What are mobile merchant services? - credit card being accepted with cell phone

What are mobile merchant services?

Sunday, November 28, 2021

When it comes to your small business, there are a lot of things you have to do to keep it running. You sweat the small stuff because as a small business you can’t afford not to. But running a small business is tough.

Besides the day-to-day operations, one of the biggest challenges is making sure your business can accept different payment options from customers. This can be an even bigger hassle if your business is mobile. So how do you accept payments on the go? That’s where mobile merchant services comes in. In this article, we’ll talk broadly about merchant services before narrowing in on mobile merchant services and how they can help keep your business moving, no matter where you do business. First, let’s talk broadly about merchant services.

What are merchant services?

The first step to understanding mobile merchant services is to understand what merchant services are. Merchant services are a variety of financial services available when a business needs to take different types of payments. 

A merchant services provider supplies businesses with the tools they need to accept different payment types, including credit cards, debit cards, and other payments. In turn, they help your business get the money from customers to your business’s bank account, or merchant account.

In general, the process is pretty simple – when a customer makes a purchase with a credit card at your business, the merchant services provider gathers the payment card information and transaction information from you, the merchant. They then contact the card issuer and receive authorization or denial for the transaction. For authorized payments, the merchant services provider then collects the money from the issuing bank and sends the funds (minus any fees) to a business's merchant account. 

Merchant services providers can be a bank or a third-party provider. Each merchant services provider offers its own suite of services, tools, and fees. When choosing a merchant services provider, it’s important to match their offerings to your business’s needs.

Here is a more detailed list of the typical services a merchant services provider offers:
  • Credit card payment processing – Merchant services providers can help your business take Visa, Mastercard, American Express, and Discover cards. They’ll help businesses like yours accept credit cards both in-person and online.
  • Payment gateways – For those who need help accepting online payments through an online store or ecommerce site like Shopify, a merchant services provider can offer a secure payment gateway to help you take online payments.
  • Point of sale systems – A point of sale (POS) system is a combination of hardware and software that allows merchants to stay on top of their business. POS systems can be a central hub for your business, allowing you to not only take payments but also process sales, perform invoicing, keep track of inventory, and more.
  • Loyalty programs – Merchant services providers can help your business set up and maintain loyalty programs that reward your customers for certain purchases.
  • Online transaction processing – In addition to payment gateways, online purchases also require more effort behind the scenes. Merchant services providers can offer tools that help your business process transactions and manage customer orders to help you stay on top of your orders while updating inventory at your business.
One of the biggest challenges when it comes to accepting payments at any business is security. If you accept payment cards from your customers, you want to make sure that their data is safe and secure. Luckily, merchant services providers can help your business ensure this safety. That’s because they shoulder the responsibility of fraud and help ensure payment card industry (PCI) compliance at your business. They’ll use processes like tokenization and fraud prevention to help protect your business and your customers. So, you’ll be able to rest easy knowing that your merchant services provider is helping to keep your business safe.

Now that you know more about merchant services, let’s dive deeper into mobile merchant services.

What are mobile merchant services?

Much like merchant services, mobile merchant services allow businesses like yours to accept and process mobile payments from customers. It also includes mobile point of sale (mPOS) systems that help you take credit card payments even on the go. These mPOS systems turn a smartphone or tablet (like an iPad) into a wireless POS terminal. That’s exactly what you need if you’re a business that’s always on the move – like a food truck, a craft company, service business, or a business that might not have a brick and mortar location. No matter what your business is, accepting payments on the go is key to running a successful business in today’s environment.

One of the biggest benefits of an mPOS system is that it allows a business owner to take their business on the move. From mobile food trucks that set up shop at a different location each day of the week to service providers who visit customers’ homes, an mPOS system can provide a versatile payment processing solution to accepting card payments no matter where business takes you. For small businesses, it’s also a great way to accept credit card payments without the costs of a full POS system.
 
Finding a mobile merchant services provider who can help you with mobile credit card processing is easier than you think. If you are currently working with a merchant services provider or credit card processor, chances are they can also help you accept mobile payments or provide your business with mPOS equipment. Now that you know more about mobile merchant services, let’s take a look at some of the popular terminology you’ll encounter.

