The business world, as many business owners and managers know it, has changed. Classic notions such as cash payments or store fronts have now been replaced by others like merchant portal and residual management. This can be a bit scary for some businesses, but if they are to make it in the new landscape of international trade and commerce, they have to adapt and get with the times. Especially because, although change can be quite scary, it isn’t necessarily hard to understand. All one needs is patience, research and a disposition towards what is new.
Why Does Residual Management Matter So Much?
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Independent Sales Organizations make their money depending on the size of the portfolio of merchants they’ve got. The more merchants their sales agents bring in the more revenue they generate for the ISO. The way this works is by taking a piece of every credit card payment accepted by the merchants and adding it to a thing called residuals. These residuals are what makes up the bulk of the ISO revenue stream and what keeps most of them capable of growing. It may not seem like much at first, considering that the ISO only takes a fraction of the credit card payment, but if you multiply that fraction by the number of merchants an ISO has in its portfolio and by the number of credit card transactions made daily, it starts to add up.
And this is where residual management comes in. Because ISOs tend to have large merchant portfolios in order to generate more revenue, that sometimes might get a bit hard to keep track of. Remember that an ISO doesn’t only operate with multiple merchants from various industries, but it also uses various credit card processors and also offers other services as well. Also, a considerable chunk of the residuals an ISO makes are actually diverted to their sales agents. This is why it can be quite difficult to keep track of all the cash coming in and going out the old fashioned way, using a calculator and pen and paper. Luckily there are a few tech solutions here to sort things out. One of them is the residual management option offered by various CRM companies.
These companies understand the need of keeping a firm grip on your revenue stream and also understand how hard it is to keep track of thousands of minute transactions from all of your merchants while giving your agents their piece of the pie. That is why more and more ISOs have started using these solutions in order to better handle their business. And the benefits can be seen almost immediately. Firstly, there is no more need for somebody to physically do math and add and divide and subtract various numbers and percentages. This way the chance of human error is virtually eliminated and the people who would normally do this can now focus on something else like getting more merchants or expanding into a new market. Also, the reporting power of some of these software solutions is impressive. They can generate whatever kind of report you would need in a fraction of the time it would take a person to do it, and with more detail than ever before.
Why Are Still Some ISOs Reluctant to Use a Residual Management Solution?
Although there are a lot of benefits to using a residual management solution, there are still those that don’t think that this is necessarily the way to go. This is usually because when a person gets used to doing things in a certain way it can be difficult for them to switch to using another method. Although the method they are doing things can be proven to be quite time wasteful and sometimes even detrimental, they still don’t think that a change is what they need. They are the people that go by the motto of not fixing something if it isn’t broke. And that ca be quite useful in many situations. But this solution isn’t a fixer. It’s an improvement. Sure, it might take some time to getting used to how it works and all the things it can do, but ultimately this can be proven as the better way to do things.
There are also some that don’t want to commit to a certain solutions provider simply because there are a lot of them out there, and they might wonder how can they find the right one. this is a very good question, especially for expanding ISOs, with large portfolios made up of long term merchants and loyal agents. Of course, as an ISO you have to look after the interests of those who have helped you over the years. You have to make sure that their sensitive information is protected and that the math is done right. But there are simply just so many companies out there promising the same thing that you might not know which to believe. One way of coming to a conclusion is by a quite risky trial and error tactic. This way you simply start working with various companies and just see which one is the best for you. In order to help ISOs thinking of such a tactic, many companies offering various solutions already offer trial periods for their products. But although this way you might get a first-hand account of what’s out there, it might end up costing you precious money and even more precious time. The solution to a correctly made decision is rigorous research. It might sound like a cliché, but only by doing some serious asking around can you get the right answer. The good news is that there are a lot of websites with plenty of information just waiting to be read.
Why Do People Hesitate When Deciding On a Merchant Portal?
The history of commerce and business is littered with different inventions and innovations that helped the relation between merchants and customers flourish and evolve. The most recent of all is the merchant portal. This new solution came to be in order to enable merchants to better their businesses by improving the way they managed their stores, accepted payments and anything else a growing business might need. It was created in order to make use of the new technology available and to help businesses grow and expand far more than ever before thought possible.
But there are still certain merchants that don’t really see what they could use a merchant portal for and so stick to their old ways. This isn’t necessarily wrong, but it kind of a backwards way of doing things. Firstly, this kind of portal helps you reach more customers than before. That can only mean that you can generate more revenue for your business and expand it. Sure there might be a couple of hick-ups along the way until you get the hang of things, but that doesn’t mean that the idea is wrong all together. The old days of the cash only brick and mortar shops are fun to think about, but any business that wants to stand a chance today needs to accept all the help it can get, especially if it means bringing in more customers.
Other business owners might just be a bit confused because of the many options they have when it comes to choosing the right provider of services. This dilemma might be a little harder to overcome. Firstly, the owner should look what other like him are using. This way he can get a pretty good idea about what he needs and how to use it. Secondly, after settling on a provider, the owner should do some serious research before committing to anything. Using a merchant portal isn’t rocket science, but it should be taken very seriously, especially for a business that is just starting out and can’t afford to make costly mistakes.