Business Start-Up Guide: Merchant Services

By Jeremy Reed Tuesday, March 22, 2016

business start-up guide; merchant servicesMerchant services have become increasingly important for start-ups in the information age. In the past, before the prevalence of online sales, start-ups would market their product or services in their local area and many accepted only cash or checks for payment.

Usually, they were within driving distance of their mostly-local customer base so accepting payments using these methods was not an issue. Scammers and forgers seem to have been less insidious in those days.

The world of commerce has since undergone colossal changes, however, and the entrepreneurs of today understand their client base is now all over the world, with information at the touch of a button.

The days of clients coming into your place of business with a check or cash are gone. Business owners need to be able to accept payments from a world-wide customer base quickly and efficiently. The safest and easiest way to accomplish this is called merchant services.

What Is "Merchant Services?"

Merchant services is defined as a category of financial services in the United States authorized to accept credit card or bank debit card transactions online or via Point of Sales systems.

business start-upo guide: merchant servicesTo utilize merchant services, a U.S.-based business must first obtain a merchant account in order to accept customers’ credit card and electronic payments through an e-commerce website. Providing your clients with this method of fast and easy payment using their credit card is easier than you may think, and there are a lot of options out there.

There are a number of choices regarding merchant services payment types and processing methods.

Some business owners require a merchant account provider as well as a Point of Sale system for their brick-and-mortar retail store, while others need a mobile option that can be transported anywhere they may need to go.

Some business owners only need to accept payments electronically through their website, while for those in the food service business, a restaurant POS system is essential. All of these situations can be met by a variety of merchant services. Most service providers offer several different options in order to meet the needs of your company.

Top 5 Merchant Services providers for 2019

The top five merchant services providers for 2019, as listed by are:

  • Host Merchant Services - payment processing company that also hosts business websites
  • National Processing - thousands of customers across the U.S. and Canada
  • iPayment/Paysafe - iPayment recently joined the Paysafe family but still provides high quality service
  • Square - mobile payment solution recognizable by the white square attachment to mobile phones.
  • Flagship Merchant Services - offers credit card processing services to most business types.

Follow the Consumer Affairs link above for even more top-rated merchant services companies.

If your start-up company is searching for a means with which to accept payment, find a few different potential providers and do your research; any reputable merchant services company should have knowledgeable, patient sales representatives who are able to explain what may work best for your business.

The requried equipment may be purchased or leased, so examine the prices and see what is most cost-efficient for you in the long run.

Be sure to fully explain to a salesperson what type of payments you’ll need to accept; what kind of start-up and brand(s) you are managing; what you expect on the customer service level; and, of course, what you are looking to spend annually for merchant services.

A merchant service account is generally used in conjunction with your company’s bank account, which accepts your payments and transfers the fees due to the merchant services provider, so make sure whichever merchant services provider you choose is able to work in tandem with your bank.


*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.

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