Merchant Service Provider

What is a Merchant Service Provider? Definition, Types, Examples

Suppose you have recently begun your own company or choose to add credit and debit cards as payment options. In that case, you may be overwhelmed by a dizzying set of unfamiliar words and definitions that you have never seen before. That is why the first rudimentary phrases you may need to educate yourself with are the type of business organization referred to as a Merchant Services provider.

Your Merchant Service Provider is a crucial partner that can help you run and expand your company. It simplifies the issuing of credit cards and provides your company with other essential resources. Important features provided by a Merchant Services provider include:

  • Accepting credit, debit, and electronic payments from your customers to allow for smooth transactions.
  • Managing PCI enforcement safely when collecting and retaining payment information for your business.
  • Making sure that your consumer data confidential.
  • Providing technology for the organization to manage purchases, understand business facts, and receive overdue invoices.

To further understand the concept of a Merchant Service Provider, let’s first get down to some fundamental definitions.

What is a Merchant?

What is a merchant?
What is a merchant?

“Merchant” is a word used by payment service providers to refer to their consumers. Customers, or merchants, are companies that approve of card payments from their clients in-person, online, or over the phone. A merchant represents an entity or corporation that offers products or services.

Basically, there are two styles of merchants: retail and wholesale. With the growth in online retail success in an ever-growing digital environment, new forms of merchants known as eCommerce merchants have appeared.

An eCommerce merchant refers to a group that primarily sells products or services on the Internet.

According to the PCI, merchants are defined as:

“…any entity that accepts payment cards bearing the logos of any of the five members of PCI SSC (American Express, Discover, JCB, MasterCard or Visa) as payment for goods and/or services.”

What is a Merchant Service?

Merchant Service
Merchant Service

You will first need to know the idea of Merchant Services to fully comprehend what a Merchant Service Provider is and what benefits can it bring about for your company.

The idea behind Merchant Services is literally just transferring money from a customer’s wallet into a merchant’s bank account.

Things were pretty straightforward before the Internet came along. In the past, Merchant Services counted on countertop terminals to input card purchases, processing services to accept the purchase, and Merchant Accounts to deposit, withdraw the money.

Today, with eCommerce opening up far more opportunities to sell products from anywhere rather than just mail and telephone orders, it is a much more complex landscape. Software products like Payment Gateways empower consumers to pay online directly. Simultaneously, inventory tracking and online monitoring systems enable retailers to control nearly any parts of an organization on a single device.

If you run a physical shop, Merchant Service is of great importance since the world is turning to cash-free more than ever before.

If your company runs online and wants to obtain immediate payment for services provided, Merchant Service is even of greater importance. You will do away with check payments and money transactions (they are always a headache for anyone involved) by turning to online Merchant Service systems.

What is a Merchant Service Provider?

What is a Merchant Service Provider
What is a Merchant Service Provider

“Business entities that are not a payment brand, involved in the processing, storage, or transmission of cardholder data on behalf of another entity. This also includes companies that provide services that control or could impact the security of cardholder data.”, according to PCI.

Merchant Services providers are often referred to as acquirers, processors, or Merchant Account providers. The word “Merchant Services Providers” is generally used by business owners as a method to include various entities such as Payment Services Providers (PSPs), Payment Gateway Providers, Merchant Account Providers, and any other form of business that enables customers to take different payment options besides just cash or physical checks.

How does the Merchant Service Provider work?

Here, we have broken down the process into seven steps that detail each step shown below:

How does it work?

  • Stage 1: By swiping or putting the credit/debit card into the point-of-sale (POS) device of a retailer, customers activate a purchase.
  • Stage 2: The Merchant’s payment program sends the Transaction information to the Merchant Service Providers (money amount, card number, bank name, etc.).
  • Stage 3: The Merchant’s Merchant Service Provider transfers account details (Visa, Discover, MasterCard, etc.) to the relevant card association.
  • Stage 4: The association of cards transfers accounts data to the bank of the customer.
  • Stage 5: The bank reviews the payments/credit cap available to the consumer and approves the payment accordingly. Approval for payment is sent back to the card association.
  • Stage 6: The card association reaffirms authorization of the purchase with the Merchant Service Providers.
  • Stage 7: The merchant finishes the transaction and provides a receipt for the purchase to the buyer.
Card-Based Transaction
Card-Based Transaction

9 Most common types of Merchant Services

Most providers of Merchant Services deliver a wide range of products and services to enable merchants to accept payments by credit/ debit card, as well as manage their stock levels and monitor other areas of the business.