Mobile merchant services technology terms

When it comes to mobile merchant services technology and mobile payment processing, there are a few key terms you’ll need to know:
  • Mobile virtual terminal – This is how you process credit or debit card transactions on the go. When you plug the mobile card reader into your mobile device or tablet, you’re creating a mobile virtual terminal. These mobile credit card readers typically utilize the lightning jack or headphone jack on smartphones or Bluetooth connectivity. Your smart device will need to connect to the internet and may also need a mobile app, depending on your mobile merchant services provider. Many providers offer support for both iOS and Android devices, but it's best to check with the provider for exact specifications.
  • Contactless payments – This is a payment method that utilizes near-field communication, or NFC, to pass credit card payment information from one device to another. Customers can use their mobile wallets like Apple Pay, Google Pay, or Samsung Pay on their smartphones. To accept mobile payments, you’ll need to make sure your card reader can accept NFC payments.
    NFC – NFC is a technology that enables a payment card or mobile wallet to talk to a card reader, passing data from the card or wallet to the card reader. Thanks to NFC, businesses can accept contactless payments. NFC payments are often seen as more secure methods of payment because they only work within close proximity and often require secondary authentication before the payment occurs. NFC card readers are available from many mobile merchant services providers.
  • EMV – While it stands for Europay, Mastercard, and Visa, this is a technology that is now on all cards – including American Express and Discover. These chip cards use EMV chip technology, a security feature that makes it more difficult for thieves to steal credit card information. EMV chip-enabled card readers allow customers to insert their credit or debit cards for a more secure transaction.
  • Magstripe – This stands for magnetic stripe cards. These magnetic stripes are usually on every credit, debit, prepaid, and gift card. When a customer swipes a credit card at your business, they’re using the magstripe to transfer their payment details to your system. If you want your business to accept magstripe payments, you’ll want to make sure that your card reader has that capability, as some card readers no longer have that function.
  • QR code – A QR code, or quick response code, is a two-dimensional version of the barcode made up of black and white pixel patterns. Many restaurants and bars use QR codes to share their menus. Once you scan a QR code, your smartphone can bring up the information quickly. QR codes are also a popular way for patrons to review and pay their bill.

No matter which merchant services provider you go with, these terms can help you evaluate your business’s options. As you look to find the right solution for your business, there are a few things you’ll need to keep in mind.

How to choose a mobile merchant services provider

Your business is ready to work with a mobile merchant services provider, but you’re not sure what to look for. We know it can be overwhelming, but luckily we’ve got you covered. When selecting the right provider for mobile processing services, here are some things to consider:

Pricing

As a small business, you’ll want to consider the costs of the mobile merchant services. These costs include how much the credit card processing costs in addition to any equipment you’ll need to buy or lease from the provider. Review the costs of an mPOS system, card reader, and any other hardware you might need, plus the processing fees and monthly fees.

You’ll also want to consider any extra fees that the mobile merchant services provider might have. Speaking with payment processors to understand their fee structures is paramount. From account fees to statement fees, PCI-compliance fees, transaction fees and cancellation fees, these fees can really add up for your business.

Different providers have different pricing methods and processing rates, so it pays to shop around to find the best solution for your business. Like normal merchant services, pricing and rates depend on a lot of factors, including if you're a low- or high-risk merchant and your business type. Depending on the number of transactions you process and your cost-per-transaction average, a different pricing structure might be more cost-effective and fit with your business better than others.

Capabilities 

The solution your business needs must have capabilities that help you keep your business moving. So make sure your mobile merchant services provider has the tools you need – from inventory management and customer relationship management (CRM) functionality to offline processing and real-time reports. The more complex your business is, the more complex the mobile solution will most likely be. You’ll also want to ensure your provider can support the various payment options you’d like to accept at your business and that you get the right hardware necessary to accept them.

Integration

When looking at a mobile merchant services provider, it’s important to consider how taking mobile payments and using an mPOS system will integrate with your other business processes – including invoicing or other business management software like QuickBooks. Keeping all of your business with one merchant services provider can streamline this process, especially if your business runs into issues and needs any sort of customer support.

However, if the solution you pick for mobile processing doesn’t integrate with your current setup, you should consider if you’re willing to switch to a software solution that does integrate. After all, you’re looking for solutions that help your business run more smoothly and efficiently, not cause you more work and headache.

While there are many factors to consider, choosing a mobile merchant services provider is an important step in your business’s growth. A good partner can set your business up for success and give you the tools your business needs to succeed.

Ready to work with a mobile merchant services provider built for small businesses?

Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at heartland.us.