Merchant Services

Merchant Service Providers

It is quite important for me to make it known that; I am somewhat new at reviewing merchant service providers (MSPs). Though I am doing well at it now, it took me just a little time to understand the process and even what MPS meant.

You may seem overwhelmed with the whole payment processing, but I assure you that you will finish well with a sound knowledge of what this is all about. It took me quite some time to untangle the twists but I was able to move beyond the steep… It was quite a wonderful learning experience.

The payment chain is confusing

You must have come across different terms while searching through Google to get meaningful information about the payment chain but most definitely, you would have gotten confused because of the numerous terms which have their meanings in various contexts. It is necessary to understand these terms but don’t get too conscious of terms than understanding the process itself.

It is important to note that there are only a few giant card processing companies who handle the majority of the transaction process. It is more likely for you to fall into the hands of a merchant service provider who liaises with one of these major card processing companies or even a smaller MSP that solely depends on the big shots to process their transactions.

In such cases, the smaller MSPs usually manage the paper work & onboarding, then, negotiate other flexible elements of the contract such as rates, fees, etc. An outstanding difference between both service providers will be the quality of customer support and it is important to note that the management of your account is not solely dependent on your Merchant Service Provider. There are a few processes done behind the scene which influences other factors such as chargebacks and withheld funds so it is important to know the institutions responsible at the different stages of the payment process.

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Payment processing fees and rates tend to be opaque

Pricing systems are complex and there is a need to imbibe some simplicity and openness. Even from the beginning, the process is complicated and it is indeed necessary for the merchants to liaise with the MSPs and negotiate a favorable offer in order to ensure an ideal transaction and a fair deal. This will enable a simpler process such as bundled pricing. It’s a concept of grouping weightier transactions into a larger group and charging a specific rate for independent groups.

This will avoid trapping unskilled merchants in an unfavorable deal.

3. Cost and value are not always correlated

All processes have the same wholesale charges and this is because there is a set fee on all card networks. Though some Merchant Service Providers offer some exciting benefits such as professional consultancy, thereby giving more value to the account, other counterparts charge more without any commendable offer or value to their accounts. This can be worthless when compared to the other accounts with benefits.

For this reason, it is necessary for merchants and reviewers to scrutinize the cost-value of each Merchant Service Provider. You shouldn’t be in haste to jump at an offer because it looks exciting. Comparing a few more could give you a better deal.

4. Merchants feel like they’re being ripped off

Because of the opaque process, many merchants feel like they are being ripped off as the service wasn’t really what they thought they would get. A lot of merchants do not possess adequate skills and knowledge about how the process and pricing actually works and this throws them a curve ball and they get to experience something else just when they thought they had an awesome deal.

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The most unfortunate part of this is that most contracts are long-termed alongside with a hidden clause of early and costly termination fees. This can be a nightmare for a merchant.

5. It could be so much simpler

Having a page with explicit information of pricing on every Merchant Service provider’s website would be awesome. Each standard fee should be carefully stipulated for card processing regardless if it is being charged or not. This isn’t the usual scenario, but it would be helpful if this can be imbibed.

MSPs have chosen not to be open enough because there are a whole lot of them out there who operate at the same or similar margins. But the tide may change as a handful of MSPs have chosen, to be honest and transparent in their dealings. One can only hope that this will bring a change to the conventional trend of other MSPs.

Merchants do need to take a careful look before signing up contracts.