Merchant Services
Financial Model

How Will Your Business Make Money?

Your revenue is driven by three core streams: commissions on transactions, monthly subscription fees from sellers, and extra services like ads or promotions. The model calculates commission revenue based on a variable take rate (starting at 2.90%) plus a fixed fee of $0.10 per order. Seller subscriptions range from $29 to $49 per month depending on the seller type, creating a recurring, predictable revenue base for your payment gateway business plan.

Core Revenue Streams

• Commission Revenue: A variable percentage plus a fixed fee on every transaction.
• Seller Subscriptions: Monthly recurring fees from merchants on the platform.
• Seller Extras: Additional income from services like ads and payment processing tools.

What's the Path to Profitability?

You're projected to hit breakeven by September 2026, just nine months after launch. While the first year shows a net loss with an EBITDA of -$186k, the business scales into profitability quickly, with EBITDA growing to $714k in the second year. This rapid turnaround is driven by scaling transaction volume over a largely fixed cost base, after accounting for direct costs like interchange fees (1.80% of GMV) and payment gateway fees (0.50% of GMV).

Levers for Improving Profitability

• Increase Average Order Value (AOV) from higher-tier buyers.
• Reduce Seller and Buyer CAC through organic channels.
• Optimize commission rates as transaction volume grows.

How Much Funding Do You Really Need?

To get this business off the ground, you'll need an initial investment of approximately $330,000. This startup financial model for merchant account providers details every one-time cost required before you start generating revenue. The largest single expense is the initial platform development at $150,000, followed by server infrastructure and security software. This clear breakdown ensures you raise enough capital to cover all critical launch activities.

Key Initial Investments

• Platform Initial Development: $150,000
• Server Infrastructure & Security: $70,000
• Office Setup & Furnishings: $25,000

When Does Cash Flow Turn Positive?

The financial model shows exactly when your cash flow dynamics shift, helping you manage liquidity with precision. You're projected to hit your minimum cash balance of $387,000 in September 2026, which aligns perfectly with your breakeven date. From that point forward, the business begins generating positive cash flow. This forecast is crucial for ensuring you have enough runway to navigate the initial growth phase without running out of money.

How Will You Acquire Sellers?

Your seller acquisition is driven by a defined marketing budget and a target Customer Acquisition Cost (CAC). In the first year, a $150,000 marketing budget combined with a $500 CAC allows you to acquire 300 new sellers. The model assumes these sellers are a mix of small retail (40.0%), online stores (35.0%), and service providers (25.0%), each with different subscription fees and transaction values. As you scale, your CAC is projected to decrease to $300 by 2030, improving marketing efficiency.

What's the Plan for Buyer Growth?

Buyer growth is modeled similarly to seller acquisition, using a dedicated budget and CAC. With a Year 1 marketing budget of $200,000 and a buyer CAC of $20, you can bring on 10,000 new buyers. The model segments these buyers into Individuals (70.0%), Small Businesses (25.0%), and Enterprise (5.0%), each with distinct purchasing behaviors. For example, an individual buyer is projected to place 2.5 orders per month with a $40 AOV in 2026.

Who Do You Need to Hire, and When?

Your hiring plan starts lean and scales with revenue. In 2026, the core team consists of a CEO, CTO, and a Lead Software Engineer, with a total annual payroll of $480,000. Key commercial roles like a Head of Sales and Marketing Manager are added in 2027 as the business gains traction and requires dedicated growth functions. This phased approach ensures your payroll expenses stay manageable while supporting your expansion at the right moments.

This financial model template excel is 100% editable, giving you complete control to tailor every assumption to your specific business plan. You can easily adapt the revenue streams, cost drivers, and hiring plan to match your unique payment processing financial model. This flexibility saves you dozens of hours while ensuring your projections are a perfect fit for your strategy.

Adjust all core business assumptions

Model multiple revenue streams easily

Align cost structures with your operations

Test different scenarios in minutes

You get a complete five-year financial forecast to map out your long-term growth and capital needs. This detailed view is critical for making smart, data-driven decisions and creating credible financial projections for your payment company. Effective business financial modeling isn't just about the next year; it's about building a sustainable future.

Plan long-term strategy with confidence

Forecast revenue, costs, and profitability

Understand future hiring needs

Prepare for future funding rounds

The model provides a clear breakdown of both startup and ongoing operational costs so you can budget with precision. It separates one-time capital expenditures from recurring monthly fixed and variable expenses. This detailed view helps you understand your true cost structure and avoid common cash flow traps early on.

Estimate initial launch investments

Track fixed and variable operating costs

Analyze Cost of Goods Sold (COGS)

Manage payroll and marketing budgets

We've integrated key industry benchmarks to help you validate your assumptions against market realities. This allows you to perform more accurate credit card processing analytics by comparing your projected performance on metrics like transaction fees and customer acquisition costs. It's a reality check that grounds your financial model in real-world data.

Compare against industry standards

Refine your financial assumptions

Identify areas for improvement

Strengthen your business case

This Excel financial template works seamlessly in both Microsoft Excel and Google Sheets, giving your team the flexibility to collaborate in the environment they prefer. Whether you're working on a Mac or Windows, or sharing a live link with advisors, the experience is smooth and consistent. This ensures everyone is always working from the latest numbers.

Works on Windows and Mac

Share and collaborate in Google Sheets

Access your model from any device

No compatibility issues to worry about

The dynamic dashboard visualizes your most important financial metrics, giving you an instant snapshot of your business's health. With pre-built charts and graphs, you can quickly track revenue growth, profit margins, and cash flow without digging through spreadsheets. It's your command center for financial oversight.

Visualize key performance indicators

Track monthly revenue and expenses

Monitor cash flow trends instantly

Present financial health clearly

This pre-built excel financial model for merchant services is designed to meet the high standards of professional investors. The clean formatting, clear documentation of assumptions, and comprehensive financial statements (P&L, Cash Flow) ensure your pitch is polished and credible. It covers all the key metrics and analysis that investors expect to see.

Formatted for professional presentations

Includes key investor metrics

Clearly documented assumptions

Builds credibility with stakeholders