio. Read more...

Little to Fear in a Buyer’s Market

In the “build-to-sell” world of merchant processing ISOs, sellers assume they are building a book of business that will have buyers beating a pathway to their door when they are ready to sell.  ISOs may want to re-evaluate the notion that buyers will be coming out of the woodwork to buy their ISO or portfolio in the present state of the market.  It isn’t doom and gloom as some folks may lead you to believe, but it isn’t as easy as it may have been 6-12 months ago to find a strong group of qualified potential buyers who are all eager to purchase your ISO or portfolio. Read more...

How Sellers Blow Deals

It’s a bit counterintuitive, but from a professional intermediary’s perspective, one of the most common and greatest hazards to successfully selling a portfolio (or ISO) are the sellers themselves.  Here are a few suggestions for sellers to help prevent their opportunity from looking like a giant “DANGER, LIVE MILITARY EXERCISES UNDERWAY” posting to a would-be buyer. And trust me when I tell you that the analogy is appropriate.  I’ve seen more deals “blow up” on account of the seller’s approach and demeanor than I care to recall. Read more...

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