Choosing a Merchant Service Company

If you own a cash-only business, then you handle all payment transactions yourself. However, if you want to accept payments beyond cash—including offering your customers a variety of payment options such as credit cards, debit cards, and mobile payments—you’ll need to partner with a merchant service provider, or MSP. MSPs handle the complexities of processing credit card payments, like dealing with banks and credit card associations and consolidating fees.

When choosing a merchant service company, payment acceptance methods and available payment options are key considerations, as they determine how easily your business can accept payments in different environments.

So, how do you choose a merchant service provider? This guide will discuss what to look for, what to avoid and how to factor in your business’ unique needs so you can make the best decision.

How Do You Measure Success?

Before you start comparing merchant service companies, it’s a good idea to consider your own company. Ask yourself, what qualities matter most to you in a payment processing partner? Maybe you would be willing to pay more if it meant having excellent customer service and responsive customer support. Or, perhaps you want a processor that offers fixed rates to make your budgeting and accounting simpler.

Whatever matters most to you, you should have this in mind so you can take a more purposeful, targeted approach to choosing the right MSP. Even if a fellow business owner recommends a certain MSP they’ve worked with, that doesn’t necessarily mean that provider would be the right fit for your business — even if you have a similar-sized business in the same industry.

Determine what a successful merchant service relationship would look like to you, and keep it in mind as you consider MSPs and select one to partner with. Your ideal merchant service company is one that checks the boxes that matter most and can help you accomplish your goals for your business. Integrating merchant services with other business software, such as accounting systems, can also streamline business processes and contribute to your overall success.

What to Look for in a Payment Processing Merchant Service Provider

While every business may have its own ideas of what matters most in a merchant service provider, there are some general qualities any business should look for. The best merchant service companies offer comprehensive payment solutions tailored to business needs, ensuring seamless transaction processing and account management. How you prioritize these qualities is up to you, but the ideal partner would offer all of them, and understanding key things to know when shopping for merchant services can help you evaluate providers more confidently.

Some of the most important things to consider when you choose a merchant service provider:

• A positive reputation: Look for a company that has been around long enough to establish a solid reputation among merchants. Look for reviews and testimonials that speak to what sort of experience you can expect to have with the company. Note what qualities people celebrate. Where does the company really excel?

• Reliable customer service: Customer service is always an important quality to look for in an MSP. If you run into a problem or have a question, you want to know you can get in touch with your MSP easily and enjoy quick and easy communication with them. If you’re using technology from your MSP, you’ll want to have tech support you can count on whenever you need it, as well as access to comprehensive payment tools that support your business across different sales channels.

• Transparent pricing models: Finally, you always want to look for an MSP that keeps things clear and simple when it comes to paying for their services. You should be able to understand the pricing models for services like credit card processing or other tools, so you’re never left in the dark or unsure of whether you’re being charged fairly. Keep in mind that some providers may require a monthly subscription for advanced features or services.

• Processing volume flexibility: Some MSPs will put a cap on how many transactions you can process in a given month. If the cap is well above what you could ever expect to do, it may not be a problem. But, what if you have a sale that does incredibly well and you process far more payments than usual? An MSP that is more flexible will allow you to process whatever number of payments you need in a given month.

Consider Your Business’ Unique Needs

When you choose a merchant service provider, you’ll also need to consider which qualities are most important. Many business owners face similar challenges when selecting a merchant service company, such as managing cash flow and choosing the right payment processor for small businesses. The right merchant account provider for your business may not be the right choice for the business next door.

To find an MSP that will meet your business’ specific needs, ask yourself:

It’s also important to consider how merchant services will integrate with your existing business software, as seamless integration can improve efficiency and streamline your operations.

What Type of Business Do You Run?

First, you’ll need to consider the type of business you run. What industry are you in? Do you own a retail store? A salon? A cafe? A health clinic? Some business types, where chargebacks are more common, are considered high-risk. If you own a high-risk business, you may find it difficult to find an MSP that will work with you. Otherwise, you’ll have a variety to choose from. Look for an MSP who has experience processing payments for other businesses in your industry.

What Size Is Your Business?

