When talking about e-commerce, terms like merchant portal and residual management can be quite hard for some people to understand. But given enough time and research anybody can get the hang of what they are all about. Even some business owners might have a hard time dealing with such terms. They can find all the help they need if they are willing to do the research and keep an open mind.
What Is a Merchant Portal?
E-commerce is becoming more and more a part of daily routines. Helped by the international context of the pandemic, more and more traditional businesses are starting to create an online presence and to move the bulk of their operations online. Also, an ever increasing number of people chose to do their shopping online, form the comfort of their homes or in the few minutes they have between traffic stops. But starting an online business, although easy in theory, might be harder to understand and put into practice for the business owners that haven’t had to deal with such things before. Luckily, there are many platforms that are ready to help and guide these new e-merchants along the way to online success.
The first thing any business has to do in order to have an online presence is opening an e-merchant account. And the way to do that is by using a merchant portal. Portals are platforms that have been designed to host various merchants and help them develop their own online stores. These platforms can range from the internationally renowned ones, such as Amazon or eBay, to more localized ones specific to a certain region, country or even type of merchants that are allowed on it. Using a portal is easier, and much cheaper, than setting up your own website, especially if you are just starting off on your e-commerce adventure.
Also, a merchant portal has the added advantage of already having a well-established client base. So what the merchant is doing is practically linking his name to a more famous brand. This way he can get more business and also use the portal as a marketing tool. Another major advantage of such a portal is that it comes with some serious security protocols. This way clients are ensured that nothing can happen to their sensitive data and merchants can go about their business knowing that strong security protocols “have their backs”.
Disadvantages of Using a Merchant Portal
Although a merchant portal is a great way of establishing an online presence and boosting your client base, there are also a couple of drawbacks that any business owner should take into consideration before opening any kind of account. The biggest one would be the fees and charges you as a merchant have to pay in order to operate on that portal. Bear in mind that every portal has a different way of charging these fees and they may differ according to various criteria. Some portals might just have a flat-rate regardless of how large or small a merchant is, while others might have a proportional increase depending on the volume of transactions made. Others might even charge depending on the type of products and services offered. In any case, a fee has to be paid, because that is how the portal makes its money. Bit considering the alternative would be a large investment in a website and various security protocols and payment processing software, this doesn’t sound half bad.
Another disadvantage of almost any merchant portal that usually drives people away from them is the fact that, although they allow for the merchant do design his store how he likes, they do impose some strict policies when it comes to marketing and using certain promotional elements. This is sometimes seen by merchants as a too forceful policy, and that is why some of them avoid being associated with portals. But this can also be overcome through negotiations. The portals’ management has to retain some kind of corporate control over the way it is represented in various stores, but that doesn’t mean that it does not recognize the importance of branding and store imagery.
How to Better Understand Residual Management
Residual management can be defined as the way any ISO manages the revenue it makes through its clients. The idea behind this is that the revenue is composed of small amounts of money that the ISO gets whenever a merchant uses a service provided by it. These small amounts are then al gathered up and deposited into an account, but not before the transactions they have resulted form are checked. At the end of each month the ISO gets a report of how much money he has made in that month and from where did it come. This way it has a clear image about how productive his portfolio is and where he should direct his attention.
But counting all transactions from all the customers and adding up every red nickel can be tiresome. Mistakes can be made and sometimes merchants don’t accurately report every transaction made. This is why residual management solutions are needed. They do all the accounting for you, freeing you up in order to concentrate on getting more clients and expanding your business. Also, these solutions do more than just tally up dollars and cents. They can also generate elaborate reports than cat help you understand which merchants are performing better and which are not. These reports can also be used in order to predict which way to go with your portfolio and what kind of merchants to pursue next.
What to Look for in A Residual Management Solution?
There are a lot of residual management solutions on the market right now. And that is why sometimes it can be hard to choose the right one. Each of them have features that can help any ISO grow and keep track of revenue and its evolution. But not all solutions are created equally. Some are better suited to handle large client portfolios while others might have better reporting capabilities. It all depends on what you are looking for in such a solution. There are still some general characteristics that can help you make up your mind.
Firstly, you should choose the residual management solution that is in your price range. When doing your research, you should always be mindful of the price and what you get for it. This is because although some solutions might have more bells and whistles, you might not need them. You don’t want to get stuck paying for features you’re not going to use or don’t know how to use. Focus on the essentials at first and then decide if you really need any extras.
Secondly, make sure that it is user-friendly. Just because you’re dealing with numbers doesn’t mean that you can’t have a user friendly interface. Nobody is saying to have something out of a game, but something simple enough that anyone could use. Wasting time learning to use a software solution isn’t really something you need right now. Better go for something less complicated but more efficient.