Everything you Need to Know About Merchant Services

0
1267

If you run a business, chances are you need to process credit and debit card payments. To do this, you need to sign up for a merchant account with a company that provides merchant services.

There are a lot of different merchant service providers out there, so it can be tricky to choose the right one for your business. In this guide, we’ll cover everything you need to know about merchant services so you can make an informed decision.

What are Merchant Services?

Merchant services are basically the middlemen between your business and the credit card companies. When you sign up for a merchant account, you’re essentially giving the merchant service provider permission to process your customers’ credit and debit card payments.

In exchange for this service, the merchant service provider will charge you a fee. This fee is usually a percentage of the total sale, plus a small per-transaction fee.

What are the Benefits of Merchant Services?

There are a few key benefits that come with using merchant services.

First of all, it allows you to accept credit and debit card payments from your customers. This is important because a lot of people prefer to use cards instead of cash. In fact, according to a study by the Pew Research Center, 60% of Americans say they make most of their purchases with a credit or debit card.

Accepting card payments can also help you increase your sales. A study by the Interchange Group found that businesses that accept credit cards see a 20% increase in sales on average.

Another benefit of merchant services is that it gives you the ability to process online payments. If you sell products or services online, you need to be able to accept payments through your website. Merchant services make this possible.

Finally, merchant services can help you manage your cash flow better. With merchant services, you can choose to have your payments deposited into your account on a daily basis instead of waiting for customers to pay their invoices. This can help you keep your business afloat during slow periods.

What are the Drawbacks of Merchant Services?

There are a few potential drawbacks to using merchant services.

First of all, there are fees associated with merchant services. These fees can vary depending on the provider you use, but they typically range from 1.5% to 3% of the total sale, plus a small per-transaction fee.

While these fees may seem small, they can add up over time. If you process a lot of sales, you could end up paying thousands of dollars in fees every year.

Another potential drawback of merchant services is that you’re at the mercy of the provider. If the provider goes out of business or decides to stop offering merchant services, you’ll be left without a way to process payments.

Finally, you may need to upgrade your equipment to use merchant services. For example, if you have an old point-of-sale system, you may need to get a new one that’s compatible with the provider’s technology.

How to Choose a Merchant Service Provider?

Now that you know a little bit about merchant services, you may be wondering how to choose a merchant service provider.

There are a few things you should keep in mind when choosing a provider.

First of all, you need to make sure the provider offers the services you need. For example, if you plan on processing online payments, make sure the provider offers that service.

You also need to consider the fees associated with the provider. As we mentioned earlier, these fees can add up over time. Make sure you understand what the fees are and how they’ll impact your bottom line.

It’s also important to consider the provider’s reputation. You can read online reviews or ask people you know if they’ve had any good or bad experiences with the provider.

Finally, make sure the provider is compatible with your existing equipment. If you need to upgrade your point-of-sale system, for example, make sure the provider offers a system that’s compatible with your current setup.

The Bottom Line

Merchant services can be a great way to accept credit and debit card payments from your customers. However, there are some potential drawbacks to using merchant services, such as fees and the need to upgrade your equipment. When choosing a merchant service provider, make sure you consider all of these factors.