April 17, 2024

How to Choose the Right Payment Processing Partner

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Small Business Tips

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If you’re an experienced ISO or agent, you already know that your payment processing partner can make or break your business.

The right partner helps you grow residuals, retain merchants, and streamline your portfolio. The wrong one can cost you deals, damage your reputation, and slow you down.

In this article:

• What Is a Payment Processing Partner?
• What You Should Look for When Choosing a Payment Processor
• Red Flags to Avoid
• Smart Questions Experienced Agents Should Be Asking
• The Hidden Growth Lever: Partnership, Not Just Processing
• Frequently Asked Questions on Payment Processing Partnerships

What Is a Payment Processing Partner?

A payment processing partner is the technology and service provider that handles electronic payments between a business and its customers. It securely moves funds from the customer’s card or account to the merchant’s bank, ensuring each transaction is authorized, approved, and settled quickly.

How the Relationship Should Work

For seasoned agents, payment providers aren’t just a service—they’re strategic partners, not gatekeepers, competitors, or simple vendors. The right partner offers the tools, support, and transparency you need to grow and protect your portfolio.

Here’s what that relationship should look like:

• Aligned goals: You’re on the same team, not fighting over leads or accounts.
• Clear, open communication: You know exactly who to call. You get real answers, not runarounds. And when you bring feedback from the field, it’s taken seriously.
• Shared growth: You’re building your brand, not just theirs.

Behind the Labels: What Your Processor’s Name Really Means

In the payments space, not all providers operate the same way, and the differences can directly impact your control and earnings.

Resellers & Aggregators

Resellers and aggregators provide access to processing through a third party. You may benefit from established relationships or pricing, but you’ll have less direct control. This model can work well if simplicity and speed are priorities, but experienced agents often seek a more direct connection to their provider.

White-Label or Hybrid Providers

Some partners offer a blend, using their own tools and branding while relying on a larger processing network behind the scenes. These setups can offer a great balance of customization and reach, depending on the level of in-house integration and service capabilities.

Direct Processors

A direct processor owns the payment infrastructure, including the authorization network and clearing platform. This can mean faster funding, more control over merchant support, and greater visibility—all of which benefit ISOs building long-term portfolios.

While there’s no one-size-fits-all solution, the closer your partner is to the actual infrastructure, the more control and clarity you get.

What You Should Look for When Choosing a Payment Processor

Inexperienced agents often focus on things like high splits, upfront bonuses, training, or lead gen—but that’s not how you build a lasting business.

At this stage in your career, you’re looking for a strong business partner who can help you set yourself apart. Here’s what to do to find a partner who’s truly committed to helping you succeed long-term.

Robust, Scalable Technology

Your merchants need modern tools, and dependable tech is the foundation of merchant trust. Your first priority when considering a payment provider needs to be the actual payment tools they provide. Look for partners who offer the technology merchants expect, including:

• Advanced point of sale systems
• Virtual terminals for online payments
• Seamless, secure integrations with common tools like QuickBooks®
• Built-in EMV, NFC, and PCI compliance
• Mobile payment options
• Dual pricing capabilities
• Real-time portfolio and reporting access

The best partners offer tools that make business easier. This leads to fewer service calls, less friction, and stronger retention over time, helping you stay competitive and close more deals.

Transparent, Predictable Payouts

No hidden fees. No fine print surprises. You should know exactly how you’re paid, how your merchants are priced, and what, if any, cancellation policies are in place. Make sure it’s easy to get straight answers to your questions. Look for partners that offer reliable payout schedules, easy-to-read residual reporting, and lifetime ownership terms. Bonus points for early pay dates and strong portfolio protections.

“From my perspective, honesty and transparency are the top qualities experienced agents look for from their merchant services partners. Agents want to have ownership and agency within their business.” – Nikki Montague, EPI Business Development Manager

Support That Protects Your Time

Every service call your merchant makes reflects on you. That’s why responsive, U.S.-based tech support matters, especially if it’s in-house available 24/7. A processor who handles issues quickly keeps your merchants up and running and your phone from ringing off-hours.

Business Tools That Help You Grow

Strong partnerships let you lead with your brand. That includes options for co-branded portals, merchant statements, and marketing materials so you can build your business and keep top-of-mind visibility with your clients.

You also want a partner who provides you with the tools to scale, including CRM access, merchant tracking dashboards, training content, and portfolio management reports.

Private vs. Public Ownership

Who owns your partner (and who they answer to) affects your experience more than you might think:

• Privately held processors tend to be more agile, partner-focused, and transparent. Their success is often directly tied to yours, which means stronger relationships and fewer surprises.
• Public or investor-backed processors may have more layers of bureaucracy, shifting priorities, or frequent restructuring. That doesn’t mean they’re off-limits, but you should know how your priorities align with theirs.

Ultimately, choose a partner whose structure supports your long-term growth and stability.

Portfolio Stability and Residual Survivability

When evaluating a payment partner, look beyond immediate payouts. A strong processor should offer willable residuals and clear protections that ensure your portfolio continues to generate income even if you retire or leave the business. If survivability terms aren’t clearly outlined, it’s a red flag. Some processors even allow agents to will residuals to their families, ensuring that the income from their merchant portfolio continues to support loved ones as part of their estate plan.

