4 Min. Read

Merchant Management System (MMS): What It Is & How Does It Work

March 13, 2024

With nearly every business having an online presence, online programs and software are a must. A good online system can be a powerful tool for a business. It can allow for better customer relations and generate more business. One of the tools most businesses should be aware of is the merchant management system. If you’re running a business, keep reading to learn more about merchant management systems and their importance.

Here’s What We’ll Cover:

What is a Merchant Management System?

Why is an MMS Necessary?

Key Takeaways

What is a Merchant Management System?

A merchant management system (MMS) is a web-based environment used by merchants. It allows them to access transaction data in real-time. The data they track is related to data transactions generated by a payment gateway. An MMS allows both the merchant and the payment service provider to detailed transaction receipts. They also have access to transaction history.

Access to data regarding transaction channels in a payment gateway is important for merchants. An MMS allows for the generation of merchant reports. These reports detail transaction history and transaction summaries, and a wide range of other metrics.

Why is an MMS Necessary?

You may be thinking to yourself, “Does my business need all of this data?” Simply put, yes. We are living in a digital age. Along with that comes numerous digital transactions, both by customers and businesses. The digital environment also opens up room for competition. Many merchants need to examine the way that they are handling online services.

There are many competing financial institutions that want your business. They may offer lower transaction fees or may give access to more payment options. An MMS can help you review and determine what changes you should be making on behalf of your business.

We are living in a multi-channel world when it comes to payment methods. As such, no longer can a business use a single channel. Merchant management services are helping businesses find the various channels that can help them grow.

Who is Involved in Online Transactions?

Generally speaking, there are four parties involved with all online transactions. An MMS helps with tracking all data regarding these four parties as transactions are made. Check them out below:

The Merchant: The business accepting the payment
The Customer: The party making the payment to the merchant
The Issuing Bank: The customer’s bank
The Acquiring Bank: The merchant’s bank

To be able to accept payments and accommodate all of these parties, merchants need access to a variety of tools. They’ll need access to a payment processor, a payment gateway, and their own account.

The Need for a Payment Gateway

The payment gateway is the service that enables the merchant to accept payments online. They are responsible for the merchant being able to take more than just cash as a form of payment. Payment gateways let merchants accept debit cards, credit cards, and other electronic payments.

Payment gateways also allow merchants to connect with payment networks. It is integrated into both the online commerce and POS options that merchants have. Without a payment gateway, an online merchant cannot accept many forms of payment.

How an MMS Brings it All Together

An MMS helps merchants bring all aspects of electronic payments together. Without an MMS, merchants tend to have more difficulties when trying to track transaction data. This can lead to a number of problems. However, with an MMS, you can turn problems into growth opportunities. The key benefits of using an MMS are listed below.

An MMS offers powerful tools tailored to implementing complex pricing models. Even though the models are complex, the MMS makes them simple for the merchant.
System customization is possible using an MMS that wouldn’t otherwise be.
Merchant and partner structures can be described using an MMS. This is made possible by defining specific business rules at different points of hierarchy.
Applications can be placed into customizable workflows, allowing processing to be controlled.
Because an MMS provides limitless flexibility, it also means that it is future proofed. As things adapt and change, so can the MMS. It will always be able to suit the needs of the business, and so will the payment processes associated with it.

Key Takeaways

The management of merchant functions and operations can be challenging for a business. Merchant management systems aim to remedy that. They allow for endless customization of sales operations, which leads to higher profit generation over time. If your business is looking for merchant management solutions, an MMS may be the answer you’re looking for. If you’re looking for other business-related information or news, check out our resource hub. It has more content just like this!