All companies, along the way, will need either a Merchant Account or a Payment Service Account (if you have a PSP signed up).

Bear in mind that there are a lot more types of Merchant Services you can choose from in addition to these said two. As a merchant, your demands will vary depending on the circumstances and the type of your company; that is why you need to choose wisely since some features will only be of value to specific merchants’ types.

For example, you would not need a Payment Gateway if your company is a starter or does not sell anything online.

Below is a short description of the most basic forms of Merchant Services:

1. Merchant Accounts

Merchant Accounts
Merchant Accounts

A Merchant Account is an account where the money is stored from processed transactions. That money is then shifted to a business account of your choice (such as a business checking account) by your supplier.

A Merchant Account would be required for any entity that wants to accept credit cards or debit cards as a means of payment.

Though most Merchant Account providers have full-service Merchant Accounts, those from PSPs lack a particular merchant ID code. Merchant ID codes make it easier for your business to correctly recognize payment processing systems, providing you some fraud detection and adding consistency to your account.

A Merchant Account will help you to get:

  • Increased sales: You read it right because credit card orders are more outstanding in number than check & cash orders these days.
  • Faster checkout: As processing credit card payment is immediate, it speeds up the checkout queue.
  • Better financial value than cash: Due to the extensive order numbers, it is cheaper to process cards.
  • Security: You will need to be more cautious when you work with cash, as the risk involved is high. Dealing with massive volumes will lead to confusion, and workers are more prone to sending out the wrong amount of cash.
  • Many options: The more payment options you offer to buyers, the more you reduce the risk of missing the transactions.

However, you may also need to take into consideration these potential setbacks:

  • Fees: Acknowledging credit cards means that you may also take on additional costs to manage the business. Initial set up fees, and increased credit card transaction fees, are expected when working with most Merchant Account Providers. While these payments are reasonably minimal, they will add up and decrease your earnings over time.
  • Additional Job: Adding solutions for card transactions also means more accounting work to track and manage all of your card payments, credit card transaction costs, and other fees associated with Merchant Accounts and Payment Gateways.
  • Fraudulent transactions: Finally, the inclusion of payment options for credit and debit cards raises the possibility of cyber theft and other security concerns. Credit cards are quickly robbed, and the risk of illegal card usage, therefore, increases. The exchange of confidential personal and financial details is made more accessible through card payment gateways. If the Merchant Account’s security features do not safeguard this information, it can be breached.

2. Credit/Debit Cards Terminals

Credit/Debit Cards Terminals
Credit/Debit Cards Terminals

It is compulsory that a retailer have a hardware product that can interpret the credit and debit cards of your clients and then pass the data to the distribution network of the provider.

Through either an Ethernet connection or a landline, traditional countertop ports can connect to processing networks. There are also wireless versions available, but they appear to be larger and heavier, and more costly than conventional models and require a wireless data plan to run (usually about $20.00 per month).

Terminals may be purchased directly or rented from your provider of Merchant Services. It is highly suggested that you either buy your Terminal straight from your provider or from a third-party supplier.

Terminals require a heap of software that must be set up before transactions can be accepted. You will have to get it re-programmed to install the software if you buy your Terminal from a third-party provider.

3. Point of Sale (POS) Systems

Point of Sale (POS) Systems
Point of Sale (POS) Systems

Being able to monitor sales and other critical transactions accurately is one of the most essential needs of any organization.

While many small or new companies usually manually handle and keep track of transactions with a paper document or use spreadsheet software such as Excel, POS (Point of Sale) systems offer automated solutions for bookkeeping along with many other benefits that can help smaller companies survive in a competitive environment.

To be more specific, a POS system helps a company to control revenue efficiently, measure profits/expenses in detail, monitor stock, analyze sales patterns, as well as allow users to keep an eye on staff and other supply chains.

The point of sale program effectively incorporates administrative tasks, bookkeeping, and monitoring of transactions into a small automated system that costs much less to use than hiring staff to perform these duties.

