A merchant service provider, or a merchant account provider, is a service by which the provider will give a business the ability to receive payments from consumers and customers via debit and credit card payments. This can be from a range of different methods, including over the phone, via the internet, or face to face.
The world is becoming increasingly more digital, payment methods being no exception for this. With consumers’ use of their debit cards rising 14% from 2016 to 2018, and the number of people paying by cash decreasing 15% in the same amount of time, merchant service providers are becoming more in demand than ever.
Plastic money’s overtaking of cash transactions has arrived earlier than predicted, all with the help of quick and simple contactless payment. With the rise in credit and debit card payments, businesses need to keep up in order to accommodate for the consumer’s preferred payment method. Therefore, for businesses it is important to understand exactly what a merchant service provider is, when to consider getting it and how to apply for one.
What is a Merchant Service Provider?
As previously touched on, a merchant service provider (or MSP) is a service that provides a retailer with the means to accept plastic money (payments for goods and services in the form of credit or debit cards). Having a merchant service provider, and furthermore having a good relationship with the chosen merchant service provider is critical; as this service will help enable a business to accept currently the most popular payment method preferred by consumers.
Not only this, an MSP will also help a business to meet the required standards of security for this type of payment option. A merchant service provider is becoming an essential for the majority of retailers across the globe. The Payment Card Industry (or PCI) is the global authority on these types of payments, and define a merchant service providers as follows:
“Business entities that are not a payment brand, involved in the processing, storage or transmission of cardholder data on behalf of another entity. This also includes companies that provide services that control or could impact the security of cardholder data.”
When to Consider Merchant Service Providers
For any type of retailer, it’s always important to consider options that could help to benefit their business. Enlisting the help of a merchant service provider can help to boost a business’s earnings by offering up more popular methods of payment. Cash payments currently account for only 34% of payments. Therefore, having only this means of payment can significantly restrict a business, as consumers may be less likely to make purchases with retailers who do not have their desired method of payment.
These services offered by MSP can also help businesses to improve upon their security when it comes to transactions. MSPs should ensure that all transactions are in compliance with the Payment Card Industry regulations. This will include ensuring that all data from consumers credit and debit cards are secured and cannot be accessed by outside parties.
Whilst plastic money has become the preferred payment method of choice, it is important to not neglect the fact that, as UK Finance chief executive Stephen Jones commented, “We’re far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many”.
Therefore, when considering getting a merchant service provider it’s important not to negate cash as a payment option, and rather see that having a range of different options available can help to both increase a business’s transactions, whilst also enhancing an accommodating attitude to the business’s face – catering to all means of consumers and their varied preferred methods of payment.
How to Find the Best Merchant Service Provider
The best merchant service provider will entirely depend on the type of business. However, there are a few factors that all businesses should look for when determining what provider to go with. One of the main factors businesses must look for in their MSP would be finding a reputable provider that upholds the Payment Card Industry Data Security Standards. A popular way of finding the ideal merchant provider for your business is to use comparison websites such as Business Reviewed who help consumers and businesses make more informed decisions.
Another important factor would be to make sure that the provider offered a good quality of customer support to the business in case of any issues, in addition to whether the providers charge reasonable rates for their services in comparison to other providers. With the steady rise in plastic money payments, it is important for businesses everywhere to know exactly how a merchant service can improve upon their earnings, all helping to keep a business relevant with the current payment method of choice.