The short answer
| Asset | What is actually sold | Pricing basis | Reference range | What moves it |
|---|---|---|---|---|
| ISO residual book | An income stream: the residuals a processor pays on a merchant portfolio | Multiple of monthly net residual | Not published on this site; see the note on third-party ranges below | Attrition curve, portability and consent rights, concentration, vertical mix, processor platform |
| Full ISO | An operating business: sales engine, agent network, technology, brand, plus the book | EBITDA, with the residual book as the floor | Priced deal by deal; the book sets the floor and the operating business sets the premium | New-merchant production, agent economics, sponsor and processor terms, owner dependence |
| Payment facilitator | Retained payments economics on sub-merchants, usually embedded in software | Retained net revenue; EBITDA once mature | 3x to 6x retained net revenue for PayFac and merchant acquiring; PayFac-as-a-Service near 8x; mature profitable processors 10x to 18x EBITDA and above | Net take rate quality, embed depth, ISV distribution, loss rate, sub-merchant churn |
| Gateway or orchestration platform | Software and connectivity that routes, tokenizes and authorizes | Net revenue, priced as software | 10x to 15x net revenue for payment orchestration; 12x to 20x for infrastructure and rails | Gross margin (70 to 85 percent), processor-agnostic position, authorization-rate lift, net revenue retention |
Reference ranges from Windsor Drake, Payments Valuation Benchmarks, benchmark 2026.09.22-1, window Q1 2024 to Q3 2026, stated against retained net revenue after interchange and network pass-through.
Why the same industry produces three pricing bases
A buyer prices what it can underwrite. A residual stream is underwritten as an annuity, a payfac as a margin business, a gateway as software.
The residual buyer is asking how long the cash lasts. The payfac buyer is asking what the retained margin is worth after the processor, the network and the losses are paid. The gateway buyer is asking what recurring software revenue with very high gross margin is worth, and whether it keeps growing without the owner. Each question produces a different denominator, and the denominators are not interchangeable: a payfac described in residual language gets an annuity price; a residual book described as a company gets discounted for the operating cost it does not have.
The ISO residual book
What is being bought
The right to receive the residuals a processor pays on a defined set of merchant accounts, net of the processor’s own share and of any downstream agent splits. Nothing else transfers unless the contract says so.
How it is priced
As a multiple of monthly net residual. The arithmetic matters because the convention hides the real yield: a book bought at 36 times monthly residual is bought at 3 times annual residual, and the buyer earns back its price only if the portfolio survives roughly three years of attrition at a stable margin. That is why the attrition curve is the first schedule a buyer builds, and why each point of annual attrition is worth more than any other single variable.
What moves the multiple
- Attrition, measured by merchant count and by residual dollars, by vintage. Dollar attrition is the one that prices the book.
- Portability. Whether the residual stream contractually transfers, and whether the processor or sponsor bank holds a consent right, a right of first refusal or a buyout formula. An unclear answer is priced as a no.
- Concentration. A handful of merchants, one agent channel or one referral partner carrying the book becomes a price deduction or an earnout.
- Industry and channel mix. Card-present versus e-commerce, regulated verticals, chargeback profile, processor platform.
- Vintage and production. A book that is still being added to is priced differently from one that is running off, which is the point at which the conversation becomes a full-ISO conversation.
Third-party published ranges
Windsor Drake does not publish a residual-book multiple, because the figure moves with rates and consolidator appetite and goes stale within a quarter. For orientation only: broker guides published in 2026 by 733Park and CT Acquisitions describe portfolio sales in the high-twenties to mid-forties as a multiple of monthly net residual, with attrition the primary driver and the top of the range reserved for low-attrition, well-documented books on major processor platforms. Those are the authors’ ranges, not the firm’s, and they should be read as marketing material from firms that intermediate such sales.
The full ISO
Selling the operating business rather than the stream changes the basis to EBITDA. The residual book becomes the floor; the premium comes from new-merchant production, the agent network and its economics, proprietary technology, and whether the business runs without the founder. Buyers normalize agent commissions, owner compensation and any residuals the seller has already sold forward. The common error is to sell residuals only while owning real distribution, which hands the buyer the operating business for nothing. The firm’s guide to selling an ISO or merchant portfolio covers the decision.
