What is a merchant broker

Bankim Chandra Staff asked 4 months ago
1 Answers
Bankim Chandra Staff answered 4 months ago

A merchant broker is a company or person that offers merchant services to business owners. This includes various kind of segments. Lets look at each of them.

  • Credit Card Processing online. Here the broker connects business owners with Payment processing companies for internet payment gateway solutions. The transaction type is card not present or CNP.
  • Retail Credit Card Processing. Brokers work with retail card processing companies and help merchants get EDC/POS/Credit card processing terminal. The transaction type is Card Present as there is a face to face interaction between card holder and the merchant.
  • ACH/Echeck/Check21. here the broker offers bank to bank transaction capabilities to business owners. This can be Face to face or over the phone/web transaction
  • Merchant cash advance. Many business owners require working capital/additional capital to grow there business. Here the merchant broker connects businesses with lending companies.
  • Chargeback alert/Notification/Insurance services. Merchant brokers that work with high risk clients also offer this additional service. This helps merchants reduce the return ratio and chargeback ratio.
  • Cash discounting. This is a segment that is mostly touched by USA based brokers. Retail merchants can utilise this service.
  • IBAN/Bank Account. Merchant brokers can also help companies establish Bank accounts and IBANs. This can be a secondary service that they may offer to clients
  • Company formation. Some merchants may need to establish offshore companies if the requirement is from PSP. In this case brokers can establish tie ups with company formation companies and earn some extra commissions.

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