3rd Party Processors vs. Banks

Bank Offerings

Banks are a natural consideration for setting up an account with and using to process your transactions. However, they have two options available to you: a business account and a merchant account. The business account is exactly what it sounds like, an account for all of your business’ transactions to go into. Nothing more, nothing less. Consider it a checking account but for your company and not you. A merchant account,  however, goes further. By setting up a merchant account, you gain the ability to process cards and other transactions. Many banks will add more services to your merchant account to compete with third-party providers, such as dispute support, customer service, and point-of-sale systems. 

That Sounds Great!

Hold up. Despite these wonderful offerings, they are not all that they seem. Mainly, these services are offered by third party processors, and more. What’s more, Banks will generally have higher rates to compensate for those services. More importantly, many banks will have hidden fees and rates that you won’t know about until its too late. The setup costs may be advertised as free, which is quite attractive, however, those waived fees are more than made up with the aforementioned hidden ones. They might even preach customized rates for each merchant, despite how easy it is to standardize them. 

What About Third-Party Processors?

Third-party merchant service providers, such as FlashBanc, offer all of the same services as banks and more for lower rates. The pricing structures may also be much more flexible or easier on your bottom line. Instead of tiered pricing, you may encounter a small fee per transaction. What’s more, certain processors may offer a “discount” where the fee is moved onto the customer’s purchase, though it is only compatible with select POS terminals. They may also offer loyalty programs to help with recurring customers, gift card programs for the holiday season, and even provide loans for any business need. All third party processors are licensed under a bank and process through larger companies such as First Data. While this may seem like a disadvantage, many banks such as Bank of America, use First Data as well. 

So Which One Should I Use?

While banks offer merchant services, they are often unsatisfactory, overpriced, and do not offer as many as a third party processor. However, you should not use just any processor, as they were not all created equal. Many processors have different rates, programs, and products to help you with. FlashBanc offers a wide variety of services and terminals that you can find here: https://flashbanc.com/solutions/. As a little sneak peek, many of our solutions for you include our loyalty and gift card programs, high-risk or non-traditional business solutions, and smart POS terminals. We also offer dedicated 24/7 support for all of your needs in tandem with First Data’s support. Explore our services to your heart’s content and when you’re ready to partner with us, give us a call or email!