You're probably thinking, "Duh. Merchant services are services for merchants." That's what I would have thought, too...until I started working at a bank that offers such services. While a lot of folks who use merchant services know exactly what the term means, others may know they have a need but don't know what to ask for.
I asked our Business Banking Officer, Stephanie Hipps, to help us demystify the mysterious world of merchant services. First of all, you're right. Merchant services ARE services for merchants. But what exactly is a merchant? Read on to uncover the true meaning behind this and other words and phrases commonly used in the realm of merchant services:
MERCHANT: In terms of merchant services, a merchant is a business or business owner who provides goods and services to the public, like retail stores, restaurants, hotels, hair salons, flower shops...you get the picture. Services and goods can be sold either face-to-face, online, or even through the mail.
TERMINAL: How do people pay for these goods and services? Cash and checks are still around, but most often merchants are being paid by credit or debit card. If a customer is paying in person with a credit or debit card, the merchant uses a payment terminal to process the card. Customers either swipe the card through the terminal, or insert the card (if using a new EMV chip, which we'll talk about later). Some call this contraption "the card swipe thingy," or "that machine you run your card through." Even some folks "in the business" call this a "card reader." Stephanie says that no matter what you call it, her team can help you set it up and support it!
MOBILE CARD READERS: Think of a mobile card reader as a terminal you can take with you. Mobile card readers are small devices that can be plugged into the headset jack on your mobile phone or tablet to let you swipe and process credit or debit cards. They are perfect for merchants that offer services or goods on-the-go, like yoga instructors, plumbers, open market vendors, etc.
NFC: Speaking of terminals and ways to pay...you can thank "NFC" technology or near field communication, for allowing terminals to accept cardless payments like Apple Pay or Samsung Pay. NFC is a wireless technology within the payment terminal and your mobile phone (and some debit or credit cards) that makes it possible for the devices to talk to one another and transmit payment information. You also may hear this called "contactless" payment.
POS: It's not what you're thinking. In merchant services lingo, "POS" stands for point-of-sale. This term is used in a lot of different ways, and they are all technically correct. It can refer to the time, the place, or even the manner in which you pay for goods and services. A lot of businesses use POS to describe the hardware and/or software they use to ring up the sale, print receipts, manage inventory, read barcodes, etc. Stephanie's team recently added a super POS software system to the list of Business Banking services Bank Independent provides--you can learn more about that here.
EMV: I know...stop with the acronyms! This one is less about what it stands for (Europay, MasterCard, Visa) than what it does. EMV chips are embedded into debit and credit cards to add an extra layer of security to card transactions (this is why these cards are often called "chip cards.") Because these cards can only be read by terminals equipped with EMV slots and technology, they are much harder for fraudsters to duplicate. EMV technology has been around in Europe since 1999, but as of now less than 50% of US merchants have adopted EMV payment technology. Most banks and card issuers are keeping the traditional magnetic stripe on their customers' cards so they can still be used at non-EMV equipped terminals. Bank Independent recently upgraded all debit cards to include the new EMV technology, but as this recent blog post shows, there are still a lot of questions about chip cards.
These are just a few of the terms in the Business Banking vocabulary...enough for another blog post! The great thing is that our Business Banking professionals do a wonderful job explaining these and other service in real terms. In addition, they understand that you're busy, so they'll talk to you when and where it's convenient for you...before and after the sale. If you'd like to speak with a Business Banking representative about all they can do, please complete the form below!