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What Is a Merchant Services Provider?

You have likely heard the term Merchant Services Provider. If you haven’t heard that term, you have most certainly heard of a credit card processor. The two terms are interchangeable in common speech. However, credit card processing is merely one service that a Merchant Services Provider (MSP) delivers. You might have also heard that all MSP’s are alike, and all provide basically the same services. That’s not true and today I am going to share with you what separates our company from others. 

 

Understanding our Role 

If you are in business, you likely need to accept credit cards in our increasingly cashless society. If you are running a small business, you may have implemented Square to accept credit card payments using your cell phone and an adapter. We should point out that Square is neither an MSP or a credit card processor. They are known as an aggregator. An MSP serves as the gatekeeper between your customer’s credit card and your cash register. We provide the technology that allows you to accept credit and debit cards and maintain security standards.

 

What Is the Function of a Merchant Services Provider? 

All MSPs are regulated by one central authority across the globe. That is the Payment Card Industry Council. They set the standards and best practices that merchants, Merchant Services Providers, banks and card issuers must abide by. The PCI Council defines a Merchant Services Provider as “Business entities that are not a payment brand, involved in the processing, storage or transmission of cardholder data on behalf of another entity, such as a merchant. This also includes companies that provide services that control or could impact the security of cardholder data”. 

 

About the PCI Council 

The PCI Council is comprised of Visa, MasterCard, American Express, Discover and JCB. The council regulates merchants that accept these cards, consumer banks such as Wells Fargo or Capital One that issue branded credit cards and payment processors such as Aurora Payments or Chosen Payments.  

 

Transactions Involve Five Parties 

Every credit card transaction involves five separate parties. Those parties include that brand themselves, such as Visa. The issuing bank, such as a Wells Fargo Visa, the acquiring bank that advances the transaction amount to the merchant and of course, the customer making the purchase. Your MSP serves as the traffic director for all of these parties and makes sure that everything is in order, fees are collected, and PCI compliance is maintained.  

 

Behind the Scenes  

Here’s what happens behind the scenes when you complete a transaction. Keep in mind that all of this happens within seconds: 


Step 1: Transaction begins with a swipe, chip read card or manually keyed transaction.

Step 2: Transaction information (amount, card number, issuing bank etc.) is sent from merchant’s terminal, POS, payment software or app to the MSP.

Step 3: MSP forwards the transaction data to the appropriate card brand such as Visa, Discover or MasterCard.

Step 4: The card brand sends the transaction data to the issuing bank, such as Wells Fargo.

Step 5: The issuing bank checks the account status and available credit and approves the transaction within the brand network.

Step 6: The brand network, such as Visa, confirms the transaction approval with your MSP.

Step 7: The transaction is completed with the merchant and an approval code is issued.

What Sets Aurora Payments Apart? 

Most Merchant Services providers are considered an Independent Sales Organization with an associated bank. The rules they follow are dictated by many other entities. When a new merchant signs up for credit card processing, the merchant might be rejected by the acquiring bank’s underwriter if they don’t have a solid financial history. At Aurora Payments, we are a Full-Service Provider. We have our own underwriters who make decisions on risk. We have Solutions Architects that integrate all types of Point-of-Sale systems with our credit card processing services. If you are using QuickBooks, we offer integration products that allow you to save time and money and avoid the high fees that QuickBooks charges for processing your transactions. In other words, you don’t have to process credit cards with QuickBooks just because you use their software for accounting. 

In addition to these specialized integration services, we offer Merchant Loans, ACH Check Processing, Chargeback Assistance, Merchant Education, 24/7 tech support and much more. If you are looking for a Full-Service MSP, we are ready to begin serving you today. Give us a call at 833-287-6722 or send us an email at contact@risewithaurora.com.