Thinking about accepting credit and debit cards for the first time? Just starting your business? In either case, you’re probably realizing that there are new concepts and terminology that you must learn before moving forward. One of the most important concepts to understand is the entity known as a merchant services provider (MSP).
What is a merchant services provider?
In its simplest terms, an MSP is a company that makes it possible for a merchant to accept credit and debit card payments, as well as to conduct other types of transactions. Many of these companies now also offer other services, including access to secure payment gateways and point of sale software, as well as back-office solutions to simplify employee, customer, and inventory management. There are several types of MSPs.
• Merchant account providers. These companies provide you with a bank account that your credit card payment proceeds can be deposited into after processing. Larger MPSs tend to integrate with the major credit card networks (Visa, Mastercard, etc.) to process transactions while the smaller vendors outsource these services.
• Payment services providers. Signing up with one of these companies enables you to accept credit card payments without the need for a merchant account. Instead, your account is combined with those of many other merchants. On the downside, your account will be more prone to termination or freezing without notice, and you will not have a unique merchant ID (MID) number.
• Payment gateway providers. These give you the software and network connection necessary to securely process customers’ ecommerce payments. Some of these providers also offer merchant accounts while others do not. In the latter case, you’ll need to obtain one elsewhere and integrate it with your gateway software.
What services will I need?
Your merchant services provider can connect you to several vital capabilities that you’ll require if you are accepting electronic transactions. These include the following.
• A merchant account where your payments are stored after they are authenticated and approved.
• Credit card terminals that read physical cards and transmit data to the credit card processing company. Many of today’s readers are also capable of taking tap-and-go and contactless payments via customers’ digital wallets on their smartphones.
• Point of sale (POS) systems that combine the payment services of a credit card terminal with a large display and robust software. You can harness the many capabilities of these systems to manage employees, customers, and inventory, send invoices, and create reports.
• Mobile POS systems that enable you to use your tablet or smartphone as a credit card terminal.
• Payment gateway access that facilitates secure online payments.
• A virtual terminal that transforms your computer into a credit card terminal. With this software, you can enter the card information manually or through the use of a connected Bluetooth card reader.
As you can see, your MSP can offer you much more than just a repository for your profits. If you do your homework and partner with a provider that fits best with your goals and business model, you should find them to be an invaluable ally as you offer an array of convenient payment options to your customers.