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Attrition Rate Calculator

Track merchant attrition and project its impact on your residual income and portfolio value.

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What Is Merchant Attrition?

Attrition is the rate at which merchants leave your portfolio -- they stop processing, close their business, or switch to a competitor. For ISOs earning residual income, attrition directly erodes your monthly income. A 3% monthly attrition rate means you lose approximately 31% of your merchants annually. To grow your portfolio, you must add new merchants faster than attrition removes them. This calculator quantifies your actual attrition rate and projects your portfolio trajectory. If new merchant additions are not outpacing attrition, your residual income is declining even if you are actively boarding new accounts. This math is the foundation of portfolio planning and valuation.

How to Use This Calculator

Enter period start and end counts

Use actual merchant counts from your processor portal. Count only actively processing merchants (at least one transaction in the last 60 days).

Enter new merchants added

Count merchants you boarded during the period. The calculator uses this to separate organic attrition from gross additions.

Review the trajectory

If merchants lost exceeds merchants added, your portfolio is shrinking. The 12-month projection shows where you will be at the current trajectory.

Key Concepts

Gross Attrition

Total merchants lost during the period, regardless of new additions. Calculated as: Start + New - End = Merchants Lost. Gross attrition rate = Merchants Lost / Start.

Net Growth

End count minus start count. Positive means your portfolio is growing. Negative means attrition exceeds new additions. Net growth is the number that drives long-term residual income trajectory.

Replacement Rate

The number of new merchants needed each month just to offset attrition and maintain flat portfolio size. At 3% monthly attrition on 100 merchants, you need 3 new merchants per month just to stay even.

Expert Insights

Attrition Is the Silent Tax on Your Business: Most brokers celebrate new merchant wins but do not track losses. A broker who boards 5 new merchants per month and loses 4 to attrition has a net growth rate of 1. At that pace, growing from 50 to 100 merchants takes 4+ years. Reducing attrition from 4% to 2% per month while maintaining the same boarding rate doubles the net growth rate.

Categorize Attrition to Fight It: Not all attrition is equal. Business closures (15-20% of attrition) are uncontrollable. Competitive poaching (30-40%) is addressable through retention programs. Merchant dissatisfaction (20-30%) signals service problems. Non-renewal (10-20%) means the merchant no longer needs MCA. Categorizing each lost merchant helps you focus retention efforts where they have the most impact.

Frequently Asked Questions

Monthly attrition of 2-4% is industry standard. Below 2% is excellent and indicates strong retention. Above 4% signals problems -- either merchant quality issues, competitive pressure, or service failures. Annual attrition of 25-40% is typical, meaning you must replace a quarter to a third of your portfolio every year just to stay flat.

Attrition is the primary driver of portfolio valuation multiples. A portfolio with 2% monthly attrition might sell for 40-48x monthly residual. The same portfolio with 5% attrition sells for 20-28x. Each percentage point of attrition improvement can increase your portfolio value by 5-8x monthly residual.

Sometimes. If the merchant left due to a fixable issue (rates, service, product fit), a targeted win-back outreach 60-90 days later can recover 10-20% of lost accounts. If they left due to business closure or fundamental dissatisfaction, win-back is unlikely. Track departure reasons to identify win-back opportunities.

Results are estimates for educational purposes only. Actual amounts may vary based on your specific financial situation, market conditions, and other factors. This calculator does not constitute financial advice.