Merchant services power how modern businesses get paid. From in-store card swipes to online checkouts, they make it possible to accept payments quickly, securely, and at scale. If you sell products or services, you need a good merchant services provider to power your transactions.
Yet merchant services are more than simply moving money – it’s a business growth engine. The right provider helps you collect data and develop the ecosystem so your business can scale.
What are merchant services?
Merchant services are the tools and financial services that allow businesses to accept electronic payments. This includes credit and debit card processing, payment gateways, and point-of-sale systems. When a customer pays, merchant services securely move funds from their account to your business’s bank account. The result is faster transactions, better visibility into payments, and a smoother checkout experience for customers.
How do merchant services work?
At a high level, merchant services connect your business to the systems that move money securely and efficiently. They make it possible to accept credit cards, debit cards, and digital payments in person or online while handling transaction processing behind the scenes.
Here’s a closer look at how merchant services work.
From customer payment to your business’s bank account
Every payment follows a similar path:
- A customer enters payment information at checkout, whether that’s through a point-of-sale system, a credit card terminal, or an online payment page.
- The payment is then sent to your merchant’s payment processor, which routes it through the appropriate credit card network for approval.
- Once the transaction is approved, the issuing bank prepares the funds, which are typically settled and deposited into your merchant account during your daily batch.
- The money is then deposited in a merchant account (a specific holding account) before being swept into your business’s bank account, usually within one to two business days.
This entire process happens in seconds, allowing you to complete transactions quickly and keep cash flow moving.
Types of merchant services businesses can use
| Type of merchant service | What it does | Best for | Key benefits |
| Credit and debit card payment processing | Enables businesses to accept credit and debit card payments in person by routing transactions through card networks and payment processors | Retailers, service businesses, in-person sales | Supports credit and debit card transactions, fast approvals, reliable deposits to your business bank account, steady cash flow |
| Online payment processing and digital payments | Allows businesses to accept payments through websites, ecommerce stores, and mobile apps using secure payment gateways | Ecommerce businesses, subscription services, online-first brands | Secure handling of payment information, seamless online transactions, reduced checkout friction, improved customer engagement |
| Point-of-sale (POS) systems and credit card terminals | Combines payment acceptance, inventory, and reporting using POS software and physical or mobile card readers | Retail and hospitality businesses | Faster checkout, support for electronic payments, centralized payment and sales data, integration with accounting software |
Merchant services aren’t one-size-fits-all. Different payment services are designed to support how and where you sell, whether that’s in person, online, or across multiple channels. Most merchant service providers offer a mix of merchant processing services that help businesses accept payments, manage transaction processing, and improve the overall checkout experience for customers.
Credit and debit card payment processing
Credit and debit card payment processing allows businesses to accept card payments in-store or on-site. When a customer pays with a credit card or debit card, the transaction is routed through the credit card network, approved by the customer’s bank, and processed by your merchant’s payment processor.
This type of payment processing supports both credit card transactions and debit card payments, making it a core service for businesses that rely on in-person sales. With reliable debit card transaction processing, funds are deposited directly into your merchant account and then sent to your business’s bank account, helping maintain steady cash flow.
Online payment processing and digital payments
Online payment processing enables businesses to accept payments through websites, ecommerce stores, and mobile apps. This includes credit cards, debit cards, and other digital payment methods that customers expect when shopping online. A secure payment gateway plays a key role here by protecting payment information and transmitting it safely to the payment processor.
For businesses that operate online, these payment services make it easy to process payments quickly while supporting seamless online transactions. When set up correctly, online payment processing helps reduce friction at checkout and improves customer engagement, especially for repeat purchases and subscriptions.
Point-of-sale (POS) systems and credit card terminals
Point-of-sale systems bring payment acceptance, inventory, and reporting together in one place. A modern point-of-sale (POS) allows businesses to accept credit card payments, debit card payments, and other electronic payments using physical credit card terminals or mobile readers.
Sales POS systems are especially valuable for retail and hospitality businesses that need fast, reliable checkout experiences. By combining payment processing with daily operations, POS solutions help businesses complete transactions efficiently while keeping sales and payment data aligned with their business account and accounting software.
How to choose the right merchant services provider
Choosing the right merchant services provider can have a direct impact on how easily you accept payments, manage costs, and scale your business. While many merchant service providers offer similar payment services, the best merchant services are the ones that align with how you operate today and where you plan to grow.
Key features to look for
When comparing providers, focus on features that support both daily operations and long-term growth:
- Secure payment gateway to protect payment data and support safe online transactions
- Accounting software integrations that sync payment information and reduce manual reconciliation
- Access to detailed payment data for tracking payment transactions, processing fees, and cash flow
- Flexible payment acceptance for in-person, online, and mobile payments
- Scalable payment processing solutions that grow with your business
Questions to ask before signing a merchant services agreement
Before committing to a provider, make sure you understand the full scope of the agreement:
- What is the markup above interchange? What monthly fees and processing fees will I be charged?
