Your Merchant Services Provider is a vital partner that can help you operate and grow your business. They facilitate credit card processing and provide other important services for your business. Essential services offered by a merchant services provider include:
Accepting payments from your customers via credit, debit, and electronic payments allows for seamless transactions.
Securely managing PCI compliance when processing and storing payment information for your business, making your customer data safe.
Providing your business with technology to track payments, understand business data, and collect outstanding invoices.
Who Is Considered a Merchant?
A merchant represents a person or company that sells goods or services. Merchants can sell items in-person or online (sometimes called eCommerce merchants). Most merchants today operate both in-store and online.
Different Types of Merchants:
- eCommerce Merchant: A merchant who sells items online.
- Retail Merchant: A merchant who sells items that they purchase from manufacturers.
- Wholesale Merchant: Merchants/manufacturers who sell items to retail merchants.
- Affiliate Merchant: Merchants who use affiliate networks to sell goods.
- Direct-to-consumer (DTC) Merchant: Merchants who sell items to consumers that they themselves create.
DTC merchants have become quite common in recent years, as selling goods on the internet has a very low barrier to entry. Most DTC companies are still wholesale merchants, selling their items to retailers who then sell the item to the consumer.
What Is a Merchant Account?
A merchant account is a bank account specifically established for business purposes where companies can make and accept payments. Note that a merchant account isn’t a typical bank account. This is a basic assumption that poses a lack of clarity for most business owners. Merchant services accounts allow businesses to accept credit and debit card transactions or other forms of electronic payment from customers, with the aid of a payment gateway.
Merchant account services often come with added fees, but also an array of services. Most often the merchant has to cover the transaction fees from payment processors, the credit card association, and the issuing bank for the merchant account. To that effect, it’s perhaps savvier for the merchant to look out for an option that’ll help cut down the cost per transaction.
On the other hand, a low processing fee doesn’t guarantee reliable service and support in the long run.
Merchant Account Provider vs. Merchant Services Provider
While the two entities overlap quite a bit, there are some distinctions between merchant services providers and merchant account providers.
The former is a much broader term that’s used to describe an organization that has various offerings for merchants—including payments, technology integrations, business services, etc.
Merchant account providers typically stick to helping businesses set up their merchant accounts—i.e., the type of bank account that enables you to accept credit and debit card payments.
In many cases, these terms are used interchangeably.
How Does Merchant Services Work?
Merchant services companies provide businesses and individuals with the tools and requirements to accept credit cards, debit cards, and other forms of electronic payment for transactions to take place.
How Easy Is It To Open a Merchant Services Account?
A merchant services account establishes a business relationship between a merchant services provider and a business. Doing so provides the business with the ability to accept debit and credit cards, contactless payments such as Apple Pay, eCommerce transactions, and more.
Merchant Services Products
The next essential part of what makes up “merchant services,” is the different tools available for payment processing. The products that merchant service providers offer to businesses in order for them to actually be able to accept and process payments in a way that works for them and their customers.