Merchant Services Made Simple

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Does your business have merchant

services? If you accept credit and debit

cards, you have merchant services. If

you don’t accept credit and debit cards,

you should — and the right merchant

services provider can make it easy

and cost-effective. “Merchant services”

refers to the product and services that

a business needs to process electronic

payment transactions involving credit or

debit cards.

Merchant services providers — also known as payment processing providers — manage your credit and debit card processing for your business. The top providers offer merchant services that go beyond credit and debit card payment processing and include the sale and/or lease of point-of-sale systems, check guarantee, Automated Clearing House (ACH) check drafting services, gift and loyalty card programs, electronic benefits transfer (EBT) processing and more.

I N T R O D U CT I O N

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All businesses that accept payment cards need merchant services, and a business’s needs are likely to change over time as their businesses evolve. Each business is unique, and it’s important that their merchant services program be flexible and scalable enough to handle whatever changes come about. To ensure that, a merchant services provider should have a comprehensive overview of your business, your credit card processing requirements and your plans for future expansion. A merchant services program that can be adapted to your specific business needs can be a key factor in the business’s ongoing growth.

Why Merchant Services Are Important

B US I N E SS & CR E D I T CA R D P R O CE SS I N G

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As with any new business relationship, there are criteria you should consider when choosing your merchant services provider. Keep in mind that you will rely on your provider on a daily basis for secure, quick and dependable credit card processing.

There are a lot of merchant services providers to choose from, so make your decision using a step-by-step process:

1. Begin your search by asking other merchants for referrals and then follow through by checking out the companies’ histories and track records; you can learn a lot from their websites and the Better Business Bureau

2. Once you’ve compiled a short list of candidates, contact each company through its website or toll-free number and talk to a representative. Be sure to share information about your type of business, the services and/or products you deal in and the type of credit card processing that interests you:

• Credit card processing is a high-tech industry, so you’ll want to choose a provider that is experienced with the most up-to-date technologies and can offer specific examples of how they work with those technologies

• The provider should be willing to discuss various processing options, including point-of-sale terminals, mobile, Internet and wireless.

Selecting Your Merchant Services Provider

3. Pay particular attention to superior customer service and support; look for U.S.-based support personnel who are available 24/7/365 to help ensure that any issues that arise will be dealt with immediately

4. The processor should provide their service and support terms in writing, and they should also offer training for you and your staff on the products and services you receive

5. Discuss rates and fees in detail, both what’s included and what costs extra; make sure you’re not paying for products or services that you don’t need and won’t use, and ask about hidden fees upfront to avoid surprises later

P R OV I D E R S E A R CH CR I T E R I A

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Merchant services begins before any credit card information is collected. The first step is to establish a merchant account for the client. This account is where funds from the merchant’s credit and debit card transactions are deposited. It is totally separate from any other bank accounts the merchant may have.

Next, the merchant services provider can provide the client with all the hardware and/or software needed to handle their credit card processing needed to process card transactions. For example:

• A retailer who does business from a brick-and-mortar location needs a POS system to process face-to-face, card-present transactions; usually this includes a countertop credit card terminal equipped with a card reader and a phone or Internet connection to the processor

• Alternatively, card-present businesses that work from multiple locations or don’t have a set physical location may want to process transactions from their mobile devices such as smartphones; a merchant services provider can supply the hardware and maintain downloadable apps for this purpose

• Card-not-present businesses such as mail order/telephone order (MOTO) or e-commerce internet retailers can use a merchant services provider’s electronic gateway to manage their transaction processing and reporting

How Credit Card Processing Works Once you’ve established your merchant account

with a merchant services provider and have all the necessary products and services to get started, you’re ready to accept credit and debit cards.

The merchant services provider acts as the middleman between the business, the credit card networks and the issuing banks. Here’s how the process works:

1. The transaction begins when the customer slides their card through the merchant’s terminal or enters the account information on a secure online payment page; this information is transmitted via the provider to the bank that issued the credit/debit card

2. When the bank receives the data, it checks the cardholder’s account to see if the customer has adequate credit or funds to cover the sales total. If so, the bank issues an authorization or decline code that is passed through the merchant services provider down the line to the merchant, who completes the transaction by issuing a receipt if the transaction has been authorized, or voids the transaction if it has been declined. This portion of the process takes just a few seconds to complete.

3. At the end of the day, the merchant sends all the authorization codes they have accumulated in one batch to the merchant services provider, who sorts them and submits them to the appropriate banks for settlement; this is known as batch processing or settling the batch

4. The bank releases the funds to the merchant services provider and bills the cardholder; the provider deposits the proceeds into the merchant’s account, usually within 48 hours of the transaction

S E CU R E CR E D I T CA R D P R O CE SS I N G

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CO N CLUS I O N

In today’s business climate, merchant

services is a competitive and constantly

evolving industry. Make sure you align

yourself with a reputable provider

that has the experience, reputation,

products, services and customer

support you need to help grow your

business and continue to succeed.

To learn more: contact 888.845.9457 or visit tsys.com.

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©2017 Total System Services, Inc. TSYS® is a federally registered service mark of Total System Services, Inc. All rights reserved. TS6688g