Shaw Merchant Group - Become a Merchant Services Broker for Providing Credit Card Payment Processing Solutions to Small Businesses

Starting a Merchant Services Brokerage: Business Model Overview

Tuesday, October 10 2023

If you are a merchant or business owner, then you know that one of the most important aspects of your business is accepting payments. While it is a part of business that is often taken for granted and assumed as being operational, choosing a merchant services partnership and accepting payments is not quite the walk in the part that it is usually thought to be. In fact, it is a somewhat complicated process that involves a lot of different parties and requires business owners to make several very important decisions. While choosing a merchant services partner might seem trivial, it actually has a large impact on the future of the business and can even play a large part in the profit margin that a merchant is able to achieve.

When you are going through the process of finding a merchant services partner to help you, it’s best to find a merchant services partnership that can help you navigate this complicated topic and pair you with a merchant services provider that fits your needs and is considered trustworthy by the merchant services industry. With an experienced and helpful partner by your side, you’ll be able to find the payment solution that fits your needs and elevate your business to the next level.

What Businesses Need a Merchant Account?

The answer to this question is very simple. If you want to be able to accept credit card payments for your goods and services, you need a merchant account. Almost every business in existence needs a merchant account so that they can accept payments in the most effortless and convenient way possible. Merchant accounts are typically provided by banks that partner with processors in order to process these credit payments.

Basically, a business cannot function without a merchant account, unless they somehow can operate on just accepting cash. As this is not a viable solution for most businesses, every business that hopes to remain competitive and gain market share should have a merchant account.

Some businesses point out the fact that merchant accounts also come with fees, and that is a valid point. However, accepting cash only in your store or business affects you in heavier ways that merchant fees ever could. The credit card is the fastest path to the purchase and if you are a business that wants to see growth and revenue, then getting a merchant account is essential.

What Exactly is a Merchant Account and How Much Does it Cost?

Now that we have established that everyone needs a merchant, you probably want to know about the downside, what it involves, and what it’s going to cost your business. A merchant account is an account with a merchant services company that allows a company to accept credit and debit card payments. It often also includes POS solutions to help facilitate payments of any kind.

To obtain a merchant account, a business must go through a thorough application process that often involves providing important information such as past processing information, bank statements, tax information, credit checks, and more. This very thorough process ensures that you can be trusted with a merchant account and your industry is suitable for accepting credit and debit payments.

Getting this service for your business is a great achievement and will unlock unlimited possibilities for growing your revenue, but it never comes without a cost. Getting a merchant account is often free, but using it is most certainly not. Merchant accounts often take anywhere from 1-4% as a transaction fee off of every transaction. This is how the operations are funded. While many look at this as a large expense, it is actually a low expense when you consider what having a merchant account enables you to do.

When searching for a merchant account provider, the rate is one thing that you’ll want to pay attention to and work with your merchant account services brokerage to find the best solution at the best rate for you.

About Merchant Services Brokers

While you have almost definitely heard of merchant services providers, there’s a slightly lesser chance that you have heard of merchant services brokers. Merchant services brokers are not as well known, but they are every bit as important in the process of helping you to find a great merchant services partner.

The role of a merchant services broker is to be your partner throughout the process of finding merchant services to fit your needs. It can often be overwhelming and confusing trying to find a merchant services partner, and to help with that you can enlist the help of a merchant services broker.

With a merchant services broker, much of the work of finding a merchant services provider is eliminated for the owner of the business. Simply tell the merchant services broker what you are looking for in a merchant services partner and they will hand-pick options that work for you and present them to you in an easy-to-digest manner.

By using a merchant services broker, the process of selecting a merchant services provider is made much easier and you may be able to save your business thousands of dollars in the long run by finding a partner that not only meets your needs, but is also affordable.

How Can a Merchant Services Broker Help You?

There are various areas that a merchant services broker can help your business to be a more efficient and effective organization. When you think of merchant services, you might only be thinking of credit card processing. However, there’s a lot more that goes into the process of choosing a merchant services provider and many aspects to consider. Here are the areas that a merchant services broker can help you with when it comes to picking out merchant services providers:

Credit Card Terminals
POS Systems
Virtual Terminals
Mobile Payments
Payment Gateways
Electronic Check Processing (ACH Payments)

There are a lot of considerations to keep in mind when you are picking out payment providers for your business, so when you need to go through that process, you should partner with a merchant services broker that has a great understanding of each of these symptoms and knows what makes for a good partnership between businesses and merchant services providers.

Should You Consider a Third-Party Service?

