Credit Card Processors vs. Merchant Service Providers

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A key to your business’s success is offering a convenient way for customers to pay that allows you to remain within budget. Merchant services and credit card processing both accomplish this in different ways.

What Services Do Credit Card Processors Offer?

A credit card or payment processor is the service that goes to work once a customer pays by credit card. It ensures  each transaction moves along the correct route between swiping a card and accepting a payment. In order to accomplish this:

  • The point-of-sale or POS system must receive the customer’s credit card information in its entirety.
  • The customer must have sufficient credit with the bank that issued their card, and this credit must be confirmed.
  • The bank accepting the payment on behalf of the business must receive and process the customer’s card information quickly and accurately.

A credit card processor may include a point-of-sale, or POS, system that allows a customer to wave or tap a chipped credit card over a unit to make their payment.

This system may be static and installed at the checkout, or it may be a handheld unit. A credit card processor may also offer live support.

What Services Do Merchant Service Providers Offer?

A merchant service provider concerns itself with the front end of customer transactions, meaning the hardware and software involved in transaction processing. These merchant processing services include:

  • POS software that allows you to accept credit cards and other payments
  • Physical card readers that allow customers to pay via swipe, tap, or mobile device
  • Other software that allows for customer, employee, inventory, and order management
  • Promotional and customer engagement tools like loyalty programs and gift cards
  • Live customer service
  • Regular security maintenance and upgrades to ensure PCI compliance

Types of Merchant Service Providers

A merchant service provider can be any company that liaises between your business and the bank of you or the customer. Therefore, they can be one that provides a POS system, as well as a bank itself, a payment gateway provider, an independent sales organization (ISO), or:

  • Online shopping carts
  • Merchant account providers
  • Virtual terminals
  • Check processing services

How Businesses Benefit from Merchant Service Providers

Because merchant service providers offer such a wide range of services to businesses, they’re also able to offer a wide range of benefits, such as:

  • Always ensuring use of the current technology to keep you competitive
  • Helping you increase sales
  • Reducing fraudulent transactions
  • Employing the latest fraud-prevention solutions and ensuring your systems are frequently updated to meet current threats
  • Helping improve cash flow management
  • Keeping the process of achieving PCI compliance simple and straightforward

Important Definitions

Every business owner should familiarize themselves with the following terms when choosing a merchant service provider:

Merchant account – This is the bank account into which all successful customer credit and debit card payments are deposited. An interchange fee is charged for each deposit. These funds are then transferred by your provider into your business bank account.

Merchant category code – This is a 4-digit code that identifies your businesses according to the type of merchandise you sell.

Payment solutions – The tools a business uses to accept payments from their customers, payment solutions could be mobile credit card processing, an online shopping cart, mobile payment POS system, or all of the above.

POS systems – These are systems of hardware and software that allow a business to accept credit, debit, and other forms of payment from the customer at the checkout or point of sale.

SSL – This secure socket layer encrypts sensitive information being transmitted online, such as that from a card reader to a customer’s bank or credit card account.

PCI compliance – This is a universal security standard for protecting the privacy of sensitive customer data like a credit card number. Any business accepting card transactions must achieve PCI compliance.

Anti-fraud tools – These are tools that protect businesses and customers from fraud. These can include tokenization, cardholder verification, and EMV compliance.

Full-Service Payment Processing, Simplified

Adept Payments is an experienced payment processing solutions provider. We offer the latest credit card processing systems, including EMV Level 1- and 2-compliant readers that are compatible with both magnetic stripe and chip cards. Give us a call to learn more about our no-hidden fee products and services: 888-732-3838.

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