What Is a Third-Party Payment Processor?
Posted: Mar 30, 2021
Even the biggest organisations have to deal with difficulties and issues while running their business. Payment processing is the most common and yet the most necessary issue that small and medium businesses encounter. Cash is barely used in today's digital world and most customers wish to pay with credit and debit cards.
Electronic payment processing can be easy for small businesses instead of being intimidating. By using third-party payment processors, transactions can be made easier for merchants, customers and any involved third party.
What is a Third Party Payment Processor?
Successful businesses often own a merchant account with their merchant service provider. When their clients make payments using debit cards, businesses accept payments directly in their merchant account and complete the process.
New businesses however cannot always afford accepting payments via this method. They can use a third-party payment processor in these situations. A Third Party Payment processor will act as an intermediary between the business owner and the merchant service provider, hence instead of paying set up fees and making their own merchant account, a new business owner can use a third-party payment processor service that has their own merchant account.
When you use a third-party payment processor you no longer have to create a new merchant account in a bank for yourself. You can process all credit and debit card payments using the third party's merchant account. The Third-party Payment Processor will review your client's payment information by using many anti-fraud measures and only after that they will complete the transaction of your client.
You can scale up your business into the digital world through third-party payment processing companies. They provide services such as running debit card and credit card processing and serving as online payment processors.
Choosing a Third Party Payment Processor is the decision for you if your business accepts online payments from customers.
A Third-party payment processor is one that is also a merchant service provider and provides you with the opportunity to give your customers more payment options while assisting you in receiving payments without requiring you to set up a merchant account.
You will enrich your business experience by obtaining a third party payment processor as you will not be required to create a bank account just to receive credit card payments and conduct card transactions.
Do you need a Third Party Payment Processor?
Many new business owners wonder if they need a third party payment processor. Apart from the easy signup and zero payable fees on sign up, there are many more benefits and reasons to obtain a third party payment processor.
Many new businesses cannot afford the monthly fees of dedicated bank accounts. The setup fees and costs of an account may be much more than the business can afford especially if they do not receive as many credit card payments. Hence a third party payment processor is an ideal fit for a new business especially when they do not expect a lot of credit card transactions.
Michael Bedwell is a Professional Content Writer at Host Merchant Services. He Lives in New Jersey, United States. Having years of experience in content writing he writes content on diverse categories like technology, emaorece, business, finance etc.