Understanding Merchant Services: What Freelancers Need to Know

"Did I ever get paid for that?" "Did I send over that invoice?"

"Oh sorry, I don't have any cash. I would like to pay using another method."

If you are a freelancer or business owner, you've probably asked those questions, or had a potential client ask you the questions. Maybe it was you asking yourself such.

Merchant services are designed to help you better manage and track your financials, covering everything from setting up online payment gateways to handling high-risk payment processing.

As a freelancer and business owner, it's important to understand what merchant services have to offer, and how you can use them to make the most of your business and freelancing career. 

What Are Merchant Services?

When people think of freelancers, they often think of creatives like writers and photographers, but you can consider yourself a freelancer even if you nanny in the community.

Merchant services act as an intermediary between one party (say a freelancer) waiting to receive funds and another party (say a client) looking to purchase goods or services.

Essentially, different merchant service providers and platforms offer a variety of financial services and payment solutions to enable a business or freelancer to securely accept a transaction payment and keep finances organized.

Everything from financial services to help you accept payments online to solutions to integrate a payment gateway on your website and even loyalty programs are available from merchant services. 

Why Do You Need Merchant Services?

Merchant services not only provide a way to stay organized, but also provide security when it comes to your financial transactions. When a client gives their credit card information, the payment from their bank is almost instantaneously transferred to your bank, and a lot of personal information could be revealed during this time.

Merchant services, however, provide a safety net or protection during this transaction by holding funds collected from successful payments and then distributing it to merchants according to the amounts they have processed. In this way not only you, but also your clients are protected from data breaches and payment frauds. 

"But what if I only accept cash?" you might ask. Merchant services provide businesses, freelancers, and individuals with a variety of incentives and the ability to seamlessly accept credit cards, debit cards, and other forms of electronic payment for transactions to take place. Some merchant service providers even offer cash advance services to transfer funds faster electronicly.

Research has actually shown that most people prefer to pay with their credit cards. Even if you've got a stall at a local farmer's market, odds are that most people, especially younger generations, are more likely to buy if you offer cashless payments. In other words, you should be accepting most types of payment! This way ou'll increase your revenue and your customer base. 

What Do Merchant Services Do Exactly?

1. Credit and Debit Card Processing: Merchant services provide the technology and software to accept credit and debit card payments from clients. They also protect the data of both your business accounts and your clients' accounts.
2. Online Payments in All Currencies: If you want to sell anything online, not only do you need extra payment security and technology, but you also need to be able to accept all types of payment. Merchant services provide a payment gateway that encrypts data to your merchant account. 
3. Virtual Terminal: A virtual terminal allows you to accept credit card payments with a computer instead of a credit card machine. This is vital for businesses that accept telephone or mail-order sales.
4. Check Payments: No more waiting around for days to see if the check is actually cashed. With the proper merchant services, you'll be able to move money from a client's account to yours in a matter of minutes. 
5. Sale System Data: One of the most valuable parts of joining a merchant services platform is that you'll have access to your sales data in one, easy to use place. You'll learn where most of your customers are from and be able to see if there are any purchasing patterns. Make sure that whatever system you use allows you a free trial or a money-back test run so that you get the most out of the platform. Additionally, find a merchant services provider that has great customer services. It's worth its weight in gold!
6. Customer Retention: Some providers offer support for customer retention, such as loyalty programs or gift card services. These are helpful to keep your customers returning, but they do require special technology to use, so make sure your merchant services provider has this.
7. Cash-Advance Loans: Many merchant services providers also have cash advance or loan options. As your business grows, you may need to bring on staff, purchase new equipment, or invest in a new workspace. Working with a merchant service provider that offers loans can be valuable for your business.

Best Merchant Service Platforms to Check Out

If you are now wondering which are some of the top merchant service platforms, they are many in the market including:

1. Your Funding Tree: One of the best online business services is Your Funding Tree. They have multi-layered protection for your business and will set you up to work with the platform Clover, an industry leader. The team at Your Funding Tree will help you choose a processing partner so that you can spend more time working on building a business.
2. Host Merchant Services: This provider is ideal for freelancers who have a high monthly income and are looking for things like offshore merchant accounts. The Better Business Bureau gives them an A+.
3. PaymentCloud: PaymentCloud specializes in working with high-risk businesses. One perk of PaymentCloud is that they offer a virtual terminal in which invoices can be generated and paid. Prices are based on each merchant's history and business type.
4. Fattmerchant: Fattmerchant is ideal for those looking for online shopping and billing as well as Quickbooks integration. They offer subscription-based pricing and have a dashboard that makes it easy to keep track of who still needs to pay you.
5. Payment Depot: Payment Depot has a reputation for great customer service. They offer support for a wide variety of industries and are a subscription-based model.
6. National Processing: National Processing is another merchant service with a great reputation for customer service and transparency. Regarding credit card processing, they offer in-person card, Keyed-in card info, and eCommerce options.
7. Dharma Merchant Services: If you want to know how much you'll pay going into the service, Dharma is for you. They clearly list all of their prices online and they also have a reputation for high-quality and personalized customer service.

Ready to Get Started?

Now that you have a better understanding of what merchant services are, you can search for the best service with the features you need to take your business to the next level. 

If you want your business to grow, you’ll need to manage your financial transactions better, which means now is the time to invest in the right merchant services as a freelancer and business owner!