How To Choose a Merchant Service Provider

Curious how to choose a merchant service provider? Learn key factors to consider when selecting the right merchant service provider for your business.

A great merchant services provider is secure, reliable, effective, and mostly silent. Swipesum is one of them. We are a payment technology and merchant services provider: we provide and manage merchant accounts, payment processing, gateway infrastructure and ongoing payment operations, and because we work through multiple backend provider relationships rather than a single processor, we can build the setup around your business and negotiate the terms directly.

When you have an exceptional payment processor on your side, your workflow for processing relevant payment methods will work as intended. In this situation, you can count on your provider to do the necessary work behind the scenes to accept payments. There won’t be much, if any, extra work required of you or your team.

Unfortunately, not all merchant services providers live up to this standard. Errors related to transactions and the funds that come from them can cause serious problems for your business.

Even if a provider offers reliable service, their fees may be excessive. Finding a merchant services provider that offers effective support at a reasonable price is crucial for your business. Evaluating the merchant services cost is essential, especially for businesses that process a high volume of card payments.

Swipesum can do exactly that. We are not tied to one processor, so we can put together the payment setup that meets your requirements, negotiate the rate, implement it and then manage it. Schedule a free consultation to learn more.

What is a Merchant Services Provider?

A merchant services provider (MSP) is a company that facilitates the acceptance of payments for businesses, enabling them to process transactions via credit cards, debit cards, and other electronic payment methods. A merchant account provider plays a crucial role in setting up accounts that allow businesses to accept these electronic payments, often catering to individual account setups and offering strategic solutions tailored to various business needs. Essentially, an MSP acts as the intermediary between the business, the customer’s bank, and the payment networks, ensuring secure and efficient payment processing. These services typically include payment gateway integration, point-of-sale (POS) systems, and the management of transaction settlements.

Benefits of Working with a Merchant Service Provider

Working with a merchant service provider offers numerous benefits for businesses of all sizes. Here are some key advantages:

• Increased Sales: By accepting a wide range of payment methods, businesses can attract more customers and boost sales. Whether it’s credit cards, debit cards, or digital wallets, offering multiple payment options can cater to diverse customer preferences.
• Improved Cash Flow: Merchant service providers ensure prompt payment processing, which can significantly enhance a business’s cash flow. Faster access to funds means better liquidity and the ability to reinvest in your business more quickly.
• Enhanced Security: Security is paramount in payment processing. Merchant service providers adhere to strict security standards, such as PCI DSS, to protect sensitive customer data during transactions. This reduces the risk of data breaches and builds customer trust.
• Simplified Payment Processing: With tools like payment gateways and POS systems, merchant service providers streamline the payment process. This simplification reduces manual work, minimizes errors, and ensures a smooth transaction experience for both businesses and customers.
• Access to Valuable Insights: Many merchant service providers offer robust reporting and analytics tools. These tools enable businesses to track and analyze payment data, providing insights into sales trends, customer behavior, and transaction volumes.
• Scalability: As your business grows, your payment processing needs will evolve. Merchant service providers offer scalable solutions that can grow with your business, ensuring you have the necessary infrastructure to handle increased transaction volumes.
• Technical Support: Ongoing technical support is crucial for resolving payment-related issues quickly. Merchant service providers offer various support options, from 24/7 helplines to online chat, ensuring you can get help when you need it.
• Cost Savings: Outsourcing payment processing to a merchant service provider can reduce the costs associated with maintaining your own payments infrastructure. This includes savings on hardware, software, and personnel.

By leveraging these benefits, businesses can enhance their payment processing capabilities, improve customer satisfaction, and drive growth.

Assessing Your Business Needs

When selecting a merchant service provider, it’s essential to assess your business needs to ensure you choose the right provider for your specific requirements. Here are some factors to consider:

• Payment Methods: Determine the types of payments you need to accept. Do you need to process credit cards, debit cards, online payments, or mobile payments? Understanding your payment method requirements will help you choose a provider that supports all necessary options.
• Transaction Volume: Evaluate your average monthly transaction volume. This information is crucial for determining the best pricing structure for your business. High-volume businesses might benefit from different fee structures compared to low-volume businesses.
• Industry Type: Consider the industry you operate in. Some merchant service providers specialize in specific industries, such as retail, hospitality, or healthcare. Choosing a provider with expertise in your industry can offer tailored solutions and better support.
• Security Requirements: Assess your security needs. Do you need to comply with specific regulations, such as PCI DSS? Ensuring your provider meets these requirements is vital for protecting sensitive data and maintaining compliance.
• Integration Needs: Identify any integration needs with other business systems, such as accounting software or e-commerce platforms. Seamless integration can streamline operations and reduce manual data entry.
• Customer Support: Determine the level of customer support you require. Do you need 24/7 support, or are standard business hours sufficient? Reliable support is essential for resolving issues quickly and minimizing downtime.
• Fees and Pricing: Consider your budget constraints. Look for a provider with competitive pricing and low fees. Understanding the fee structure, including transaction fees, monthly fees, and any hidden costs, will help you make an informed decision.

