The terms Merchant Service Providers and 3rd party processors are very loosely used in the e-business world. If you have an e-business site and wondering whether to choose a MSP or a third party processor to process your payments, here are some tips that may help you.

A merchant service provider provides an account in your name for you to help transact credit card payments on your site. The merchant service account can be provided by a bank or an independent institution. They will charge you to set-up the merchant service account on your site. One of the software that is used to facilitate payments is CyberCash. The banks or institutions will charge you chargeback fees if there is any disputes and frauds that happens on the site.

A third party processor on the other hand helps you process the transactions that happen from your site. You do not need to download any software, but interface your site with the third party processors site. They will connect to the payment gateway and complete your transactions. They will charge a fee from you for the service rendered.

If your business turnover is large and you have dedicated people to manage the merchant account then a MSP is a good option. Otherwise, it is suggested that you opt for a third party payment processor. The choice is yours and depends upon the requirement that you have. You should always plan out before you choose your option.