What Is A Convenience Fee?

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What Is Square And How Does It Work?

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How To Register Your Business: The Complete Guide

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How To Accept Donations Online

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The Merchant’s Guide To CVV2 And CVV Checks

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Can Merchants Set Minimum Amounts On Card Transactions?

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The Best Business Loan And Financing Resources For Massachusetts Small Businesses

In 2018, Massachusetts was the fastest-growing state in the Northeast, with its population growing by over 5%. As its population grows, so does the state’s economy. Once known for agriculture, trade, and fishing, this state has grown to become a global leader in finance, biotechnology, and other modern industries. Massachusetts has even been named by as the most innovative state by Bloomberg.

With a strong economy and new opportunities always on the horizon, there’s no better time than now to launch or expand your own small business. Whether you’re the owner of an established business or you’ve only flirted with the idea of entrepreneurship, the state of Massachusetts has small business financing and resources available to you.

If you’re ready to launch your business or take your existing business to the next level, keep reading! Instead of poring through hundreds of small business lenders and resources, we’ve handpicked the best options for you. Whether you’re seeking low-interest loans, fast financing, or free business tools, this guide has you covered. Read on to find out more about the small business resources available to Bay Staters.

Online Business Lenders For Massachusetts Businesses

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Running your own business keeps your schedule full. When you need extra capital for your business, it seems like there aren’t enough hours in the day to head to your local lender. Fortunately, there is a solution that allows you to get the financing you need without spending hours at the bank. That solution is to work with an online business lender.

Through online lenders, you can apply for your loan, submit documentation, and even receive funds all without ever leaving your office. With online lending, you have more choices than ever and many online lenders also have less stringent requirements than traditional lenders. This means that you can access capital even if you have credit score challenges, haven’t been in business for long, or don’t meet typical revenue requirements.

On the one hand, having so many lenders to choose from is great because you can shop around your options. On the other hand, knowing where to even start can be a challenge. Instead of scouring the internet alone, check out what these online lenders have to offer.

SmartBiz

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You don’t have to go to your local bank to get a low-interest, long-term loan. Small Business Administration loans not only have competitive interest rates but are also easier to qualify for than traditional business financing. While you can visit a lender in person to apply for an SBA loan, smart business owners know that SmartBiz is the way to go.

SmartBiz is an online marketplace that has helped small business owners receive more than $1 billion via SBA loan programs. Through SmartBiz, you may qualify for a loan is as little as 5 minutes and receive your funding in just 7 days. The application process is streamlined so you can get the funding you need as quickly and easily as possible.

There are two loan products to consider. The first option is SmartBiz’s SBA Working Capital and Debt Refinancing Loans. These loans can be used to refinance business debt, expand your business, pay for a marketing campaign, hire employees, purchase equipment, or increase your inventory.

Through this program, you could receive $30,000 to $350,000. Interest rates are 8.25% to 9.25% with repayment terms up to 10 years.

To qualify for this loan, you must meet these requirements:

  • U.S. citizen or permanent resident
  • At least 2 years in business
  • Personal credit score of 640 or above
  • Sufficient cash flow for loan payments
  • No bankruptcies or foreclosures in the last 3 years
  • No defaults on government-backed loans
  • No outstanding tax liens

The second SBA loan program available through SmartBiz is the SBA 7(a) Commercial Real Estate Loan. With this loan, you can receive between $500,000 to $5 million to purchase commercial real estate or refinance your existing commercial mortgage. Interest rates are 7% to 8.25% with repayment terms up to 25 years.

The following are the requirements for receiving this loan:

  • U.S. citizen or permanent resident
  • Property must be at least 51% owner-occupied
  • Purchase price must be greater than $500,000
  • No new construction or investment properties
  • At least 3 years in business
  • Personal credit score of 675 or above
  • No bankruptcies or foreclosures in the last 3 years
  • No defaults on government-backed loans
  • No outstanding tax liens

If an SBA loan doesn’t seem like the right option for you at this time, you can also apply for a bank term loan from one of SmartBiz’s lending partners. You may qualify for $30,000 to $200,000 with repayment terms up to 5 years and fixed interest rates starting at 6.99%.

Lendio

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No time to send out applications to multiple lenders? Give Lendio a try. With Lendio, you can get offers from multiple lenders through just one application. Lendio is a loan aggregator that has partnered with over 75 lenders, making it easier than ever to compare your financing options.

Through Lendio, you can apply for nearly any type of business financing, including:

  • SBA Loans: $50,000 to $5 million
  • Term Loans: $5,000 to $2 million
  • Short-Term Loans: $2,500 to $500,000
  • Lines Of Credit: $1,000 to $500,000
  • Equipment Financing: $5,000 to $5 million
  • Startup Loans: $500 to $750,000
  • Accounts Receivable Financing: Up to 80% of receivables
  • Commercial Mortgages: $250,000 to $5 million
  • Business Credit Cards: $1,000 to $500,000
  • Merchant Cash Advances: $5,000 to $200,000

Rates, terms, and requirements vary by product and lender. Time to funding also varies, but some products are available in as little as 24 hours. There is no obligation to accept an offer, and receiving your offers will not impact your credit.

Unsure of which business loan is best for you? Learn more about the different types of small business loans.

OnDeck

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OnDeck has provided $10 billion to businesses around the world, and you could be the next business to get the capital you need. Through OnDeck, you can apply for one of two financing options: term loans and lines of credit.

A term loan provides you with a lump sum of capital in amounts up to $500,000. Short-term loan options come with 3- to 12-month terms and are best for purchases that deliver an immediate return on investment, such inventory or a new marketing campaign. The long-term option gives you 15 to 36 months to repay your loan and is best for larger purchases such as expanding your business or buying equipment.

