Banks and payment processors work in conjunction with each other in the payment processing flow, but very few truly understand what the difference between them are. Let us explain…Payment processors connect the merchants to a payment gateway, which sends transactions to the cardholders bank and credit card companies, such as Visa and Mastercard. In the processing flow, banks simply store merchants and cardholders funds and allow these funds to flow securely from one account to the other.
A classic misconception among merchants is that the bank is also the one processing the transactions. No, Wells Fargo or Bank of America is not processing your business’ payments. In fact, very few banks provide payment processing services and even then, they are simply reselling the services of a merchant service provider at a mark-up. If your bank does process your transactions, remember you are not stuck or obligated to use your bank for merchant services.
Banks will typically use an outsourced call center or the actual provider of the merchant services to handle customer service issues. This leads to excruciating hold times, employees not vested in their clients, and poor conflict resolution. In addition, since the bank is not the one to do the credit card processing they are also not in charge of the security levels.
The difference between banks and payment processors
| Payment Processor | VS. | The Bank |
| Wholesale Pricing | Marked-up and Incorrect Pricing | |
| Designated 24/7 Customer Service Representative | Call Center Support | |
| Direct Processing | Outsourced Third-party Procesor | |
| Hardware and Software Options | Core Business |
When it comes to providing affordable and secure merchant services for you business, its best left to the experts, not your bank. Contact us for more information regarding our low cost payment processing solutions!