Merchant Services for Small Businesses – A Detailed Guide

If you’re a small business owner, you know that accepting credit and debit cards is essential to growing your business. But what you might not know is that there are a lot of different options out there for merchant services. And with so many options, it can be hard to figure out which one is right for your business.

That’s why we’ve put together this guide to merchant services for small businesses. We’ll walk you through the different types of merchant services, how they work, and what to look for when choosing a provider.

What are Merchant Services?

Merchant services are simply the methods that businesses use to accept credit and debit cards. This can include things like credit card terminals, point-of-sale (POS) systems, and mobile credit card processors.

There are a few different types of merchant services, but the most common are:

  • Card-present merchant services: These are the traditional methods of accepting credit and debit cards, like swiping a card through a terminal or using a POS system.
  • Card-not-present merchant services: These are methods of accepting credit and debit cards when the card is not physically present, like over the phone or online.

Some businesses will use both types of merchant services, while others will only use one or the other. It all depends on your specific business needs.

How do Merchant Services Work?

In order to understand how merchant services work, you first need to understand the basics of credit and debit cards.

Credit and debit cards are issued by banks or other financial institutions. They’re a type of plastic money that can be used to make purchases at businesses that accept them.

When you use a credit or debit card to make a purchase, the business will send your information to their merchant services provider. The merchant services provider will then send the information to the bank that issued the card.

The bank will then either approve or decline the transaction. If the transaction is approved, the funds will be transferred from the bank to the merchant services provider. The merchant services provider will then transfer the funds to the business.

If the transaction is declined, the merchant services provider will send a decline message back to the business.

What to Look for in a Merchant Services Provider?

Now that you know how merchant services work, it’s time to start looking for a merchant services provider.

There are a few things you’ll want to keep in mind when choosing a merchant services provider, including:

  • Fees: Make sure to ask about all of the fees associated with the account, including setup fees, monthly fees, and transaction fees.
  • Contracts: Be sure to read the contract carefully before signing. Some merchant services providers will lock you into a long-term contract, while others will have more flexible terms.
  • Equipment: If you’re using card-present merchant services, you’ll need to have the proper equipment, like credit card terminals and POS systems. Make sure the merchant services provider you choose offers the equipment you need.
  • Customer service: Things will inevitably go wrong from time to time. When they do, you’ll want to be able to reach customer service easily. Make sure the merchant services provider you choose has good customer service.

Now that you know what to look for in a merchant services provider, it’s time to start shopping around. Be sure to compare fees, contracts, and equipment before making your decision.