How to Choose a Merchant Service Provider in 2022

Expert guidance on what to look for, the questions to ask, and how to find the merchant service provider that best meets your business’ needs.

There are hundreds of merchant service providers vying for the attention of business owners and it can be overwhelming to try to pick the one that’s right for your business. 

One might offer the best price, but another has better customer service. Still another may claim to have the most payment methods available but it doesn’t operate in all of your target countries. 

The stress is real, as this service is essential for your business to be able to accept credit cards and other payment methods. Have no fear! We’re here with expert advice to guide you through the process and help you understand exactly what to look for and what to avoid in your quest to find the right merchant service provider.

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What to Look For in a Merchant Service Provider 

At its most basic, you need a merchant service provider that will enable you to process credit cards and other alternative payment methods so that customers can buy your products. Sounds simple enough, but once you start looking, you’ll find that not all providers are equal, and you really need to do your homework to find the one that suits your unique needs.

Only you can decide what features are a “must have” for your business and which are just a “nice to have.” Here’s a list of what we think are some of the most important features a merchant service provider can offer.

Wide Variety of Payment Methods

It’s not just about accepting all the different types of credit cards. Some customers may not even want to use a credit card at all, but would rather use Paypal, Apple Pay, or any of the seemingly unending payment options out there. 

One of the most important things to check for when researching merchant service providers is the number of different payment methods it supports. Of course, the first thing you’’ want to do is make sure it supports the methods most popular with your customers already. 

That said, you should also think about the long term and whether you’ll want to add more options later. It’s always good to have the option to add more payment methods whenever you want.  

Fast Onboarding

Once you choose a provider, you’ll want to get up and running as fast as possible. Look into what the onboarding process entails. Check what information you’ll need to provide, and if there are any specific requirements you must meet. 

All providers should conduct some level of due diligence (and if they don’t, that should be a red flag), but some providers will let you start accepting payments into an escrow account while they complete the process. If you’re ready to launch or already have a customer base, this could be very helpful. 

Easy Setup

After the initial onboarding process, the next step will be to integrate the payment methods that you want to accept into your site. Some providers make this super easy and require little more than the click of a button. Others may have a more complicated process. 

Think about how often you might need to add new payment methods. If, for example, the process is a bit complex but you like everything else about the provider and you don’t expect to add new methods, then it might be fine for you.

Keep in mind, though, that things can change quickly in the world of online payments. Even if you think you aren’t likely to need more than the basic payment methods, you don’t want to be stuck when a new payment method crops up and becomes super popular. 

Switching payment service providers later on can be a hassle, so it’s better to start off with a provider like Pay.com, that lets you add payment methods with the click of a button.  

Full Transparency 

Don’t fall for the hidden fees trap. If it’s difficult to get clear pricing and contract information from a provider, you can be pretty sure they’re trying to hide something. The last thing you want is to suddenly get hit with unexpected costs down the line.

Keep in mind that providers will charge you fees on top of the fees charged by the credit card companies. A good merchant services provider will be happy to explain to you exactly what all costs and fees will be based on the services you sign up for. You should walk away from the conversation with a clear picture of what you’ll be getting and what it will cost. 

You’ll also want to know what happens if you decide to stop the services – can you get out of the contract or are there additional fees involved? Again, if this information is not readily available, that may be a sign to stay away from that provider. 

24/7 Customer Service

Not all of your buyers will necessarily be in the same time zone as you or as your merchant services provider. You definitely don’t want a situation in which there’s a problem and you can’t reach anyone to help you solve it. 

To make sure you don’t lose sales, you’ll want a provider that offers customer support 24/7, whether by phone, email or chat. Confirm that you’ll be able to communicate with an actual person even during off hours. Pay.com fits the bill with friendly, knowledgeable,  and professional customer service reps available to help you 24/7.

Analytics and Reports

If your business is still small, it could be easy enough to track your sales in a simple spreadsheet, but as you grow, it will be much more effective to use an automated system. 

A good merchant services provider will offer analytics and reporting tools that will save all of the important sales and customer-related data. You should be able to customize reports to help you track your progress and make informed business decisions. 

You may want to check and see whether the provider’s platform can also integrate with any other systems and solutions that you are already using such as a customer database.   

Customizable Checkout Page

A sketchy-looking checkout page can turn customers away quickly. Look for a merchant service provider that lets you customize your checkout page so that it matches the look and feel of your site. 

