Who Provides Best Merchant services: Bank or Merchant Service Provider

Our one option is banks, where they have tougher requirements for approval and do not generally like new businesses. So it is suggested to obtaining a merchant account with a company that specializes in offering merchant services. These organizations, known as Merchant Service Providers, specialize in providing merchant accounts for new businesses. Merchant Service Providers usually have less stringent approval requirements, lower fees, better understanding of risk issues and customer service departments that only handle inquiries about merchant accounts. You will probably not deal directly with a Merchant Service Provider, but rather an ISO that contract with a MSP. These independent sales organizations.

These independent sales organizations specialize in marketing to new businesses soliciting merchant accounts. The ISO focus is selling you a terminal or software that will allow you to process credit card sales. The MSP also compensates ISO but the focus of the ISO is usually selling equipment or Software. There are many reputable ISO in the bankcard industry but a few bad apples. I will explain how to choose the right MSP and ISO shortly.

Risk is the main concern of any bank or merchant service provider. Banks are more conservative and are highly regulated which gives the MSP and ISO an edge. Internet, mail, telephone or any business that does not see the credit card usually must use a MSP or ISO because banks will usually not approve these types of businesses. In addition, many MSP and ISO offer a number of associated services, especially to online businesses, such as shopping cart capabilities and website design.

Source: http://www.freecreditcardprocessing.com/html/sound_advice.html#g4