Merchant Service Providers Vs Banks: What is the Better Option?

For the past several years, banks have enjoyed domination over providing merchant credit card processing services that are referred to as providing businesses with merchant accounts. These were the banks that maintained individual merchant accounts, housed the processing platforms, handled authorization and connections to the major credit card companies. Over the time, as they realized they were the only game in the town, the processing rates they offered to businesses looking to accept credit cards became higher and higher. And then the need for third-party processors or merchant service providers arose as the banks realized that handling everything was more cumbersome than profitable.

Nevertheless, the smart business owners still take time to analyze all their options before deciding whether to maintain a merchant account with their bank or with a third-party processor which offers merchant services. In Woodland Hills CA, there are many good merchant service providers which handle all those things that your bank may not be able to handle. Let us cast a glance below to know what these things are.

Authorization: At the time of credit or debit card transaction, a merchant service provider acts as an intermediate between a merchant's acquiring bank and a buyer's or customer's issuing bank. They ensure that each transaction is authorized against the purchaser's credit limit, route the request to the appropriate card association and receives and transmits batch deposits for each merchant on a daily basis.

Chargeback: A chargeback is what happens when an error occurs while entering the transaction data, when an item or service arrives to the customer not-as-described or damaged, when a customer did not receive an item or service they paid for, or when there is an identity theft occurrence where card information is stolen and used to make fraudulent purchases. Chargeback needs to be resolved, whether it is the customer or the merchant at fault and it is the merchant services provider’s duty to resolve them.

Fraud Detection: Third party processors also provide the advanced services which monitor transactions for prospective fraudulent activity.

Settlement: When a transaction takes place, a merchant doesn't just receive the amount of the sale immediately. There's a whole transaction cycle that takes place before a merchant receives funds. At the end of each day, a merchant sends out an information data file of all their transactions for that day and sends the batched file to their processor. After the service provider completes all this work and within a certain period of hours, merchant will receive a deposit into their bank account for the amount of that day's transactions.

Therefore, consider your requirements and decide whether you need the extra services that providers of merchant services in Woodland Hills CA can provide.