12 Apr [INFOGRAPHIC] A Bank CEO’s Guide to Merchant Services
As a bank CEO looking down at merchant services, it can be hard to determine whether your program is performing well. Take a look at our latest infographic, A Bank CEO’s Guide to Merchant Services, for 3 concrete steps to help you identify missed profit in your merchant services program. For a more in-depth look at this topic, click here to read the full blog post.
1. Determine how much revenue your program should generate. First, take your annual merchant services revenue and divide that by your bank’s asset size. If you are an agent bank and handle merchant services in house, your program’s revenue should make up a minimum of .06% of your bank’s asset size. If you are a referral bank and simply refer customers to your processor, you should expect a minimum of .03%. Is your program meeting these benchmarks?
2. Calculate your missed income. To calculate your missed income, we’ll gauge whether your merchant services program is meeting that minimum amount from step 1. To do that, take your current annual merchant services revenue and divide it by your bank’s total asset amount. In the following scenario, we have a $1.5B agent bank earning $272,000 annually from merchant services:
272,000 ÷ 1,500,000,000 = 1.81 (.018%)
This is much lower than the .06% baseline for agent banks. Now, we’ll calculate how much income your program should be generating. For the bank used in the prior example, we’ll take their total assets and multiply that amount by .0006.
1,500,000,000 x .0006 = 900,000
The bank in our example should expect $900,000 in annual revenue from their merchant services program, but they’re only bringing in $272,000! How much income is your bank losing out on?
3. Plan for growth! If your bank is missing out on valuable income, you’ll need to implement growth strategies. Every new merchant is important to your bottom line. If you’re an agent bank, you can expect to make $1,236 annually per merchant, while referral banks can expect $566.
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If your processor isn’t delivering top-notch customer service and strategies to help grow your merchant services revenue, please call BASYS Processing at (800) 386-0711 or enter some basic information in the form below. Let’s talk about creating a true business partnership that will help you meet and exceed your goals.