OnDeck’s short-term loans have simple interest rates starting at 9%. This is the total amount of interest you will pay and is a percentage of your borrowing amount. Long-term loans have a 9.99% annual interest rate. OnDeck also charges an origination fee of 0% to 4% of your loan amount for short- and long-term loans. Payments are made daily or weekly and are automatically deducted from your checking account.

To receive a small business loan from OnDeck, you must have:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 600 or above

If you need a more flexible financing option, consider applying for an OnDeck line of credit. You can receive up to $100,000 to cover unexpected expenses, make up for gaps in income, or for any business purpose. Rates start at 13.99% and payments are automatically deducted from your checking account each week. A $20 monthly maintenance fee will also be applied, but the lender will waive the fee for 6 months if you draw at least $5,000 within 5 days of opening your account.

To qualify for this option, you must have:

  • Time in business of at least 1 year
  • At least $100,000 in annual revenue
  • Personal credit score of 600 or above

Fundbox

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What do you do if your business is performing well, but you don’t have an excellent credit score? There are options open to you, including a line of credit from Fundbox.

Fundbox bases its approval decision on the performance of your business, so you don’t have to have perfect credit to qualify. Through Fundbox, you may be eligible to receive a revolving line of credit with limits up to $100,000. You’ll repay the lender over a period of 12 or 24 weeks. Fees start at just 4.66% of the draw amount.

If you don’t use your line of credit, you won’t pay a dime. If you do make a draw, you can pay your balance off early and save since Fundbox waives all remaining fees. Payments are automatically deducted from your business checking account each week. As you pay down your balance, funds will become available for you to use whenever you need them.

To qualify for a Fundbox line of credit, you must have:

  • A U.S.-based business
  • At least $50,000 in annual revenue
  • A business checking account
  • At least 3 months of transactions in a business banking account OR at least 2 months of activity in supported accounting software

BlueVine

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If you’re seeking a higher limit for a line of credit, you can receive up to $250,000 through BlueVine. Rates start at 4.8% for the most creditworthy borrowers. There are no fees if you don’t use your line of credit. Repayments are made on a monthly or weekly schedule over 6 to 12 months.

To qualify for BlueVine’s line of credit, you must have:

  • Personal credit score of 600 or above
  • Time in business of at least 6 months
  • At least $100,000 in annual revenue

If unpaid invoices are causing your cash woes, BlueVine offers an invoice factoring service that could provide you with up to $5 million. You can receive up to 90% of the balance of your unpaid invoices up front. Then, once the customer pays the invoice, you’ll receive the remaining balance, minus fees. Fees start at 0.25% per week.

To qualify for invoice factoring, you must be a B2B business that meets these requirements:

  • Personal credit score of 530 or above
  • Time in business of at least 3 months
  • At least $100,000 in annual revenue

Amex Business Loans

American Express OptBlue

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Worried that applying for financing will harm your credit score? If you’re an American Express cardholder, there may be an option available for you that has no impact to your credit score.

American Express Business Loans provide you with $3,500 to $50,000 in capital for your small business. You can repay your loan over 12, 24, or 36 months. These loans come with fixed APRs of 6.98% to 19.97%.

This offer is available only to select American Express Business cardholders. By logging into your Amex account, you can find out if you’ve been preapproved. This preapproval will provide the maximum borrowing amount and your maximum rate. After providing some information about your business, you could receive your funds in as little as 3 business days if you’re approved.

Because American Express uses the information it has on file for you, there’s no impact to your credit to apply. To qualify, you must meet these requirements:

  • Hold a Basic Card or Business Card
  • Be in good standing with American Express
  • U.S. citizen or permanent resident
  • Be at least 18 years old

Amex Merchant Financing

American Express OptBlue

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If you don’t qualify for American Express Business Loans, you may be able to get the capital your business needs through Amex Merchant Financing. If your business accepts American Express cards, you could qualify for this funding option.

Amex Merchant Financing provides $5,000 to $2 million to qualified business owners. Repayments are made over 6, 12, or 24 months. You’ll pay one fixed fee of 1.75% to 20% to take advantage of Amex Merchant Financing. Repay early and you can receive a rebate of up to 25% of your fixed fee.

Daily payments are automatically deducted to pay off the lender. You can opt to have a fixed amount taken from your business bank account, or you can choose to get a percentage of your daily receivables withdrawn.

To qualify for Amex Merchant Financing, you must have:

  • A business that accepts American Express cards
  • At least $50,000 in annual revenue
  • At least $12,000 in annual debit and credit receivables
  • Time in business of at least 24 months

Upstart

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Many of the previous options listed require at least a few months in business, but what do you do if you’re looking for capital to launch your business? Time in business requirements could bar you from receiving small business financing. However, you could qualify for a personal loan to use for business expenses.

Because this isn’t a business loan, time in business, annual revenue, and business credit history aren’t considered. Instead, your personal credit score and annual income are used to qualify you for a loan through a lender such as Upstart.

Upstart offers qualified borrowers $1,000 to $50,000. These funds can be used to fund your startup costs or cover other business expenses. Upstart’s APRs range from 7.54% to 35.99% based on creditworthiness. Repayment terms are 36 to 60 months.

To qualify for an Upstart loan, you must:

  • Be a U.S. citizen or permanent resident
  • Be at least 18 years old
  • Have a valid email account and a verifiable name, date of birth, and SSN
  • Have a source of income
  • Have a personal bank account
  • Have a personal credit score of at least 620

In addition to your credit score, Upstart will consider other factors of your personal credit profile. Additional qualifying requirements include:

  • No bankruptcies or public records
  • No delinquent account
  • Less than 6 inquiries over the last 6 months
  • Solid debt-to-income ratio

Banks, Credit Unions, & Nonprofit Lenders In Massachusetts

While online lenders make borrowing easier and more convenient than ever, you may still prefer to go the traditional route with a local bank, credit union, or nonprofit lender. If you haven’t already established a relationship with a local institution, consider one of these lenders that serve small business owners in Massachusetts.

