What Is a Merchant Services Broker?
One of the best ways to understand what a merchant broker is to think about who needs one. Imagine you’re that business owner who’s running a cash-only business because he’s afraid of the transaction fees but knows that accepting cards could end up being better for the bottom line. A merchant broker can help find this business a merchant account that works best for them.Merchant services brokers are also highly beneficial to business owners who are unhappy with their current merchant account or those that might have a hard time finding one for various reasons. Because of their history with different banks and providers, merchant brokers can often get an account for businesses that are unable to get accounts elsewhere.
Experienced merchant service brokers find their clients the best merchant accounts by working with multiple payment service providers to meet the needs of each business’s unique circumstances.While a business owner can find a merchant account on their own, finding the right one involves a lot of work. A merchant broker handles all of this by researching different providers, evaluating and analyzing them, comparing pricing, making a lot of phone calls, and sorting through a lot of paperwork. Plus, because they’re in the business, most merchant services brokers have long-standing relationships with different providers and know what each has to offer inside and out.
In addition to finding the right merchant account, a merchant services broker can help clients in a lot of other ways, too. Here are some of the other products that most merchant brokers offer:
Note that all merchant service providers do not offer the same amount of services which is all the more reason why it’s so important to find the right one. While some businesses may only be looking for a merchant account, others could need a range of services to get started and being able to find everything in the same place makes the process much less stressful.
There are several third-party processing services online that may seem like they’re easier to use than getting a merchant account. That said, there are a lot of benefits to working with a merchant broker and using a merchant account.Banks aren’t always willing to give a merchant account to new businesses, especially small startups. Business owners are often asked to submit business plans and other information to prove that the startup is viable. This is a perfect example of when a merchant broker helps because they likely already have a relationship with the bank which improves the chances of securing an account.While setting up an account with an online service is easier, there are some drawbacks. After settlement, revenue automatically gets deposited into a merchant account and is accessible right away.With some online services, revenue gets deposited into the account and must be transferred to a bank account. Often, there are limits on how much can be transferred at one time and it can take up to a week for the transfer to go through. This can be devastating to a small business.While there are fees involved with merchant accounts, online services typically charge a transaction fee for each transfer. Depending on how many transactions occur, the fees to an online service could be much higher than per transaction fees charged by merchant accounts.Another important thing for business owners to think about is customer service. With an online service, it can be difficult to get in touch with someone should problems arise. By using a merchant broker, there’s always someone to call with questions.