Secrets of Building a Successful ISO: Know Your Numbers

Secret # 4 to building an ISO that will stand the test of time: Know your numbers.

One of the key activities to managing a successful payments portfolio is to track its performance with meaningful KPI’s.

✔️ First, set your strategic, financial, and operational goals.
✔️ Identify the KPI’s that align with your goals.
✔️ Set up a system to collect, calculate, and review regularly.

Here are a few ideas to get you started:
• First the obvious – processing volume, active merchant count, revenue billed, etc. If these baseline numbers aren’t correct, nothing else will be. START WITH GOOD NUMBERS! Then be consistent in the way that you measure.
• Profitability by merchant so that you can easily identify under- and over-performers
• Month over month margin change for the overall portfolio
• Average merchant life
• Average lifetime value of merchants
• Net revenue / gross revenue ratio (how well are you managing your expenses as your revenue grows? If you’re scaling well, this ratio should be increasing)
• Net margin loss – average margin of deals lost vs. average margin of deals being boarded
• Losses as a percentage of revenue (are you taking too much or too little risk?)
• Overall chargeback ratios

• Calls/Inbound customer service inquiries per day
• Average call time / response time
• Call hold times, average and longest
• Number of customer service inquiries per rep per day
• Client satisfaction level whether your clients are merchants, agents, or other ISOs
• Underwriting timeframe from application submission to MID issue.

As you track these, you’ll see the trends– the most important of which is that improvement in your operational metrics leads to success with the financial ones.