How Cloud-Based Merchant Services Benefit Business

A businessman wearing a navy suit leans over a desk to use a silver laptop computer.

The days of manual merchant services transactions are long gone. Now, the most innovative merchant services platforms are all cloud-based, which means that businesses can easily conduct sales online, in person, at brick-and-mortar stores or on mobile devices.

With the rise of cloud computing and tokenization services, business owners now have a wider range of payment options for their clients, better inventory management and order fulfillment, and on-the-go access to their financial details. Cloud-based merchant services also make it easier to track your finances from wherever you are, rather than having to be on-site to take a look at your company's cash flow.

How Cloud-Based Merchant Services Benefit Businesses

In the past, accepting payment types beyond cash and check meant providing hard-wired credit card readers that sat alongside—but were not integrated with—cash registers. Plus, financial records were stored locally within a business's own computer network, which left them susceptible to technical failures and lost data (or, worse, stored on paper in insecure and disorganized filing cabinets).

Now, merchant services providers (MSPs) have embraced new technology. This means businesses can accept payments both on- and offsite as needed—a huge boon to both small enterprises and customers alike. Cloud-based merchant services not only make transactions easier and payment processing more flexible, but can offer customers the essential option to pay through their phones—something many have come to expect as people do increasingly more on their devices. That's something that simply can't be accomplished with older technology tethered to a landline.

Cloud-based merchant services providers also offer other crucial tools, such as point of service terminals, inventory management support, and financial tracking software. Most integrate online and in-person transactions into one platform, mitigating the need to reconcile purchases manually. Plus, these new systems include software that can help businesses do away with some manual bookkeeping tasks.

How Cloud-Based MSPs Are the Future of Business

Not only does cloud computing reduce the friction of conducting electronic transactions for small and medium-sized businesses, it can also change the ways in which these companies do business entirely. Mobile card readers and POS terminals enable businesses to take payments wherever there's an opportunity to serve customers, and remove payment obstacles in an increasingly cashless society.

Businesses with out-of-date payment services stand to benefit the most from making the jump to cloud-based merchant services providers. Cloud-based tools integrate a series of software applications that rarely have the functionality to share data with one another. By upgrading to a cloud-based provider, businesses stand to improve their productivity by eliminating separate tasks. For example, many find cloud-based merchant services providers make the process of reconciling accounts much easier, since business owners can access real-time data quickly and easily through consolidated reporting.

Upgrading also makes it easier for multiple stores to share financial information in real time, a huge benefit for businesses with multiple locations. Or, for companies looking to expand, they're better enabled to make any future ventures easier to manage from a financial perspective.

Many MSPs also offer to handle customer service issues that arise with credit card transactions. Small business owners do not have to get involved in these issues, instead leaving them to their merchant services partner to fix. This can help save time for business owners and, best of all, leave experts to fix these technical issues.

Making the Jump to a New MSP as Small Business

There's never been a better time for business owners to upgrade their merchant services setup to a cloud-based system. The technology has become much more affordable, with per-swipe transactions for cloud-based providers matching their less tech-enabled rivals. POS terminals and card readers are often included for free as part of a user's monthly service, or are affordable to rent or buy as necessary.

Very often, working with your financial institution can help you navigate the process of picking the right MSP. Since your financial institution has a deep understanding of how your business works, they can assist in matching you with the right provider that can be best equipped to handle your volume.

MSPs tend to offer pricing flexibility, offering fee structures for businesses that can complement the volume and frequency of card-based transactions. Some choose to bundle each of the individual fees involved in a credit card transaction, while others offer an a-la-carte approach. Depending on your business, one of these two models may save you money depending on how your customers prefer to pay.

The differences between MSPs go beyond fees, too. Businesses should also consider ability to set up and run loyalty programs, which could go a long way toward getting people to become repeat customers. Plus, with customer information gathered directly from your loyalty program, you can set up marketing and newsletter campaigns that can help keep your products in the minds of your would-be customers

The Benefits of Cloud-Based MSPs

As most business-related technology moves to the cloud, it’s inevitable that the way in which businesses accept payments would make this jump as well. The good news is that there are plenty of cloud-based MSPs around, which means lower fees and better options for business owners. Plus, with the right banking partner, picking the right cloud-based MSP doesn't have to be a daunting process that you go through alone.

The right banking partner will help you not only make the right choice for your MSP, but also continually educate you on what’s changing in payment processing, and help you understand your next steps as technology evolves and stakeholders change.

With a bit of research, a solid understanding of your payment processing needs, and solid advice from experts in the field, you can take a digital leap forward for your business that will make it easier to track customer purchases, keep financial data secure, and bring a key component of your business into the future. Cloud-based MSPs can do all of this and more, so long as you know what you need and partner with the right players.

The views expressed by the authors are not necessarily those of Fifth Third Bank, National Association and are solely the opinions of the authors. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank, National Association or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever. Deposit and credit products provided by Fifth Third Bank, National Association. Member FDIC.