How do I know the difference in merchant service providers?
There are thousands payment processors in the market; some large and many small. Some have been around for a long time and many are considered "fly by nights"!
Here is a breakdown of the different types of processors out there:
- Large banks with their own Merchant Services - BofA, Chase, Wells Fargo, etc.
- Large Merchant Acquirers - First Data, Global, FIS, etc
- Merchant Aggregates - Square, PayPal
- Independent Sales Organizations - thousands
- Independent Sales Agents - work alone and submit application to an ISO>Acquirer
The large banks offer (almost demand) you sign up with their own merchant processor when they sign a merchant up with a bank account. There are usually long-term contracts, cancellation fees and higher rates. The worst part is that you are alone in your new merchant account! They will mail you equipment and you will have to install and call and 800# for ANY customer service help! The bank advisor that loved you during your bank set-up will not be the person you can go to for any help!
Large Merchant Acquirers are so big that they have local reps. But these reps are paid for ACTIVATIONS not customer service! Once you have signed the application, they are gone and on to the next merchant. Any help with installation, billing or customer service will be calling an 800#.
A payment aggregator is a credit card provider that allows merchants accept credit and debit card payments without setting up a merchant account through a bank. The aggregate provider groups your business with other merchants and accepts payments on behalf of everyone. You are using a third-party payment provider to process your online transactions which means you are paying higher rates, can have your payments held for no apparent reason or your account just shut down!
Independent Sales Organizations are "sponsored" by the large acquirers and have to display who they are associated with on their documents and media. These companies are tied to rules and regulations applied by the Brands: Visa/MasterCard/Discover/American Express. The acquirers are also the entities that pay the merchant after collecting from the customers' credit card banks. This means that there is a direct relationship with the Brands>Acquirers>ISO> merchant.
Independent Sales Agents are individuals or groups of people that were not "sponsored" by the large acquirers and are contracted with an ISO company to sell merchant services. What this means for the merchant is that they are now many hands in your pocket! Brands>Acquirer>ISO>Agent>merchant!
Best higher rates and unkept promises, many of these agents NEVER answer your calls after you sign up! Even Worse, you find out that you are paying the wrong rates, were charged for equipment you never request ... and the list goes on!
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