Why Merchant Services Outperform Payment Service Providers for Retail Business
With so many options available to retailers today, researching the best ones can easily get complicated.
AT DTS, we’ve done the research for you. Here’s what you need to know.
Merchant Services
Merchant services refers to electronic transaction processing (primarily from credit and debit cards) that is managed through a merchant account, which holds transacted funds until they’re delivered to your regular business bank account.
Merchant accounts require credit approval to open. Because they are separate from the business bank account, they help safeguard retailers from credit card fraud.
Merchant services include a higher level of service than other payment processing service types, from assistance getting set up to dealing with chargeback disputes.
Services are also commonly customized to the needs of the retailer, also known as the merchant.
This means that plans are tailored to the needs of each business. When you set up your merchant services account through DTS, we’ll guide you every step of the way to make sure that your plan best fits your needs—and those of your customers.
Payment Service Providers
It used to be that you had to open a merchant account to process credit card payments. Today, with the proliferation of online technology, retailers have multiple ways to go about accessing card transactions.
A popular method recently is to use a PSP. Payment Service Providers provide retailers with access to payment gateways and transaction processing without requiring a dedicated merchant account. Instead, they aggregate transactions from thousands of merchants into one account.
The result is two-fold:
- Deceptively low payment processing rates
- High rates of account holds and freezes due to leaving retailers to handle chargeback disputes, and commonly siding with customers, leaving retailers responsible for sales refunded but not returned, and all the fees associated with them.
At first glance, PSPs appear to be a cheap and easy way for retailers to obtain their electronic payment processing.
For high volume retailers, retailers that have lots of international customers or tend to experience higher rates of chargebacks and returns, PSPs can become costly.
An account freeze due to too many chargebacks can cripple a business. With a merchant services account, you have greater security from the ramifications of fraud, and can work with your provider (such as your DTS service professional) to minimize its occurrence.
Payment Gateways
Payment gateways refer to the software used to process transactions electronically.
Payment Service Providers and Merchant Services both use payment gateways. Well-known gateways (and PSPs) include Paypal, Square and Stripe.
If you use a payment gateway but don’t have a merchant account, your credit processing service is being provided by a PSP.
Getting Started: Merchant Services with DTS
New to retail? If you’re in the market for an ATM, have a high volume of sales or anticipate receiving chargebacks, there’s no question—You need merchant services.
Ready to upgrade your payment processing? If you’ve had your payment processing frozen, lost multiple chargeback disputes, and/or started to experience chargebacks at a rate higher than 1 for every 100 sales, you need merchant services.
We’ll work with you to tailor your merchant services account to the needs of your unique business.
Our underwriting process usually takes a week or less, sometimes up to 2 weeks. So you’ll be set up and accepting payments in no time.