Tuesday, April 14th, 2020
MSPs ease the business process by setting up and supervising your merchant services and deals.
They handle everything from application to pricing and seal the deal that describes the relationship between microbusinesses and other parties that take part in processing transactions.
On top of that, they handle any other additional custom payment services a company may need such as virtual terminals, POS systems, payment gateways, card terminals and so on.
Merchant service companies sometimes offer customer support for problems related to your accounts, but will often refer you to your payment processor for transaction-related issues.
In essence, they do almost everything for you and help you negotiate all matters related to merchant services.
How do Payment Processors differ?
Payment processors offer in-the-background infrastructure and services that enable the safe and secure processing of all card payments.
An MSP is therefore considered a direct processor if it arranges for processing services alongside merchant account services.
But in most cases, the merchant account service provider focuses on onboarding a retailer, and then partners with an external payment processing firm.
In essence, the MSP is the small firm that deals with a retailer’s merchant account, while the payment processor is the well-established firm that works to process payments in the background.
In many cases, the processor owns the account, the MSP only sells the offer to a merchant. Though a processing company can issue merchant accounts on its own, they prefer working with self-governing MSPs to help extend their reach.
Which Way to Go?
It’s tempting to think that a more established company—like a processor would serve you better or suggest greater offers than an MSP.
But many times that is not always true. Skipping an MSP for a processor is not the same as dodging a broker or middle person.
Processors tend to inflate their standard pricing terms. A merchant must, therefore, do a thorough negotiation. You will hardly find fair terms like waived cancellation fees in standard plans.
On the flip side, a competent MSP will ensure you get the best pricing plans, disclose all hidden fees and negotiate all deals for you.
In other words, they do all assessments and tailor the most suitable deal for your business. And on top of that, you enjoy the extra services and tools useful in running a thriving business, not to mention unswerving support on all matters related to your account.
The journey to acquiring a merchant account and processing payments can be painful and exorbitant if you don’t know where to search. MSPs can handle all the hard work and allow you to concentrate on growing your business.