Merchant services are financial services businesses provide to other businesses. If you’re familiar with affiliate marketing, then you’ll also be familiar with merchant accounts. Merchant accounts are what make it possible for online retailers to sell goods or services via websites and mobile apps.
Merchant Accounts Explained
Merchant accounts allow businesses to process credit card payments directly from a customer’s credit card. Rather than having to wait for a check in the mail, or shuffle papers around the office in order to pay suppliers and employees, businesses can take care of all that with just one simple swipe.
How Do They Work?
When you use merchant services (or send someone over to your own site), you can click on check out (if you’re using PayPal, for example). If the website doesn’t ask you to sign up for merchant services then chances are they’re using an alternative payment gateway.
For example, Stripe or Braintree are popular alternatives to PayPal.
Once you have made the sale online, the company will send you an invoice via email with payment instructions. It’s now up to you to process that transaction and deposit the money into your account so it can be sent to suppliers or employees who are waiting for their paycheque. The problem with this system is that you have to manually process all of those transactions.
That’s where merchant services come in. They typically charge a percentage fee for every transaction they process on your behalf, or an interchange rate along with other fees depending on the plan you subscribe to. That way, the money goes into your account automatically, allowing you to focus on more important things. For example, growing your business and increasing your revenue.
So basically, these services act as middlemen between the customer and the company that sells them goods or services. The merchant takes care of all transactions for the online store by processing credit cards directly through their service. They also provide tools to help businesses run their business more efficiently, by processing recurring billing and keeping track of inventory.
Merchant services are necessary for any online store that takes credit or debit cards as payment options. Don’t forget to ask your provider about PCI compliance!
Merchant accounts essentially make it possible for any business to sell their goods or services online without having to worry about credit card transaction fees or PCI compliance.