The Difference between Merchant Service Providers and Payment Facilitators

Do you want to accept card payments in store and online? To do this, you need a payment processing company. There are three different types of payment processor; ISO/MSPs, direct processors and payment facilitators. Both direct processors and ISO/MSPs provide merchant accounts, while payment facilitators do not. A comparison of ISO/MSPs and payment facilitators may help you better understand the differences between them and the benefits that each can offer.


Most credit card processing companies are independent sales organizations (ISOs) and merchant service providers (MSPs) that offer merchant accounts from direct processors. They act as middlemen between your business and your customer’s credit card company or bank. They process your payments and ensure that the funds are correctly withdrawn from a credit card account and transferred into your business merchant account. Once the money is cleared, the merchant service provider then transfers it from your merchant account to your business’s regular bank account.

Merchant service providers are generally the least expensive choice for small businesses that process at least $3 000 per month or have average or high sales tickets. This includes brick and mortar stores as well as mobile and online businesses. With a merchant account from a merchant service provider, you usually receive a variety of equipment for accepting credit and debit cards. This includes POS systems, terminals and mobile card readers, as well as corresponding software.

Payment facilitators

Payment facilitators sponsor merchants under their master merchant accounts and are also called merchant aggregators. Businesses do not receive a merchant account with a payment facilitator; rather, they are set up as a sub-merchant under the master merchant account.

This type of processing company is usually only ideal for small businesses that process under $3 000 per month because of their higher transaction fees. Because this kind of account is generally considered by customers to be less professional than having a dedicated merchant account, it is also not recommend for business that want to convey a more professional appearance, but it can be an excellent choice for hobbyists or small eBay sellers.

What’s the difference?

There are four major benefits of using an ISO/MSP that provides you with a merchant account instead of a payment facilitator that sets you up as a sub merchant under its master merchant account.

  1. They have better pricing for high-volume and high-ticket merchants. They are also usually much more willing to negotiate to adjust your rates as your business grows.
  2. Their security is generally higher and they are less risk-prone than payment facilitators.
  3. They usually provide more comprehensive merchant service and support, such as 24/7 phone support and a dedicated merchant account representative from the company.
  4. A dedicated merchant account provides a much more professional appearance for your business and/or website.

For more information about merchant service providers or to sign up for a merchant account, please call (888) 924-2743 or go to

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