Online payment processing services are a vital part of any modern business. These services allow organizations to conveniently accept credit and debit card payments from customers, granting them access to the funds from those transactions.
More than 108.6 million credit card transactions occur in the U.S. each day, and 70% of people own at least one credit card. And in 2019, 71% of consumers preferred to make purchases using a credit or debit card. As debit and credit cards continue to grow as consumers’ preferred payment methods, the need for highly qualified merchant service providers or internet merchant accounts also grows.
The Advantages and Disadvantages of Major Merchant Service Providers
When searching for a payment processing service for your business, opting for a major merchant service provider may seem like the simplest choice. However, there are pros and cons. Let’s look at the advantages and disadvantages of a major merchant service provider.
Advantages of Major Merchant Service Providers
One of the biggest advantages of a major merchant service provider is that it handles the time-consuming administrative duties that come with storing and managing your customers’ payment card details, along with the daily responsibilities of operating an internet merchant account.
But there are more advantages. With these providers, you can:
- Eliminate the need for your business to develop and maintain its own secure payment system.
- Easily apply for an account, compared to the more rigorous process for smaller internet merchant accounts. (There will be much fewer details surrounding your business plan, trade history and current suppliers.)
- Obtain an account much more quickly than a smaller internet merchant account.
Although these are upsides, let’s do a reality check and look at the downsides.
Disadvantages of Major Merchant Services Providers
Unfortunately, there are some significant drawbacks to using a major merchant service provider. One of the biggest? Customers can see that their payments are not going directly to your business, even though they may be making a payment on your website. This could decrease the amount of trust the customer has in your organization, potentially leading them to seek similar goods or services elsewhere.
Here are some other disadvantages:
- Payment processing companies can hold funds paid to your business for up to one or two months. (Months, not weeks or days.)
- Major merchant service providers typically charge more than an internet merchant account, even as the market becomes more competitive.
- When the security of your customers’ data is in the hands of a major merchant service provider, any data breach or leak that occurs will reflect poorly on your business.
Although major merchant service providers offer some convenience, the disadvantages could have a serious impact on your business. It’s hard to earn trust back after a breach, and even more frustrating when it’s out of your control.
The Advantages of Internet Merchant Accounts
Internet merchant accounts bring numerous advantages to businesses of all sizes, offering flexible contracts, better prices and no hidden charges or early termination penalties.
These three reasons are enough for many businesses, but internet merchant accounts can bring even more advantages, including:
- Personalized and convenient customer service at every touchpoint, from first contact to equipment setup and implementation.
- Straightforward, transparent pricing so that businesses understand the total cost of services.
- Customizable options that are tailored to your business needs, goals and budget.
- Strong customer support during the setup, installation and maintenance process.
Choosing the Right Merchant Service
Before choosing between a major merchant service provider or a small merchant service company, ask yourself a few key questions:
- Which option is more tailored to my business needs, goals and budget?
- Which option is more cost-effective?
- Which offers more flexible contracts?
- Are there any hidden fees in either option’s pricing structure?
An internet merchant provider like National Processing discloses all pricing information upfront and doesn’t lock you into long-term contracts. Plus, there are no hidden fees or early termination charges. See how easy and cost-effective a partnership with an internet merchant account can be. Contact us today to learn more.