Eastern Bank

Eastern Bank was founded in 1818 and has its headquarters in Boston. Today, there are over 120 locations throughout Massachusetts and New Hampshire in cities including Boston, Burlington, Reading, and Lowell.

Eastern Bank offers multiple financial services for small business owners. The institution not only offers business checking and savings accounts, but entrepreneurs can also take advantage of the following services:

  • Eastern Express Business Loan: Up to $100,000
  • SBA 7(a) Loans: Up to $5 million
  • SBA 504 Loans: Up to $5 million
  • Cash Reserves: Up to $10,000 to protect against overdrafts
  • Business Term Loans
  • Lines Of Credit
  • Business Credit Cards

Eastern Bank also has commercial financing options, including industrial lines of credit, commercial real estate loans, and asset-based lending.

You can learn more by visiting your local Eastern Bank branch or applying for your chosen financial product online.

Metro Credit Union

If you want a more personalized experience, consider joining a local credit union, such as Metro Credit Union. This institution has locations throughout the state of Massachusetts to best serve more than 200,000 members. Metro Credit Union branches are located in cities including Boston, Lawrence, Framingham, and Salem.

As a member of Metro Credit Union, you may be eligible to receive small business financing through one of its lending programs including:

  • Commercial Real Estate Loans
  • Business Lines Of Credit
  • Business Term Loans
  • Unsecured & Secured Business Credit Cards

Metro Credit Union also provides merchant credit card services, payroll services, and additional services to small business owners in Massachusetts.

To apply for financing, you must be a Metro Credit Union member. To become a member, you must:

  • Live, work, or own a business in one of the following counties: Barnstable, Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk, Worcester
  • Open a Metro Regular Savings account with a $5 deposit

Common Capital

Common Capital is a community loan fund and nonprofit organization that provides tools, resources, and financing to small businesses and community projects in order to strengthen communities.

Through Common Capital, small business owners can apply for fixed and variable rate loans and lines of credit. Funding of up to $300,000 is available and can be used for the following purposes:

  • Working Capital
  • Inventory & Supplies
  • Equipment
  • Startup Costs
  • Business Acquisitions Or Expansion
  • Debt Refinancing
  • Leasehold Improvements Or Real Estate

Repayment terms are up to 10 years. Payments can be structured to account for seasonal fluctuations in revenue.
To qualify, you must own a business in the counties of Berkshire, Franklin, Hampshire, or Hampden. If you reside in Worcester County, you may be eligible to apply for the Fast Track Program, which provides up to $50,000 with a fast turnaround.

Loan applications are available online. You must provide historical financial statements and/or three years of future financial projections with your application. Startups must also include a business plan. The typical time to underwrite and close the loan is 4 to 6 weeks after the completed application package has been received.

Small Business Grants In Massachusetts

Grants are another source of financing you can use to start or grow your business. The good thing about grants is that these aren’t loans, so you won’t incur debt. You won’t have to repay the grant or worry about interest or fees.

However, this free money isn’t available to just anyone. Most of the time, you have to meet very specific requirements for small business grants, such as being in a particular industry or being a minority, woman, or veteran business owner. Even if you do qualify, most grants have many applicants.

While it isn’t guaranteed that you’ll receive a small business grant, there’s no harm in applying if you meet all of the requirements. There are a variety of state and federal resources available to help you locate small business grants, but you can kick off your search with these options.

State Trade Expansion Program Grant

The State Trade Expansion Program (STEP) grant is offered through the Massachusetts Office of International Trade and Investment in partnership with the Massachusetts Small Business Development Center Network, the Small Business Administration, and the Massachusetts Export Center. This grant is designed to help offset the costs of international business development and associated marketing costs.

Through this program, eligible small businesses can receive reimbursements of up to $12,000 for expenses including:

  • Compliance testing products for entry into an export market
  • Design of export market-specific marketing media
  • Overseas trade show or conference expenses

To qualify for STEP funding, an online application must be submitted. Proof of payment for the project, service, or activity must also be submitted for consideration. Applicants are also required to match 25% to 40% of funding.

Office Of Safety Workplace Safety Training Grant

The Office of Safety Workplace Safety Training Grant is a reimbursement program for businesses located in Massachusetts. This grant is provided through the Department of Industrial Accidents. Qualifying businesses can receive up to $25,000 to pay for training and education promoting workplace safety.

Businesses of all sizes are eligible to apply provided they are operating within the Commonwealth of Massachusetts and are covered under the state’s Workers’ Compensation Law.

To qualify, you must submit a grant package. Your package must include the grant application, a description of your business, training goals, a budget narrative and summary, qualifications of training providers, and a Department of Revenue Certificate of Good Standing.

Workforce Training Fund

The Workforce Training Fund provides business grants to support the training needs of businesses throughout the state of Massachusetts. There are two grant programs available.

General Program

The General Program is open to businesses of all sizes. Businesses can receive a training grant up to $250,000 through this program. Training grants must be matched dollar-for-dollar by the grant recipient.

Express Program

This program is open to businesses with 100 or fewer employees. Grants of up to $30,000 per company and $3,000 per employee per course are available through this program. Companies will be reimbursed up to 50% of training costs.

Grants can be used to pay for training for current and new employees. An online application can be submitted along with a cover letter, Certificate of Good Standing from the Department of Revenue, and a description of training modules and courses.

Loans & Resources For Startups In Massachusetts

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Finding the loans and resources you need for your startup business doesn’t have to be challenging. If you’re a small business owner in the Bay State, consider putting the following resources to work for you.

