How do Merchant Services work?

Discover the most frequently asked Merchant services questions

Whate are the pros and the cons of merchant card machines?

Sourcing a card terminal from your credit card processor gives you a single contact for your credit accounts. 

When you start taking credit and debit card payments for your business you'll need a terminal in order to take the card details and authorise the transaction. The merchant that you use to process your payments usually offers you the option of renting the device directly. However, you can also choose to source your own.


Should there be a problem with your terminal the merchant will be familiar with its operation and any common problems. If you are unsure exactly whether an issue is due to the terminal or some other reason, you still only need to contact one company to resolve the issue. If it is the merchant's machine that is causing the problem, you may be able to successfully lobby for a discount on your bill or some other compensation.



With this kind of arrangement there are some downsides. The processing company will set a rental fee which you pay every month. In addition, if you decide to switch providers you will need to return your card terminal. This may leave you with nothing to take payments while you wait for those from your new provider. If your new provider uses different devices you have to retrain your staff on their use, leading to lost efficiency while they get up to speed.

When you purchase your own merchant credit card machine you have a single capital expenditure rather than a monthly rental fee. If you purchased it second-hand this can lead to significant savings. You do not need to retrain staff when switching providers, as you simply keep your old machine.

It is important to ensure that your device works with your provider’s software. It may be more difficult to get support for your machine. In addition, should you wish to upgrade to a new or more sophisticated machine, you will have to pay the full cost, rather than just a monthly rental fee.

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