The payments processing industry involves a unique chain of participants, starting with the customer, who makes a payment and passes through several entities before reaching its destination. Somewhere along the way, agents are involved. Here’s a look at the difference between agents and merchants and the vital role that agents play in providing payment processing services to their merchantA business that accepts credit cards for goods or services. clients.
Difference Between Agents and Merchants: The Payment Chain
Identifying all the different players along the chain of events involving a processed payment is essential and understanding their roles. Here’s the cast of characters for a typical transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account....:
Customer: This person makes the credit card or debit card payment to the merchantA business that accepts credit cards for goods or services. for goods or services the merchantA business that accepts credit cards for goods or services. sells.
MerchantA business that accepts credit cards for goods or services.: This is the seller or retailer who receives the payment in exchange for goods or services. Likewise, the term “merchant” can refer to all types of merchants, from a small business with one or two salespeople to a mega-corporation like Walmart or Amazon. Essentially, the term “merchant” refers to the person or entity owning the products and controlling the sale of goods for their business.
Agent: Also called an independent agent or Independent Sales Organization (ISO)ISOs act as a third party between the merchant and the acquiring bank. ISOs must register with Visa/MasterCard. agent, this is the person who helps merchants create a merchantA business that accepts credit cards for goods or services. account by connecting them to a payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services..... An agent sells credit card processing products and services to merchants. A merchantA business that accepts credit cards for goods or services. can maintain a merchantA business that accepts credit cards for goods or services. account through an agent, which is required to process credit card payments.
MerchantA business that accepts credit cards for goods or services. acquirerAny bank, financial institution, and public or private company that maintains a seller’s credit card processing relationship and receives all transactions from the seller to be distributed to the credit card issuing banks.: The acquirerAny bank, financial institution, and public or private company that maintains a seller’s credit card processing relationship and receives all transactions from the seller to be distributed to the credit card issuing banks. is the bank or financial institution that hosts and manages the merchant’s account and accepts the sales payments. Acquirers serve as the financial backers for credit card networks. When analyzing the difference between agents and merchants, acquirers provide the product (in the form of payment processing services), which agents can then sell to merchants.
As one of the nation’s leading acquirers, National Merchants Association provides a wide variety of payment processing products and services. With a National Merchants Association merchantA business that accepts credit cards for goods or services. account, a merchantA business that accepts credit cards for goods or services. can accept credit cards and a vast array of electronic payments, including direct deposit ACH payments and convenient digital wallet payments. With a National Merchants Association membership, you can have the affordable payment processing tools you need to streamline your operations management, boost sales, and increase customer retention.
Payment processorA large data center that processes credit card transactions and settles funds to merchants. A processor connects to the merchant on behalf of an acquirer via a gateway or POS system to process payments electronically. Processors edit and format messages and switch to bankcard networks. They provide files for clearing and settlement and other value-added services....: The payment processor has the critical task of managing and executing the credit card transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account..... Payment processors transport the card data and information to its end destination: the banks and financial institutions backing the credit cards.
Credit card networks or card brands: These are the credit card companies that own and manage all the major payment cards, such as Mastercard, Visa, Discover, and American ExpressAn organization that issues cards and acquires transactions, unlike Visa and MasterCard, which are bank associations..
IssuerA bank that issues credit cards to consumers.: Standing at the end of the payment processing chain, the issuerA bank that issues credit cards to consumers. is the bank or financial institution that issues the credit or debit cards. In addition to providing the cards, the issuerA bank that issues credit cards to consumers. releases transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... funds to the acquiring bank when the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... is approved. Also, the issuerA bank that issues credit cards to consumers. has the power to approve or deny transactions and is responsible for approving or denying credit card applications.
Now that we’ve explained the chain, you can see the main difference between agents and merchants. Essentially, the merchantA business that accepts credit cards for goods or services. sells goods and services to the customer for payment. The agent provides the merchantA business that accepts credit cards for goods or services. with ways to accept those payments by connecting them to an acquirerAny bank, financial institution, and public or private company that maintains a seller’s credit card processing relationship and receives all transactions from the seller to be distributed to the credit card issuing banks. such as National Merchants Association.
How Do Agents Work?
Agents work independently with payment processing providers, selling their merchantA business that accepts credit cards for goods or services. services and products to merchants. Agents earn money by adding residual fees to the payment processing products they sell and setting their monthly rates to make profits.
It’s important to understand that independent agents don’t work as salespeople. Instead, they act as intermediaries or mediators in the payment processing supply chain by connecting the merchantA business that accepts credit cards for goods or services. to the processing services provided by a reputable acquirerAny bank, financial institution, and public or private company that maintains a seller’s credit card processing relationship and receives all transactions from the seller to be distributed to the credit card issuing banks.. So, for example, an independent agent can set up a merchantA business that accepts credit cards for goods or services. to use National Merchants Association credit card processing services. This way, an ISOISOs act as a third party between the merchant and the acquiring bank. ISOs must register with Visa/MasterCard. agent connects the merchantA business that accepts credit cards for goods or services. to the payment processing products their business needs.
How Agents Can Benefit Merchants
Market research shows that customers may spend 83 percent more when they have the option to pay with a credit card. In addition, studies show that using credit cards can increase the enjoyment customers experience when making purchases.
There are many types of merchants, from retailers that sell in large quantities and require warehousing for their inventory to full-service wholesalers that use a variety of distribution channels to ensure that products reach their end users. By connecting retailers, e-commerce sellers, merchantA business that accepts credit cards for goods or services. wholesalers, and distributors to an acquirerAny bank, financial institution, and public or private company that maintains a seller’s credit card processing relationship and receives all transactions from the seller to be distributed to the credit card issuing banks. like National Merchants Association, independent agents can provide these merchants with a full roster of payment options that can increase sales.
If you’re an independent agent or planning to become one, National Merchants Association’s ProAgent Partner Program gives agents a wide variety of unique programs, services, and revenue-generating initiatives. These are all specially created to help agents gain the skills they need to maximize their earning potential and build profitable portfolios of merchantA business that accepts credit cards for goods or services. clients. In addition, our customized interactive training programs can help you gain an edge in this highly competitive industry, so you can make merchantA business that accepts credit cards for goods or services. services easy for your clients and profitable for your business.
If you’re a business owner and need merchantA business that accepts credit cards for goods or services. account services, contact us to learn how National Merchants Association can provide you with a wide range of credit card and electronic payment options that can boost sales and profits.
ABOUT NATIONAL MERCHANTS ASSOCIATION
National Merchants Association is a merchantA business that accepts credit cards for goods or services. advocacy group dedicated to reducing unnecessary fees associated with accepting credit card payments. Since 2004, it has delivered tailored payment processing solutions, best-in-class merchantA business that accepts credit cards for goods or services. service, and support for all levels of credit risk. Whether it’s high-risk merchantA business that accepts credit cards for goods or services. accounts, low-risk merchantA business that accepts credit cards for goods or services. accounts, brick-and-mortar businesses, or e-commerce stores, National Merchants Association will create the best payment processing experience for your business. For more information, call (866)-509-7199 or visit legacy.nationalmerchants.com.