Business Banking. Merchant Services.

Merchant services allow companies to accept credit card and e-wallet payments. They are offered by major banks and credit card processing companies such as Square or Stripe. There are typically 4 ways of charging credit cards:

• swiping: the card is physically inserted in a processing terminal.

• keying: the card number is entered in a merchant system by the business.

• online: the customer checks out online and enters the card number.

• invoicing: an invoice with a payment link is sent and the customer clicks on the link and pays.

Merchant providers charge the following fees:

• equipment: one-time payment to buy the credit card processing terminal ($200-1,500)

• commission from transactions: a percentage or a flat fee or a combination of both from every transaction is charged (2.65 - 3.5). Depending on a way of charging, the commission may change. Typically, swiping has the lowest risk of fraud and therefore the lowest commission.

• monthly fees: flat service fee charged for software support.

When choosing merchant services provider businesses must consider the following:

• The fees

• Which way of charging the card does the business need and whether the merchant provider allows that. Do not assume they provide all 4 of them.