Blog

Credit Card Processing: Better To Work With Resellers Or Processors?

May 22, 2017

When merchants are trying to make the best possible decisions about how to move into the next generation of payment processing, they have a lot of options available to them.

When merchants are trying to make the best possible decisions about how to move into the next generation of payment processing, they have a lot of options available to them. One of the biggest choices to make revolves around what kinds of companies to work with: big payment processing companies or smaller resellers. A little bit of studying on this topic could go a long way toward informing the choices that work best for each merchant’s unique needs.

When making such a decision, there are plenty of choices available, with a few major payment processors, but literally hundreds or more resellers in operation nationwide, according to Practical Ecommerce. In general, the processing industry giants handle at least some of the payment processing for about 90 percent of all merchants nationwide. That does not, however, mean they’re necessarily better in all ways.

Merchants have plenty of options when choosing a payment processor.Merchants have plenty of options when choosing a payment processor.

What To Look For
The issue for many merchants is that there are advantages to either sticking with major processors or going with a smaller firm, the report said. For instance, the cost of each transaction is likely to be a little lower going directly through a processor than through a reseller, but that will typically only vary by a few cents per transaction. Therefore, depending upon the type of business in question, perhaps the extra three or four cents doesn’t matter to some owners if other benefits from a reseller come into play, such as added potentially flexibility and more hands-on customer service.

But at the same time, it’s important to note that competition among resellers in particular is on the rise, and that might have a depressive effect on the cost of processing transactions through those companies, according to a report from Morningstar. That’s only like to continue as the EMV and mobile payment revolutions continue and smaller merchants adopt the latest technology; some estimates show that smaller companies alone could process as much as $2 trillion in transactions by 2020, double the level seen today.

Watch The Trends
It might be wise for merchants to make sure they weigh all their options not only when they first make the step to next-gen payment technologies, but after that as well, according to K.C. Agu, writing for Entrepreneur Magazine. New payment technology evolves all the time, and the ability of merchants to seize on the latest options they might be able to find with either large processors or smaller resellers should come into their initial decision as well. This may be particularly true when it comes to the evolution of mobile wallets, which are gaining steam but still not major drivers of payment activity.

The good news for the payments ecosystem today is that more merchants are now taking the step to reassess their payment processing options and upgrade to EMV- and NFC-enabled point-of-sale devices. When doing so, those that put in the work to properly research all their options are likely to be the ones that have the most fruitful ongoing relationships with the companies they choose.

Back To Blog