What Are The Different Types of Credit Card Processing Companies?

Although there a literally thousands of different companies that offer credit card processing services, there are really only two types of Merchant Service Providers (MSP’s): Acquirers and Resellers.

Acquirers
Acquirers, also known as Processors, are distinguished by their ability to process sales transactions. A Processor has the technical capability and high level security protocols to receive the transaction data, communicate with the appropriate financial institution, approve or decline the specifiic transaction, settle the completed transactions with the financial institution and deposit the funds into the merchants account. In short, they are the ones that actually process the sale, charging a discount rate and/or processing fee
for handling the transactions. Acquirers are registered members of the Visa and MasterCard Associations, soliciting, screening and accepting merchants in their processing programs. Processors acquire their merchant base through direct marketing to merchants, independent sales agents and utilizing resellers. For example, EPS is an Acquirer (Processor) which provides merchant payment processing solutions and value-added programs to merchants directly through a direct sales force in addition to Independent Sales Organization partnerships (resellers).

Resellers
Resellers, also known as Independent Sales Organizations (ISO’s), resell the products and services of one or multiple Processors. They are "Third-Party Processors" in addition to sometimes offering their own value-added products. There are basically two types of ISO’s: banks and non-banks.

Banks – banks of all kinds, local community banks, large regional banks, national banks and credit unions have entered into the merchant service provider business as it seemed like an easy vertical expansion to give them another way to increase revenue of their customers. Most banks are ISO’s although they usually private label their services so that it is difficult to tell whether or not they are the actual the Processor.

Non-banks - this group of ISO’s ranges greatly from top-notch, competent and capable providers to less than honorable people just out to make a quick buck. As there is not any regulatory agency enforcing acceptable and ethical business practices in the industry, the most serious problems merchants encounter are usually from dealing with an unscrupulous, rogue sales agent rather than the Processor. Unfortunately, this has given the industry as a whole a bad reputation.
Both Processors and ISO’s offer payment and processing solutions such as credit/debit/prepaid credit card processing, check verification/ conversion/ guaranty services, online transactions, gift/ loyalty cards, and cash advances with very little, if any, difference in pricing.

Whatever the industry or business size, it is vital that you find a merchant service provider that can focus on your specific area, whether its ecommerce, retail, service, catalog, restaurant, telephone/mail order, wireless, or a home based business. It is equally important to choose a provider that also has the level of infrastructure needed to provide the best system for your needs, from software and terminal plug-in’s to repayment gateways and real time account access. EPS is a full service merchant service provider which means it can handle all of your processing needs and employs a dedicated team for each individual area of merchant accounts including customer service, sales and technical support 24 hours a day, 7 days a
week.