Usually, a Point-of-sale device comprises software installed on a cashier terminal that interacts with another standard computer storing transaction information and other sensitive material that is important to maintaining a company’s profit margins.

Many providers offer additional gadgets such as cash drawers and check scanners, enabling you to accept any form of payment via a single device.

It is safe to say that the benefits of using a POS system extensively outweigh any drawbacks. In terms of revenue and consumer footfalls, many would regard the expense involved as a burden on the company and stick with traditional billing approaches. However, considering the benefits of converting to a POS system, it will help the organization in the long run.

With an estimated market cap of nearly $15 trillion, the POS market is massive and highly lucrative, up from less than $10 trillion just two years ago. In addition, by 2020, the demand is expected to expand by another $5 trillion.

4. Mobile Payment (mPOS) Systems

Mobile Payment (mPOS) Systems
Mobile Payment (mPOS) Systems

These systems enable you to use your smart device as a credit card terminal.

Most mPOS units consist of a peripheral credit and debit card reader that is used in tandem with a smartphone or tablet app; others are a purpose-built portable terminal that acts as a bridge between a wireless barcode reader and a debit device.

mPOS system is relatively easy to use. For example, at big supermarkets, salespeople can use a wireless barcode reader and mPOS to complete payment immediately, without having to guide a customer all the way back to the old POS.

Besides, customers do not have to wait to pay. Electronic receipts may be transmitted directly from the Terminal to the client’s email address, reducing the possibility of missing receipts if a customer requests a return or an exchange.

It is not to mention that certain mPOS providers, such as PayPal, don’t require contracts.

Bear in mind that the mPOS system is not flaw-proof. Some may complain mPOS services are susceptible to cyber-attack.

Some services will keep your money longer than the traditional POS systems, so make sure the terms are clear before deciding to work with any mobile POS service.

Furthermore, as mPOS operates online, a disrupted or unstable connection can be deadly to your company, especially outdoor vendors. If you can’t be confident that your wireless barcode scanner, mPOS terminal, or card reader mobile would operate smoothly, then it is not the best decision for you to deploy an mPOS device.

5. Payment Gateway

Payment Gateway
Payment Gateway

A Payment Gateway is essentially software that connects your website and your provider’s distribution networks, enabling you to make transactions over the Internet.

Most gateways provide recurring billing support, a database for consumer information processing, and security functionality such as encryption or digital signatures to secure the clients’ data.

The use of an online payment portal has quite a few benefits. Security is the most significant advantage, perhaps. A Payment Gateway guarantees that the card data is transmitted safely from the customer to the retailer and from the merchant to the payment processor, the process is extremely confidential.

Another excellent benefit of a Payment Gateway is that they allow business owners to substantially grow their client base. With anything relating to processing and currency exchange being done by the payment processor, the company can conveniently receive payments from consumers worldwide.

Nothing will ever be without risk, and the same for the handling of online payments. Although Payment Gateway providers make substantial security investments, there have been incidents where data breaches have led to the disclosure of customers’ confidential information.

Charges and expenses can also be unaffordable, so much that they can cut away a large portion of the gross margin. Since not all retailers require a gateway, providers typically charge a monthly gateway fee to use this feature (around $25.00).

6. Virtual Terminal

Virtual Terminal
Virtual Terminal

Put it simply; a virtual terminal is a protected web page in your internet browser where you can generate card payments online. It is named “virtual” because it operates like a debit/credit card terminal, albeit by a non-physical application of software rather than a real one. Manual transactions are usually executed without the cardholder present.

Transactions can also be inserted manually or swiped using an additional USB-connected card reader. Mail order/telephone order firms that do not have an eCommerce platform most often use virtual terminals.

Virtual Terminal can be a boon to your wallet if applied correctly. You can process payment quickly and conveniently without needing your customer to be present (if the customer is present, for authentication and verification purposes, you would need a card reader that can carry out a chip and PIN or contactless payment instead)

Besides, you do not need to pay for an expensive operating system like POS or commonly costly credit card machines. It is not to mention that if you sell entirely online, you don’t even need to spend on a cash box. There are more independence and flexibility – as long as you have a connection to the Internet, you can receive payments anywhere and anytime.

