Finding The Best Merchant Service Provider For Your Small Business

merchant service provider

It’s as simple as this: if you wish to continue running a successful business, you’ll need to be able to accept electronic and card payments; and to accept electronic and card payments you’ll need a merchant service provider (MSP). 

But even if you know that this is the best investment to make, choosing the right MSP can be overwhelming – especially as the one you choose will impact your profits, monthly expenses, transaction speed, and user experience. Here are the factors to weigh before signing a contract. 

Determine Your Small Business’s Needs

As the economy moves towards a cashless system, paper currency transactions have dropped below 17% of all payments, and MSPs are responding to this trend by providing simpler fee structures, faster transactions, and increased flexibility. 

But, while nearly 86% of business owners are now satisfied with their MSP, not two of the 5.5 million small businesses in the UK are exactly the same. 

So, how can you find the right merchant service provider that meets your financial and CX goals?

The first step is to determine your needs. Some of the aspects to look at include:

  • Your customers’ preferred payment method 
  • The nature of your business (i.e.: eCommerce platform vs brick-and-mortar businesses)
  • Your customers’ geographical location (for example, if you target the Chinese market, you’ll need an MSP that accepts WeChat Pay)
  • The size and age of your business
  • Monthly sales volumes (in-store and online)
  • Your budget and required features

Review Each Provider’s Features and Services

At their core, merchant service providers aim to be an efficient intermediary between your business, your customers, and the bank receiving your customers’ payments. When relying on an MSP, you can ensure that funds reach your bank account safely and promptly (usually within 24-48 hours). 

But most MSPs also offer a wide range of features, including:

  • Payment processing services for multiple payment types, including debit and credit card payments, ApplePay, GooglePay, Klarna, and more. 
  • Online and digital payment processing for eCommerce
  • Point of sale (POS) systems and hardware
  • Merchant accounts

Whether you have access to private or shared merchant accounts, choosing the right online bank account can help you better manage transactions directly from your phone or computer. 

Understand an MSP’s Real Processing Fees and Costs

Understanding how merchant service providers build their fee structure might not be straightforward, but it is certainly one of the most important aspects of payment processing and managing eCommerce transactions

Today, the average credit card processing fee can vary between 1.6% to 2.9%, but this isn’t the only fee that merchants will have to absorb when accepting electronic payments.

Other costs include card-present and card-not-present fees, monthly fees, authorisation fees, and invoice transaction fees. Make sure to review all the costs involved to adjust your profit margin. 

Most merchant service providers aim to help merchants better manage their finances while offering more payment options to their customers. In turn, an increasing number of MSPs offer multiple integration options with popular accounting software used by small businesses, including Quickbooks. 

This might not be an essential feature to have, but it can simplify your business’s bookkeeping and tax filing. 

Ask About Security Features

Merchant service providers are designed to boost your customers’ checkout and payment experience, while also looking after your earnings. Because of this, MSPs tend to collect and store customer, business, and financial information. 

While most services offer cutting-edge online security systems and authentication strategies, business owners should carry out thorough due diligence before choosing a certain provider. 

Test Their Customer Service and Set Your Expectations

MSPs might make your transaction much faster and more secure, but even a few minutes of downtime can disrupt the customer experience, affect your reputation, and cause severe financial losses. 

In these rare eventualities, as well as in the case of chargebacks, returns, and discrepancies, you’ll need to be able to count on a solid support system that can resolve any issue promptly and without delay. After all, the checkout step is one of the most impactful ones on a customer’s experience with your business! 

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