Merchant services encompass all the financial services that allow a business to accept electronic payments from customers, from payment software technologies, to point-of-sale hardware, and payment processing services. If you are planning to start accepting various forms of digital payments from customers, it is important to become familiar with merchant services, and the available service providers on the market. In this article, we’ll walk you through the most essential information about merchant services and how they can support your business.

What are Merchant Services?

A simple definition for merchant services is that it broad term used to describe various payment and financial services that provide businesses with the technical infrastructure and physical equipment to enable electronic payment for customers whether online or in-store. From payment cards like MasterCard and Visa to the POS machine where you insert your card and the checkout page on an e-commerce website, we encounter merchant services in every form of digital financial transaction we make. Merchant services can come in form of a physical product or an online system all for the purpose of accepting digital payments.

How Merchant Services Work

Merchant services cover the entire transaction process starting at the point when a customer attempts to make a payment in-store or online and completing the process when the merchant’s account is settled with the acquired funds.

Here’s a breakdown of a complete payment process and the work of merchant services:

1. Customer inserts their card into your POS machine or enters their bank details on your e-commerce checkout page.
2. The customer’s financial details are received by a payment gateway integrated into your POS system or e-commerce website.
3. The payment gateway transmits this information to a payment processor which is responsible for verifying the transaction from the customer’s bank.
4. The bank approves or declines the charge based on whether there are sufficient funds in the account and if no suspicious activity has been determined. 
5. The payment processor notifies the customer of the approval or decline message from their bank
6. If approves, a funds transfer notice is sent to the merchant’s bank and the appropriate funds are to be deposited in their account.

Types of Merchant Services

Here are the three major categories of merchant services available today.

• Payment Gateway

A payment gateway is a merchant service that acts as a digital terminal for accepting and transmitting a customer’s payment details for transaction processing. The job of a payment gateway is to read and confirm the validity of card details, and securely transfer the information to a payment processor to complete the transaction. A payment gateway communicates with the payment processing system to confirm if the transaction was successful before notifying the paying customer of the status of their transaction. Payment gateways are used both by e-commerce businesses and physical stores which accept online payment methods.

• Payment Processor

This merchant service works behind the scene to process and settle digital payments. A payment processor acts as an intermediary between the various financial parties involved in a transaction. The payment processor is responsible for receiving authorisation from the customer’s bank for funds to be withdrawn and ensures that the funds are deposited into the merchant’s bank.

• POS System

This merchant service refers to the hardware and software systems used to receive payments in a brick-and-mortar store. A card reader and a QR code reader are common hardware components used at a POS terminal. These devices are usually integrated with a computer system that allows you to monitor sales.

The type of merchant services your business requires depends on your type of business and how you wish to accept payments from customers. For example, you can offer customers various payment options like debit cards, QR codes, bank transfers, USSD, etc. Also, if you own a physical store, you might require a card reader or POS system

Tingg – Top Provider of Merchant Services in Nigeria and Kenya

Tingg provides simple and flexible merchant services for physical and online businesses in Nigeria and Kenya. We provide both modern POS systems, easy-to-integrate e-commerce payment gateways and a rich payment processing service that supports a wide range of electronic payment methods. Today over 1000 businesses in Africa use Tingg merchant services.

Benefits of Using Tingg Merchant Services

1. Supports various payment methods
2. Enables you to receive multiple-currency payments
3. Advanced security and fraud detection technology
4. Provide easy reporting and cashflow monitoring dashboard

Enjoy the best merchant services with Tingg. Visit tingg. africa to set up an account today!