SCORE

The SBA’s SCORE program provides free and low-cost services and resources to small business owners. Through SCORE, you can take advantage of free business counseling and mentoring online or at a SCORE location near you.

SCORE also offers local workshops on a variety of small business topics such as accounting, management, and marketing. These events allow you to educate yourself on these topics while networking with other local business owners.

SCORE also has additional tools and resources available on its website. This includes business guides, free templates, and blogs that offer helpful tips and tricks to business owners.

There are multiple SCORE branches located throughout the state of Massachusetts in cities including Boston, Springfield, Amherst, and Salem.

Massachusetts Small Business Development Center Network

Since 1980, the Massachusetts Small Business Development Center (MSBDC) has provided free and low-cost resources to startups and established businesses. Through MSBDC, you can receive free one-on-one business counseling.

MSBDC also hosts free and low-cost seminars and events throughout the state. You can learn more about business topics such as developing your business plan, cash flow analysis, and financing options.

MSBDC offices can be found throughout the state in cities including Springfield, Fall River, Boston, and Salem.

What To Consider When Choosing A Lender

We’ve given you a list of lenders to finance your small business. Maybe you’ve even done your own research and have your own list. Now, it’s time to make a difficult decision: which lender should you work with? It’s important to weigh out all of your options and not just stick with the first lender that gives you an approval. You want to make sure that you make the wisest financial decision for your business. Do this by asking yourself the following:

Why Does My Business Need Money?

What is the purpose of your business loan? Not only will you have to put this on your loan application, but knowing exactly how you plan to use your funds can help narrow down your lender options. Let’s say that you want a flexible line of credit for emergency expenses. If a lender specializes in SBA loans, short-term business loans, or other financing that provides a lump sum, move on to the next lender.

How Much Money Does My Business Need?

Again, this is something you will need to include on your application. But you can also use this information to sort through lenders. If you need financing of at least $100,000, lenders that have lower maximum borrowing limits can be crossed off your list.

Can My Business Afford The Loan?

Lenders will look at a variety of factors to determine if you can afford a loan or other financial product. If you can’t, your application will be denied or you may be approved for a smaller amount. Don’t rely solely on the lender to determine the affordability of your loan. Consider your incoming revenue, your current expenses, and any fluctuations in income. Then, shop around with lenders that not only offer the amount of financing you need but also have the lowest rates and best terms for your situation.

Do I Meet All Requirements?

Do you meet all the requirements of your chosen lender? If a lender requires an excellent credit score, borrowers with scores below this requirement will be declined.

Have bad credit that’s preventing you from getting an affordable loan? If your need isn’t urgent, take the time to boost your credit. Obtain your free credit score, review your report, and take a few easy steps to raise your credit score. This will help you receive higher borrowing amounts, lower rates, and better terms.

Make sure you meet all other requirements, including time in business, annual revenue, and business credit history.

Final Thoughts

Starting or growing your small business can be a challenge. However, with the right resources and a source of capital, you’ll increase your chances for success. The state of Massachusetts offers multiple resources and financing options for your small business. You just need to take the time to evaluate the needs of your business and choose which resources offer the most benefits to you.

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6 Square POS Features To Run Your Small Business Like a Pro

When a merchant signs up for a new Square account to start processing payments, many times the focus isn’t on the other features; it’s on getting paid — and rightfully so. But after signing into your account for the first time, it may become evident to you that there is a lot more to Square than just payment processing.

For those of you who are new to Square or if you are shopping around and checking out your options to make a final decision — you’re in the right place. We are going to take a look at what is available in the free Square POS app. We’ve discussed both Square (read our review) and Square POS (read our review) in depth, so check out their respective reviews for a more comprehensive look. Don’t forget, when you sign up with Square Payments, you get access to the POS app, the online selling tools, invoicing, and a whole lot more. 

But before we dig into all that, let’s quickly review Square’s payment processing costs for the price savvy among us. Square has very upfront pricing, but keep in mind that your processing costs change with the Square hardware you use. With the free Square POS and your own smartphone or tablet, you’ll pay a flat rate of 2.75% per swipe, dip, or tap. Check out How Much Does Square Charge? for a thorough explanation of any other fees you might incur with Square, including software. 

While it’s true that Square’s fee for payment processing may seem a bit higher on the face of things, keep a few things in mind: Square doesn’t charge any additional monthly account fees, and you can expect the same flat rate for all of the cards you process, even American Express. You can also close your account any time with no cancellation fees whatsoever. However, one of the more notable reasons we like Square here at Merchant Maverick is that merchants get end-to-end, PCI compliant payment security included with every account, without paying a dime for it.

While Square may not be as packed with features as a traditional POS, there are still a wide range of features waiting if you take advantage of them. In addition to features within the app itself, Square’s back-end management tools (centralized in the web Dashboard) are powerful. 

We have much to cover, so let’s discover the most noteworthy POS features you can start using to manage customer engagement, employees, inventory, and take charge of your business like the pro you are!

Customer Directory

Square Customer Profile

If you have an existing customer list, you can migrate that over via CSV right into the directory and get started. Every time you complete a sale, your customer directory grows to include your customer’s name, purchase history, location, and credit card (save this only with their permission). If your customer enters their email for an e-receipt, that gets added to the directory, too!

The customer directory builds automatically with each sale, but you can also manually add customer information from the Square POS or the Square dashboard. (See Why We Like Square’s Online Dashboard and Analytics App for a primer on the dashboard.) In the Customer Directory, you can add an email, birthday, make notes about their order history, or add their company, for instance.

