Whether you use card readers and terminals or operate solely through an ecommerce platform to support online clients, one fact remains the same: You need to partner with a reliable, reputable merchant service provider to help you process credit cards and navigate securely through the payment process. Even the quickest Google search will show you that these companies are numerous. Exactly how do you know what you are doing and who to trust? Take a few minutes to absorb the information in this guide to learn what you need to know.
Merchant service providers: a broad definition.
The term “merchant service provider” is far-reaching. In general, however, it pertains to any company that assists a business client in the processing of payments. As the internet has evolved, these entities also furnish sellers with all of the security-related safeguards, point of sale equipment, and analytics they need to ensure the safety of payments while streamlining their overall operations.
What do merchant service providers do?
In general, their services fall into three distinct categories.
- Merchant account providers. After a customer buys a product or service from you, the funds can be directed to a merchant account, a secure repository where the dollars are stored until the transaction is completed.
- Aggregate payment service providers. This alternative to a single merchant account is designed to consolidate numerous businesses into one large group to cut down on costs and simplify transactions. Business owners do not have their own ID to process funds and may have difficulties with customer service issues and account closures.
- Payment gateway providers. These companies offer a pathway to securely process online payments via web applications that help to keep customers’ payment details safe and protect the merchant from liability should a breach occur.
Regardless of which of these services you choose, your merchant services provider will be there throughout. As soon as a customer swipes their card or enters their details, your payment provider sends a request to the customer’s credit card company, which then forwards the request to the buyer’s bank. That institution checks to make sure there are sufficient funds to make the purchase and screens for fraud. If all is well, the payment will be accepted, and the buyer will receive their product. You, the merchant, will get your funds, sometimes immediately but often within a few days.
What you can receive from your provider.
There are several extremely helpful tools that your merchant account provider may furnish to you once you become a client. They include the following.
- Merchant account. Think of this as a bucket into which your funds are dropped and kept safe until the transaction is completed. You are given a unique identification number to expedite transfers.
- Credit card terminal. These hardware devices connect to the internet and are used to read customers’ credit and debit cards. Most modern ones are equipped with the near-frequency communication (NFC) technology that makes contactless payments possible.
- Point of sale system. More than a simple card reader, the POS also includes analytics, inventory, and financial management software as well as reporting and integration capabilities.
- Virtual terminal. Used for remote billing and phone orders, this software turns your computer into a credit card terminal. It can be combined with a USB card reader to handle in-person transactions.
- Mobile payment system. This lets you accept payments using a tablet or smartphone connected to a card reader. When you use this equipment, you can take your business anywhere.
- Payment gateway. This web application connects your merchant account or financial institution to a payment center to facilitate secure online payments.
- Online shopping cart. This is more than just a place for holding items for purchase. It also allows the merchant to highlight products and set their brand apart, customizing and streamlining the buying experience.
When combined, these elements serve to make your merchant service provider one of your best allies in promoting the success of your company.
What to look for in a merchant service provider.
Since these companies are becoming more plentiful every day, you need to be careful to select the one that’s right for you. To that end, look for the following.
- Features customized to your business. For instance, if you are an ecommerce store, your provider should offer a reputable gateway and robust data protection features. If you plan to go global, choose a provider that lets you accept multiple currencies.
- Security features. Make sure your provider is committed to data safety and anti-fraud measures and is in compliance with the Payment Card Industry Data Security Standard (PCI DSS).
- Equipment that is easy to use, with understandable training modules.
- Reliable customer support via various channels (email, live chat, user forums, and human help desk) to assist you quickly should problems arise.
- Reasonable, transparent fees.
Before you make your final merchant provider decision, examine the whole picture: the hardware and software offered, the quality of customer service, the obligations, and price.
In-person and online sales do not occur in a vacuum. In order to succeed, you need to partner with a merchant service provider who can facilitate the diverse types of purchases your customers will make now and in the future. Be thorough now in making your choice, and you will be rewarded with solid service, higher efficiency and greater customer satisfaction for years to come.
