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Difference Between Merchant Services and Payment Processing

Merchant Services vs. Credit Card Processing

While the terms “merchant services” and “credit card processing” are often considered synonyms, they are not actually the same thing. Both concern the processing of payments for your business, but the capabilities and support available for each is quite different.

What Is a Credit Card Processor?

A credit card processor is also called a payment processor. The primary role of a payment processor is to route data from a credit or debit card to a merchant’s bank account. 

A payment processor is often paired with a point of sale (POS) system to facilitate payments. The POS is the physical or digital place where a transaction occurs (e.g. where the credit card is swiped), and the processor is a component of the POS system that routes the information from the card. 

In some cases, the payment processing company will provide POS equipment, customer support, and assist with things like PCI compliance. Generally speaking, however, credit card processors are limited to simply moving data from one place to another. 

What is Merchant Services?

Merchant services takes the credit card processing system a step further by adding a human element that focuses on helping you cut costs, remain compliant, and stay secure. A good merchant services company offers several direct benefits to your business:

1. Merchant Services Is Your Personal Payment Expert

A good merchant services provider will be well-versed in anything related to a business accepting payments. From the best POS systems to security compliance, you will have someone you can contact to help you navigate the complexities of electronic payments. 

Having someone you know you can count on to handle the entire payment process not only alleviates stress, it frees up valuable time. You can focus on actually running your business and let merchant services worry about the headache of accepting payments. 

2. Merchant Services Know the System

As a business owner, you are probably always looking for ways to cut overhead costs. Merchant services can help you save money by negotiating better rates and minimizing fees. Your provider will also be aware of common “hidden charges” associated with payment processing and try to eliminate or reduce these charges. This rate and fee reduction can result in significant savings for your business.

3. Merchant Services Keep You Secure

One of the most important aspects of payment processing is keeping client information secure. You must obtain a certification stating you are compliant in this respect. If you do not have a certification or your certification lapses, you are subject to fines ranging from $5000 to $500,000. 

This may sound scary, but a merchant services provider can demystify the certification process and ensure you adhere to regulations. They will know what you need to do to maintain compliance based on the types of transactions you accept each month.

Additionally and very importantly, a merchant services provider will be informed of the latest trends in cybercrime. This is an ever-growing threat and there are literally hundreds of ways data can be stolen. Your provider will teach you what to watch out for to avoid a security breach. 

Finding a Good Merchant Services Provider

Finding the right merchant services provider can seem daunting. There are many, many companies to choose from, all with varying costs and capabilities. The best place to start when selecting a provider is by going to a qualified broker. He or she can suggest the merchant services provider that suits your individual needs. 

If you are in need of merchant services but aren’t sure where to start, give Summit Payments a call. We have years of experience in the payment processing industry and love finding ways to save you money. Contact us to schedule a consultation today.

3 thoughts on “Difference Between Merchant Services and Payment Processing”

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