Business Idea: Selling Merchant Accounts

One business you can do from home, whether full time or part time, is to sell merchant accounts. There are a number of merchant account providers, including big companies such as Card Service International or smaller outfits such as Vantage Card Services.

In this business, you tap businesses accepting credit cards processing to use your merchant account provider or to shift to your provider in case they are already using another provider. Basically, you're a salesman.

But merchant account salesman is not an easy work. You have to know business owners -- which is not an easy task. You can't just go into a nail salon or restaurant or dry cleaner and ask them to change their credit card merchant provider. Many businesses are against soliciting, so you'd be turned away right at the door.

To get accounts, the business owner must be familiar with you, know you, or you must come in highly recommended. If you have contacts with a lot of business owners -- e.g. you are a member of a business networking group -- then this would be a great fit for you. For example, getting restaurant owners to shift their credit card processing entails a lot of dining and wining in that restaurant - just so owner get to see you and become familiar with you (they are more likely going to give you the business if you are their loyal customer). You need to win the trust of the business owner -- before they give to you their merchant account bill so you can analyze where you can help them save money.

Your earnings will depend on the profit of the merchant account provider after paying off the fees of Visa, Mastercard, Discover, American Express and other credit card companies. What typically happens is that Visa for example sets a rate, and the merchant account provider gives a higher rate to their customers. That difference is their profit -- and you as their salesman, will only get a percentage of that profit.

It's not a flat commission, but your earnings will depend on the profitability of the account. Note though that your income depends on the sales volume of the business owner and the rates that you've given said business owner. The problem lies on the fact that this is a very competitive business, and you cannot give the business owner a high rate. In fact, if you're trying to win the business owner, your presentation will focus on how much they will save if they use you instead of their current provider -- so you lower the rate that was given to them or you remove some of the extra fees that are typically charged. As a result, profitability of the account becomes smaller and your earnings are smaller.

For example, your customer is a convenience store owner whose credit card sales volume amount to $35,000 per month. It wouldn't be too far fetched to earn only $45-$100 a month from this account. Hence to make a lot of money from this business, you need to have a lot of accounts.

One thing to watch out in this business is the requirement for landing new accounts. I've seen merchant account providers that require their sales people to have at least one sale every quarter -- otherwise commissions from previous sales will be forfeited. Imagine if you already have 100 accounts earning you a couple of thousands a month, and you laid low in that quarter, then boom -- that earning will disappear!

Choose a company that you know offers good rates to their clients as well as salespeople. Be sure to look at how well they support their sales people, especially in the implementation and hookup of the new credit card processing system when the business owner changes to your company. Also check how many salespeople they already have in a particular location, so you won't have to compete with other salespeople from your company.