Customer Directory

As your customers continue to shop with you, Square builds reports on customer behavior patterns, too. You can find out things like visiting frequency and when they purchased something from you last. You can view some reports from the in-app reporting in the Square Point of Sale, but to access all of the reporting features, you’ll need to get to the Square dashboard.

A lesser-known Square feature is the private feedback you can gather after a sale. Giving your customers this opportunity to share their opinions with you directly (and right from their receipt) helps keep the lines of communication open. When your customer leaves feedback, you can respond to them directly and offer to comp their item if you wish. In this way, you can hopefully also avoid negative public reviews — and keep your customers happier while you’re at it.

Inventory Management

Keeping up with inventory changes and accurately ordering the stock you need is probably one of the most critical business matters there is. Not only does good inventory management build loyalty and trust with your customers, but you can also avoid some unneeded expenses surrounding both excess and deficient stock. The great news is that basic inventory management comes along with your free Square POS software.

Have a large amount of inventory? You can easily import any existing stock with a CSV spreadsheet. You can also add items manually through your dashboard or Square POS. Either way, you can quickly update product names, prices, and quantities as needed. Setting up low stock alerts is easy — set alerts to send when inventory gets to the amount you decide. In the screenshot below, you can see that this shop has 20 prints in stock and the alert will be sent when there are three left.

Creating an Item in Square

Have different sizes or other variables of the same item? Square supports setting up different price points and variants, too. Square does not support partial quantities — but don’t lose heart! If you sell in partial quantities, you can work around this issue by setting up a Variation, as seen in the screenshot below.

Square Item Variant

Whether you’re a micro shop or you move hundreds of items a day, you can set Square up for what makes sense for your business. However, if your business has several hundreds of items, you’re likely going to find the inventory navigation a bit unwieldy. That’s because you have to scroll to find the item manually; you can’t just type the name in a search bar. Square does offer a more robust solution with Square for Retail (See our review), starting at $60/month/register/location.

To keep up with inventory and track customer spending, you can also assign your products to specific categories. Keep in mind that all of the initial work you do to distinguish your inventory through categories, variations, and accurate item descriptions pays you back with richer insights when it comes time to check out your reports. Square creates free basic reports such as Sales Summary, Sales Trends, and Category Sales, to name a few.

Square Sales Reporting

It’s worth it to mention that if you are in a time crunch or you don’t have an item already in your inventory, you can still ring it up easily in quick sale mode — simply punch in the amount, and you’re ready to take payment!

Loyalty

Square Customer Loyalty Program

The proof is in the pudding — loyalty programs lead to more customer spending. This fact is proven time and again in retail spending statistics, but Square also reports that customers spend over 30% more after joining their loyalty program. That’s a nice chunk of change, but making the loyalty program work for your business is the key to profitability.

The Square Loyalty Program is not free — it starts at $45 and the prices scale with the number of loyalty visits. That means that you won’t be paying for what you don’t use, but we still suggest checking your reports to track success. However, you really are in charge of the program and its success in your business. That’s because everything is highly customizable. From a classic digital punch card to earning points each visit, you control what — and how — your customers earn rewards with you.

According to Square, merchants get the best responses with their loyalty program by offering a meaningful reward, making the reward happen sooner rather than later (about 30 days from enrollment), and limiting the rules when it comes to earning rewards.

When you ask your customer to join your loyalty program, they enter with their phone number, which you can then promote via text messages. The other cool thing about the loyalty program is that the add-on software gives you even more data about your customer’s purchase history and buying behavior. All of this information makes it easier to personalize customer service or even plan your next promotion.

Employee Management

Small Business Owner Using Square Customer Service

The optional employee management software can make a significant impact on your business if you have multiple locations or many employees. From customizing permissions to timekeeping, performance tracking, and advanced reports, there is a lot of potential here.

With your basic Square account, you can let employees take payments as Mobile Staff and allow or disallow issuing refunds. Beyond these two functions, you are limited unless you opt for Employee Management at $5 / month per employee, however.

For example, employee-specific reporting only comes with advanced Employee Management. In the screenshot below, you can see what types of insights are available under the Employee Sales reports that come along with Employee Management.

Square Employee Management


In addition to gaining better insights regarding your employee’s performance, you also have much more control over employee permissions. Choose who has access to cash drawer reports, assign individual access codes, and choose other custom permission settings both at your Point of Sale and in your Dashboard.

Cash Drawer Management

From the Square Point of Sale app, you can enable cash drawer management to promote greater accountability across the board. Take note that you can only manage your cash drawer from an iPad or Android tablet — you can’t track and manage with your smartphone. Basic information about your cash drawer session includes:

  • Cash amount
  • Cash sales
  • Cash refunds
  • Cash paid in and out
  • Expected cash amount in drawer

Cash Drawer Management lets you know exactly how much cash you start with and what to expect in the drawer at the end of the session. You can set up cash drawer reports to be auto-emailed at the end of the business day. Because the reporting is specific to the device connected to your cash drawer, you’ll have to run a separate report for each device. You can view your drawer history at any time from your Square app, too. All you need to do is select the date and the drawer session to see details.

If you have Employee Management software, you can also control employee access to your in-app cash drawer reports. Grant your manager access while restricting other employees from accessing cash reports you may not want to make privy to everyone.

Offline Mode

For days when even the Internet can’t seem to work correctly, being able to accept payments offline prevents losing customers and sales. Offline Mode is also a game changer for the many businesses who aren’t bound to four walls. Whether you have set up shop in a more remote location or you are a mobile business traveling across the country, you can use your offline mode to swipe your card and securely accept payments. There are a few things to keep in mind when it comes to Offline Mode, however:

  1. Offline Mode only works with a magstripe swipe card, and you must swipe it.
  2. You have to connect to the Internet within 72 hours of the sale, or it expires.
  3. Offline transactions automatically process when you get connected with the Internet again.
  4. If payment doesn’t go through after connection, you are responsible for the cost of goods or services.

