According to the Federal Reserve, an estimated 82% of U.S. adults had a credit card in their name in 2022. With so many consumers using credit cards to make purchases, small-business owners can prepare themselves to meet those needs by looking into merchant services.

Merchant services encompass everything from hardware to software that is needed for businesses to accept and process credit or debit card payments for both in-store and online sales.

A merchant account is a type of bank account that lets businesses accept payments by debit or credit card. The account acts as an agreement between your business, a merchant bank, and a payment processor. Once you establish an account, the payments processor works with the issuing and acquiring bank to process that payment. A merchant services provider is an entity that allows you to accept payments by credit card, debit card, or mobile wallet.

Understanding the different types of merchant services can help you determine which solutions are right for your business. Here are a few services to consider:

• Credit card processing: Debit and credit card processing products allow you to accept payments from customers. There may be different fees depending on the method of processing and credit card merchant services.
• Point-of-sale solution: A point-of-sale system is the hardware and software that enables your business to make sales when customers check out online or walk up to your counter to make a purchase. A point-of-sale system can allow you to accept payments, track sales, manage your team, offer a loyalty program, etc.
• Gift card and loyalty programs: Gift cards and loyalty programs can grow customer retention and loyalty. With loyalty programs, you can incentivize customers by dollars spent, return visits, or purchase of specific items. Gift cards can be used to attract new customers, increase sales, or deepen customer loyalty.
• ACH (Automated Clearing House): ACH is a financial network used for electronic payments. Sellers using ACH can transfer money from one bank account to another. ACH payments are most commonly a substitute for checks but can also be used in the place of wire transfers, cash, or credit card networks.

Using merchant services can allow you to expand your customer base beyond cash and check buyers. By processing payments electronically, customers can shop online or in-store, and payments are received more quickly than paper checks, cash, or mailed invoices.

Cynthia Marconi is treasury, deposit, and business services manager at F&M Trust.