Any business operating a retail store or e-commerce website needs a merchant services provider. They serve as the gatekeeper between the customers' credit and your "cash register." But with so many different providers on the market, choosing the right one can be difficult.
What is a merchant services provider?According to the Payment Card Industry (PCI)
, which sets the standards and best practices that merchants, banks, and card issuers must abide by, “[Merchant services providers are] business entities that are not a payment brand, involved in the processing, storage or transmission of cardholder data on behalf of another entity. This also includes companies that provide services that control or could impact the security of cardholder data.”
In a world where the use of cash is dwindling, and the importance of safe, secure credit transactions has become more pressing (in the face of frequent and ferocious cyber attacks), the role of merchant services providers has become even more significant. But with so many different ones to choose from, merchants are often unsure of how to select the right one.What to look for when choosing a merchant services provider
The question is, how do you compare different merchant services providers? And what exactly are you looking for in a reliable partner? While it often depends on the particular details of your situation, here are some things to think about:1. Rates
“Any merchant services provider you consider working with should clearly explain the entire pricing structure so your business doesn't end up paying more than it should in rates and fees,” North American Bancard explains
. “Inquire about monthly fees that might apply if you don't have a certain number of transactions, as well as how fees work depending on your business structure.”
Any lack of transparency on the rate side of things should send alarm bells off in your head. An honest merchant services provider will be forthcoming, and you won’t have to pull details out.2. Fraud protection
Did you know more than 14.2 million credit card numbers
were exposed in 2017? Credit card fraud is the most common type of identity theft and is something that businesses have to take seriously.
When choosing a merchant services provider, find a partner that offers high-level security protections. Some providers will offer free EMV chip card technology and terminals, which can release some of the liability from you. If you do get equipment like this, make sure it’s all PCI-compliant. 3. Equipment and hardware purchases
Factor in equipment and hardware purchases. Some merchant services providers will require you to lease or buy their payment processing terminals (and then upgrade when they move to different hardware). Ask for the details to make sure everyone is on the same page.4. Processing volume caps
Believe it or not, some merchant services providers have volume caps built into your contract. If you see these caps, run the other way.
“Let's say you're having an awesome month, sales are through the roof, and you still have two weeks left in the month. All of a sudden, you can't process any credit card sales. This isn't just a bad day at work; it could ruin your business,” entrepreneur Steve Olenski admits
. “Take the time to make sure there are no caps in volume before choosing a provider.”Make a smart decision
It may seem like just another decision, but selecting a merchant services provider isn’t something to take lightly. While they work behind the scenes, they provide services that are vital to your day-to-day operations. From customer service to sales, the impact is felt in every area of your company. Take this decision seriously, and you’ll enjoy the benefits of greater efficiency, reliability, and profitability.