By thoroughly assessing your business needs, you can choose a merchant service provider that aligns with your specific requirements and supports your business goals. This careful evaluation ensures you select a partner that enhances your payment processing capabilities and contributes to your overall success.

How to Choose a Merchant Services Provider?

Choosing the right merchant services provider is a critical decision for any business, as it impacts your payment processing efficiency, costs, and customer experience. Evaluating merchant account services is essential to ensure you select a provider with transparent pricing, adaptable features, and industry-specific solutions. Here’s a step-by-step guide to help you select the best provider for your needs:

1. Decide whether you want a provider that also manages the account

Some merchant services providers stop at opening the account. Swipesum provides the merchant account, the processing and the gateway, and then keeps running them: reviewing the current setup, negotiating the pricing, handling implementation and managing the relationship afterwards. Because we are not captive to one processor, the backend provider is chosen to fit the business rather than fixed in advance.

2. Find Processors That Integrate with Your Business Management Software

Ensure the payment processor you choose integrates seamlessly with the software you already use for managing your business, such as eCommerce platforms (Shopify, WooCommerce), accounting tools (QuickBooks), or enterprise resource planning (ERP) systems (NetSuite). This integration simplifies operations, reducing the need for manual processes and ensuring that your payments sync with other business functions like inventory and financial reporting.

3. Evaluate Transaction Fees and Costs

Understanding the fee structure is essential when selecting a merchant services provider. Look at the transaction fees, monthly fee, and any hidden costs like early termination fees or PCI compliance charges. Understanding these charges is crucial as the monthly fee can significantly impact overall expenses. Swipesum, for example, helps businesses identify the most cost-effective options by comparing various providers and negotiating on your behalf, ensuring that you’re not overpaying for services.

4. Prioritize Security Features and Compliance

Security should be a top priority when choosing a merchant services provider. Look for providers that offer advanced security features, including encryption, tokenization, and fraud detection. Additionally, ensure that the provider is PCI DSS compliant to protect sensitive cardholder data. Working with a provider like Swipesum, which implements and manages the infrastructure rather than just reselling it, keeps compliance and security part of the ongoing account management.

5. Consider Customer Support and Reporting Tools

Look for a provider that offers strong customer support and detailed reporting tools. Reliable support ensures that issues like downtime or transaction disputes are resolved quickly, minimizing disruptions to your business. Additionally, robust reporting features help you track sales, monitor fees, and analyze customer payment behavior. A provider that offers easy-to-understand analytics will allow you to make data-driven decisions to optimize your payment processing.

By following these steps, you can confidently select a merchant services provider that not only meets your current needs but also supports your business as it grows.

How Merchant Services Providers Work

Merchant services providers handle the complex, behind-the-scenes aspects of payment processing, including credit card payments. When a customer makes a purchase using a credit or debit card, the MSP works to securely transmit the transaction details between the business and the acquiring bank, ensuring the payment is authorized. Once approved, the funds are transferred from the customer’s account to the merchant’s account, less any processing fees.

MSPs also offer services such as fraud detection, chargeback management, and compliance with regulations like PCI DSS (Payment Card Industry Data Security Standard). By taking on these critical tasks, MSPs enable businesses to focus on operations while ensuring they meet the necessary security and financial requirements.

Key Services Offered by Merchant Services Providers

• Payment Processing: The core function of MSPs is handling electronic transactions, which includes processing credit and debit card payments. MSPs offer various payment processing services that cater to both physical and online businesses, enhancing payment acceptance and operational efficiency.
• Point-of-Sale (POS) Systems: Many MSPs offer hardware and software to facilitate in-store and online sales, streamlining the checkout process for customers.
• Payment Gateways: For eCommerce businesses, MSPs provide payment gateways that allow secure online transactions between the business and customers.
• Security & Fraud Protection: MSPs offer tools to detect fraud, secure sensitive data, and ensure compliance with industry regulations.
• Customer Support & Reporting: MSPs typically provide customer support and detailed reporting on transaction volumes, revenue, and payment analytics.

Who are the Best Merchant Services Providers?

