FIS Modern Banking Platform
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June 29, 2019
Merchant services, often labeled credit card processing, is the handling of electronic payment transactions. They’re generally run through an account that a merchant sets up to facilitate credit card processing. A provider simplifies the payments acceptance process, enabling merchants to expand their payment options, get their money more quickly and a number of other benefits.
Accepting credit and debit cards is a complicated business – here’s a simplified breakdown of how it works:
Each time a shopper swipes (or inserts, in the case of EMV chip) his or her payment card, a fee is charged to the merchant. Usually a percentage of the transaction amount, this fee is charged because the issuing bank and acquiring bank assume the financial liability of the electronic card transaction. For example, if the consumer never pays his credit card bill or pays it late, for goods purchased, the issuing bank will be out those funds. Also, if the transaction turns out to be fraudulent, the banks have historically assumed the burden of those transactions (though this has shifted back in the direction of the merchant with the introduction of EMV chip technology).
The amount and types of fees you are charged as a merchant depend on several factors, including:
In general, here’s what a merchant services provider does:
Above and beyond enabling credit and debit card acceptance, a good merchant services provider or payment processor can help you grow your business in ways you might not think. When you’re looking for a provider, you should ask if you can accomplish the following with them to consider:
When you partner with an experienced merchant services provider, you should be guided through each step of the set-up: from understanding the terms of your processing contract to funding your bank account. Your merchant services representative will work with you to understand your business and your goals to recommend the best POS system for your business. Perhaps a more traditional cash register is right for you – or maybe a tablet-based POS system that allows you to ring up purchases out on your showroom floor or in the field is best for you.
The financial services industry – and accepting electronic payments – can be complex. But, the good news is that you certainly don’t have to go it alone. Choose a reputable processor for your credit and debit card acceptance needs and you’ll be well positioned to grow your business for years to come.
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