Experience and Competence Across Verticals

Your growth opportunities multiply when you can access more verticals, so look for processors that support a diverse pool of merchants. While most providers can handle standard retail, not every payment partner is equipped for more specialized industries, such as:

Restaurants and Food Service

Supporting restaurants opens doors to a wide range of opportunities, from full-service eateries to QSRs, fast-casual spots, and food trucks. Merchants in these verticals need technology tailored to the demands of food service, including:

• Easy tip adjustments
• Menu management tools
• Tab management
• Kitchen display systems

Service-Based Businesses

Businesses offering services such as health and wellness, automotive repair, and landscaping provide opportunities for long-term, recurring revenue. These merchants benefit from specialized features like recurring billing, appointment scheduling, and customer history tracking.

High-Risk Verticals

Many processors avoid high-risk businesses, leaving these profitable markets undersupported. Verticals like CBD, vape, adult retail, and firearms can be highly rewarding if you have a partner who understands the compliance landscape. Direct processors, such as Cygma®, are often more flexible and better equipped to support these industries.

“We’re seeing a clear shift toward industry-specific software and hardware. Agents are getting more vertical-focused requests—and ISV partnerships are becoming essential.” – Nikki Montague, EPI Business Development Manager

Red Flags to Avoid

Keep an eye out for these common traps:

• Rate creep: When merchant rates are quietly increased over time without your input.
• Outsourced support: Merchants notice when help feels disconnected or undertrained.
• Locked-in hardware or software: If you can’t upgrade tech easily, your flexibility suffers.
• Falling for upfront bonuses without long-term value: Big signing bonuses or flashy incentives can be tempting, but check for reduced residuals, restrictive terms, or clawbacks before signing.

“One of the biggest misconceptions I hear from agents is that an 80/20 split is the same no matter who you work with. But not all 80% splits are created equal—what counts as ‘80%’ can vary significantly depending on how each processor structures their pricing, fees, and reporting.” – Nikki Montague, EPI Business Development Manager

Smart Questions Experienced Agents Should Be Asking

Most agents know to ask about residual splits and equipment costs. But the best agents dig deeper. In addition to vetting your potential processor for red flags, ask about the following:

1. How soon are residuals paid out? Are they willable?
2. Who controls merchant pricing—me, you, or someone else?
3. Are there any verticals you don’t support?
4. Will I get reporting tools to track merchant activity and income?
5. What happens if I want to sell my portfolio?
6. Are there attrition clauses, buyout restrictions, or minimum deal requirements?
7. Can you support modern POS systems, virtual terminals, dual pricing, and mobile payments?

The Hidden Growth Lever: Partnership, Not Just Processing

In this industry, the biggest wins don’t come from flashy bonuses or quick contracts. They come from relationships that scale with you, where the processor is invested in your portfolio, your merchants, and your long-term success.

If your processor supports you with transparent pricing, stable ownership terms, and tools that help merchants stick around, you’ll build a book that pays you back for years.

Ready to Work with a Partner Who Invests in You?

Explore EPI’s ISO Agent Program

Frequently Asked Questions on Payment Processing Partnerships

How do I select a payment processor?

Look for a partner with transparent pricing, strong support, modern tech, and vertical flexibility. Choose based on long-term alignment, not just short-term perks.

What percentage should payment processors take?

It varies, but agents typically earn a split of the net residuals. Focus less on headline rates and more on how pricing, interchange optimization, and ownership affect your bottom line.

How do I know if my current processor is limiting my growth?

Red flags include restricted verticals, delayed payouts, limited pricing control, outdated tech, or lack of portfolio ownership. If you’re saying “no” to deals you should be closing, it’s time to reassess.

What are the legal or contractual terms I should get in writing?

Confirm residual payout schedule, termination clauses, buyout terms, and pricing control. If it’s not spelled out, assume it favors the processor.

What specific tools should I be looking for from providers?

Modern POS systems, dual pricing, virtual terminals, same-day funding, and tools for niche verticals like CBD or QSRs. Support and tech that simplify operations are key differentiators.

How can I get started with a new partner without disrupting my current workflow?

Look for a provider with a dedicated onboarding team, portfolio migration support, and co-branded resources. The right partner will make the transition seamless for you and your merchants.

Electronic Payments, Inc. (EPI) is a privately-held payment processor, acquirer, and financial technology company that delivers innovative POS systems, merchant services, and integrated payment solutions to businesses nationwide. Backed by over 25 years of industry experience, EPI is known for its transparent partnerships, proprietary technologies—including Exatouch® POS, ProCharge®, and Cygma®—and exceptional 24/7 in-house U.S.-based support. EPI serves a wide range of industries, from retail and restaurants to service-based businesses and professional offices, and acquires new merchants through a national network of POS value-added resellers (VARs), agent banks, independent sales agents, and ISOs.

800-966-5520 | www.electronicpayments.com