NMI Residual Reports for ISO Partners

A residual report is the monthly commission statement an ISO partner earns from their merchant portfolio on NMI. Each merchant generates processing volume; NMI charges interchange + processor fees + gateway fees; the difference between the merchant's total fees paid and NMI's wholesale cost is the margin — and a portion of that margin flows to the ISO as residual.

Residuals are the foundation of the ISO business model — recurring monthly income that compounds as the portfolio grows. A well-managed ISO portfolio of 100 merchants can generate $5,000-$50,000+ per month in residuals depending on processing volumes and merchant mix.

NMI generates these reports automatically and makes them available in Merchant Central.

A typical NMI residual report includes:

Per-merchant breakdown: Each merchant's monthly processing volume, transaction count, total fees collected, fees retained by NMI/processor, and the residual amount due to the ISO.

Fee categorization: Discount rate, transaction fees, monthly minimums, PCI fees, gateway fees, statement fees — all itemized.

Adjustments: Chargebacks, refunds, BIN downgrades, return fees — all deducted before final residual calculation.

Net payable: Total residual amount owed to the ISO for the month.

Year-to-date totals: Running YTD residual earnings.

The report exports to CSV/Excel for ISO accounting.

NMI posts residual reports on a monthly cycle:

Cutoff: Last business day of the month (transactions through 11:59 PM that day count toward the month).

Calculation period: First 7 business days of the following month, while NMI receives final processor settlement data.

Posting: Reports appear in Merchant Central typically by the 8th-10th business day of the following month.

Payment: ISO residual payments are typically issued via ACH on the 15th-20th of the following month, after the report posts. Specific timing depends on the ISO's NMI partner agreement.

Holiday delays or processor settlement delays can push timing 1-3 days.

ISOs typically reconcile residual reports against their own merchant tracking system:

Step 1: Download the report from Merchant Central (Reports tab, Residuals).

Step 2: Compare per-merchant volume against your CRM or merchant tracking system — flag merchants with unexpected drops in volume (potential attrition signal).

Step 3: Spot-check fee calculations on 2-3 merchants — verify discount rate × volume + transaction fee × count = the fee amount.

Step 4: Reconcile total residual amount against expected ACH deposit.

Step 5: Investigate any discrepancies — common causes are chargebacks (which reduce residuals), processor adjustments, or fee schedule changes.

For large portfolios, ISO operations teams build automated reconciliation scripts that import the CSV and compare against expected values.

If a residual amount doesn't match expectations:

1. Check the detailed breakdown — drill into the specific merchant to see per-transaction adjustments.

2. Verify the fee schedule — confirm the merchant's discount rate, transaction fee, and monthly fees match the contract you have on file.

3. Check for processor adjustments — late-arriving chargebacks, interchange downgrades, or batch errors can adjust residuals after initial posting.

4. Contact NMI partner support — open a ticket in Merchant Central with specific merchant ID, statement period, and amount in question.

5. Document everything — keep historical residual reports for tax filing and dispute trail.

NMI typically resolves residual disputes within 5-10 business days when documentation is clear.

Residual reports show YOUR earnings as the ISO partner. Merchant statements show what the merchant pays.

The merchant sees a single monthly statement with their total processing fees. They don't see how those fees split between NMI, the processor, and the ISO residual.

ISO partners should never share residual reports directly with merchants — the report shows internal cost structure and would let merchants negotiate against your margin. Merchant Central enforces this with separate role-based access: merchants don't see residual reports, only their own merchant statements.

This separation is fundamental to the ISO business model.