If you’re looking for a payment processor to handle all your business’s credit card transactions, all the industry jargon could get pretty confusing. In this article, we’re going to give you the rundown on third party payments processors, what they are and if you should use them for your credit card processing needs.
What are Third Party Payment Processors? A third party payment processor lets you accept online payments without a merchant account of your own. They’re nonbank processors, but they are bank customers that provide payment processing services of their own to merchants. They let you use their merchant account with the bank under their own terms of service, typically with little setup required. So the bank doesn’t have a direct relationship with you, the merchant.
What are the Advantages of Using Third Party Processors? Merchant accounts with financial institutions (banks) tend to be expensive and time-consuming to set up. Unlike merchant accounts with banks, many third party payment processors don’t charge you a huge deposit fee for setup. You’re only charged for the transactions you make. We can’t speak for other third party processors or banks, but at Fattmerchant we don’t charge any of the outrageous monthly fees either. Here’s a list of some fees you’ll see from other banks and processors, but never from us:
- No termination fee
- No customer service fee
- No statement fee
- No IRS fee
- No batch fee
- No annual fee
- No contract fee
- No PCI compliance fee
Third party processors could especially benefit merchants who sell just a few products online or those who live outside the U.S. If you don’t want the hassle of handling your own merchant account and you prefer the ease of a third party handling your payment processing, then third party processors are perfect for you as well.
What are the Disadvantages of Using Third Party Processors? The only disadvantage to third party payment processors is that the transaction fees are usually a little higher than with a typical merchant account. This isn’t really a disadvantage though considering the added cost is made up for because you’re not charged high markup or ancillary fees. You also save a lot of time— and as we all know, time is money.
Increasingly, many merchants have found that third party payment processors are the way to go for their merchant account services. They’re quicker, easier and more cost-effective than financial institutions. The trick is to find a perfect third party credit card processor with low rates. You can read more on that in this article.
If you’re considering a third party processor to handle credit card processing for your business, check out our affordable subscription plans! With no markups, no ancillary fees and no contract, you get the processing solutions and services you need for the price you deserve.
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