merchant portfolio · 7 attrition frame analys is objective: todetermine whether there isany...
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MERCHANT PORTFOLIO 2015-2016
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1. PORTFOLIO DIAGNOSTICS: OVERVIEW AND ANALYSIS…………………………………………………3
1.1 Month-To-Month Portfolio Performance……………………………………………………………3
1.2 Attrition………………………………………………………………………………………………..7
1.2.1 Frame Analysis…………………………………………………………………………….7
1.3 Negative Account Trend Analysis…………………………………………………….…………….8
1.4 Vintage Analysis………………………………………………………………………….…………10
1.5 Sales Agent Breakdown Analysis - January 2016……………………………………..…………11
1.5.1 Sales Agent Breakdown - Percentage of Total Accounts………………….…………11
1.5.2 Sales Agent Breakdown - Percentage of Total Merchant Revenue………...………12
1.6 Concentration Analysis - January 2016……………………………………………………...……13
1.6.1 Top 10 Accounts - Volume………………………………………………………………13
1.6.2 Top 10 Accounts - Merchant Revenue………………………………………………...14
1.6.3 Volume Concentration Analysis of Top 5%, 10%, and 25% of Accounts…………..15
1.6.4 Revenue Concentration Analysis of Top 5%, 10%, and 25% of Accounts………….17
1.7 Non-Processing Account Analysis - January 2016……………………………………………....20
1.8 Composition Analysis (SIC/MCC) - January 2016………………………………………………..21
1.9 Geographic Distribution Analysis - January 2016……………………………………………….22
1.9.1 Top States by Number of Accounts…………………………………………………....22
1.9.2 Distribution of Accounts by Geographic Region…………………………………….23
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Portfolio Diagnostics: Overview and Analysis
Month-to-Month Portfolio Performance
Objective: Overview of historical monthlyportfolio performance.
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Attrition Frame Analysis
Objective: To determine whether there is any material acceleration or deceleration of
attrition, or “loss”, for the portfolio over time. To assess this, we perform a Frame
Analysis, which attempts to measure any material change in the attrition rate for
Accounts, Volume, Transactions, Merchant Revenue, ISO Earnings, and Profits over 3
distinct 1-year time frames - in this case: October 2014-2015, November 2014-2015, and
December 2014-2015.
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Negative Account Trend Analysis
Objective: To determine the number and percentage of negative revenue (Total Earnings)
(<$0) producing accounts over time.
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Vintage Analysis
Objective: To determine how the number of accounts, sales volume, and revenues are
distributed in the Portfolio as a function of the age of the accounts (the year in which
the accounts were written and activated).
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Sales Agent Breakdown Analysis
Objective: To determine distribution of accounts and revenue of the top 10 sales agents.
Sales Agent Breakdown - Percentage of Total Accounts
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Sales Agent Breakdown - Percentage of Total Gross Revenue
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Concentration Analysis - January 2016
Objective: To determine the revenue and volume of the top 10 producing accounts as a
percentage of the total portfolio.
Top Ten Accounts Breakdown - Percentage of Total Volume
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Top Ten Accounts Breakdown - Percentage of Total Merchant Revenue
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Volume Concentration Analysis of Top 5%, 10%, and 25% of Accounts
Top 5% of Accounts Volume vs. Bottom 95%
Top 10% of Accounts Volume vs. Bottom 90%
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Top 25% of Accounts Volume vs. Bottom 75%
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Revenue Concentration Analysis of Top 5%, 10%, and 25% of Accounts
Top 5% takes up 3.84% revenue
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Top 10% takes up 8.02% revenue
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Top 25% takes up 19.74% revenue
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Non-Processing Account Analysis - January 2016
Objective: To determine the percentage of accounts in the portfolio that are
non-processing and the revenues thereof according to the following three definitions:
● Group 1 - Accounts with $0 in CC Volume per month
● Group 2 - Accounts with less than $2,500 in CC Volume per Month
● Group 3 - Accounts with less than 10 Transactions per Month
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Composition Analysis (SIC/MCC) - January 2016
Objective: Based on Standard Industrial Classification (SIC) code/Merchant Category
Code (MCC), we determine whether or not there is a large concentration of business
types (industry category) that would make the portfolio more or less susceptible to
attrition increases.
Composition Analysis (SIC/MCC) Breakdown of most common merchant industry
categories.
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Geographic Distribution Analysis - January 2016
Objective: To determine whether there is any substantive concentration of merchants in
any one particular geographic area of the U.S., at both the state and regional level.
Distribution of Accounts by Top States
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Distribution of Accounts by Geographic Region