When it comes to accepting credit and debit cards, the method you choose may cost you time and money. Alternatively, it could save you revenue while giving you extra benefits. Selecting the breakdown most suited to your requirements depends upon the amount of time you are willing to invest and the amount of information on merchant services you can process.
Merchant services refer to a broad category of finance-related services required by every business entity, which includes services like hardware, software, and financial relationships. Specifically, they are tools that enable businesses to accept secure transactions, generally credit or debit card payments or other electronic payment methods, from their customers.
Merchant service providers are the intermediary link between the bank, the individual or the organization receiving the transaction, and the customer providing the funds for a particular good or service.
The merchant service provider will provide businesses and individuals with the necessary tools needed to accept credit and debit card payments and other forms of electronic payments. Several entities act as merchant service providers, also known as merchant account providers, credit card processors, acquirers, acquiring banks, or processors.
Merchant accounts or merchant services accounts are responsible for establishing an official relationship with a merchant services provider and enable a business to process card payments or other forms of contactless transactions (like Apple Pay, eCommerce payments, etc.).
When it comes to financial relationships and, in this case, credit/debit card processing and transactions, what better place to start than your bank? After all, you already have an established relationship and trust them on financial matters.
But, the bank may not always be the best option. Here’s how it works-
First, to accept credit cards, you will need to apply for a merchant account. This requires acquiring a business license. To process an application for merchant credit card services, documents like credit histories, employment history, bank statements, and more will be necessary. Getting approval for your business card services can take several days, depending upon the size and type of your business and your past experiences.
Once your application is approved, the bank will either help you directly with payment processing, card reader hardware, and other software like POS systems and other merchant services, or it will refer you to a vetted acquiring partner. This will depend upon the size of your business as well as the bank’s capacity. A third party is more likely to handle your requests rather than your trusted bank directly.
A bank or a third party, in either case, you will end up with a ‘bundled’ solution.
This means that your merchant services which will include payment processing, hardware, and software, will be marketed as one big package but will come from different sources. While in theory, the result should work, products from different companies may not blend as smoothly. Additionally, in the long-term, all those systems working together may cost you a hefty price tag in maintenance.
The next option to consider is an independent sales organization or ISO. An ISO will generally approach you proactively, or you could choose to directly reach one yourself through advertisements or online. Sometimes, smaller banks that may not have an acquiring partner will refer you to an ISO instead.
To initiate, you will need to open a merchant account by filling out a lengthy application that may require manual credit checks, bank statements, and employment histories.
The problem lies in the costs. While most ISOs will advertise very low rates, you will probably end up paying numerous additional fees. When working with an ISO, you will have to be alert while agreeing to the contract terms and the total amount you will pay.
Like banks, ISOs also provide ‘bundles’ of hardware, software, and credit card processing from different companies.
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We focus on fintech, customer service, and most importantly, your business, as well as customer satisfaction and exclusivity.
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