The payment facilitator
What is being bought
The retained economics on a base of sub-merchants, usually embedded in vertical software, plus the licences, registrations and sponsor relationship that allow the company to board and settle them. Volume is not revenue. Gross processing revenue that includes interchange and network pass-through is not revenue either. Buyers price retained net revenue: what the company keeps after interchange, network fees and processor cost.
How it is priced
On retained net revenue, and on EBITDA once the business is mature enough to have one. Windsor Drake’s benchmarks place PayFac and merchant acquiring at 3x to 6x retained net revenue, with a 40 to 60 percent gross-margin profile capped by interchange, and PayFac-as-a-Service near 8x on software margin earned on a 20 to 40 basis-point net take. Mature, profitable processors and infrastructure assets trade at 10x to 18x EBITDA and above. The payments valuation calculator builds the number from volume, retained take rate, software fees, retention and company-borne losses.
What moves the multiple
- Net take rate quality. How many basis points the company keeps, how stable they have been through pricing cycles, and what share is contractual versus discretionary.
- Embed depth and distribution. Payments the merchant cannot leave without leaving the software price above payments bolted onto a resale.
- Losses and compliance. Company-borne chargeback and fraud losses, reserve requirements, and the underwriting and monitoring record the sponsor bank has already reviewed.
- Who holds the registrations. The sponsoring acquirer holds the network registrations; a buyer that must re-sponsor the portfolio prices in the time and the re-underwriting. See change-of-control approvals.
The gateway or orchestration platform
A gateway sells software and connectivity: routing, tokenization, authorization optimization, reporting. Its revenue is net by construction, its gross margin runs 70 to 85 percent, and it is priced as software. In Windsor Drake’s benchmarks payment orchestration trades at 10x to 15x net revenue and infrastructure and rails at 12x to 20x, the richest tiers in payments. The drivers are the ones software buyers always underwrite: a processor-agnostic position that does not depend on one acquirer, measurable authorization-rate lift that merchants can see in their own numbers, net revenue retention, and direct network connectivity that is scarce and carries little liability. A gateway whose revenue is really a resold processing margin is priced as a payfac, not as software, which is why buyers split the revenue line before they price it.
The errors that cost a turn of value
- Presenting gross processing volume, or gross revenue including interchange, as revenue.
- Mixing bases: quoting a residual multiple for an operating business, or an EBITDA multiple for a residual stream.
- Leaving portability unresolved until the buyer asks. Confirm consent rights with the processor and sponsor before launch.
- Letting a payfac be priced as an ISO because the software story was never separated from the payments story.
- Taking the first call. The spread between buyer types for the same book is wider in payments than in most categories; see who buys payments companies.
Questions founders ask
How is an ISO residual portfolio valued?
On a multiple of monthly net residual, the income left after the processor’s share and any agent splits. The multiple moves with the attrition curve, portability of the residual stream, concentration, vertical mix and the processor platform. A multiple of monthly residual divided by twelve gives the equivalent multiple of annual residual.
How is a payment facilitator valued?
On retained net revenue, never on payment volume: 3x to 6x retained net revenue for PayFac and merchant acquiring and near 8x for PayFac-as-a-Service in the firm’s benchmarks, with mature profitable processors at 10x to 18x EBITDA and above.
How is a payment gateway or orchestration platform valued?
As software: 10x to 15x net revenue for payment orchestration and 12x to 20x for infrastructure and rails in the firm’s benchmarks, driven by gross margin, a processor-agnostic position, authorization-rate lift and net revenue retention.
Sources. Windsor Drake, Payments Valuation Benchmarks, benchmark 2026.09.22-1 (tier ranges, gross-margin profiles, EBITDA range for mature processors), and Who Buys Payments Companies. Third-party residual ranges as published by 733Park (Merchant Portfolio Valuation) and CT Acquisitions (Payment Processing Business Valuation), accessed October 1, 2026; both firms intermediate portfolio sales and their ranges are their own. Figures on this page are reference ranges, not a valuation of any company.
Windsor Drake is an independent sell-side M&A advisory firm headquartered in Toronto, advising founder-led fintech and payments companies. Windsor Drake is not a registered broker-dealer and does not offer, sell or place securities. Published October 1, 2026.