Retail Merchant Services is a type of credit card processing that allows businesses to accept credit and debit cards as payment. This service is provided by a third-party company, such as banks, independent sales organizations (ISOs), or merchant service providers (MSPs).
There are three main components to a Retail Merchant Services agreement:
- The credit card processing network
- The acquiring bank
- The merchant service provider
The credit card processing network is the infrastructure that facilitates the transfer of information and funds between the customer, the merchant, and the card issuer. The most popular networks in the US are Visa, Mastercard, Discover, and American Express.
The acquiring bank is the financial institution that provides the merchant with a credit card processing account. This account allows the merchant to accept credit and debit card payments from customers. The acquiring bank also handles all of the back-end processes associated with credit card transactions, such as authorization, settlement, and funding.
The merchant service provider is the company that contracts with the merchant to provide Retail Merchant Services. The merchant service provider is typically an ISO or MSP.
There are four main steps in a Retail Merchant Services transaction:
- The customer presents their credit or debit card at the point of sale.
- The merchant swipes, dips, or manually enters the credit or debit card information into their point of sale system.
- The point of sale system sends the transaction information to the acquiring bank for authorization.
- The acquiring bank approves or declines the transaction and sends a response back to the point of sale system.
If the transaction is approved, the customer signs the receipt and the merchant processes the sale. The funds from the sale are then transferred from the customer's bank to the merchant's account, less any fees charged by the acquirer or processor.
If you're thinking about using Retail Merchant Services for your business, there are a few things to keep in mind. First, you'll need to have a good credit history in order to qualify for an account. Second, you'll need to be able to accept credit and debit cards as payment. And finally, you'll need to be aware of the fees associated with credit card processing.
Overall, Retail Merchant Services can be a great way for businesses to accept credit and debit cards as payment. Just be sure to do your research and shop around for the best rates and terms before signing up for an account.