What is a “Registered Agent” in Merchant Services?
A registered agent is an individual or a business entity that serves as an independent marketer for a larger merchant account provider or credit card processor. Essentially, the registered agent resells payment processing services provided by the companies with which it has commission agreements. Often, business entities that operate as registered agents do so under their own separate branding. However, the services, and frequently the customer support, are provided by the company that the registered agent represents.
The Role of a Registered Agent in Merchant Services
Generally, registered agents act as independent salespeople or organizations that market and sell credit card processing services of large merchant account providers. Such agents often have flexibility in adjusting pricing and the contract terms of the merchant services they market. Registered agents are paid commissions for successfully placing businesses with credit card processing services. These commissions often come in the form of an upfront bonus and ongoing residual commissions based on the fees charged to the business for the processing of its sales.
Controversy Regarding Registered Agents
Registered Agents are often incentivized by the processors they market to sell card payment services at the highest tolerable pricing in exchange for larger commissions. Additionally, these agents often undergo little screening before they are hired and receive minimal training on the actual details and bottom line costs of the processing services they are promoting. This has led to an industry dominated by intermediaries who, knowingly or unknowingly, sign unsuspecting business owners into expensive card payment agreements. Consequently, this has led to countless complaints about the industry and tarnished its reputation among small business owners.
