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Wholesale Merchant Services

Just what are wholesale merchant services and what can they do for the serious seller or buyer who has chosen a particular product or line of products? The answer may not be simple, but there are some basic guidelines for those interested in wholesale merchant services and what they mean to the business.

First of all, do not be misled into thinking that wholesale merchant services means that some expert in the industry is going to take you by the hand and show you how to avoid mistakes, get good prices and make lots of money. Oh, there are consultants and long time wholesalers who will sometimes assist a newer business. In fact, there are some wholesale merchant services companies who include mentoring and advice as part of the package when you sign with them. But when you hear someone mention the term "wholesale merchant services" you are going to be hearing about companies who offer processing systems and equipment to handle payments from your wholesale customers.

This is the bottom line, though each company may have some slight differences in the way they handle the processing and how much "hands-on" help they give you. Wholesale merchant services can include credit processing, online debit payments, purchasing cards and much more (including major credit cards). How is this a profitable business venture for the wholesale merchant services firm? Again, to put it quite simply, these companies charge a fee for each transaction they process for the wholesale merchant.

Here's an example of just what wholesale merchant services mean to the supplier/wholesaler who needs to collect payment. Suppose that a customer orders $100 worth of product from you, using the Web site and a credit card. The wholesale merchant services company might take out a small percentage of that amount: 1 percent, 2 percent, 3 percent, 4 percent. Whatever your agreement says, that is the cost to you, the wholesale merchant. Tip: There can be additional pennies added to this cost – if it necessary to do any manual entry of numbers etc. It is always best to ask.

Perhaps the best way to understand what wholesale merchant services are and what they can be is to list some examples of what may be included in a service agreement.

There can be: application fees; technical support fees; cost for the "terminals," (the physical equipment the merchant uses, if any; downtime, especially if a customer service representative is not available; interchange – the amount of each transaction paid to the bank that issues the credit card. Interchange fees have numerous levels. A clear understanding of this cost factor is necessary for any wholesale merchant to be successful. The rate is based on how risky the issuing bank feels the transaction may be. The level of the fee will basically be determined by the conditions and restrictions set for accepting credit cards and processing the purchase. Wholesale merchant services can also involve authorization fees – as much as 3 cents per transaction. Tip: Ask about this fee when researching wholesale merchant services. Essentially, wholesale merchant services are a very specific set of financial activities to help business collect money.

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