Starting a business can be challenging, given the sheer amount of aspects to consider. That's why most starting business owners opt for a merchant services provider. Even if you do not know what an MSP is, chances are you have interacted with one before.
Merchant services providers cover every product, service, and technology a business requires to facilitate transactions. Without a merchant payment provider, a business cannot facilitate transactions online.
But how do they work, and how can they help your business? Let's comprehend their fundamentals and their functioning.
What are Merchant Services?
Merchant services account for every tool a business needs to accept any form of payments. Merchants ensure the transaction is conducted securely. Thus it is crucial to choose a well-reputed merchant services provider.
Depending on your business' needs, there are multiple types of merchant services online to choose from.
Most Common Merchant Services Providers
Merchant Accounts
A merchant account is the designated account collecting the customer's payments. Merchant accounts generally offer a unique ID with a full-service account. The ID is used to distinguish your business in the payment processing system.
Without the ID, the chances of security breaches and fraud increase.
Credit Card Terminals
Also known as EDC (Electronic Data Capture Terminal), a Credit Card Terminal is a device that allows the use of credit cards. This means that consumers use the terminals to dip, tap, or swipe the debit/credit card to facilitate payments. If needed, merchant service providers can provide the terminal themselves.
Point of Sales (POS) Systems
POS or point of sale system is the destination where customers make payments for your services or products. Merchant service providers offer POS systems to help your customers complete their purchases after completing a POS transaction. Usually, these systems provide checking scanners, printing devices, tablet mounts, and cash drawers.
Online Shopping
An online shopping cart allows eCommerce stores to personalise their shopping experience. You must always opt for a service provider compatible with your business' nature and domain.
Virtual Terminal
A virtual terminal facilitates credit card payments without the physical need of the card. The method is ideal for mail orders, telephone operated businesses or remote billing. However, the process can incur higher setup costs than traditional card payment methods.
Mobile Payment Systems (mPOS)
mPOS allows payments through smartphones and tablets. After attaching a card reader to your device, the information is accessed by the provider. Choosing a system with a wireless Bluetooth connection or EMV compatibility is ideal in the long run.
SME Loans and Advances
Merchants can also offer minor loans and advances to businesses. The funds can help SMEs get started or expand their reach.
Payment Gateway
A merchant payment gateway is placed on an eCommerce store or website to process secure online payments. You can use the software instead of a credit card terminal. Customer data, encryption, and recurring billing are common benefits of payment gateways.
How Does the Process Work?
The merchant service involves seven steps:
- Customers facilitate a transaction.
- Transaction data is sent to the service provider's network.
- The information is transmitted to the concerned card company.
- The company sends the data to customers' banks.
- The bank verifies the transaction.
- Next, the used card will facilitate the transaction and send a notification.
- The transaction is finalised, and a receipt is generated.
As starting a business requires covering numerous aspects, businesses opt for merchant service providers for help. Names like Wibmo offer esteemed merchant services, helping businesses get started. With their help, facilitating routine proceedings becomes simple.
Alisha Hill is a freelance writer cum blogger.
Post new comment
Please Register or Login to post new comment.