Over the past few years, several third-party merchant services and payment processors have risen up and started to offer businesses direct access to payment processing. This might seem like an easier process, but there are many considerations to keep in mind when you decide to go this route. The benefits of working with a merchant services provider and traditional broker are almost always more plentiful than the benefits of using a third-party service.

One of the most relevant struggles that businesses go through when they are trying to obtain merchant services for their business is the fact that many banks and merchant services companies are not willing to provide brand new merchants with processing accounts. This could leave many businesses out in the cold, but if you have a reliable merchant services broker, that doesn’t have to be the case. Many brokers already have strong and trusted relationships with the banks that provide these services, so they are able to provide you with a competitive edge when it comes to applying for a merchant services account. With a third-party provider, you don’t have anyone advocating for you or passing on their trusted status to your business when applying.

Another major factor that holds merchants back from selecting a third-party provider is the lack of accessibility to funds. Yes, funds typically settle within a couple days just like any other provider, but they settle to a merchant account within your third-party application. You will then have to withdraw the funds from your third-party merchant service account into your own bank account. Sounds simple, but what you might not know is that many of these third-party services impose a maximum withdrawal limit which heavily interferes with your cash flow and ability to expand your business. With so much cash being held up in your third-party account, any small crisis that requires cash to fix could severely damage your business.

Becoming a Merchant Services Broker

The role of a merchant services broker is to work closely with businesses to find them the right merchant processing services solution for them. This means meeting with business leadership and determining exactly what their needs are, identifying pain points, and other information that will help lead a broker to the right option when it comes to processing services.

In addition, merchant services brokers continue to collaborate with merchants to optimize their payments process and take full advantage of what their selected solution has to offer. This intensive job is also rewarding and can be lucrative under the right circumstances. Regardless, a merchant services broker will always be essential for businesses that want to truly get the most out of the merchant services that they have deployed and gain a competitive edge in their industry.

Posted by: Shaw Merchant Group AT 01:14 pm | Permalink | Email

Merchant services agents and brokers play a vital role in the payment processing industry, helping businesses find the right solutions for their payment processing needs. While both roles involve selling merchant services, there are key differences between the two. In this report, we will provide a comprehensive comparison of how to become a merchant services agent vs a merchant services broker.

Merchant Services Agent:

1. Job Description:

Merchant services agents work on behalf of a payment processor to sell their services to businesses.
Agents earn commissions based on the volume of transactions processed by the businesses they sign up.
Agents are responsible for providing customer support and troubleshooting any issues that may arise with the payment processing system.

2. How to Become a Merchant Services Agent:

To become a merchant services agent, you will need to partner with a payment processor or payment processing company.
Most payment processors offer agent programs that provide training, marketing materials, and support to help agents succeed.
Agents are typically required to undergo training and certification to ensure they understand the products and services they are selling.
Agents can work independently or as part of a sales team, and may need to meet sales targets to earn commissions.

3. Pros of Being a Merchant Services Agent:

Agents have the potential to earn significant commissions based on the volume of transactions processed by the businesses they sign up.
Agents have the opportunity to build relationships with businesses and provide ongoing support to help them succeed.
Agents can work independently and set their own schedule, giving them flexibility and control over their work.

4. Cons of Being a Merchant Services Agent:

Agents may face competition from other agents and payment processors, making it challenging to stand out in the market.
Agents may need to invest time and resources in marketing and sales efforts to attract new clients.
Agents may need to provide customer support and troubleshoot technical issues, which can be time-consuming and challenging.

Merchant Services Broker:

1. Job Description:

Merchant services brokers work independently to match businesses with the right payment processing solutions.
Brokers earn commissions from both the payment processor and the business they sign up, making it a potentially lucrative opportunity.
Brokers act as intermediaries between businesses and payment processors, helping businesses find the best rates and services for their needs.

2. How to Become a Merchant Services Broker:

To become a merchant services broker, you will need to have a strong understanding of the payment processing industry and the different services and solutions available.
Brokers typically work independently and build relationships with multiple payment processors to offer a variety of options to businesses.
Brokers may need to invest in marketing and sales efforts to attract clients and build a successful business.

3. Pros of being a Merchant Services Broker:

Brokers have the opportunity to earn commissions from both the payment processor and the businesses they sign up, potentially increasing their earning potential.
Brokers have the flexibility to work independently and build their own business, giving them control over their schedule and workload.
Brokers can offer businesses a range of options and help them find the best payment processing solutions for their needs, building trust and long-term relationships.

