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3rd Party Credit Card Processors - Looking Beyond The Bank For Best Deals
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Traditionally banks have played a principal role in credit card processing. Guessing the reason for this is not difficult. Banks are where merchants have had accounts usually for years and it was relatively effortless to sell credit card processing to existing account holders. Their merchant accounts could be easily linked with point of sale machines and the bank could get a percentage for moving that money thus creating an additional revenue stream for themselves.
In recent years however, banks have been losing their preeminence to third party credit card processing companies. This is not accidental. Irresistible pricing supported by solid technology has helped the third party credit card processing companies make considerable inroads into the industry.
Banks were under the assumption for a long time that since the merchant account was held by them, they had the privilege of selling every other service associated with merchant funds. They did not comprehend that the customer is always searching for the best deal and they leave if your competition is offering better rates and service.
Consumers do not necessarily want a one-stop shop for their financial requirements. What they do prefer is that their needs be met in the most efficient and inexpensive manner. It does not really matter if they have to source from multiple vendors so far the rate and service is fantastic. This is where the banks were edged out by third party processors. They had a strong business proposition of bettering the banks' offering at a lesser price.
This business proposition was hugely facilitated by the arrival of the internet. It changed all norms of the business world. Thanks to economical and quality connectivity provided by internet, third party credit card processing companies are able to process credit cards accurately and inexpensively. They are able to offer their services to merchants of any size. While such service was earlier made available only by the banks, now several technically savvy outfits which provide if not more but equal value have come up to service the merchants.
We cannot deny that all financial services at a single point is comfortable receiving. It saves a lot of time and effort otherwise spent in coordination. But it is crucial to cautiously consider the costs too. Businesses would be keen on furthering their relationship with the bank especially if they have had their accounts with them for years. But they would want to get a fair deal as well. It is crucial to call attention to the other key service areas as well in addition to rates and charges: internet processing, no signature processing etc.
The third party credit card processing companies are playing an important role. They help businesses do better when they negotiate with their bankers. Banks cannot take this threat lightly anymore due to the strong competition and are altering their modus operandi to take the new competitors head on. Eventual beneficiary is the consumer - the business, irrespective of who they decide to partner with, they are assured the best deal.
Daljeet Sidhu is at Tradeseam B2B Marketplace. Read Cheap Credit Card Processing advice. Credit card processing quotes.
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