Merchant services is basically a broad class of financial services aimed for the utilization by businesses on a wide scale. In its narrower sense, it typically refers to financial service providers that enable a business to take payments in the form of credit cards, debit cards, online credit card payment systems, and other electronic and cashless payments systems. For the merchant to utilize these services, he or she should have a merchant account (a merchant account is usually also referred to as an EFT account).
EFT is essentially a short form of Electronic Funds Transfer and it stands for Electronic Fund Transfer, Transfers, and Transactions, and the name EFT is an abbreviation for these various words. A merchant’s merchant account can be considered as the main source of EFT transactions as the transactions are made through this channel.
When EFT is used for transactions, the payment of the funds is automatically transferred by a third party service provider like a bank or a card company to your merchant services account. The money transfer can either be initiated directly from the merchant account to the third party service provider or a third party service provider may perform a pre-authorization process whereby a pre-determined amount is deducted from the customer’s account on a regular basis until the funds reach the merchant account. There are some banks that do not allow direct transfers of funds between their merchant accounts and third party services providers because they believe this can compromise their system security.
There are some EFT service providers who do not charge any fees for their services. They have a large database of cardholders, a wide network of merchants, and an efficient payment processing system which allow for quick authorization and settlement of transactions. You can find several of these service providers at online directories. Some of them also offer online account management facilities to its customers.
The fees charged by an EFT provider vary depending on the type of service and the number of card transactions performed. Some of these companies have a flat fee and some charge a per transaction rate. Some of these services are managed by third parties and others are managed internally by the merchant.
An EFT provider has several advantages over other types of providers in terms of cost efficiency and flexibility. Another advantage of EFT is that it is faster than other forms of transaction due to the fact that the EFT process is automated. It also helps to minimize fraud risk because it eliminates the need to physically monitor and accept credit cards or debit cards.