However, if you do not apply wisely, you may suffer from some backlashes—for example, payback charges (you need additional security mechanisms to allow card-not-present purchases). Also, fees for transactions where the card customer is not present are typically higher than for payments from the card machine.

7. eCheck (ACH) Processing

eCheck (ACH) Processing
eCheck (ACH) Processing

Basically, eChecks, also often referred to as ACH payments, are an automated way of submitting a service check. Unfortunately, e-Checks are only provided in the US and with US bank accounts.

The way the system works is relatively straightforward: the customer enters his/her checking account number and routing number (on the lower part of your paper checks, the two sets of bold numbers). The money is sent from the user’s bank account to yours via electronic transfer.

The first and most noticeable gain of having eCheck Processing is providing more options for the customers. There are a lot of reasons why people choose one form of payment over another. It may be because, on an upcoming holiday, they plan to use their credit card and want to set aside some credit; it may also be they do not wish to enter their credit card information.

The more choices you give them to make a payment, the higher the likelihood that the payment will eventually be made.

Also, eCheck Processing has cheaper rates for sales. eChecks usually has a low flat rate (typically $0.50-$2) instead of one percent cost like the majority of transaction fees, allowing you to save lots of money on large-value transactions.

If you are running a B2B company charging $5,000 / month/client, you could save hundreds of dollars a year from one client. Now, imagine this amount with all the customers throughout the next two years … as you see, this adds up!

Supporting eChecks means that you no longer need to open mail, go to the bank and withdraw the money, freeing your staff so much more time money. You will also enhance customer’s experience and retention rates by reducing the number of ways they deal with their monthly bills. Don’t make them have to perform separate payments; eChecks are enough.

The only and only downside of eCheck Processing so far is its being slower than other payments. Although payments are getting significantly quicker over the ACH network, they still tend to be slower than credit cards. Often, it takes up to a week for payments to process, which could be an issue if your company is small and running on a small budget.

8. Merchant Cash Advance (MCA) / Small Business Loans

Merchant Cash Advance (MCA)
Merchant Cash Advance (MCA)

A Merchant Cash Advance (MCA) operates as a loan, but it is more like a cash advance. The amount of money will vary depending on the credit card sales in a Business’ Merchant Account.

Merchant Cash Advance suppliers analyze potential losses and evaluate credit criteria differently than a banker or other lenders. To decide whether a company can pay back the advance in a timely fashion, they look at regular credit card receipts.

In terms of how Merchant Cash Advance works, first, the lender gives the borrower the amount required. The borrower pays off the loan by enabling the lender to access its credit facility. When the borrower has a new purchase, a small number of the sale is given to the lender until the loan is paid off.

On the upside, a business owner may apply for a Merchant Cash Advance and have funds reasonably quickly, often as fast as one day after acceptance, into a business checking account.

Many smaller businesses find a short-term loan to be a solution. And with a solid financial profile, most can use a business credit line to fulfill potential cash flow for short-term requirements.

On the downside, Merchant Cash Advance fees can be significantly higher than other funding choices, so it is crucial that you consider the conditions given to make an educated decision on whether or not an MCA sounds good to fulfill your needs.

Besides, you may not be able to ask for a large amount of money. As the debts are paid off way earlier, they usually involve modest amounts so that the debtor won’t be overwhelmed with large monthly payments.

See more: Merchant cash advance, how does it work

9. Shopping Carts

Shopping Carts
Shopping Carts

The software for shopping carts is targeted at eCommerce retailers who need a more sophisticated shopping interface or wish to modify their website’s functionality. One of the most prominent shopping carts online is Shopify. Check compatibility with your Merchant Services provider before selecting an online cart.

You must analyze your company to decide whether you need a shopping cart on your web. A shopping cart is vitally important if you have a wide range of items that would be scattered over several sites. You do not need a shopping cart if you have a limited number of things that can be put on one page.

Three most common types of Merchant Service Providers

Three most common types of Merchant Service Providers
Three most common types of Merchant Service Providers

For all the economic developments happening, it is important to provide your clients with a multitude of payment choices. Wallet management technologies such as electronic wallets, virtual Terminal, and touch-free or mPOSs increase possibilities for maximizing profits and providing a more streamlined interface for the consumers.

