One of the main indicators of a great, booming, and commercially viable business, as checked by potential investors, is the number of players actively involved in that market segment. In the merchant services industry, the scene is so active and almost saturated that merchants no longer felt the need to fear that a certain company will monopolize the industry, which sometimes leads to underwhelming services that are left unchecked.
But why is it such a booming industry? To start off, let’s backtrack a bit and talk about what merchant services are. Briefly, merchant services refer to a range of financial services for business, with more focus on accepting and processing electronic payments. As the term implies, merchant services also include the behind-the-scenes process that allows merchants to accept payments, the service providers they work with, and the hardware and software needed to run the entire process.
For this to run, merchants first needed to set up their own merchant accounts so they can start accepting payments. They can do this by directly working with acquiring banks, which primarily serve a back-end role in facilitating the exchange of funds between card-issuing banks and merchants. Acquiring banks also rely on third-party sales organizations, also called acquirers, to sell the accounts and offer customer service.
There is another option that merchants can explore if they do not set up accounts directly through their acquiring banks, and this is through working with merchant service providers or MSPs. Merchant service providers are not payment brands, but they are involved in the processing, storage and/or transmission of cardholder data on behalf of the merchant. MSPs may also provide services that control or impact the security of cardholder data.
One of the reasons merchants go for merchant service providers than with banks is that while choosing banks to be their processors would seem convenient, their services will turn out to be more expensive than what MSPs offer. On an average, bank fees are usually at least 100 basis points or 1% higher than that of merchant service providers, as revealed by Entrepreneur magazine. MSPs have created such a game-changing impact on the way merchants operate that they have taken a more integral role in ensuring their success.
Choosing the best MSP for your business
Merchant service providers have now become the key to a merchant’s completion of transactions that UK-based online publication Techradar already released their review on the best merchant service providers of 2020. Since they play a very crucial role in the success of a merchant’s entire business operations, it is even more important for a merchant to choose the best MSP for their business.
Now, the next question would be: how do you choose the best providers of these merchant services that will work best with your business? We’ve broken down these important tips to help you come up with the best fit:
Overall, there really is no merchant services provider that is a one-size-fits-all. However, there are MSPs that can easily adjust and meet the above listed non-negotiable requirements so they can be the best fit and provide the best offer for your investment.
At Agapay, we take the needs of our merchants seriously and offer products and merchant services you will need to help grow your business. To know how we can assist you by assessing what packages would best suit you, call us at 800 644 3909 or reach any of us here.