The checkout page should also be intuitive and provide a quick and painless experience for customers. If they have to click too many times or be redirected to too many different pages, they’ll just click away to another site that’s easier to use. 

PCI Compliance

Unfortunately, any online merchant is always at risk of fraud or data breaches. The best way to protect yourself and your customers is to make sure that the provider you use is PCI-compliant in line with industry standards. 

Look into what the provider offers when it comes to fraud protection and management. A good one will provide encryption, tokenization, and other fraud management tools. 

Questions to Ask Your Merchant Service Provider Before You Sign Up

Most of the points described above should be relatively obvious from the provider’s website, but there are some key details that may be better discussed in an initial discovery call. 

For example, if a provider offers different pricing structures for different types of businesses, they may prefer to speak directly rather than post prices online.

Once your initial research has narrowed down the search, here’s a list of questions you might want to ask the final candidates to help you make your decision:

  • What are all of the fees, terms, and conditions, including any “fine print”?
  • What types of companies does the provider usually work with (and is it experienced with your specific industry)?
  • What’s the process if you decide you need additional services and want to upgrade?
  • How long will it take to receive funds once payments have been processed?
  • Are there any limits on the amount of payments that can be processed in a given time period?
  • Do they have references that you can speak to?

How Do You Choose the Best Merchant Service Provider for Your Business? 

The merchant provider that can best meet your needs is out there – you just have to find it. The suggestions above will help you figure out what different providers can offer, which is the first step. The second step is understanding which of those offerings are actually what’s best for your business.

To find the provider that’s best for you, first think about some of the things that define your business:

  • Location: If you have a large number of customers in a particular country, you’ll want to choose a merchant service provider that offers the payment methods that work there.
  • Status: If you’re launching a brand new venture, it might make sense to work with a provider who’s used to being more hands-on and can offer the extra guidance you may need.
  • Work methods: Maybe you have your own development team who will want to code new payment methods into your existing site, or perhaps you prefer a simpler, no-code solution. You’ll want to make sure your provider can give you the solution you need.
  • Industry: Depending on your industry, you may want a provider who specializes in your type of business. This is especially true if you’re in a higher-risk business, like gaming. 
  • Physical store: If you have a physical location in addition to an online presence, you should look for a merchant services provider that can also give you the physical hardware you need, such as a card reader or contactless terminal. 

The Bottom Line 

With so many providers to choose from, it can be tempting to just close your eyes and pick one, assuming that they all offer more or less the same thing. In reality, however, there are subtle (and not-so-subtle) differences that can make or break your success if you choose the wrong provider.

Make sure you understand your own needs, do your research, ask lots of questions, and then make the decision that feels right to you. Pay.com is a great place to start! Check out how quick, easy, and convenient we make it to accept payments on your website.

FAQs

What is a merchant service provider?

A merchant service provider is a company that enables sellers (or merchants) to accept credit cards, debit cards, and alternative payment methods from their customers. The merchant service provider takes care of the payment processing and usually offers additional features and services, like reports and analysis.

What are merchant services for small businesses?

Merchant services can include payment processing, authenticating credit card data, providing a dashboard to keep track of your customers and payments, providing a secure checkout system, and more.

How do I set up a merchant service?

Each merchant service provider will have its own onboarding process that you will need to follow. With Pay.com, the onboarding process is quick and painless, and we can walk you through everything to help you get set up as soon as possible.

How can I accept payments on my website?

It’s easy to accept payments on your website with Pay.com. All you need to do is set up an account. With our quick onboarding process, you’ll be up and running in no time. We take care  of the processing in the back-end, ensuring that online payments go through so that you can focus on building your business. 

What's the difference between a payment gateway and a merchant account?

The customer enters their payment details into the payment gateway, which facilitates the payment processing. The funds are then held in a merchant account for a short period of time until the transaction is complete, and then they’re transferred to your business bank account. Both are necessary in order to accept payments online.

How much do merchant services cost?

The cost of merchant services can vary significantly from provider to provider. You can expect to pay credit card processing fees charged by the credit card companies as well as additional fees charged directly by the merchant service provider. These fees can be a flat fee or a per transaction cost or some combination and on average range from 1.5-3.5% of each transaction.  It’s important to choose a provider that is fully transparent about its pricing process. With Pay.com, there are no hidden fees and you will always know up front how much each service costs. 

Meet the author

Emily Kirschenbaum

Emily is a content writer with a special interest in fintech and business. She loves sharing her knowledge to help small businesses take their first steps towards success.

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