Tuesday, April 5th, 2022
Merchant services are bank-like services that allow businesses to accept credit and debit card payments. These services include transaction processing, merchant accounts, payment gateways, and point of sale (POS) solutions.
Merchant services are a staple in today’s world. No matter the size or type of business, you need to be able to accept credit cards. The merchant service provider you choose will have a large impact on your business, so it’s important to know what you’re looking for before signing up with a company.
Merchant Services: What do they Entail?
Merchant services are a broad range of financial services focusing on processing payments between businesses and payment facilitators, like credit card companies.
Merchant service providers (MSPs) are third-party companies that offer a variety of payment processing services to businesses, like payment processing and merchant accounts.
Merchant services typically include:
- Processing credit cards from all major credit card companies
- Accepting payments from ACH and mobile wallets
- Integrating with point-of-sale (POS) systems for in-person payments
- Providing online payment gateways for eCommerce transactions
- Setting up recurring billing options for subscription-based businesses
Why Merchant Services Matter
Merchant services matter especially for eCommerce startups searching for a place in the market. Most importantly, it connects to a payment gateway, which is an eCommerce application that authorizes payments between a payment portal (like a website) and the front-end processor or acquiring bank.
A merchant account is required in order for businesses to accept credit and debit card payments. The merchant account links your business’s bank account with your customers’ card issuers, allowing you to receive funds from those transactions.
Merchants must pay processing fees on all transactions completed through their merchant accounts, but most companies consider these fees worth it because they allow them to be paid electronically.
Last Words: Choose Based on Your Needs
The best merchant services provider for your business depends on your needs. For example, if you’re a small business with low processing volume, you may qualify for inexpensive merchant accounts with an online payment facilitator.
On the other hand, high-volume businesses may have special requirements, such as support for multiple locations or specialized card readers, that might be better met by a traditional merchant services provider.