When you think of merchant services, what comes to mind? If you’re like most people, you probably think of credit card processing. And while credit card processing is a big part of merchant services, it’s not the whole story.
In its simplest form, merchant services is anything that helps a business accept and process payments. This can include credit card processing, but it also includes other services like ACH processing, check processing, and even gift card processing.
Let’s take a closer look at each of these services to see what they involve and how they can benefit your business.
Credit Card Processing
As we mentioned, credit card processing is probably the first thing that comes to mind when you think of merchant services. Credit card processing simply refers to the process of accepting and processing credit card payments.
There are a few different ways to process credit card payments, but the most common method is through a point-of-sale (POS) system. POS systems can be as simple as a card reader that plugs into your smartphone or as sophisticated as a dedicated terminal.
Another way to process credit card payments is through an ecommerce platform like Shopify or BigCommerce. These platforms allow customers to enter their credit card information on your website and then process the payment themselves.
No matter which method you use, you’ll need to sign up for a merchant account in order to accept credit card payments. A merchant account is simply a bank account that allows you to process credit card payments.
There are a few different ways to get a merchant account, but the most common method is through a merchant services provider like Square or Stripe. Merchant services providers will usually provide you with a merchant account and a credit card processor in one package.
Once you have a merchant account, you’ll need to set up a credit card processor. A credit card processor is a company that handles the actual processing of credit card payments.
There are a few different credit card processors to choose from, but the most popular option is PayPal. PayPal is a trusted name in online payments, and they offer a variety of features that make them a good choice for businesses of all sizes.
Another option to consider is Stripe. Stripe is a newer player in the credit card processing space, but they’re quickly gaining popularity due to their low fees and easy-to-use platform.
Once you have a merchant account and a credit card processor, you’ll be able to start accepting credit card payments. In most cases, you’ll be able to start processing payments within a few days.
ACH Processing
ACH processing is another type of payment processing that’s often used by businesses. ACH stands for Automated Clearing House, and it’s a network that allows businesses to process electronic payments.
ACH processing is similar to credit card processing in that it allows customers to make payments using their bank account information. However, there are a few key differences between the two.
First, ACH payments are processed through the ACH network, which is separate from the credit card network. This means that ACH payments can take a few days to process, whereas credit card payments are processed immediately.
Second, ACH processing is typically cheaper than credit card processing. This is because there are no interchange fees associated with ACH payments. Interchange fees are the fees that businesses pay to accept credit card payments.
Finally, ACH processing is often used for recurring payments, such as monthly subscriptions. This is because ACH payments can be set up to process automatically, which makes it easy for businesses to manage their recurring payments.