When it comes to selecting a merchant services provider, businesses are often faced with a wide range of options, each offering various features, pricing models, and levels of support. Among the top providers, Swipesum, Elavon, Worldpay, and TSYS consistently stand out for their comprehensive services, industry reputation, and proven results in helping businesses process payments efficiently.

Swipesum

Swipesum is a payment technology and merchant services provider built for businesses that need a setup tailored to how they actually operate. It provides and manages merchant accounts, payment processing, gateway infrastructure and ongoing payment operations, and because it is provider-agnostic rather than captive to a single processor, it can place each business with the backend provider that fits. Fee audits, direct negotiation and AI-driven statement analysis are part of that service rather than the whole of it.

What sets Swipesum apart is its hands-on service, especially in industries like retail and eCommerce, where transaction volume can vary significantly. Entrepreneur ranked Swipesum #1 in merchant services in 2024. Its transparent-pricing model and hands-on delivery make it an appealing choice for businesses that want the payment operation run for them rather than handed over at signup.

Elavon

Elavon is consistently named one of the largest merchant service providers in the world. Backed by U.S. Bank, it reports supporting over 1 million businesses globally, with a focus on high-volume industries such as retail, hospitality, and healthcare. Elavon has publicly reported processing over $450 billion in card transactions in 2023. Check the company’s current disclosures for up-to-date figures.

One of Elavon’s strengths is its ability to offer integrated payment solutions that work across multiple platforms, making it easy for businesses to manage both online and offline payments. The company’s ability to integrate with industry-leading platforms like Shopify and NetSuite ensures flexibility and scalability for growing businesses. Their recently enhanced gateway, Fusebox, now allows even more secure, tokenized transactions, reducing the risk of fraud for clients.

Worldpay

Worldpay, part of FIS Global, is another major player in the merchant services industry. Worldpay has publicly reported processing on the order of 40 billion transactions a year, and serves businesses in nearly every sector, from retail to fintech. A 2024 report noted that Worldpay continues to be a preferred choice for large enterprises and global companies, thanks to its international reach and multi-currency processing capabilities.

Worldpay's strength lies in its technological innovation. The company has recently invested heavily in expanding its capabilities for real-time payments and cryptocurrency processing, both of which are critical for businesses looking to stay ahead of the payment trends. With a comprehensive suite of services that includes risk management and fraud protection, Worldpay is ideal for businesses seeking scalability and global reach.

TSYS

TSYS, now part of Global Payments, is a longtime leader in the payment processing industry. With a focus on card issuer services as well as merchant services, TSYS brings a unique angle to the table. The company is known for its customized solutions, especially in the retail, restaurant, and healthcare sectors. Global Payments has publicly reported TSYS payment volumes in the trillions of dollars annually, indicating capacity for very large transaction volumes.

Recent developments from TSYS have emphasized integration with emerging payment technologies, including NFC and mobile wallet transactions. Their cutting-edge POS systems and mobile payment apps have made them a popular choice among businesses looking for seamless in-store and online transaction management.

Choosing the best merchant service provider depends on your specific business needs. For businesses that want a provider to build, run and keep optimizing the payment setup, Swipesum stands out as a top choice. Elavon, with its global reach and powerful infrastructure, is perfect for large-scale operations. Worldpay is an excellent option for companies needing innovative, forward-thinking payment solutions. Finally, TSYS offers flexibility and cutting-edge technology, making it a strong choice for retailers and healthcare providers alike. By evaluating each provider's strengths and considering your business's unique needs, you can select the best partner to support your payment processing needs.

Is Price or Quality More Important for a Merchant Services Provider?

Service quality, software features, and your businesses needs are the top priority when finding a merchant services provider. Rates are always negotiable and you cen get them where they need to be, but features and functionality generally aren't. Find the ideal solution first, then leverage a payments expert to help with price matching and negotiating fees. 

Finding the Best Merchant Services Provider for Your Business

Merchant services providers aren't a one-size-fits-all solution. Yes, they all help you accept credit and debit cards (and, increasingly, various forms of electronic payments). However, they can vary significantly in terms of the tools, resources, services, and support they provide on the individual level.

A provider can offer exactly what one company needs, but come up short in terms of service and support for another. The size of your business, the industry you operate in, your customers' preferred payment methods, and more can all make a difference.

That's why it's so important to understand what your business needs from a merchant services provider. Start thinking about these factors to document your company's requirements. Then, you'll be in a better position to compare offerings from payment processing companies.

The Point of Sale (POS)

Starting with your POS system helps guide the rest of the decision-making process. Nearly every business with a brick-and-mortar location needs POS tools — terminals, software, and more.

