How to Value Your Credit Card Processing Portfolio for Sale

A merchant services account portfolio is the result of extensive time and effort. It is a collection of businesses that use merchant services accounts to obtain payments from customers and business partners.

Independent Sales Organizations (ISOs) and agents earn residual incomes through the revenue these portfolios generate. As these working professionals accumulate and service accounts, their residual streams continue growing. However, conditions can also cause merchants to leave and business sales to drop. Such uncertainty can leave anyone interested in determining when to sell a credit card processing portfolio.

In this post, you’ll discover the factors determining a credit card processing portfolio’s market value. You’ll also learn how to value your credit card processing portfolio, understand what’s a good merchant services portfolio value, and how to decide if it’s time to sell.

What Determines the Market Value of a Credit Card Processing Portfolio?

The most basic way to determine the worth of a collection of accounts is to go by size. For example, a portfolio containing 10,000 accounts is likely worth more than one with only 100 accounts. That’s because the more extensive portfolio will likely earn more residual income than the smaller one.

However, a professional valuation requires delving deeper. Portfolio size doesn’t tell the whole story. As buyers, only looking at the number of accounts in a portfolio is a strategy sometimes prone to backfiring. For example, a smaller portfolio with high-performing, loyal merchants is often worth far more than a massive account with skyrocketing attrition rates and low-performing merchants.

For a thorough understanding of how to value your credit card processing portfolio, look into these critical factors:

• • Attrition Rate: Is a measure of merchants lost and, residuals lost or lowered over a specified period. Consistently losing sizable portions of accounts and income can affect a portfolio’s overall value. Average attrition without adding new accounts is below 20% per year.
  • Concentration: A Merchant portfolio with a few large residual producing merchant accounts is not worth as much as a portfolio with many small residual producing merchant accounts.  
  • Income Producing Non- Processing Accounts: Accounts that produce a residual but do not have any processing volume have very little value.  These accounts indicate a merchant that is about to cancel or forgot to cancel and will terminate the contract soon.
  • Basis Points Per Merchant Account:  A portfolio with a low profit margin (basis points) will be more valuable to a Buyer than one with high profit margins.  The lower margin accounts will make them more sticky and less likely to switch processors.  Very high margin accounts make losing the residual more likely.
  • Monthly Recurring Revenue (MRR): Potential buyers use MRR to determine the monthly predictable income a portfolio generates. An ideal portfolio generates stable or growing income each month.
  • The Diversity of Your Portfolio: Diversification is a key element of investing and plays a role in determining the market value of credit card processing portfolios. It’s often beneficial for a portfolio not to rely too specifically on a small area or too narrowly on an industry.
  • Loans on the portfolio:  Any loans you received will need to be paid at the closing of the sale of the portfolio.
  • Market Trends: Valuing your credit card processing portfolio in 2025 (or any other year) involves looking at current market trends. Consider the rise of AI, omnichannel payment solutions, and other developments when determining when to sell your merchant services portfolio.

What is a Good Merchant Services Portfolio Value?

High or low market values for credit card processing portfolios vary based on many factors.

A crucial factor in determining a portfolio’s worth is its monthly recurring revenue (MRR). When valuing a credit card processing portfolio, buyers typically multiply their MRR between 22 and 30  times.

Example: Your portfolio earns an MRR of $20,000. If a buyer feels that the portfolio is highly valuable, it may multiply its worth at a multiple of 28. $20,000 x 28 = $560,000 (offer from buyer).

However, that’s only one general calculation.

What’s a good merchant services portfolio value can also be answered by observing the following:

• It outperforms portfolios of a similar nature
• Low attrition rates
• Improved year-over-year performance
• Operating in a low churn industry

Follow These Steps to Value Your Credit Card Processing Portfolio

Step 1: Gather All Portfolio-Related Information

How to determine when to sell your merchant services portfolio requires knowing how much income your accounts are cumulatively earning. Key factors to understand when valuing your credit card processing portfolio include:

• Monthly recurring revenue
• Attrition rates
• Portfolio diversity

However, this step doesn’t just include gathering financial-related data. You’ll also want to have and present information about your merchants’ current contracts. For instance, knowing that most of your agreements are long-term rather than ending soon can make a positive impression on a buyer.

Step 2: Calculate Key Metrics

With your portfolio-related information handy, it’s time to delve into key metrics. This information includes calculating your portfolio’s:

• Residual Income 
• Attrition 
• Concentration 
• Basis Points:  Monthly Residual divided by Sales Volume Processed

If you’re not a fan of math, we get it. Thankfully, online credit card processing portfolio calculators can help take the guesswork out of calculating key figures.

Step 3: Comparing Your Data

The final step in how to value your credit card processing portfolio is to compare your calculations and totals with industry benchmarks. For instance, one step is to investigate how much similar portfolios have recently sold for. Look for account collections that match the size, diversity, and industry of the one you’re valuing.

If that’s not possible, you may also consult industry-related reports to use as benchmarks for your comparisons.

Sell Your Credit Card Processing Account Portfolio

How to Determine When to Sell Your Credit Card Processing Portfolio

Besides knowing what good merchant services portfolio values are, time plays a vital factor in when to sell your accounts. Consider the factors below before deciding if it’s time to sell.

Preparing for a Potential Sale

Preparing information about your portfolio before speaking with buyers can reduce potential future stress. Gathering thirteen months of residual reports and current ISO/Agent contracts will help speed up the process.

If you’re not in a particular rush to sell, several strategies to enhance your portfolio’s value include:

• Focusing on retention to lower overall attrition
• Expanding into new territories or industries to increase diversity
• Resolving any current portfolio-related disputes or legal matters
• MAke your merchant accounts stick with POS systems or other products that make it difficult to switch processors.

Personal or Business Reasons

This aspect of determining when to sell your credit card processing portfolio depends less on your accounts and more on business and personal situations. For instance, you could be facing emergency expenses. You may also learn how to value a credit card processing portfolio because you want to reinvest your residual stream into growing business ventures.

Keeping an Eye on Market Conditions

It’s important not to put too much importance on market conditions. If you do, it’s easy to fall into the trap of waiting for perfect market conditions that never quite arrive.

Velocity Funding: The Easy Way to Value Your Credit Card Processing Portfolio

As you’ve learned, accurately determining the market value of a credit card processing portfolio takes time and effort. Considering something so important, this isn’t an area where you want to make potentially costly mistakes. If you want assurance from a professional portfolio valuation, choose Velocity Funding.

Our company has purchased over 300 portfolios and counting. One reason is that Velocity Funding provides the maximum value for portfolios we make offers on. We’re also fast. Our specialists present offers to buyers within 24 hours.

Knowing how to value your credit card processing portfolio is a vital skill. If you need professional guidance on determining when to sell your merchant services portfolio, contact Velocity Funding. We have decades of experience evaluating portfolios and providing top-dollar offers for them. Plus, we never interfere with merchant and sales agent relationships.

Get a FREE Merchant Services Portfolio Valuation