What exactly does a merchant service provider (MSP) do? How should they approach their role? What are some things to look out for?
If you’re currently on the search for a merchant service provider for your business, you might currently be asking these questions.
An MSP is a company that provides services such as payment processing, fraud protection, data security, and other functions related to eCommerce.
They also provide support for merchants who want to accept payments from customers using credit cards or mobile wallets.
In this article, we are going to be providing you with a breakdown of all the factors that you should take into account when selecting a merchant service provider for your business, as well as providing you with some additional insight into what they actually offer.
What Is an MSP?
Before we dive into how to choose an MSP, it’s important to understand what an MSP actually does. An MSP takes care of many different aspects of running an online store. It handles everything from accepting payments to protecting your card details.
The main function of an MSP is to act as a middleman between the merchant and the bank. This means that they handle the actual transactions that occur in real-time.
The most common type of transaction is the purchase of goods or services. However, there are other types of transactions that can happen within an online store, including subscription fees, donations, and more.
The MSP will then pass these transactions onto the appropriate banks and/or financial institutions. For example, if services.
However, there are also services like recurring billing which can be used to automatically charge a user a monthly fee.
The MSP will also collect information about the purchases made by the customer and pass it on to the merchant so that he/she can keep track of his/her sales. Some MSPs even allow merchants to create custom reports based on specific criteria.
What Services Do MSPs Offer?
An MSP can offer a variety of services depending on your needs. Here are some of the most popular ones:
- Payment gateway – This type of MSP specializes in handling transactions. They take care of everything related to accepting payments online. They do this through payment gateways such as Stripe, Braintree, PayPal, etc.
- POS system – Point-of-sale systems are used to process credit card purchases at physical stores. An MSP can help you set one up.
- Inventory management – Managing inventory is another important part of running a business. An MSP can assist you with managing your stock levels.
- CRM software – Customer relationship management (CRM) software helps you manage customers and prospects. A good MSP can create a customized solution for you.
- Website hosting – Hosting websites is another crucial task for any business owner. An MSP can host them for you.
- Email marketing – Sending emails to potential clients is another great way to promote your brand. An MSP can send out promotional messages on your behalf.
- Cloud computing – Cloud computing allows users to store data in the cloud instead of storing it locally. You can access your files whenever you need them.
- Data backup – Backups are essential if you want to protect yourself against losing valuable information. An MSP can back up your data so you won’t lose anything.
- Analytics – Business owners need to know what works best for their business. An MSP will be able to analyze your sales and other metrics to give you insights into which strategies work best.
What Are Some Of The Best Merchant Service Providers?
There are many reputable companies offering merchant services. However, here are some of the top providers based on reviews and ratings.
GoDaddy has been around since 1997 and is known as the world’s largest domain registrar. It also provides website hosting services and email addresses. It was founded by Bob Parsons and Scott Wagner.
Bluehost is another well-known web hosting provider. It was founded in 1998 and now operates in more than 150 countries. Its headquarters are located in Utah, USA.
PayPal is a digital wallet owned by eBay Inc. It was founded in 2002 and is headquartered in San Jose, California, USA.
Shopify is a global eCommerce platform that allows merchants to sell products or services online. It was founded in 2006 and is headquartered in Ottawa, Canada.
Square is a mobile point-of-sale app that allows businesses to accept credit cards without having to buy expensive equipment. It was founded in 2009 and is headquartered in San Francisco, CA, USA.
How Do You Pick A Merchant Service Provider?
Choosing the right MSP isn’t easy. There are many factors to consider before making a decision. Here are some tips to follow when looking for an MSP.
1. Understand Your Needs
Before choosing an MSP, you should first understand what you need. Are you looking for a basic package that includes only a few services or do you want something more extensive?
What kind of budget do you have available? How much time do you have to spend researching companies? These questions will help you narrow down your options.
2. Compare Prices
Once you have a better idea of what you need, compare prices. Make sure the cost of each service offered by different providers is comparable.
Also, look into the terms and conditions associated with each plan. Some plans may come with hidden fees while others may not include certain features. It’s also important to check whether the provider has experience working with similar businesses.
3. Look For Reviews
It’s always a good idea to read reviews about the company you’re considering. Read customer testimonials and see how satisfied they were with the service provided. If there are complaints, make note of them.
If you’re looking for a reliable merchant account provider, then there are plenty out there. Now that you have taken the time to read through the guide above, we’re hoping that you now have a much greater understanding of how to pick the best MSP for you.
Thank you for reading! For more information, checkout our merchant resource gallery.
Paul Martinez is the founder of EcomSidekick.com. He is an expert in the areas of finance, real estate, eCommerce, traffic and conversion.
Join him on EcomSidekick.com to learn how to improve your financial life and excel in these areas. Before starting this media site, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.