Before the use of technology skyrocketed and our world became so globalized, it was easy for entrepreneurs to assume that running a successful business mostly involved offering excellent products, providing stellar customer service, and employing competent business practices. Of course, all of these components are important. However, today’s hyper-connected, electronic society requires greater diversity and connectivity, including the establishment of an ongoing relationship with a merchant services provider.
What is a merchant services provider (MSP)?
Before we can delve into the benefits that working with this entity will offer to your business, as well as your customers, it is important to understand what these vendors do. In simple terms, any retailer engaged in credit card processing must work with a middleman or intermediary that facilitates payments. This provider is known as a merchant services provider or payment processing company.
The processor performs this task by communicating and transmitting payment details from a shopper’s debit or credit card to you and your customer’s bank. Assuming that the buyer has enough funds in their account and the payment can be verified, the transaction is completed within a matter of just a few seconds. The payment processor streamlines the job by screening for fraud or any potential breaches in data security and assists you should a customer dispute a charge.
Once the customer’s purchase has been verified and accepted and the other players in the process have received their fees, the remaining funds are deposited into the seller’s merchant account. This special repository is where your payment processor will deposit the funds from all of your debit and credit card payments. In most cases, you’ll receive your funds by the next business day at the latest.
How working with a merchant services provider can enhance your bottom line.
Once you solidify your relationship with a processing company whose offerings are in line with your business model, you can leverage this alliance to bring more cash into your coffers. Even if you have focused solely on a brick-and-mortar presence up to this point, your payment processing company can help you to enhance your footprint by making it easier to enter the world of ecommerce. Showcasing your products online and providing your customers with additional buying channels will enable you to offer the range of in-person, online, and mobile options that today’s shoppers are clamoring for.
In addition to giving you the ability to embrace ecommerce, your payment processor can set you up with other cutting-edge technology that will further streamline your operations and lead to more satisfied buyers. Take, for instance, your ability to accept customers’ payments with wireless mobile card readers that can travel with your associates around your store or across the globe. No matter how you slice it, this leads to more efficient yet highly secure payments, enriched by increased access to product information.
Incorporating this technology into your business also optimizes your entire sales and management team. Thanks to mobile and contactless payment options and accessible product and inventory data, each employee’s time can be maximized. Whether staff members are providing excellent service to buyers or working behind the scenes to run and grow the business, the end result will be higher profits and happier customers.
The merchant services provider’s role in bolstering your security.
Whether people are doing their shopping in-store or online, the privacy and safety of the data they share is and should be a primary concern for all of the players involved. As a business owner, it is your responsibility to provide an environment where security awareness is emphasized. That means training your staff regularly, as well as putting protocols in place, monitoring activities, and so forth.
Your payment processor will prove to be another key link in the data security fencing that surrounds your company, its practices, and its safety controls. As the entity that is primarily responsible for facilitating all electronic payments, it must be highly steeped in the most up-to-date systems and practices for keeping data safe.
All payment processing companies must follow the electronic payment processing standards set forth by the Payment Card Industry. Depending on the size of your business and the number of transactions you process annually, you will be placed into one of four levels. Although your processor is required to provide services that comply with PCI Data Security Standards (PCI DSS), it’s always a good idea to ensure that there are no additional steps you need to take to remain in compliance with these requirements. That is because failure to comply can have long-term negative consequences, including financial loss.
Data security is a burden that must be borne by all actors in the payment process, including you as a business owner. That being said, finding a processing company that is highly rated and demonstrates an ongoing commitment to PCI standards is one of the smartest decisions you can make for the long-term welfare of your business.
In addition to PCI compliance, your vendor should also help you to enhance the privacy and integrity of your customers’ payment data in other ways. Specific avenues you should inquire about include the following.
- SSL protocol. This internet security encryption protocol is only relevant for you if you sell products or services online. If customers see that your website features a padlock symbol or your URL begins with “https” they will know that you are working with a payment processing company that prioritizes their data security.
- Encryption. You’ll want to partner with an MSP who offers certified, point-to-point encryption.
- Tokenization. This extra security layer converts your customers’ payment data into a random series of numbers. As a result, hackers’ attempts to copy sensitive payment details will be foiled.
- 3-D secure. Although facilitated by your payment processor, this extra layer of authentication is administered by the cardholder’s bank at the time of checkout. Common protocols involve using biometrics or PIN codes to ensure that the payee is the same person the card was originally issued to.
- Address Verification Service (AVS). This measure is easy to implement and helps to prevent fraud by asking the customer to enter information that should be second nature as long as the payment is legitimate.
- Regular system upgrades. As part of their commitment to data security, a good payment processor will ensure that their systems and networks are updated to the most current software versions and patches. Criminals tend to target the most vulnerable, so remaining abreast of all technological developments is an excellent preventive strategy.
How your payment processing company can facilitate enhanced reporting features.
The point of sale solution from your payment services provider comes jam-packed with features that can boost your productivity and profits and streamline your entire operations suite. Perhaps one of the most compelling aspects of this system is the reports it allows you to generate.
The magic happens because your POS integrates with your product database, employee roster, and customer contact list. As a result, you can create customized reports telling you all sorts of illuminating information.
- Your best-selling products.
- Seasonal sales data by product or time of year.
- Employee production details (who is your top seller, who is struggling, etc).
- What times of the year are most and least profitable.
- What parts of the day, week, or month are your busiest.
This is just the beginning of the analytics you can conduct with the right POS system. The sky's the limit when it comes to tweaking the data, and you can use this information to train workers, order products, and even make tax time a breeze.
In an era when business is moving at a faster pace than ever, technology is helping to streamline operations and maximize the performance of every member of your team. The protocols and solutions provided by your payment processing company should prove invaluable as you work hard to juggle this daunting array of important priorities. Take the time to choose the vendor that is most compatible with your priorities, and you can enhance profits, ensure security, and guarantee accountability to your customers and stakeholders.
