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Credit Card Activities Manual

Appendices - Appendix B

Merchant Processing Examination Tools 
Portfolio Profile Worksheet

 Prior Year-EndCurrent Year-to-Date
Sales Volume  
Number of Transactions  
Number of Merchants/Outlets  
Average Ticket Size  
Number and Dollar Reserves  
Major Third Parties and Services Provided  
Top Three Concentrations by Geographic Distribution  
Top Three Concentrations by Industry  
Top Three Concentrations by Volume  
Charge-back Percentage of Sales  
Charge-back Loss Volume  
Fraud Loss Volume  
Operational Loss Volume  
Niche Market  
Net Income/Contribution  
Percent Electronic vs. Paper  
   

The portfolio profile worksheet can be used to summarize the profile of merchant portfolio at each examination and track changes in the profile from one examination to the next. 

Income and Expenses (Sample Only)

Volumes (000's)Expenses
Total Sales VolumeExternal Data Processing
Total TransactionsInternal Data Processing
Average TicketResearch and Development
 Terminal expense/depreciation
IncomePersonnel
Gross Merchant DiscountTelephone Expense
Interchange (-)Occupancy Expense
Assessments (-)Travel & Entertainment
Net Merchant DiscountSupplies
Interest IncomeProfessional Fees
Transaction FeesFraud and chargeback losses
Terminal FeesMiscellaneous Expenses
Miscellaneous Fees 
  
Total IncomeTotal Direct Expenses
Total Income Per TransactionTotal Allocated Expenses
Return on Total Income 
Return on Total ExpenseTotal Expenses
Direct Expenses Per TransactionNet Contribution Before Tax
Total Expenses Per Transaction (Unit Cost) 

This sample list of income and expenses associated with a merchant processing operation can be used in evaluating the bank's profit analysis of the merchant processing activity. 

Merchant File Review Worksheet

     
Merchant Name    
Merchant Application    
- Signatures    
- Business Type    
- Description of Product and Services    
- Average Ticket Size    
- Volume Information    
- Social Sec. #/Tax ID    
- Trade and Bank References    
- Processor    
- Time in Business    
- Proper Approval    
Site Inspection    
- w/Photo    
- Inspected By    
Financial Information    
Credit Bureau Report    
Evidence of Previous Merchant Activity    
Check MATCH    
Purchase/Lease Equipment    
Discount Rate    
% Swiped Transactions    
     

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Last Updated: June 18, 2007