If you are looking to accept credit cards, debit cards, and other electronic payment methods on your online business you may have already heard of the term merchant service provider. Keep reading to find out all about merchant providers and how to choose the best one for you.
1. What is the Merchant Services Provider (MSP)?
The term merchant services refer to solutions, financial platform, relationship, and all the aspects that businesses need to accept and process credit or debit card payments. There are many different ways to call the entities that are authorized to be merchant services providers, such as merchant account providers, credit card processors, or payment processors.
2. Types of Merchant Services Provider
When talking about merchant service providers there is no single standard of features and services that can be offered, we can say that there are several types of merchant providers and each one of them has its differentials. Here are the most common ones:
Merchant Account Providers
These entities can provide a merchant account and also payment processing for credit and debit cards by connecting the retailers to the banks and other players of the industry. This way the customers can pay with cards and the merchant receives the money from their provider. There are some merchant account providers that can set you up a merchant account, however, they don’t offer the payment processing service, that’s why sometimes you need to connect your business to a payment provider.
Payment Services Providers (PSPs)
Payment Service Provider, also known as PSP, Payment Solution Provider, or Merchant Services Provider, is a financial entity that is authorized to process transactions between buyers and merchants. Partnering with a Payment Provider can be a fast and cost-effective way to accept payments without needing to open your own merchant account or open a legal entity in each country where you want to do business. In a certain way, a Payment Service Provider acts as a bridge between the merchant, acquiring banks, and card networks involved in the transaction.
Payment Gateway Providers
In recent years more and more new e-commerce and online services are emerging and as a consequence, the payment gateway providers are also increasingly present to enable this business to offer online payments. By integrating with a payment gateway the merchant will have access to different payment methods and all transaction information is connected through that gateway.
3. What do you need to consider when choosing a Merchant Service Provider?
The requirements to choose the best merchant service provider are not the same for everyone. Each merchant service provider has its own unique combination of products and services, so you need to analyze your kind of business, your goal, and the essential features that you need to run your online business. With that in mind, it’s easier to search for the providers that better fits with your demands.
Have a good partner by your side is a game changer to succeed and get better results. Also, if you are looking for a provider that supports you with cross-border payment processing the best call is to get a local merchant service provider. The local expertise about the market and the direct connections with local players of the payment industry are essential to get higher approval rates and the best payment performance.