As we have discussed above, Merchant Service Provides will help you do just that.

However, every Merchant Service Providers has some unique features that cannot find anywhere else. In other words, not all providers of Merchant Services have the same features, but most fall into one of several groups allowing them to distinguish them a bit from their rivals. The most popular categories of providers for Merchant Services include the following:

1. Merchant Account Providers

Sooner or later, most small business owners will need to be ready to accept and process credit card payments, as undoubtedly cards, rather than hard cold dollars, will be the preferred payment method of the majority of their clients and buyers. But to do so, you would need a reputable Merchant Account Provider.

Simply put, a Merchant Account Provider will provide you with a Merchant Account and credit card processing services to make sure that anytime a customer pays by credit or debit card, do not have to wait for your customer to pay off their credit card bill to get paid, or in other words, you can obtain your money immediately.

Your Merchant Account Provider keeps your company’s money received from the credit card purchases until they are converted to your business bank account.

Although you can set up a Merchant Account from all Merchant Account providers, only a handful of the larger firms can now provide processing facilities across the credit card networks (Visa, Mastercard, American Express, etc.) in order to accommodate a broader range of customers.

These businesses are referred to as direct processors, including market giants such as First Data, Elavon, and TSYS Merchant Solutions. The majority of other Merchant Accounts Providers only count on one of these exclusive processors to handle the buyers’ payments.

Many Merchant Account companies also sell business owners additional goods and services, including the requisite hardware to handle credit card transactions (also known as POS terminals), in addition to supplying you with a good Merchant Account.

2. Payment Services Providers (PSPs)

Getting a Merchant Account is a smart idea. However, if your company is only small-scaled or barely starts, you may not need Merchant Account to accept credit or debit card payments.

A payment service provider (PSPs), such as Square or PayPal (see our review below), can give your business the ability to accept credit card payments with no specialized Merchant Accounts needed.

Instead, the Payment Services Provider will group your account with other merchants’ accounts, and you will not possess a particular merchant ID number.

The Payment Services Provider works side by side with acquiring banks (payment processors) to control the whole purchase process from the beginning to the end, which means that from the moment a customer inserts their credit card information to the moment the money arrives in the bank account of the merchant, the Payment Services Provider is held responsible.

This system’s advantage is that the account costs and long contract terms that frequently come with a conventional Merchant Account are practically gotten rid of.

Merchants operating for a supplier of payment systems will save money because the costs for using a Payment Services Provider are much cheaper than the expense of combining individual forms of payment. This is because the Payment Services Provider gets high volume processing discounts and is already set up to deal with many payment options.

On the downsides, these accounts are more likely to be frozen or closed without warning, and customer service options are not as extensive as they are for a Merchant Account with full service.

For companies that only handle a few thousand dollars a month in credit/debit card transactions or only operate on a seasonal basis, PSPs are an excellent choice.

3. Payment Gateway Providers

The advent of eCommerce has given rise to a new kind of Merchant Account provider: Payment Gateway Providers.

The Payment Gateway enables your company to accept cards and other digital payments from your customers. Basically, Payment Gateway Providers will act as an intermediary between the customer and the payment processor. They also do other tasks like checking for fraud, for example.

Let’s look at the key stages involved when a customer makes a purchase online to understand the context further:

  • At online checkout, the user places an order and generates a transaction.
  • Before submitting it to the payment processor, the Payment Gateway encrypts the payment details of the client.
  • Then the payment processor tests the transactions’ authenticity, checking with the issuing bank behind the card or other payment forms.
  • The payment system of the customer (PayPal, Visa, etc.) receives the processor’s data and checks whether the buyer has the needed amount of money to pay for the transaction.
  • The Payment Gateway collects the processor’s permission and sends it to the site, and finishes the transaction.

These businesses will provide you with a Payment Gateway that you may use to accept online payments. They may not necessarily give you a Merchant Account to go with it.

Authorize.net, one of the biggest and oldest gateway services, provides you an option between one of their Merchant Accounts or using their gateway for your current Merchant Account.

A gateway-only service is provided by other providers, such as PayTrace

8 best Merchant Service Providers examples

Every cent matters when it comes to improving the operations of your company. This is why it is so important to find the finest Merchant Service Provider for your company in order to expand it and further satisfy your target market. In the United States, there are over 1000 money processing providers. Let’s find out some of the best Merchant Services providers for your online store in 2020.

