Merchant Account Provider

What Is A Merchant Account Provider?

A merchant account provider is a company that works with businesses to allow them to accept payment via credit and debit cards.

• These providers are also called credit card processors or payment processors.

Note: Merchant account providers are (incorrectly) colloquially referred to as "processors", which is short for "merchant processor", but these two things are not actually the same.

Merchant Account Provider Explained

Merchant Account Providers give merchants (aka businesses) the ability to accept debit cards & credit cards from consumers who are looking to pay for products /services.

These card transactions can be in-person, over the phone, or online.

Note: Merchant account providers are (incorrectly) colloquially referred to as "processors", which is short for "merchant processor", but these two things are not actually the same.

Merchant Account Provider Examples

Imagine that you’re the owner of a small landscaping business.

So far, you’ve only taken cash and checks, but some of your customers have started requesting to pay with credit cards. You realize that if you want to grow your business, credit cards are the way to go.

There are a few ways to go about finding a merchant account provider:

You can start by asking the bank where you have your business bank account.

They can either recommend a provider or get you set up with a company that they partner with. Some larger merchant banks offer their own credit card processing services.

If you know other business owners, you can ask who they work with to process payments. A personal recommendation is a helpful starting point.

Another option is to search online for merchant account providers.

With this method, it’s important to know what you’re looking for. Some factors to consider include pricing, point-of-sale options, and contract terms. While you can always change providers later on, there may be early termination fees in your contract.

The signup process is usually fairly simple, although it depends on the details of your business:

When you apply, you’ll be asked for documentation such as financial statements and a business license. In some cases you can sign up entirely online.

For people whose business is more complex, a sales agent can guide you through the process.

Square, Stripe, and PayPal all offer payment processing for small businesses.

Other options include ISOs, or Independent Sales Organizations. These third parties work with larger payment processors to offer a full range of services.

Additionally, some banks including Chase and Bank of America also provide credit card processing services.