4. Cons of being a Merchant Services Broker:

Brokers may need to invest time and resources in building relationships with multiple payment processors to offer a variety of options to businesses.
Brokers may face challenges in standing out in a competitive market and attracting clients to their business.
Brokers may need to provide ongoing support to businesses and troubleshoot any issues that arise with the payment processing system, which can be time-consuming and challenging.

Conclusion:

Becoming a merchant services agent or broker can be a rewarding and potentially lucrative opportunity in the payment processing industry. While both roles involve selling merchant services, there are key differences in how agents and brokers operate and earn commissions. Agents typically work on behalf of a payment processor, while brokers work independently to match businesses with the right payment processing solutions. Ultimately, the decision to become a merchant services agent or broker will depend on your goals, skills, and preferences. Whichever path you choose, it is important to invest in training, marketing, and sales efforts to build a successful business and help businesses succeed with their payment processing needs.

Merchant services brokers play a crucial role in facilitating payment processing solutions for businesses, allowing them to accept card payments from customers. With the increasing reliance on card payments and digital transactions in today's business landscape, the demand for merchant services brokers has never been higher. One way to establish and grow a successful merchant services business is by using white label payment processing solutions. In this comprehensive report, we will explore the steps and strategies involved in becoming a merchant services broker using white label payment processing.

What is White Label Payment Processing?

White label payment processing refers to a payment processing solution that is rebranded and resold by a third-party provider. Essentially, white label payment processing allows you to offer payment processing services to your clients under your brand name, without having to develop and maintain your own payment processing infrastructure. This allows you to focus on building and growing your merchant services business, while leveraging the expertise and resources of a white label payment processing provider.

Advantages of White Label Payment Processing

There are several advantages to using white label payment processing as a merchant services broker:

1. Branding and customization: White label payment processing allows you to brand the payment processing services under your own name, giving you full control over the branding and customization of the services you offer to your clients.

2. Access to advanced technology: White label payment processing providers often have access to advanced payment processing technology and infrastructure, allowing you to offer cutting-edge payment solutions to your clients without having to invest in technology development.

3. Cost-effective solution: By using a white label payment processing provider, you can save on the costs and resources required to develop and maintain your own payment processing infrastructure, making it a cost-effective solution for starting and growing your merchant services business.

4. Scalability: White label payment processing solutions are scalable, allowing you to easily accommodate the growth of your merchant services business and expand your client base without having to worry about the limitations of your payment processing infrastructure.

Steps to Become a Merchant Services Broker Using White Label Payment Processing

Now that we have established the benefits of white label payment processing, let's explore the steps involved in becoming a merchant services broker using this approach:

1. Research and market analysis: Before diving into the merchant services business, it is essential to conduct thorough research and market analysis to understand the demand for merchant services in your target market, as well as the competition landscape. Identify the industries and businesses that could benefit from your payment processing solutions and determine the unique selling points that will set you apart from competitors.

2. Choose a white label payment processing provider: Once you have a clear understanding of your target market and the services you plan to offer, the next step is to choose a white label payment processing provider that aligns with your business goals and requirements. Consider factors such as pricing, technology capabilities, customer support, and reputation when selecting a provider.

3. Establish your brand and online presence: Building a strong brand and online presence is crucial for attracting clients and establishing credibility in the merchant services industry. Create a professional website, develop marketing materials, and actively engage in networking and social media platforms to promote your services and attract potential clients.

4. Develop a pricing strategy: Pricing plays a key role in the success of your merchant services business. Determine your pricing strategy based on factors such as the services offered, the level of customization required, and the pricing models preferred by your target market. Ensure that your pricing is competitive yet profitable for your business.

5. Provide excellent customer service: Quality customer service is essential for retaining clients and building long-term relationships with them. Ensure that you provide responsive and personalized support to clients, addressing their concerns and inquiries in a timely manner to build trust and loyalty.

6. Expand your client base: To grow your merchant services business, focus on expanding your client base by targeting new industries, businesses, and geographical regions. Utilize marketing strategies such as email marketing, social media advertising, and referrals to attract new clients and generate leads for your business.

7. Stay updated on industry trends: The merchant services industry is constantly evolving, with new technologies and trends shaping the way businesses accept payments. Stay updated on industry trends, regulations, and advancements in payment processing technology to ensure that your services remain competitive and relevant in the market.

Conclusion

Becoming a merchant services broker using white label payment processing is a strategic approach to building and growing a successful merchant services business. By leveraging the advantages of white label payment processing, including branding customization, advanced technology, cost-effectiveness, and scalability, you can establish a competitive edge in the market and attract a loyal client base. Follow the steps outlined in this report to kickstart your journey as a merchant services broker and position your business for success in the rapidly evolving payment processing industry.