The good news is that there’s no additional charge for Offline Mode, just the standard rate of 2.75% per swipe. And there are a few things you can do to protect yourself from the issues listed above. When you take a sale in Offline Mode, be sure to check for the signature on the back of the card and have your customer sign so you can compare signatures. Checking your customer’s ID is also recommended, of course. You’ll also want to double check the card’s expiration date. If you remember these simple best practices, you can still accept offline payments with a reasonable amount of assurance that your sale is good to go.

Is Square Right For You?  

Square offers a wide range of features to support a growing small business. If you are adding employees and locations, Square is ready with advanced software that grows with you, including Employee Management and the highly customizable Loyalty Program. (Not to mention the less glamorous but just as important features like cash drawer permissions, inventory management, and offline support.)

Want to find out even more about Square? Check out our Square POS review for more insights on the Square Point of Sale or visit our full Square Review for more helpful insights. If you’re ready to try Square out and see for yourself, head over and set up your free Square account to start processing your first payments!

The post 6 Square POS Features To Run Your Small Business Like a Pro appeared first on Merchant Maverick.

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What Is Credit Card Tokenization?

Tokenizing Payments

While tokenization in the payment security space may be relatively new, evolving, and even somewhat complicated, the concept of substituting one bit of information for another to protect something is anything but new. Tokenizing protects sensitive or personal data by replacing it with a “token” — a code word, essentially, though that might be oversimplifying the matter. Because the token is a substitute for the actual data, it holds no value if intercepted by fraudsters. You would need a way to decode the token in order for it to have any value. 

In this post, we are going to focus on credit card tokenization, but you should also know that tokenizing other types of highly sensitive data like social security numbers and personal records may become commonplace across markets — and very soon.

But back to the payment industry. As of late, the idea of tokenization is typically linked to digital wallets like Apple Pay and Android Pay, and for good reason. But there are many implementations of tokenization technology including:

  • Card-on-file subscription billing
  • One-click checkouts on eCommerce sites
  • In-app payments
  • All NFC mobile wallets (contactless payments)

Whether you are a brick-and-mortar shop wanting to implement contactless payment options for your customers, you have an online shop, you use an app to support your business, or you have regulars you know and love, you could start taking advantage of credit card tokenization.

And if you’ve bought anything via those methods listed above (who hasn’t?) in the last couple of years, the chances pretty good that your data was tokenized. So what is tokenization?

Tokenization Defined

When we define tokenization, it’s worth mentioning that while the main crux of the matter is consistent, no one-size-fits-all definition is universally accepted among the big payment security organizations like PCI and EMV. However, here is a simplified version, as given by the PCI Council, that gets to the heart of the matter:

Tokenization is a process by which the Primary Account Number (PAN) is replaced with a surrogate value called a token.

When we look at the PAN, which is the actual account number on your credit card, remember that other sensitive pieces of data connect to it — including your personal information and expiration date of the card. When we tokenize, we place all of that information farther from merchants, cashiers, and other players in the payment process. And because the data is no longer recognizable in its token form, we protect it across the payment process. A token’s life can be for just one interaction to get coffee, or a store could tokenize payment data for a specific customer for a limited amount of time.

Also, notice in the definition I shared in bold above, that there is no defined “how,” because it depends on how you implement the tokenization process and what application your business needs. Here are a few examples to help shed some light on how sensitive data gets tokenized.

How The Account Number Gets Tokenized

There are two ways to tokenize data: partial or total. They each have their advantages but may not be right for all situations.

First up, let’s talk about partial tokenization. In some cases, the middle six digits of a customer’s credit card get replaced with a token. The first group of numbers doesn’t get tokenized so that the processor knows what type of card they are dealing with (Visa and MasterCard have unique identifying numbers). Additionally, the last four digits of the PAN also remain intact for customer reference. This type of partialized tokenization is also backward compatible, meaning the token has the same amount of numbers as the real PAN. It “looks like a real card and acts like a real card” when a merchant enters it into their own POS system. If a merchant wants to tokenize data and keep their legacy system, this is one way to do it.

The other way to tokenize the PAN is to completely randomize all of the numbers. All of this is done by a third-party, and may include vault storage to keep the payment card data. In either case, the same general thing happens in a sale; the tokenized number is de-tokenized and matched with the real card data. More on that below.

What Happens During A Tokenized Sale?

When it comes time to process a payment, whether that is through an eCommerce site, an app, or a mobile wallet, the payment processing steps are generally similar. Here is a simplified process for your perusal below.

  1. The customer initiates payment for a product or service.
  2. Next, the merchant sends the token to the acquirer.
  3. Acquirer routes the token to Visa’s network.
  4. Visa sends a token to the card issuer.
  5. Issuer returns token and authorization.
  6. Viola! A sale is complete.

Check out the screenshot below for a visual example of tokenization, courtesy of Visa’s Infographic, How Tokens Are Used.

Tokenization

As we’ve discussed, tokenization relies on a completely random, traceless value as the surrogate. This process is unlike encryption which relies on a mathematical algorithm. Let’s take a look at how tokenization and encryption compare.

Tokenization vs. Encryption

Tokenization and encryption are similar in that the data is “hidden” from would-be interceptors, but the process of each is totally different. In tokenization, the customer data gets replaced with a token — a completely random number. In tokenization, typically a vault stores all of the actual data on a “table.” After de-tokenization, this random string of digits (sometimes alphanumeric) are matched up with the real account. The main takeaway here is that the token gets passed to the merchant and eventually back to the table, without exposing the real payment card information to the merchant.