Be sure to document your requirements. Do you need mobile card readers for transactions outside of a fixed location? How many terminals will you need if your storefront has more than one checkout line? Do you need to manage subscriptions and recurring purchases? What about ecommerce?

You have to provide fast and positive payment experiences for customers and make it easy for staff to accept and manage those payments. You can also benefit from analytics, reporting, and other options that are potentially available, depending on the provider.

A business bank account is essential for managing funds received from credit and debit card transactions, ensuring secure and efficient settlement of transactions.

That includes credit card processing. However, businesses need a broader range of payment services (digital wallets, Apple and Google Pay, etc.), to tap into modern customer preferences.

Your POS system and payment processor can be separate or combined. Closed systems, like Square, can seem convenient. However, they often come with additional fees. Additionally, a closed system will require you to switch POS hardware and software when moving to any new merchant services provider.

If you use an open system, then your POS connects to your merchant services provider through a payment gateway. That means your saved payment information is portable. Additionally, you can keep your current POS system and much more easily switch merchant services providers.

Customer Service

Every merchant services provider will use a somewhat different strategy for customer service. Do you need a direct line to support, or will self-service methods and online chats be enough? Do the support hours align with your company's own hours of operation?

Check out reviews from current and past customers and review the provider's own documentation. This can help you understand how the provider handles questions, concerns, and complaints.

Merchant Service Provider Costs and Fees

Fees and costs can also vary greatly from one provider to another. A percentage charged per transaction is foundational, and a variety of other fees are the norm for many providers.

Flat rate, interchange plus, tiered pricing, and zero-percent markup with a recurring membership fee are all common. Learn more about these common merchant services pricing structures.

We recommend avoiding tiered pricing. It's especially opaque compared to other options, and very complex. Remember that a payments expert can help you negotiate prices and fees, making a preferred provider in terms of service more accessible for your business in terms of cost.

Understanding the Merchant Application

Once you find the merchant services provider with the best combination of tools, services, and support, you’ll need to fill out a merchant application.

When successful, this process ends with your business receiving a merchant account, explained in more detail here by Investopedia. Unlike a regular bank account, a merchant account is a specialized bank account essential for businesses to accept electronic payments. Funds from transactions are managed and deposited into the business’s primary bank account after settlement. You’ll also receive a Merchant Account ID number (MID). This is vital for efficiently and accurately moving money to and from your account.

The application itself requests relatively basic information. You will need to share details about your business in general and data about transaction volume. Supporting documents are needed as well.

When fully and accurately completed, the merchant application facilitates fast approval. You can have a new merchant account in as few as three days.

Get Payments Experts on Your Side for a Crucial Business Decision

Swipesum empowers a seamless transition from your old provider to your new one. We make sure you understand the new setup and what to expect. We also provide access to all of the internal tools needed to process payments and view reporting easily and consistently.

At Swipesum we do all the research for you. You make the final decision, while our experts set it all up and integrate it for you. You can fully hand off complex payments workflows to payment professionals.

Merchant Services Provider FAQs

How to stop merchant services calls?

The national no calls registry was founded as a tool that stops sales calls by companies. You can register your home number here.

Who is my merchant service provider?

Just call Swipesum, we help merchants solve this question daily. Often a reseller sold someone in your business on "Merchant Services" and the reporting statements have no contact or branding information making it difficult to know who your merchant services provider is.

How do merchant service providers make money?

Merchant service providers make money primarily by charging fees on each transaction processed, which can include a percentage of the sale and a flat rate per transaction. They may also charge businesses monthly service fees for payment gateway access, POS systems, and other value-added services. Some providers earn through leasing hardware, such as card readers or POS terminals, to merchants. Additionally, they may collect fees for ancillary services like chargeback management, PCI compliance, and fraud prevention.

What is a good merchant service rate?

A good merchant service rate typically includes both interchange fees and processing fees. Interchange fees, set by card networks like Visa and Mastercard, are paid to the card-issuing banks and generally range from 1.5% to 3.5% of the transaction amount. Processing fees, which go to the merchant services provider, are added on top of interchange fees and vary depending on the provider. What a business actually pays depends on card mix, pricing model and volume, so the only reliable figure is your own effective rate: total monthly fees divided by total processed volume.

Some providers offer flat-rate pricing models, typically charging 2.6% to 2.9% per transaction, which can be easier to manage but might not always offer the lowest costs for higher-volume businesses. Swipesum reviews your current statements, negotiates directly with providers and then provides and manages the resulting setup. How much that changes your effective rate depends on where you are starting from, which is what the statement review establishes before anything is quoted.

Ready to learn more? Schedule a free consultation today!