Before we dive into the world of Merchant Service Providers, you need to understand first the Merchant Services.
What is Merchant Services?
Merchant Services refer to a range of financial services for businesses. They are the hardware and software solutions that enable your transactions.
You went shopping and paid it using your credit card or debit. Have you imagined how this establishment processed and received the payment from your card? How do they identify which transaction is good and cleared and which is not? How do online and eCommerce platforms charge your purchase if your card is not present?
Today, let us eliminate your confusion about Merchant Service Providers. So, you can keep up and start elevating your business in this New Normal era.
What is a Merchant Service Provider or MSP?
- They are sometimes also referred to as acquirers, processors, or merchant account providers.
- They can determine whether your customer has the necessary funds to approve their purchase (online or offline).
- They facilitate credit card processing and provide other services for your business.
- They process the payments you receive from your customers via credit, debit, and electronic payments with a seamless transaction.
MSP is your vital partner to help you operate and grow your business. Especially in this New Normal, if you want to create a successful strategy online, you will need a payment processing solution, and a Merchant Service Provider (MSP) can help with that.
Here are some of the usual terms you will encounter when you decide to offer multiple payments, and you will see how each other is related.
These are the clients or customers. They initiate the purchase. It is either online (handing over their payment information to the merchant) or through swiping, tapping, or dipping their card.
The merchant is the one who accepts and collects the payment information either in-store or online. Merchants can accept physically with a credit card reader. They can also utilize an online gateway to collect payment from the consumer (online).
The merchant or credit card processor gathers the customer (consumer) payment information and sends it to the next step, usually the card network. The processor facilitates and makes it easier for the parties to communicate.
The card network takes payment information from the processor and sends it to the (consumers) bank. One of the major credit card networks used was Visa and MasterCard.
When the consumer’s bank receives the payment request, it will check if the customer has sufficient funds or credit to execute the transaction. There were additional security procedures to avoid fraud. When the funds are authorized to be released, the consumer will send a message back to the networks and credit card processors indicating that the transaction is complete.
Credit card processing is a complex process that requires many steps. For example, after reaching the consumer’s bank, the bank will send a message back to that same channel to inform the merchant of the transaction status. The merchant will confirm to the consumer if it is Approved or Declined.
Every business is different. MID Kingz understands the unique needs of all types of business. If you want to learn more and get a good grip on Merchant Service Providers, feel free to connect with us. MID Kingz will provide you with key points on why it is essential and can help you find the right solution for your business.