1. Stripe

STRIPE
STRIPE
  • Fees: Stripe takes a straightforward approach. They charge you a flat rate of 2.9% + 30 cents per successful purchase if you’re doing below $1 million in volume annually. This rate differs depending on the countries, but it is always fixed
  • Credibility – Stripe is an online processor that is well esteemed. Thanks to a straightforward pricing approach, they operate primarily online and have a very broad clientele.
  • Terminals and Systems: Stripe has Virtual Terminal. The rates per Terminal vary, and it is important to contact Stripe for the most up-to-date prices.

2. Shopify

Advanced Shopify (Advanced features for scaling your business)Shopify (Everything you need for a growing business)Basic Shopify (All the basics for starting a new business)
Monthly priceUSD: $299 / monthUSD: $79 / monthUSD: $29 / month
Online credit card rates2.4% + 30 cents USD2.6% + 30 cents USD2.9% + 30 cents USD
In-person credit card rates2.4% + 0¢ USD2.5% + 0¢ USD2.7% + 0¢ USD
Third-party Payment Processors 0% if you are using Shopify Payments.0.5%1.0%2.0%
Multiple payment methodsSupportedSupportedSupported
  • Fees: Shopify’s price differs considerably based on what you choose among the three plans they offer. They have a Basic, Standard, and Advanced package to select from. The more expensive plans has lower transaction fees at the expense of more costly monthly fees
  • Basic$29 per month, with 2.9% + 30 cent per online transaction.
  • Standard$79 per month, with 2.6% + 30 cent per online transaction.
  • Advanced$299 per month, with 2.4% + 30 cent per online transaction.
  • Credibility: Shopify is primarily used by small and medium-sized enterprises and is widely respected by companies of that category.
  • Terminals and Systems: Shopify has an online and retail POS terminal all-in-one called the “Shopify Retail Pack.” It is planned to provide online as well as offline Processing of items in both brick and mortar stores and online stores.

3. Online merchant services Quickbooks

Online merchant services Quickbooks
Online merchant services Quickbooks
  • Fees – For swiped transactions, Quickbooks requires a 2.4 percent commission, 2.9 percent for invoiced transactions, and 3.4 percent for manual transactions. Each charge includes an extra 25 cents attached to each fee per purchase.
  • Credibility – Payment Processing for Quickbooks focuses on web and smartphone processing. They are considered to work well for businesses that already use Quickbooks’ accounting tools to approve payments for their private or corporate accounting.
  • Terminals and Systems – Quickbooks has a range of products available on their website and if you are interested, feel free to contact them.

4. Paypal payment processing

Paypal payment processing
Paypal payment processing
  • Fees – PayPal Payment Processing charges 2.9% + 30 cents per swiped transaction, and 3.5% + 15 cents per keyed transaction.
  • Credibility – PayPal is a service provider for medium to small business retailers. They are more renowned, though, for handling smaller online purchases. PayPal is also famous for its security and consumer protection that can keep you protected online.
  • Terminals and Systems – PayPal provides a virtual terminal to process payments by credit card. If you’re curious, “How long does it take to establish a Merchant Account with PayPal?”; the answer is you may wait five business days when PayPal attempts to set up your Merchant Account with your bank account

5. Amazon pay

  • Fees – The payment SDK from Amazon manages the purchase and transfers the money into the account, minus the per-transaction fee. Amazon Pay costs 2.9% + $0.30 per domestic transaction. (This is typical pricing for most payment channels for e-commerce.) E.g., if on your website, a $10 transaction is made, your overall transaction fee will be $.59. Usually, Amazon Pay purchases are finished on the same day.
  • Credibility – Amazon Pay, a new processor, primarily processes online. On the Internet, they have high ratings and work well for medium-sized firms.
  • Terminals and Systems – Amazon Pay uses a virtual terminal primarily. Prices can vary, so it’s best if you contact Amazon directly.

