Payment service providers allow merchants to accept various forms of payment, including digital wallets and credit cards. Some people know them as third-party payment processing companies, but they provide the same services. The payment service provider brings different merchants together under one umbrella while taking on the complete financial risk for its clients. Using this provider allows clients to pay less in fees than they would if they established a merchant account. BlueSnap is one such provider.
Payment Service Provider or Merchant Account?
A company may ask why they should use a payment service provider rather than establishing a merchant account. A payment service provider brings multiple users together, while a merchant account requires each user to establish a separate account. Merchant account models require more vetting and focus mainly on payment processing. In contrast, payment service providers tend to offer a complete solution. They offer clients access to a range of tools.
Payment service providers handle matters such as PCI compliance, which brings costs down for merchants. They provide a gateway for users to allow people to start selling online quickly and offer extras such as loyalty options and fraud protection.
The Drawbacks of Payment Service Providers
Individuals need to know the drawbacks of using a payment service provider. Customer service may be lacking when it comes to help with online transactions. Although many payment services provide users with technical resources they can use in these situations, it can take time to find an answer. Consider this when choosing a payment service provider and look for one with outstanding customer service.
While it is easy to get a payment service provider account, it is also easy to have that account taken away. The minimal vetting the provider does means there is more risk of having the account taken away when changes are made. For example, a huge credit card transaction may seem suspicious and lead to the account being frozen. It can take weeks to resolve the situation.
The Benefits of Using a Payment Service Provider
Payment service providers are more flexible that merchant accounts. A small business can change services easily, and business owners enjoy the pay-as-you-go pricing. Someone new to online selling will find they can have an account up and running in little time, and the platform comes with additional services that benefit businesses. This means an owner has fewer providers to work with, which simplifies operations.
The use of a payment service provider allows businesses to accept credit cards online and offline. Business owners appreciate that they have fewer fees to worry about, and the transaction fees are limited. This makes it easy for every business to use the platform as they grow.
People looking for flexibility and affordability when it comes to payment processing benefit from working with a payment service provider. For those who run a major corporation and need more guidance, a merchant account often serves as the better option. Consider a payment processing provider for your organization. It may be what you need to take the venture to the next level.