With encryption, the payment card information runs through an algorithm, a mathematical process, to transform the original data into something indecipherable until unlocked with the “key” during processing. Since the process isn’t randomized, the algorithm is somewhat vulnerable to hackers trying to crack the code.

In short, encryption is mathematically reversible, and tokenization is not. Additionally, encryption is not a complete, end-to-end security method, like tokenization. Payment processing costs can be a bit higher with encryption as it requires more computational power (e.g., rotation of “keys”) than tokenization throughout the payment processing cycle.

Considering The Pros & Cons

While tokenization can be cheaper to implement per transaction than encryption, and it isn’t mathematically reversible, there are some issues to consider. Because vaulted tokenization requires central management, there is a lot of pressure to maintain a wholly secured vault (however, sometimes the issuer (e.g., Visa) hosts the vault, too).

Additionally, tokenization does significantly reduce PCI scope for merchants, meaning there is less pressure on the merchant for payment security overall. That means less work for you to do in order to remain PCI compliant. While encryption is a generally accepted security measure, it does not do anything to reduce your PCI scope or lessen the work you must do to stay PCI compliant. 

However, tokenization is still a relatively young whippersnapper in the world of payment security. Encryption has been around for a while, and consumers regard it well. But tokenization has become more attractive to those who understand that the payment security industry must stay a step ahead.

Tokenization’s Protective Role In Payment Processing

Tokenization Vault Security

There are a few ways that tokenization protects information during payment processing. As mentioned before, customer data is made useless to a would-be interceptor because it’s no longer the actual information; it is a token that substitutes the actual data. The other way that tokenization protects data is that in the case of digital wallets, the credit card number isn’t stored on the customer’s device, either. That means thieves can’t retrieve credit card numbers from a phone, tablet, watch, or connected device when a customer and a merchant utilizes a digital wallet.

As the payment security industry evolves, we’ll continue to move further away from sharing a physical card and any identifying information that comes with it. Tokenization successfully separates our sensitive data from the transaction by taking the physical card out of the equation entirely, and it does this by tokenizing parts or all of the credit card number.

Because tokenization also removes the merchant from the equation when it comes to transmitting highly sensitive data, it also significantly reduces a merchant’s risk to fraud — from both internal and external threats. That being said, there are some things to consider depending on how you implement tokenization.

How Can Merchants Adopt Tokenization?

There are several ways that you can adopt tokenization into payment processing for your physical, eCommerce shop, or your mobile app! The simplest way for the brick-and-mortar shop to tokenize payments is to get a contactless, NFC-capable reader. Mobile wallets already tokenize the data so as long as you can accept payments from these mobile wallets without having to do anything yourself. As far as tokenizing other transactions, you can ask your existing payment processor about tokenization options for your POS. If you are an eCommerce shop or you have an app, MasterCard and Visa both offer solutions, too.

Mastercard offers a free, optional service called Digital Secure Remote Payment (DSRP), and all you need to do is contact your acquirer to see if they support DSRP, and then integrate the mobile app with the digital wallet partner. You can also look into the Visa Developer Platform — a program offered by Visa where their team works with you to create your mobile payment application with Visa Token Service SDK.  

Sometimes, there is more to the whole tokenization shift than patch-on solutions, however. If your business has a tremendous legacy system with other data to consider, a more complex, third-party solution may be necessary. While we won’t get into all the nitty gritty in this post, here are a few things to consider below.

Companies Specializing In Tokenization

If you inherently deal with sensitive information as a part of your business model and you need to create a custom solution, you will need to find a PCI compliant company with a trustworthy, highly secure tokenization method and vault. Here are some things to ask:

  • How are tokens randomized? How protected is the “key” that de-tokenizes?
  • Is a reversible algorithm used? If so, how protected is that software?
  • And ultimately, how protected is the table holding the data and the vault protecting it?

While it becomes a bit more tricky to ensure that all of the right security measures are in place, tokenization can still reduce your risk as a merchant and help protect data from a breach. However, you’ll need to ensure due diligence when it comes to new or legacy systems. The PCI Council says it best in the PCI DSS Tokenization Guidelines Document:

Tokenization solutions can vary greatly across different implementations, including differences in deployment models, tokenization and de-tokenization methods, technologies, and processes. Merchants considering the use of tokenization should perform a thorough evaluation and risk analysis to identify and document the unique characteristics of their particular implementation, including all interactions with payment card data and the particular tokenization systems and processes.

Do You Need Tokenization To Process Credit Cards?

Keep in mind that at this point, there are no hard and fast rules as to exactly how to implement tokenization, so if you are a merchant, the ball is in your court to make the best decision for your business needs. That being said, tokenization can significantly reduce the merchant’s liability when it comes to payment security. And keep in mind: You don’t have to carry the burden of tokenization yourself. There are ways to utilize the expertise of other companies and hardware to get the job done. If your business is just looking to improve payment processing and you don’t need or want to store sensitive payment card or personal data, using the solutions discussed in this post provide a much simpler way to navigate tokenization.

While it’s not mandatory — and is undoubtedly flexible in implementation –, tokenization remains one of the fastest growing ways to keep data more secure and shift the risk of fraud away from the merchant while protecting the transaction from end to end.

The post What Is Credit Card Tokenization? appeared first on Merchant Maverick.

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What Is An SMS Payment And How Does It Work?

We all know and love our Short Messaging Service (SMS) — better known simply as the text message. But did you know that you can start taking SMS payments for your business? And that it is relatively easy to get started?

In the United States, we are just now warming up to the idea of sending and receiving payments by text, but businesses throughout the world have already adopted SMS payments for everything from mass transit tickets to lattes.

While Americans are less likely to pay by text for everyday purchases, text payments are still an undeniably growing trend. You may already be familiar with payments by text when it comes to charitable donations, but home service providers (e.g., AT&T) are starting to offer SMS payments for their customers as well.

