Merchant services

Merchant services is the name given worldwide to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment through some secure (encrypted) channel by use of the customer's credit card or debit card or NFC/RFID enabled device. More generally, the term includes the following in its use:

• Credit and debit cards payment processing
• Check guarantee and check conversion services
• Automated Clearing House check drafting and payment services
• Gift card and loyalty programs
• Payment gateway
• Merchant cash advances
• Online transaction processing
• Point of sale (POS) systems
• Electronic benefits transfer programs, such as ration stamps (called food stamps in the U.S.)

Merchant services providers typically require the merchant to set up a merchant account with a provider either directly or through an independent sales organisation or referral partner; for example, banks or B2B service companies, which is how all banks offer merchant services in the United Kingdom except for Barclays/Barclaycard which acquire their own payments.

An exception is mPOS systems which are mobile pin entry devices (PED) which typically connect to a mobile phone through Bluetooth and then use the phone's WiFi or mobile data to connect with the banks. (This system doesn't require a merchant account although the companies that offer this type of service will still have a relationship with an acquirer). Payments made through this method cost a lot more per transaction so are ideal for businesses that don't put through many card transactions. There is usually a charge for buying the device from the provider, typically £40 - £100.

See also

• Comparison of payment systems

External links

Merchant service Provider