The basic principles of merchant payment are quite simple – you first sign up with a merchant payment provider to accept debit cards, credit cards, and other forms of payment from your customers. The payment processor (or the payment gateway) collects fees for transactions and makes deposits in your bank’s business account. Merchant services are a broad term that describe a range of services businesses use to accept and process payments. However, the term merchant payment also includes all the behind-the-scenes processes through which a business accepts payments via a reliable online payments service provider like Zaakpay, including the hardware and software involved.
What are Merchant Payment Services?
Merchant payment services refer to the technology and services that businesses use to accept and process payments from customers. Merchant payment service comprises of:
- The background processes required for a business to receive and accept payments.
- The tools and techniques involved in the payment process, including the hardware and software.
- The merchant service providers or the companies that offer the services for the businesses.
- The pricing mechanism for merchant payment services and the differentiation in the cost for small businesses.
How do Merchant Payment Services work?
The point when the customer enters the card details is the beginning point of the merchant payment service process, and the deposition of funds into your business account signifies its culmination.
The key players involved in a payment transaction are:
- Customer
- Merchant/business
- Payment Processor
- The payment gateway
- Customer’s bank or credit card company
- Merchant bank
Your merchant payment services decide the mode of payment, the type of payment, and the provider that facilitates it. The typical steps in a payment transaction process are:
- The customer enters his card information in the payment app.
- The payment processing gateway transmits this data and checks with the customer bank whether to accept or deny the request.
- If the customer bank approves the request, you can accept the payment at your end, and the payment process will be completed.
To smoothly facilitate the merchant payment process, you will need to avail yourself of the services of a payment gateway such as Zaakpay. Through the payment gateway, you can accept payment from customers in various modes such as Debit Cards, Credit Cards, UPI, etc.
What is a Merchant Account?
A merchant account is essential for businesses for online payments acceptance from customers. Without a merchant account, you will not have a place to deposit the payments received from customers’ debit or credit cards.
What is a payment gateway?
A payment gateway such as Zaakpay connects the merchant account and the payment processor to the debit and credit card companies. True to its name, a payment gateway connects the customer’s financial account to the merchant account. The absence of a payment gateway makes a financial transaction incomplete. Although you will have all the required components to move about finances, you cannot receive the customer’s payment without a payment gateway.
Payment processors and merchant accounts can be incorporated into a payment gateway either via a third party or an in-house department.
Tools that enable Merchant Payments
The next essential components of a merchant payment process are all the required tools that can enable merchants to accept and process payments from customers.
- Payment Gateways
A payment gateway such as Zaakpay is a software application that works with your eCommerce store or website and allows you to receive and process payments from customers online. The payment gateway works in place of a credit card terminal in the merchant payment process.
- Point of Sale Systems
In eCommerce with online payment processing, the point of sale system must simply accept online payment acceptance. A point of sale system that works online will accept the information about the card or any other mode of payment for the product sold or services rendered and complete the payment processing.
- Merchant Service Providers
The 2 main entities at the heart of the merchant payment services industry are the online merchant account providers and payment service providers. Merchant account providers provide unique merchant accounts to businesses which are the bank accounts required to accept card payments. You can set up your bank account through the merchant service providers and begin your transactions.
Additionally, a merchant service provider will provide you with all the tools you will need to accept payments-be it a POS system or a payment gateway.
The job of an online payment processor like Zaakpay is to aggregate all funds from several clients into a centralized online merchant account and disburse these funds from this account to separate bank accounts. Unlike merchant account providers, payment service providers do not offer unique merchant accounts for their customers. However, a payment service provider can provide many different tools, hardware/software, technology, and payment gateway to enable businesses to accept and process payments.
Choosing a Merchant Payment Service Provider
There are several processes, companies, products, and stakeholders involved in payment services for small businesses. The choice of merchant payment service provider depends upon the following factors:
- Mode to accept payments – Is your business going to accept payments only online or in-person as well?
- Types of payments – Are you going to accept debit cards, credit cards, UPI payment, contactless payments, and so on?
- The technology needed – What kind of hardware/software will be needed to perform the payment processing – whether a complete POS system, a payment gateway, etc.?
- Merchant Account – Does your business need an individual merchant account to be set up by a payment service provider, or can you set it up online independently?
- Pricing – What kind of pricing are you looking for, and what is your budget for payment processing?
Answering the above questions can help you make an informed decision about your choice of a merchant payment processing provider. You can compare different providers and choose the one that best meets your needs.
If you have an eCommerce business and need online processing, you will need to pick a merchant payment service provider that has payment gateways. Payment gateways have all the features that allow your business to process online payment from your customers securely.
The Takeaway
The merchant payment services industry is huge and complex, and finding the right solution for your business may be challenging. However, once you identify your needs and preferences, you can explore the key features and benefits of the solution and narrow down on the payment processing company that can be the best fit for your merchant transactions. Payment gateways like Zaakpay help merchants to create internet merchant accounts for their eCommerce transactions. In addition, it offers multiple payment offers to your customers and a secure platform for accepting merchant transactions.
Follow Us on:
