Merchant Services

Anyone with a business is more than likely familiar with merchant services. For those who are unfamiliar with the term, it means they have an account that allows them to accept credit card payments. Anyone who sells anything today needs to have a merchant services account or their sales will greatly suffer. Fewer people today carry cash than was the case even ten or fifteen years ago.

The introduction of the debit card, especially the Visa/MasterCard check card, made merchant services accounts for businesses more important. People who had previously used cash because they didn't have a credit card or didn't want to charge their purchases were now using plastic instead of cash, and why not? It came out of their checking account, so there was no interest, and it prevented them from having to take the time to go to the bank for cash.

Of course, in the beginning merchants were picky what cards they accepted because of the fees attached to them. Many only took MasterCard or only took Visa but few took both. That meant customers had to have one of each in order to be assured they would be able to pay for purchases. Today those early fees have leveled out and most merchants take all cards except perhaps American Express, which is still more costly in merchant services processing.

One of the indirect causes to a decrease in merchant services fees is the late 90s introduction of merchant services processors such as PayPal. At a much lower cost than the average merchant services account, it allowed people to use a credit card for online purchases without having to worry about putting their credit card information on each site. Today you do not even need a credit card to use these services-you can use electronic funds transfer.