Text payments offer potential growth for many other types of businesses, too. Pizza shops, salons, or any business that has ‘regulars’ could benefit from text payments. SMS payment services are probably not for everyone, however, so let’s take a look at how text-to-pay works and if it’s right for your business.

How Do SMS Payments Work?

SMS Ordering

When it comes to the nuts and bolts of how SMS payments work, it’s pretty simple, really. While there may be some variations with each company that offers text messaging payment services, generally you can expect the following elements when it comes time to pay:

  1. A business sends a text to their customer’s phone number or the customer texts a shortcode number to the business to initiate the sale.
  2. After communicating what product or service the customer wishes to purchase, the business sends the customer a link to a secure, mobile-friendly payment form.
  3. The customer enters their payment information and can typically approve saving the card on file for recurring payments or a future purchase.
  4. The customer may get a unique code to complete the purchase.

The customer may also get another verification text from the payment processing company to confirm their intent to buy. As stated above, the exact process may vary by company, but you can expect a similar procedure to complete the sale.

Mobile Carriers Vs. Payment Processors for Text Payments

Many people associate text message payments with charity donations (often the amount is added to their phone bill). What is lesser known is that phone carriers generally only allow organizations to accept donated amounts in $5 or $10 increments. By setting up these limits, phone carriers reduce their own risk from non-paying customers. While the phone carrier setup can work great for flash-giving campaigns and allow an organization to avoid paying some payment processing fees, it isn’t a viable solution for businesses.

Enter companies like Relay, Pagato, and Sonar. These companies, and those like them, support SMS payments by integrating their messaging services with secure, PCI-compliant payment processing.

What Do You Need to Accept SMS Payments?

To get started accepting SMS payments, you’ll need to choose the company with the services that fit your needs best. There are some differences between the ways companies like Relay, Pagato, and Sonar price their services. Let’s briefly take a look at each of these three examples.

Relay (formerly Rhombus):

Relay charges $50/month for 250 “tickets” which refers to completed conversations. With that, you also get 1000 free SMS texts. All plans include automated responses, unlimited contacts, customer segmentation, and other engagement tools. Don’t forget about the actual credit card processing fees, however! Relay integrates with Stripe, and you pay 2.9% + $0.30 per successful transaction. You can accept every major card at the same rate with Stripe processing. (If you aren’t familiar with Stripe, check out our Stripe Payments Review.)

SMS Payments Relay

Pagato:

Pagato integrates with Stripe, Braintree (read our review), and Quickbooks Payments (read our review). In addition to the payment processing fees of your merchant account, you’ll pay 1% per transaction with a minimum of $0.20 per transaction. With Pagato, you can accept payments through SMS and social media channels like Instagram and Facebook, too. You won’t have additional setup, monthly, or hidden fees.

SMS Payments Pagato

Sonar:

Sonar offers packages starting at $24.67/month and $0.025 per SMS message. You can send automated messages, track customer data, set up campaigns and even A/B test them as well. Sonar integrates with Stripe, and your payment processing fees are 2.9% + $0.30 per transaction.

SMS Sonar

These are examples of some lesser-known companies, but the more prominent players like Square and PayPal allow you to send a text with a link to pay individual customers, too. The Square Cash App and PayPal don’t have the muscle to do much beyond sending a link to pay, however. You can’t A/B test marketing campaigns for an offer that you send out with Square or PayPal, for instance.

Keep in mind that most of the SMS messaging platforms mentioned above offer a free trial period and a demo to learn more about the exact features. So don’t hesitate to ask a lot of questions to get the information you need. It’s also a good idea to meet with your team and discuss the benefits of each platform, and of course, determine if your sales team has the bandwidth to have multiple open text conversations with customers. Text can be a powerful way to connect to your customers, but it is definitely not suited for every business model.

Which Types of Businesses Benefit Most From SMS Payments?

mobile-card-payment-app-service

Without a doubt, there is value in using SMS messaging to build a marketing campaign and nurture those ongoing relationships with your customers. When you consider that the global average open rate on a text is more than 90%, it makes sense to start building your phone list and reaching out that way.

As far as what businesses benefit from adding SMS payments to the mix, consider this:

If your business model provides delivery, your revenue depends on recurring payments, or you target a “repeat” customer base, SMS payments can make a lot of business sense. However, you need to have the staff and time to support the nurturing of customers via text. Text conversations can be a bit longer than a phone call if there is a specific issue, so training your team on escalation procedures can help you both save time and money with SMS texts.

All this connection can be great, but not all customers are going to love texting or getting “salesy” texts from you. While SMS texting and payments can help your sales team if you use it the right way, some may find automated sales messages impersonal. Keep in mind who your customers are and what supports their journey with you when you set up your SMS services.

Another significant benefit to SMS payments is the secure and compliant payment processing services that you can integrate with, such as Stripe. Because you don’t transmit the credit card data or store it on your servers, you can significantly reduce your liability when it comes to fraud risks. Not to mention that your customer has a fast and easy way to pay you, and all of it happens from their phone!

Are SMS Payments Right For You?

Being able to take payments by text offers potential — as long as the benefits outweigh the costs. Features vary by company, so do compare service packages before making a decision. One company may find a lot of value in the extra capabilities to target and segment lists, while another may be more focused on cutting down telephone orders. What services you choose mainly depends on your business model. Because text messaging offers a clear path to your customers’ hands, it may be worth finding the right balance to connect, engage, and encourage your customers to pay by text, too.

If you are discovering what else is out there in payment processing, be sure to check out our resources here at Merchant Maverick. Our Merchant Account Comparison Chart is a great starting point for payment providers! 

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