What is a Merchant Services Provider?
[Updated January 18, 2019]
Your merchant services provider is a vital partner to help you grow and operate your business. They facilitate credit card processing for your business and provide other vital services. The key services offered by a merchant services provider to businesses include:
- Accepting payments from your customers via credit, debit, and electronic payments
- Securely managing PCI compliance when processing and storing payment information
- Providing technology to track payments, understand business data, and collect outstanding invoices
Before we can break down what the vendors do, let’s go back to basics and define merchant.
What is a Merchant?
A merchant is how payment processors refer to their customers. Merchants are businesses that accept credit card payments from their customers in-person, online, or over-the-phone. Therefore, a merchant services provider offers products and systems to help those businesses run.
These services often integrate with other business tools. For instance, your payment provider may connect to a POS system for a retail store or QuickBooks Online for reconciliation. They can also provide customer management, inventory systems, and payment reporting.
Merchant service providers work as the intermediary between banks, your business, and your customers. That means that however your customers want to pay, you can accept the payment and get paid.
When a customer swipes a card, the merchant services provider moves the customer’s funds to your bank account. This usually takes up to 48 hours for the funds to appear in your account. Many businesses do qualify for next-day funding and can get paid even faster.
Your payment processor is where you will purchase or rent credit card terminals and mobile swipers from. Or, if you have an online business, they will integrate with your eCommerce store. Virtual terminals let you accept payments online or key in payments over-the-phone. Your merchant services provider will help you find the right payment processing services for your business.
There is a lot of risk involved in accepting payments today. According to one report, almost $25 billion was lost in credit card fraud in 2016. That’s why security is so important in credit card transactions, online payments, and card number storage.
Your merchant services provider should ensure PCI compliance. This means that cardholder data, including names and card numbers, are secure. Businesses can protect data by using strong passwords and updating their antivirus software.
Meanwhile, your merchant services provider will maintain PCI compliance on the payment side. This includes tokenizing payment information and putting fraud prevention measures in place. Learn more about how Fattmerchant protects your payments.
You can learn a lot about your business and optimize operations based on payment data. Which customers are spending the most with you? What times of day, month, or year are you collecting the most payments? Are there products or services that you could be charging more for?
We believe that all of this data should be in the hands of business owners to make strategic decisions. That’s why we built Omni, our all-in-one payment platform. With Omni, you can track payments, create payment links, and collect invoices. Plus, but you can also view detailed reports about the state of your business.