Just like choosing a POS, choosing the right merchant service provider (MSP) is integral to the success of your business. Navigating this space can feel overwhelming, and if you’re just getting started you may not know where to start in finding a quality provider.
Here is what you need to know to find the right MSP for your business:
What is a merchant service provider (MSP)?
A merchant services provider (MSP) is an umbrella term that covers banks, third-party processors or any other entity that provides businesses and individuals with the products and services necessary to accept credit cards, debit cards and other forms of electronic payment, according to TYSYS. This also includes companies that provide services that control or could impact the security of cardholder data, as defined by PCI.
The MSP securely sends the information to the card association, (VISA, Mastercard etc), in which the card association shares this information to the shoppers bank. MSPs are essential to the safety of customer information as well as necessary for a merchant to complete all the steps of a transaction.
Navigating Fees and Rates
You may be quick to want to sign up for the lowest rates, but there are a combination of factors you need to consider to find the best pricing for your business. This includes understanding how many transactions you process, through which channels, and how your business is projected to grow.
This will help you distinguish between MSPs that charge monthly fees with lower per transaction costs against MSPs that don’t have flat fees and charge higher per transaction costs. The average merchant will pay between 1.75 percent and 2.9 percent of the transaction price per sale, plus a nominal flat fee per transaction, like $.50.
Not only do you want to be set with competitive market pricing, you want to ensure it works with the latest in Point of Sale technology. If you have already chosen your POS provider, you will want to ensure that you sign up with a payment processor that is designed specifically to work with your POS. One way this can be assured is by using the same provider for both your POS and payment processor.
In the case that something goes wrong with your payment processor, it is critical to have a close and communicative relationship with your MSP. What degree of support is included in your contract? Through what channels can you access support and are there any additional costs?
Factor in all these components to best determine the MSP that fits the needs of your business.