Another aspect of your business to consider is its size. Small businesses, mid-size businesses and large businesses all tend to have different needs, and payment processing for small businesses often requires tailored solutions that differ from enterprise offerings. If a merchant account provider is used to working with large, national chains, they may not be the best fit for your small-town boutique. Providers like Payment Depot may offer flexible, low-cost solutions for small and mid-size businesses, making them a good option for those seeking transparent pricing and integrated payment processing. You want an MSP who understands your business. When you begin your search, consider using terms like “best merchant for small business” or “best merchant service for mid-size business” to help identify potential companies to consider.

Where Do You Do Business?

Next, consider where you do business. Do you sell online, in a brick-and-mortar location, or at a mobile shop at events? Whatever the case, make sure you choose an MSP who is a good fit for how you’ll be processing payments.

If you sell online, setting up an online store is essential, and you should look for a merchant service company that offers robust point-of-sale credit card processing and e-commerce solutions. These solutions should integrate seamlessly with your website to facilitate secure and efficient online transactions, which are crucial for e-commerce businesses. Also, consider what rate you’ll be charged for card-not-present transactions.

For in-person sales at a physical location, having a reliable POS system is important, especially in specialized environments like auto shops and dealerships that need tailored payment processing solutions. A POS system can streamline payment processing, help with inventory management, and integrate your sales channels, making it valuable for brick-and-mortar businesses.

If you sell on-the-go, look for an MSP that can set you up with a mobile card reader.

What Other Tools Does Your Business Need to Succeed?

Merchant account providers are often referred to as credit card processing companies, but a good MSP for your business should be able to do more than just process credit card payments. Look for a provider who is interested in equipping your business to succeed and who has the tools to help you do it. For example, robust inventory management features in POS systems can help you track stock levels and prevent stockouts, while integration with accounting software streamlines your operations and improves efficiency. A reliable payment processor is essential for facilitating transactions and integrating with other business tools like mobile apps and e-commerce platforms. Your MSP should enable your business to accept credit card payments and electronic payments, ensuring you can serve customers in any setting. Additionally, tools like payment links make it easy to facilitate online payments through shareable links or embedded pages. Secure and efficient management of payment data is crucial for compliance and operational effectiveness. Be aware that interchange fees, charged by card networks, are a key part of the overall cost structure for processing transactions, and understanding common credit card processing terms will make it easier to compare providers. Those tools will differ from business to business, so determine what would help your business the most. Do you need a scheduling platform? A loyalty program? Other apps? Look for an MSP who can set you up with what you need.

Understanding Contract Terms and Fees

When choosing a merchant services provider, it’s vital for business owners to thoroughly understand the contract terms and the range of fees involved in accepting credit card payments. Many merchant service providers offer different pricing models, and these can significantly affect your business’s cash flow if not carefully reviewed.

Start by examining the monthly fees that merchant service providers offer. These can include charges for maintaining your merchant account, access to payment processing tools, or additional services like online payments and mobile payment processing. In addition to monthly fees, you’ll encounter processing fees—costs incurred each time you accept card payments, whether in-store, online, or through mobile payments. These fees can vary depending on the type of card used, the payment gateway, and the provider’s pricing structure.

It’s also important to watch out for hidden fees that may not be immediately obvious in your contract. These can include charges for things like early termination, PCI compliance, chargebacks, or even statement fees. Over time, these unexpected fees can add up and impact your business’s profitability.

Because many merchant service providers structure their fees differently, it’s essential to compare options and ask questions about any terms you don’t understand so you can better evaluate credit card fees and what constitutes a good deal. Carefully reviewing your contract before signing ensures you know exactly what you’ll be paying for credit card processing and helps you avoid surprises that could disrupt your business operations. By taking the time to understand all the costs associated with accepting credit cards, you can choose a merchant services provider that truly supports your business’s financial health and long-term success.

Partner With Velocity Merchant Services

If you’re looking for a merchant service provider for your business, consider Velocity Merchant Services, a leading merchant services company established in 1998. With over 26 years of experience, a commitment to helping businesses succeed, and cutting-edge technology, VMS is a company you can trust to help you process payments and watch your company grow. VMS offers low transaction fees and no additional cost for certain features, making it a cost-effective choice for your payment processing needs.

Setting up a merchant account with VMS requires linking your business bank account and may be subject to credit approval, ensuring secure and seamless fund transfers to your main bank account.

Our Clover® Station Point-of-Sale Systems include everything you need to streamline your business, from scheduling technology to gift cards to loyalty programs.