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What Are Merchant Services Processing Companies?

Updated: Feb 21, 2021

For those Funding companies and even ISOs looking for partners to drive submissions and applications for merchant cash advances and other products, we recently published a list of some of the merchant services companies that offer business financing options.

Many of these companies have very close relationships with their clients so the quality of submissions could be higher than average. Often these merchants have had their processing with these companies for years which means the processor has a history of transaction data and possibly even payments of other advances, loans or credit lines.

We are providing the list as a source to help grow your funding business, not guaranteeing outcomes. These are all publicly sourced and can be found online using the links provided.

Some of these processors already have established relationships with Direct Funders however in these Covid19 times that may be up for discussion. There are also opportunities to exchange other services such as credit repair or equipment financing.

What Is a Merchant Service Processor?

Also referred to as a payment processor, it is a company appointed by a merchant to handle transactions from various channels such as credit cards and debit cards for merchant acquiring banks.

For e-commerce transactions, a payment gateway sends card and order details to the merchant processor who then both checks the details received by forwarding them to the respective card’s issuing bank or card association for verification and also carries out a series of anti-fraud measures.

Once the merchant processor has received confirmation that the credit card details have been verified, the information is sent back via the payment gateway to the merchant, who will then complete the payment transaction. If verification is denied by the card association, the merchant processor sends the information to the merchant, who will then decline the transaction.

In general, a company that wants to accept credit card payments online requires both a payment gateway and merchant processor. In some cases, the payment gateway and merchant processor may be the same company, as is the case with Square, Stripe, Bambora, and PayPal.



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