For a business owner, increasing revenue, by all means, is the aim and it means the customers should have an easy shopping experience with you. It means choosing an MSP, a Merchant services provider is an important decision for your business.
It does not matter the number of potential customers you have and are willing to purchase from your in-store if you do not have the facility to accept their card payments. Nowadays, you cannot expect to receive cash payments from all the customers. It means without an MSP, you cannot go ahead with your sales. Before collecting the payments through credit or debit card, you must partner with a Merchant services provider to receive the exact support for your business. The steps in a merchant account enable card processing.
What Are Merchant Services?
As a customer buys from your services or product, he uses a debit or credit card. However, to get the processing done and to complete the transaction, the behind-the-scenes people are the merchant services. The merchant services provider work as a messenger transmitting the payment data from your store to the issuing bank and your bank. The processing of payment in a point of sale terminal, in-store or online, allows card payments facilitating your business to do more sales and to enjoy the growth revenue.
Precisely, businesses, you get paid from the retail merchant services provider and it enables you to manage your merchant account.
How debit and credit card transactions payment is processing?
Looking for the best merchant services provider is a must because, from the time the customer pays using his card, your merchant bank account receives the funds, it is time your MSP starts working to ensure you receive the payment. The payment processing process helps the MSPs to keep track and to coordinate.
- A customer pays for buying something using his debit or credit card. It may be in-person, online, or over the phone.
- On swiping or entering the PIN, the information of the card transmits to the merchant bank (the acquiring bank).
- The acquiring bank transmits securely to the card association the payment details. (AMEX, VISA, MasterCard, Discover, American Express, is the card association).
- The card association communicated with the bank on the issue of the credit card to the issuing bank (the customer).
- The issuing bank denies or approves the transaction. The issuing bank transmits the transaction code to the card association.
- The card association informs acquiring bank if the payment is approved or not.
- On the approval of the transaction, the payment is released into merchant accounts.
As you need to assistance of the Merchant services provider, you have to choose considering a few factors. It is a crucial step to establish a successful business. Here are a few factors helping in choosing the merchant services provider.
Entering into a contract even with the best merchant services provider is appropriate when you understand why and what you are signing for. Know the length of the contract, is there a transaction threshold or are there some lock-in features? Having a contract for the long-term as upfront is a good deal. Yet getting locked into some contract presents challenges in a high-growth startup or new eCommerce merchant services, if you do not get negotiating terms.
The payment processing does not stay the same. Some things go for worse or better. If you are happy with the contract terms, check with their cancellation policy. It is best to know if there is any penalty for early contract cancelation. If it is, what is the cost? If your business involves high-risk or is a volatile industry, consider a shorter contract or look for a Merchant services provider offering a flexible cancelation policy.
The pricing structure is good with transparency. Any discrepancy in the pricing structure is due to a lack of transparency. As a business owner, you know customers dislike confusing pricing. Ensure the MSP you consider as your retail merchant services offer the cost upfront and are ready to discuss concerns before signing a contract. Confirm the price and even if you have doubt ask the merchant services specifically about the cost of the extra service.
It is much better to know the details of the pricing structure than to receive an unwelcome surprise in your bill. However, the good news is there is no need for you to bear hidden fees. Bear in mind, some MSPs keep their merchants in a firm grip using complicated fee structures, if so, look for the Merchant services provider offering flat-rate transparent pricing.
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