What Is Merchant Services?
Merchant services is the umbrella term for all the tools, technology, accounts, and support businesses need to accept electronic payments—primarily credit and debit cards.
If you want to accept card payments (and in today's economy, you really have to), you need merchant services. This includes:
- Merchant Account: A special bank account that receives funds from card transactions
- Payment Processor: The technology that routes transactions between customers, your bank, and card networks
- Payment Gateway: For online stores, the secure connection between your website and the processor
- POS Terminal/System: The hardware where customers tap, insert, or swipe their cards
- Reporting Tools: Dashboards to track sales, refunds, and deposits
How Does Payment Processing Work?
When a customer pays with a card, here's what happens in about 2 seconds:
1. Authorization: The customer's card info goes to the payment processor, which contacts the card network (Visa, Mastercard), which contacts the issuing bank to verify funds 2. Approval/Decline: The bank approves or declines based on available balance and fraud checks 3. Capture: At end of day, you "batch out"—submit all approved transactions for settlement 4. Settlement: Within 1-2 business days, funds are deposited into your merchant account, then swept to your business bank account
What's a Merchant Account?
A merchant account is a special type of bank account that serves as a holding place for card transaction funds. When customers pay with cards, the money doesn't go directly to your business checking account—it goes to your merchant account first, then transfers out (usually next business day).
Merchant accounts require application and underwriting because the bank takes on risk—if you go out of business or commit fraud, they're on the hook for chargebacks and refunds.
Merchant Account vs Payment Processor
These terms are often confused:
- Merchant Account: The bank account where funds are held
- Payment Processor: The technology company that routes transactions
Most providers bundle both together as a complete solution. When you sign up with a company like Unison Payment, you get a merchant account AND processing services in one package.
Types of Merchant Services
Card-Present (In-Person) Processing
For retail stores, restaurants, and service businesses. Customers physically present their card at checkout. Lower fees because fraud risk is lower.
Card-Not-Present (Online/Phone) Processing
For eCommerce, phone orders, and mail orders. Higher fees because fraud risk is higher—you can't verify the cardholder is present.
Mobile Processing
Accept payments anywhere with smartphone card readers. Great for contractors, vendors, and field service businesses.
High-Risk Processing
Specialized accounts for industries banks consider risky—CBD, nutraceuticals, gaming, adult, travel, and others. Requires specialized underwriting.
How Much Does Merchant Services Cost?
Processing fees typically include:
1. Interchange: Set by Visa/Mastercard, paid to the card-issuing bank. Non-negotiable. 2. Assessment: Small fees to card networks. Non-negotiable. 3. Processor Markup: The processor's fee for their services. This IS negotiable.
Total fees typically range from 1.5% to 3.5% per transaction, depending on card type, transaction type, and your negotiated rates.
How to Choose a Merchant Services Provider
Look for:
- Transparent pricing: Interchange-plus shows exactly what you pay
- No hidden fees: Beware of statement fees, batch fees, PCI fees
- Month-to-month terms: Avoid long contracts with cancellation fees
- Good support: Real humans who answer the phone
- Industry expertise: Choose a provider who understands your business type
Getting Started
Ready to accept card payments? Here's the typical process:
1. Apply: Submit a merchant application with business details 2. Underwriting: The provider evaluates your business (24-48 hours typical) 3. Approval: Receive your merchant account credentials 4. Equipment: Get your terminal, POS, or gateway credentials 5. Go Live: Start accepting payments
Most businesses can be up and running within a week.
Common Merchant Services Mistakes to Avoid
Signing a long-term contract
Many legacy processors lock merchants into 3-year contracts with $295 to $495 early termination fees. Always look for month-to-month agreements with no cancellation penalty.
Choosing based on rate alone
The lowest quoted rate doesn't always mean the lowest total cost. Look at your effective rate (total fees divided by total volume) — that's the number that matters.
Ignoring PCI compliance
Every business that accepts cards must comply with PCI DSS. Non-compliance can result in fines of $5,000 to $100,000 per month. Choose a provider that includes PCI compliance support.
Using the wrong pricing model
Flat-rate pricing (like Square's 2.6% + 10 cents) is simple but expensive at scale. Once you process over $10,000 per month, interchange-plus pricing almost always saves money.
Not reading your monthly statement
Processors can add fees without prominent notice. Review your statement every month and question any charges you don't recognize.
Merchant Services for Different Business Types
Retail stores
Need countertop POS terminals with fast checkout, EMV chip support, and contactless payments (Apple Pay, Google Pay). Inventory management and reporting features are bonuses.
Restaurants
Need table-side ordering, tip adjustment, split checks, and kitchen printer integration. Clover is popular in restaurant environments.
eCommerce businesses
Need a payment gateway to accept online payments securely. Integration with shopping cart platforms (Shopify, WooCommerce, BigCommerce) is essential.
Service businesses (contractors, consultants)
Need mobile card readers for on-site payments, digital invoicing with pay-by-link, and ACH acceptance for larger jobs. See how contractors accept credit card payments for a complete setup guide.
High-risk industries
Need specialized underwriting, chargeback prevention tools, and processors who understand the compliance requirements of industries like CBD, supplements, gaming, and firearms.
Why Choose Unison Payment Solutions?
- Interchange-plus pricing — No hidden markup, no tiered pricing games
- Month-to-month terms — No long-term contracts, no early termination fees
- Industry expertise — We specialize in retail, restaurants, eCommerce, and high-risk verticals
- PCI compliance included — No separate PCI fee or annual compliance surcharge
- 24/7 support — Real people who understand payment processing
- Free statement analysis — We show you exactly how much you can save before you switch