For anyone with a retail store or in the process of opening a retail store, a merchant service provider will be a vital part of your store’s functioning processes. So, what is a merchant service provider, and why do you need one? Well, that is what we are here to answer; let’s begin.
What Is a Merchant Provider (MSP)?
Merchant Services providers are the middleman between your customer’s payments via credit and debit card and your business. Taking this into account, the relationship between a business and their MSP is vital; not only do they provide you access to pay via credit and debit cards, but they do so in a safe and secure way.
What Do They Do?
The Payment Card Industry (PCI) is the main authority figure for all things payment. They set the rules and standards that cardholders, banks, merchants, and service providers abide by.
According to PCI, the job of an MSP is a business that is not itself a payment brand that is a part of the storage, transmission, or processing of cardholder data for another business or entity.
How Does a Transaction Occur?
Simply put, a customer pays for an item/service at a Point-of-Sale System (POS) via credit or debit card. The information from this transaction (card details) is sent from the POS to the merchants’ MSP.
The MSP then provides this information to the relevant card company, which sends the transaction information to the consumer’s bank. The bank then approves this payment which is sent back to the card association and from there to the MSP and back to the merchant, who can now hand the consumer a receipt.
Types Of Merchant Service Providers
There are different types of MSPs that suit different retailers according to the services they provide. Companies like Utility Bidder provide you information about the MSPs in your country all in one place so that you can compare prices, get the best quotes while meeting your business requirements completely free of hassle.
Some of the most common MSP types are:
They provide you with both a merchant account and payment processing of credit and debit cards. They connect your business to all parts of the transaction chain.
Payment Services Providers:
These MSPs allow you to process transactions without the need of opening a merchant account or the need to become a legal entity in each country in which you function as a business. They act as a bridge between your business and the remaining transaction chain.
Payment Gateway Providers:
This is an MSP that allows your business to carry out online transactions in a variety of different payment methods. Payment gateway is necessary for business today due to the massive increase in e-commerce.
Business Benefits of Merchant Service Provider
As you probably already know, all the businesses that sell products and services need to follow the latest trends. We are not talking here only about the marketing trends that will allow them to boost their brand identity. Businesses also need to find the best possible way to accept all the online payments. In short terms, a merchant service provider will help your brand boost its value and reputation among the people. The question is – how? Well, that is something we will explain in the text below. Let’s go!
You Will Potentially Increase Sales
Advanced technology is not just making the lives of people comfortable. It is also changing their mentality, habit, and way of thinking. In today’s world, most people would gladly accept to make a purchase with a credit or debit card instead of cash. If you allow them this type of opportunity, there is a big chance you will increase your sales.
Even if you don’t increase your sales, you can be sure they won’t reduce. Imagine the situation where your direct competitor uses the merchant service provider while you don’t. If you purchase exactly the same products (with same features and quality), why would people pick you instead of your competitors? Because of that, if you want to remain competitive and protect your place on the market, this could be one of the steps you can take to reach your goal.
Money Management Will Be Way Easier
You already know that money management is a procedure that only sounds easy in theory. If you don’t use the right tools (like this one) that will help you simplify the entire process, you will need to dedicate a lot of time to this type of obligation.
A Merchant Service Provider will help you handle all the transactions you make in a much easier way. Imagine that you need to count cash every single day. Wouldn’t that be a time-consuming task? Electronic payments will remain organized and you can get insights into them with a couple of clicks.
Bad Checks Will No Longer Be a Problem
Every entrepreneur will invest 100% of his strength to ensure his business is functioning properly. However, the small issues are often those that can cause a lot of damage. One of the problems that could appear if you are not using the merchant service provider is bounced checks. These checks often bring some unexpected costs that you have to cover somehow.
Instead of finding the way to solve this problem, it would be a much better choice to pick the solution that will make bad checks disappear from your “list of problems”. Electronic payments will handle everything, and you will manage to fix any type of problem with a couple of clicks. Besides, if you mix your merchant account with a reliable payment system, you can also accept the so-called recurring payments for the repetitive services such as landscaping, cleaning, and other stuff. Doesn’t this seem like a good reason to change your way of work and start using the Merchant Service Provider?
Conclusion: Should I Open a Merchant Services Account?
It is better for a business to open an MSP; it allows them access to a variety of different payment methods like eCommerce payments, contactless payments like Apple Pay or Samsung Pay, and of course, debit and credit cards. It is also a much safer option and provides the business and its consumers’ security.
Being aware of what MSPs are and what they do equip business owners to make the best choices for their own business regarding both safety and costs.