MSP – What is it?
A managed service provider, also known as a merchant service provider, is really nothing more than a company which receives compensation in exchange for the services it provides to companies like your own. Most companies and business operating in the 21st century work hand-in-hand with various consulting firms, who provide information technology services to their clients, in order to help keep the networks of various organizations running smoothly on an international scale. Considering your business requires some form of payment processing, it becomes a necessary part of your business plan to understand and manage how various merchant services can impact your actual sales revenues and profits. Merchant service programs allow you to process credit card payments from your customers via a special account that is directly linked to a credit card processor, who works in conjunction with your customer’s bank to route payments from them straight into your merchant bank account.
Merchant services are always provided by specialized companies known in the industry as merchant service providers, although they also go by other names such as independent sales organizations or managed service providers, but at the end of the day, they are really nothing more than independent organizations which offer payment processing as a link between you and the bank to help cushion you against various risks.
The problem in a sticky economical climate is that so many businesses, especially smaller ones, have a difficult time acquiring financing from a bank, due to the fact that businesses are either not yet established, or are simply too small to be considered safe investments by the banks. MSPs bridge the gap between these smaller merchants and the financial institutions themselves by providing a more flexible plan. It is important to understand that your business may or may not require an MSP to operate; it is largely a personal opinion depending upon what is most important for your business. If you find yourself in a situation where your bank is unwilling to help you set up merchant services, your only choice could be an MSP.
The MSP operates simply by taking a percentage of all merchant transactions. And while you could run your business directly through the credit card company, if you are considering selling on the Internet than the only viable option is through a MSP due to the professional image they offer. In addition, while third party companies such as a credit card organization could process payments, it can often take several weeks to access your cash, while using a MSP allows access within 48 to 72 hours after a transaction is finished, which means you have access to your merchant account and the funds as soon as the payment clears. Merchant service providers are the perfect way to do business in the 21st century because they will deal with all the credit card transactions and business needs on a day-to-day basis, as well as any potential problems that might arise. If you are looking to run your business as efficiently as possible with minimal effort, an MSP is the only way to go.