What is Merchant Services?
Introduction to Merchant Services
The term ‘Merchant Services’ can initially be confusing, especially if you are not working within this industry, therefore, to be completely transparent it is a good idea to try and explain this. So, describing what a merchant is first is a good starting point: A ‘merchant’ is defined as a “person or company engaged in the business of selling or trading goods” (www.yourdictionary.com/merchant). A wholesaler is an example of a merchant. A retail store owner is an example of a merchant.
Basically, the term ‘merchant’ is related to businesses and the ‘services’ part in merchant services is related to the payment processing. Essentially: accepting card payments from customers. Consequently, a business will need a merchant services provider, if / when they wish to start taking payments (other than cash). So, if you are about to open, or have already opened a retail store; you’ve most likely come across at least one merchant service provider (MSP). These are the gatekeepers between customers’ credit/debit cards and your cash register.
To qualify as a merchant, you will first need a registered business and a business bank account. These are easy steps to achieve. From here you will need to have a merchant account and a merchant ID then comes the payment gateway and the software to accept card payments.
Described above is the process that needs to be completed in order to qualify to be a merchant. The now established merchant will then have to make a decision on how they wish to take payments from their customers. This could have a big impact on which service provider fits the business requirements. Below are some of the payment taking options available and what they entail:
- Face to Face – These are any shop that takes payments other than cash. Terminals will be required for this and there is a wide range of options (wired/wireless/mobile)
- E-commerce – online website that accepts payments, for example, any fashion website like ASOS where you buy their products online
- Over the phone or by mail – a virtual terminal so you can take payments over the phone or by mail (have a portal where you enter customer details within a payment page and make a sale)
The benefits of taking card payments
There are a multitude of positives of taking card payments but the main two that businesses are likely to care about most are that it will increase sales and profit and that it is now the main source of payment in the UK, therefore there is a huge market to tap into and if you don’t accept card payments then you are missing out on a huge revenue opportunity. People are now, more than ever, likely to only have their card on them and/or not have enough cash to pay for your products and services in store especially if it is an impulse buy. As a store you want to have access to impulse buys or for them not to be restricted to the amount of money they have on their person. Some of the key benefits are highlighted below:
- Increased sales and profit
- Speeds up service (reduced queuing times)
- Essential with online payments
- The main source of payments nowadays (overtook cash in 2017)
- More flexible
Are you interested or involved in merchant services? Would you like to know more about what you are being charged? Click here – this is a simple to use guide we have created, so you can independently look into how much you are getting charged for various aspects of the merchant service process. This is because some providers write complicated statements, but we are here to help make everything involved as transparent as possible. We believe in ourselves and what we offer, that’s why we offer a price promise.
In summary, the terminology in merchant services can be confusing but once you have a base knowledge of what this includes it is easy to understand and easy to set up. It is a crucial part of your business especially as the cashless industry is ever-increasing (for more info on this check out NetPay’s blog the week before this one), proving that this is a huge revenue opportunity.
Please contact us at https://www.netpay.co.uk/contact/ for any more questions or inquiries you may have.
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