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What to Look for in a Merchant Services Provider


For businesses trying to compete in a digital world, the question is no longer whether to accept credit card payments; it’s whether a merchant services provider (MSP) can make a difference in how they compete. While all MSPs provide essential account services, they can vary significantly in their fees and the level of services they provide. And, as online consumer spending continues to increase, it’s more critical than ever for businesses to work with an MSP that’s able to stay ahead of the technology curve.

Here’s what to look for when evaluating an MSP for your business:

Fee transparency

MSPs make their money through fees charged on each transaction. While most charge a discount fee per transaction, which is straightforward, some MSPs layer on additional fees, which are not always apparent and often confusing. Some MSPs charge over-limit fees, voided transaction fees, and debit card fees. You could also be subject to a monthly minimum, which triggers a fee when transaction totals are below a minimum threshold. When evaluating an MSP, it’s essential to know how you would be charged based on your business needs and transaction volume.

Negotiable fees

Some fees are negotiable. For example, you can ask for interchange-plus pricing, which makes your charges more transparent. You can also request that the cancellation fee be waived because it is no longer a necessary add-on, and most processors will waive it anyway to keep your business. Just make sure to get everything in writing before you sign a contract.

Online payments support

An online-capable MSP provides your website with access to its secure server, as indicated by the secure server certification it allows you to display on your order page. A good MSP should also provide you with everything you need to set up payment collections on your site, including a digital shopping cart and order form template. It’s important to confirm that these services and tools originate inhouse. You don’t want to work with an MSP that outsources the development and servicing of these critical tools.

Next-day funding

When a transaction is authorized, the funds are held by the MSP for your account until you close out the day’s transactions. The funds are then released and transferred to your bank account. Many MSPs now provide accelerated settlement of card payments with the capacity to release funds the next day. Avoid MSPs that don’t offer next-day funding.

Equipment for multiple payment options

Determine the payment options you want to offer. For in-person payments, you need to accept cards and PIN transactions with physical hardware or devices that can turn any web-enabled computer into a payment processing machine. For web and phone payments, you need to accept card payments for card-not-present purchases without the need for separate contracts with a payment processor and an authorization gateway.

Equipment and software costs

Most MSPs charge for the terminal equipment and online processing software. The front-end cost for terminal equipment can be as much as $1,000, or it can be leased at an affordable monthly rate. Just be aware that your total lease costs are likely to be much higher than the outright purchase price. Be cautious of MSPs that offer free terminals or software because they may require add-ons not included in the basic rate, such as printers, check readers, or pin pads. Those add-on costs can add up.

Specialized solutions

Your business may need more than vanilla solutions. It’s important to evaluate an MSP in light of your business needs. Do you want to offer personalized gift cards with your business name and information? Do you need to manage client vehicle fleet expenses with fleet cards? Do you want to be able to set up card-based customer loyalty programs?


You need to be able to access detailed transaction data on demand, including card fees, deposit summaries, and chargebacks.

In today’s highly competitive market, you have many options for your payment processing needs. MSPs are under pressure to continuously find ways to add value to keep their customers. So, don’t limit your comparisons to pricing, because customer service, service upgrades, and technical assistance are critical factors that differentiate MSPs.

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.