- Are there any hidden fees, such as statement fees or chargeback fees?
- How quickly are funds deposited into my business bank account?
- What are the contract terms, and is there a cancellation or early termination fee?
- What level of customer support is included?
If anything feels unclear, ask for clarification before signing. Merchant service providers generally do not offer legal or tax advice, so it’s important to fully understand the merchant services agreement and how it applies to your business.
How can merchant services help your business?
Apart from the obvious benefit of letting you accept credit card payments, merchant services bring additional advantages to the table. These features help you run your operations with ease and contribute to helping you scale your business through a series of advantages.
You can tap into a larger pool of customers
No matter the kind of business you run, not every one of your clients has access to liquid cash throughout a typical month. That is why only accepting cash payments can steer potential clients away from your operations.
By offering modern payment methods, you attract more customers to your business.
This is useful regardless of your business type.
Partnering with a merchant services provider can have a large impact on businesses that usually deal with high-value items such as furnishings, jewelry, or high fashion. The additional payment methods can help clients who prefer not to carry cash or may not be able to afford luxuries outright. Offering consumer financing options like Buy Now Pay Later encourages more high-value purchases without the stress. This goes a long way in increasing your sales to regulars and having your services appeal to a larger number of customers.
You can manage finances more efficiently
With the evolution of financial technology, most merchant account services can integrate with your point-of-sale (POS) terminals. But they don’t stop there.
Most modern merchant solutions make sure that you are able to make use of additional payment methods under a single umbrella. This includes support for the latest payment features, such as mobile payments and online transfers.
This way, you can use a single payment solution through multiple revenue channels for your business.
Some merchant account providers also let you integrate your merchant account into your financial books. Any transactions that are done through your payment system are directly reflected in your books. As a result, you can see your revenues in real-time to make critical business and inventory decisions without any delay. You are also able to eliminate hours of data entry work. Not to mention, you reduce human error that comes from manually re-entering transaction information from your payment processing platform to your financial books.
You can expand business operations easily
Since you can offer more payment methods, it automatically opens doors to deliver your services in more than one way, both in-person and online.
The most evident example is leveraging online merchant account services while running a brick-and-mortar store.
If you choose the right kind of merchant services, you can easily branch out into other business models. With automated payments, you can offer monthly subscription packages for your products or services. With mobile payments, you can start direct delivery services without having to worry about cash handling at all.
The amount of time that you save by turning to merchant account services also helps you focus more on your operations. As a result, you can have a more hands-on approach to your business. This allows you to focus on identifying new ways to improve your processes and address any flaws that you otherwise may not have noticed.
Final words
Stax is more than a processor; we are an all-in-one payment experience. Our platform eliminates the complexity of traditional merchant services by offering transparent, subscription-based pricing and robust data analytics that help you scale. Stop wondering where your margins are going – reach out to Stax today for a transparent look at your processing health.
We will be glad to answer any questions you may have and help you make use of our state-of-the-art merchant services right away.
Quick FAQs about merchant services
Q: What are merchant services?
Merchant services refer to a broad range of financial services for businesses, particularly those involving the provision of merchant accounts that allow businesses to accept electronic and card payments.
Q: How do merchant services benefit my business?
Merchant services provide an alternative method of accepting payments, enabling businesses to cater to a larger customer base. They offer integrated solutions for managing finances efficiently, help in business expansion, and can cut costs while increasing revenue.
Q: What does partnering with a merchant services provider mean?
Partnering with a merchant services provider means your business can accept more than just cash payments. This partnership can be crucial for online businesses that need to receive instant payments for their services.
Q: How can merchant services help me tap into a larger pool of customers?
By offering modern payment methods, merchant services can attract more customers to your business, including those who do not have access to liquid cash throughout the month.
Q: How can merchant services help me manage my finances more efficiently?
Merchant services can integrate with your point-of-sale (POS) systems and consolidate all payment methods under a single platform. This can result in less work in terms of data consolidation and enable the efficient handling of multiple revenue channels.
Q: How can merchant services help in expanding my business operations?
Merchant services allow for the offering of more payment methods, which facilitates the delivery of services in more than one way, both in-person and online. They can also save time, enabling you to focus more on your operations and identifying new ways to improve your processes.
Q: How can merchant services help me cut costs and increase revenue?
By choosing an integrated payment solution that offers multi-channel payment support, you can save on the costs of overhead fees. This streamlined process enables you to optimize your workforce investment and improve your operations. By choosing a subscription-based integrated platform, you can eliminate hidden markups and reduce the administrative time spent on manual reconciliation.
Q: How do I choose the right merchant services?
Look for merchant services that offer a competitive pricing plan, come with an array of features and services, and can support your business. The balance between cost and service quality is key in choosing a merchant services provider.
