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Merchant processing residuals are how ISOs make money in the payment processing sector. These residuals are a small percentage of the overall fees charged to merchants for the service. Each merchant agrees on the fees they will pay and within those is the leftover or “residual” funds for the business that helped set up their account.
Residual Payments
Residual payments are made from a hosting bank to the ISO who helped a merchant through the onboarding process . These payments are delivered in set time spans that the bank decides upon. These can range from monthly to quarterly.
It’s important to keep in mind that residual payments are a byproduct of your merchant’s processing volume. A sudden increase, or change in processing from a merchant will result in a very different payout. Many ISOs monitor their residuals very closely to make sure any changes to merchant processing volume can be addressed.
