Payment processors have been known to do some pretty skeevy things to their merchants. Among them all, selling merchants out, literally, ranks high on the list. This is also known as selling a residual portfolio. When a processor or agent sells their portfolio, they are ditching their business relationship with you and leaving you high and dry. They trade their future account earnings for a one-time large cash influx. It’s a sad regularity in our industry, and you should know all about it.
Buy and Sell
Who is the buyer of these portfolios? The payment provider, usually, but it could be a non-affiliated third party. After signing a BuyOut Agreement, the sales rep gives up the residuals and control of the account to the payment provider. The sales rep had put in the work to build his portfolio of clients but doesn’t wish to continue his long-term relationship with his merchants. This is an unfortunate situation that you’ll never find yourself in with PayFrog.
It’s a Market
Sadly, most sales reps plan on selling you out during their career, and many do it as often as every two years. It’s actually a goal for them. This phenomenon is larger than you might think. Actually, it is its own market. There are blogs out there designed to advise agents of how to carry out the process, and there are even classes available for it. At a payment conference called NorthEast Acquirer’s Association, there was an entire workshop dedicated to it. When the speaker asked the audience if anyone had a plan in place to sell their portfolio, over half the audience raised their hands! None of our sales reps did, of course. Also, here is the schedule if you’re interested in what other classes we take to stay educated.
Not for Us
As you may have read before, PayFrog is different because we care. It isn’t our intention, and it has never been, to sell out any of our merchants. We enjoy building long-lasting relationships with each of our customers. It’s why we do what we do! To prove it, we post our core values right on our website. Check them out, then find out why our portfolio has grown so big in 8 years.