6. Braintree

Braintree
Braintree
  • Fees – For all purchases, Braintree charges a flat rate of 2.9 percent + 30 cents.
  • Credibility – Braintree, a PayPal division, is almost entirely processed online. In addition to being eligible to accept all significant credit cards, such as Visa, Mastercard, and American Express, Braintree’s extra advantage is the option to accept PayPal and PayPal credit cards.
  • Terminals and Systems – Braintree operates almost entirely online, as described earlier. They offer an in-store, wireless card reader, in addition to providing a virtual terminal. However, the card reader is intended for sales in small volumes and is not suggested for larger shopping centers.

7. Paysimple

  • Fees – PaySimple includes two distinct types of monthly payment; Pro or Enterprise. Pro begins at $49.95 a month, and $99.95 a month for Enterprise. The distinction between the two pricing approaches is that while Enterprise has tailored prices depending on what the company owner needs, Pro charges a fee of 2.49 percent + 29 cents per order.
  • Credibility – PaySimple may be used by an online retailer or an in-store enterprise, but it is more highly recommended for smaller companies.
  • Terminals and Systems – PaySimple provides online businesses with a computer terminal, a storefront credit card terminal or iPad POS system, and a smartphone app that can accept mobile payments for on-the-go businesses.

8. Bluepay

  • Fees – They charge several fees, including an early termination fee on top of that. Though the company does not publicly list fees on its website or program guide, some users review state that a swipe transaction costs 2.39% and 25 cents; and 2.99% and 20 cents for key-in transactions.
  • Credibility – BluePay has a negative reputation mainly due to its pricing strategy and costly, undisclosed fees and termination fees, difficulty in terminating or altering accounts, and that even after closing their account, BluePay continued to bill clients. Many firms that vote for BluePay are medium-sized.
  • Terminals and Applications – On their website, BluePay proclaims that they are compliant with all main terminal types.

How to choose a Merchant Service Provider for your business?

With all the fantastic benefits a Merchant Service Provider can bring about to your company, you can see how crucial it is to work with a credible, efficient, and consistent MSP for merchants. Besides, you cannot merely “choose then leave”, as old MSPs are sometimes not compliant with a new POS system.

Irrespective of the scenario, merchants can follow some best practices to make sure they get the best MSP for them. We have listed some valuable tips retailers can follow here

  1. Go into the evaluation process with a good picture of what you need for your business. For instance, which Merchant Service Providers currently meet your Merchant Services needs, and which MSPs are planning to add new and creative payment options in the future?
  2. Know the different fees and expenses involved with each MSP that you are considering. Some providers secretly floated up the rates after you get a certain amount in revenue. They explain the system as “the more you get, the more you pay.”

While searching for a Merchant Services Provider, remember to take in mind their pricings. You would most certainly have to keep the following fees in mind, depending on the type of options you require.

  • Fees for setup
  • Fees for Appliances
  • Fees per month/Service Fee
  • Fees for sale
  • Fees for Credit Card Reader

Also, take note of these following processing fees

  • Flat rate
  • Interchange – plus
  • Direct interchange
  • Tiered rates
  • Account fees
  • Minimum processing fees
  • Termination fees
  • Chargeback fees
  • NSF fee
  • Statement fee
  • PCI-compliance fee
  • Account setup fee
  1. It is also advisable to read online reviews and ask around to get the gist of an MSP’s customer service. What level of support can you get in your contract? Are there extra service costs? Also, take note of how efficient it is to address your problems on your own versus how the customer support.

And also, don’t exchange POS features just to get the seemingly ideal MSP, and make sure to take into consideration what type of fees your future MSP charges and services it offers.

Final thoughts

The essence of your company will dictate what particular Merchant Services you need. Retail-only companies will not need a Payment Gateway, but secure credit card terminals will be required.

Without a Payment Gateway, eCommerce companies may not operate, but they do not need terminals. Of course, you would need almost any service the market has to offer if your company works in both the retail and digital market, which is becoming more ubiquitous lately.

Each Merchant Service Provider has its own specific product and service mix, so you may want to make sure that a provider provides the functionality needed for your company when you sign up.

Many of these facilities are exclusive, which means they can only operate with the provider that goes with them. Although this tends to guarantee continuity among various products, it also implies that you will not be free to hold your beloved product with you if you switch suppliers. This is often the case in the eCommerce sector, where Payment Gateways are often exclusive products.

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