Overview
Merchant Residuals Profitability shows how much profit individual merchants and entire processor portfolios generate from residuals. Users with the appropriate permissions can view profitability from a merchant’s profile, from a residual report, or across a processor from the Residuals Profitability tab.
- Merchant Profitability: Shows year-to-date and lifetime profit for an individual merchant in both dollars and basis points (BPS).
- Processor Profitability: Shows portfolio-level metrics such as monthly volume and revenue growth, average profit per merchant, BPS margin growth, and year-to-date and lifetime profit.
- Profitability History: Users can review monthly income, expenses, profit, adjusted income, House Net, processing volume, transaction count, BPS profit, and average ticket.
- Calculation Detail: Profit represents Adjusted Net after applicable line items but before agent payouts. Users can also view the line items included in the Adjusted Net calculation.
This feature is used to understand which merchants and processor portfolios are most profitable, monitor changes in margins over time, and investigate the revenue and expenses behind those results. Access to merchant-level and portfolio-level profitability can be controlled separately through user-class permissions.
View merchant profitability
To view a merchant's profitability, go to the Merchant Details page and click the dollar icon next to the MID number.
💡The green dollar icon is also found in residuals reports and opens the same profitability report.
The merchant profitability report displays:
- Year-to-date profit in dollars and basis points (BPS)
- Lifetime profit in dollars and BPS
Here is an example of a merchant profitability report:
View processor profitability
To view profitability information for the entire processor, go to Residuals, select the Processor you wish to view, and open the Profitability tab.
The processor profitability report displays:
- Monthly Volume Growth in dollars and as a percentage
- Monthly Revenue Growth in dollars and as a percentage
- Average Profit per Merchant in dollars, BPS, and as a percentage
- Monthly BPS Margin Growth as a percentage
- Year-to-date Profit in dollars and BPS
- Lifetime Profit in dollars and BPS
Review residual earnings
The Residual Earnings report shows the complete profitability history at both the processor and merchant levels. It includes:
- Month
- Income
- Expense
- Profit
- Adjusted Income
- House Net
- Processing Volume
- Transaction Count
- BPS Profit
- Average Ticket
Click the Info icon in the Adjusted Net column to view the line items used to calculate the dollar amount, including any manually added line items.
Profitability user class permissions and access scenarios
Three permissions can be used individually or together to provide access for different profitability reporting scenarios:
- Portfolio Activity Monitoring - Merchant Profitability provides access to merchant-level profitability calculations based only on residual reports marked as Visible on the Imported Residual Reports page.
- Merchant Profitability with Unpublished Reports provides access to merchant-level profitability calculations that include all uploaded residual reports, including unpublished reports.
- Residual Reporting - Residuals Profitability provides access to portfolio-level profitability reporting through the Profitability tab on the Residuals page.
In the scenarios below, Merchant Profitability refers to either of the two merchant-level profitability permissions.
User has Merchant Profitability but not Residuals Profitability
- The Profitability tab is not visible on the Residuals page.
- The user can open merchant profitability by clicking the dollar icon next to a merchant's name.
- The profitability icon is visible on the merchant profile.
- The user can open the merchant's profitability page by clicking the dollar icon.
User has Residuals Profitability but not Merchant Profitability
- The Profitability tab is visible, but dollar icons do not appear next to merchant names.
- The user can open the portfolio's Profitability tab.
- The dollar icon does not appear on merchant profile pages.
User has Residuals Profitability and Merchant Profitability
- The Profitability tab and the dollar icon next to each merchant are visible on the Residuals page.
- The user can open the portfolio's Profitability tab.
- The user can open merchant profitability using the dollar icon in either the residual report or the merchant profile.
User does not have Residuals Profitability or Merchant Profitability
- The Profitability tab and the dollar icons are not visible in the residual report.
- The dollar icon is not visible in the merchant view.
Frequently Asked Questions
- What is Profit, and is it calculated before or after user payouts? Profit is the Adjusted Net. It is calculated after Line Items are applied but before agent payouts.
- What is the formula for calculating BPS Profit? BPS Profit is calculated by dividing the Adjusted Net by the Processing Volume.
- What is the difference between Net Profit and Adjusted Net? Net Profit is the ISO's net income. It equals Income minus Expenses on the Summary tab. This amount appears in the Net column and includes calculations from templates. Adjusted Net is the Net Profit minus any Line Items attributed to the merchant or merchants.
- How are the Volume Growth and Revenue Growth percentages calculated? Divide the Growth amount by the previous month's amount.