August 25, 2021

Merchant Services vs. Payment Processing: What's the Difference?

Samantha Hubay
Written by:

Samantha Hubay

Merchant Services vs. Payment Processing: What's the Difference?

If you were under the impression that a merchant services provider and credit card processor were one and the same, you’re not alone. Many people outside of the payments industry assume that these services are provided by the same company. They absolutely can be (we’ll get to that later), but the concepts of merchant services and credit card processing are very different.

This post will help you understand those differences and choose the right partner for your needs.

 

What are Merchant Services?

At their core, merchant services are the services a business uses to accept and process payments electronically.

There are many ways to accomplish this today, which makes the term “merchant services” quite broad. It could refer to anything from full-scale point of sale solutions to online payment gateways, mobile payment acceptance tools, and more.

merchant services provider is the company that provides the hardware and software involved with accepting and processing payments. This company works directly with your business to provide the payment acceptance tools you need, along with support for those systems.

 

What is Payment Processing?

Payment processing is the series of steps required to authenticate and approve a transaction, followed by the steps that move funds from a cardholder’s account to yours.

Any transaction that does not involve payment in the form of cash or a check needs to be processed. If you want to give your customers the option to pay with a credit or debit card, electronic check, or mobile wallet, you will need to partner with a payment processor.

Your payment processor (also commonly referred to as a credit card processor), will manage the transaction process by transmitting information from your customer’s credit card to their bank and then to yours. If your customer has sufficient funds in their account, the transaction will be approved, and your processor will send the payment through the process to you. Your processor is also responsible for monitoring and handling issues such as credit card fund limits, credit card validity, security, and so on.

 

Should I Partner with a Merchant Services Provider or Payment Processor?

If you want to accept modern electronic payment options securely, you really need to partner with a merchant services provider and a payment processor. Or you can keep things simple by partnering with one company that provides both services!

Electronic Merchant Systems (EMS) is a leading provider of both payment processing and merchant services. We have been in operation for more than 30 years, serving and supporting all types of businesses with reliable payment acceptance solutions. Our customers love working with us because of our commitment to data security, innovation, and high-quality, around-the-clock customer support.

When you choose to partner with a company like Electronic Merchant Systems, you get the best of both financial worlds. Your partner will work to help you accept payments and grow your business.

Here are five advantages of partnering with a merchant services/payment processing provider:

1. Better Rates & Clear Pricing Structure


When you’re trusting one company for all your payment acceptance needs, that company should work hard to keep your business.

At EMS, we offer the lowest rates and fees possible to help you maintain profitability, even when business is slow. We also don’t believe in surprises (outside of birthday celebrations), so you can trust that we will always provide you with a transparent, easy-to-understand monthly statement.

 

2. Industry Expertise


A company that provides merchant services and payment processing will have a well-rounded knowledge of the payments industry. You will find this extremely useful because the payments industry can be confusing if you’re not deeply involved in it each day.

The EMS team knows this industry inside and out, so we’re always ready to assist! We keep a close eye on growing payment trends and seek solutions that will help our merchants stay ahead of the curve. For example, when contactless payment options like mobile wallets (Apple Pay, Google Pay, etc.) started gathering steam, we made sure to provide terminals equipped with NFC technology so our customers could start offering these progressive options. This forward-thinking approach has always served our company and our customers well.

 

3. PCI Compliance Assistance

Data security should always be a top priority when using electronic payment acceptance methods. And we’re not the only ones who think so.

There is an entire entity for payment security standards, the PCI Security Standards Council (PCI SSC). As a business accepting credit card payments, you must maintain compliance with the PCI SSC at all times. The right merchant services/payment processing provider will assist you with this continuous process.

At EMS, we help our customers validate their compliance by completing an annual Self-Assessment Questionnaire. Once compliance is reached, we continuously monitor our customers’ accounts to make sure they do not fall out of compliance and risk facing liabilities such as:

  • Diminished sales
  • Fines and penalties
  • Fraud losses
  • Legal costs, settlements, and judgments
  • Loss of customer confidence/trust
  • Termination of their merchant account

 

4. Security & Suspicious Transaction Monitoring

Yes, security gets two entries. It’s that important!

When you choose one company to handle your merchant services and payment processing, you get more than a service provider. You get a business partner who should always be looking out for your best interests!

At EMS, we go the extra mile to help our customers protect their business and their cardholders. We watch the industry carefully for evolving fraud and data theft trends, so we can warn our customers to watch for specific signs at the point of purchase. EMS also provides suspicious transaction monitoring and chargeback assistance to help our customers keep their merchant accounts in good standing and their business healthy.

 

5. Support When You Need It

Especially if you’re trusting them with every aspect of your payment experience, your merchant services/payment processing provider should offer reliable, attentive customer service.

According to our customers and partners, there aren’t many companies out there who can match EMS when it comes to customer service. Our customer support team is available via email, phone, and live chat 24/7/365. Yes, you read that right. Whether you need assistance at 3 PM or 3 AM, our Ohio-based team will be here to help.

We take pride in delivering high-quality customer care and employ only the most qualified, enthusiastic people to help our customers increase their financial well-being. If this all sounds too good to be true, check out our Google reviews! We currently maintain a 4.7-star rating based on more than 975 reviews from happy customers.

 

So, should you partner with a merchant services provider or payment processor?

 

Ultimately, our answer is this: you should choose whichever combination best suits your business and your customers. However, we believe that partnering with a company that provides both merchant services and payment processing has incredible profit-boosting and business growth advantages.

 

Would you like to learn more about partnering with Electronic Merchant Systems? Contact us today by clicking the button below or calling (800) 726-2117. We look forward to getting to know you and your business!

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