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August 13, 2019

What’s the Difference Between Credit And Debit Transactions?

As consumers, we all have a good understanding of the difference between a credit card and a debit card. For a credit card, we get a statement on a monthly basis, and we can pay off the entire balance or only a portion of the balance while paying interest on the rest. In other words, credit cards work like bank loans.

If we use a debit card, however, the money is immediately taken out of our bank account, and we will not have to deal with additional statements. Debit cards are more analogous to paying by cash or by check.

For a merchant, the cost of processing a debit card transaction can vary quite a bit from that of processing a credit card. Otherwise, a merchant receives the money within the same timeframe, so that there appears to be very little difference between the two methods of payment.

That said, at times, a point-of-sale terminal will ask the customer to choose between credit or debit after they swipe, dip, or tap a debit card. Answering credit does not suddenly turn a debit card into a credit card, but it does affect the merchantâs cost of processing the transaction.

Below, we give a more detailed explanation of how credit and debit transactions can impact a merchantâs costs of doing business.

Understanding How Debit Cards Work

Generally, there are two behind-the-scenes ways a debit card can be processed. The first way is called the debit/online/PIN debit method, and the second way is called the credit/offline/signature debit method. If the customer selects “credit”, the transaction is sent through the credit card processing network. If the customer selects “debit”, the transaction is sent through a different computer network and the merchant is charged a debit-specific rate for the transaction. Both methods will fund the merchant’s bank account in about the same timeframe. The difference is only in the fee thatâs charged per transaction.

In order to better understand how debit cards work, let us first examine how credit cards work.

How Credit Card Transactions Work

Credit cards essentially are revolving lines of credit between the issuing bank and the consumer. When a consumer pays with a credit card, the money is transferred in roughly the following way:

The payment information is transmitted through multiple tiers of financial entities to the acquiring bank.
The acquiring bank asks the issuing bank for payment.
The issuing bank, after it makes sure the consumer has enough credit, authorizes the payment.
The acquiring bank pays the merchant.
Typically, two to three days later, the two banks pay each other to settle the charges.
Now the only money owed is between the consumer and the issuing bank.
The consumer pays the issuing bank on a monthly basis, according to the terms of the credit card agreement.

For the banks, there is some risk involved in credit card transactions because the consumer might default on the loan.

How Debit Card Transactions Work

Debit cards work differently because the consumer has already pre-authorized the bank to take the money from a specific bank account. So, when the issuing bank of the debit card gets a payment request from the merchantâs bank, the issuing bank authorizes payment and then, without waiting for additional authorization, takes the money out of the consumerâs bank account.

There is very little risk of default to the issuing bank on a debit card charge because the issuing bank can make sure the bank account does indeed have the money before authorizing payment and can place a hold on that amount until, in the regular course of business, the money can be transferred out of the account. Again, the distinguishing difference between a credit card charge and a debit card charge is that, with a debit card, the issuing bank is allowed to reach into the consumerâs bank account to take the money right away.

We’ve gone over a high-level view of how a debit charge works, but if we dig a little deeper, debit card transactions can get a little complicated.

The Different Paths A Debit Card Transaction Can Take

As mentioned in the introduction of this article, a consumer might have to select debit or credit after swiping, dipping, or tapping a debit card. Typically, this question is only asked if the merchant is at a brick-and-mortar location and has a PIN pad on their point-of-sale terminal. If the merchant operates online, uses a point-of-sale terminal without a PIN pad, or uses a third-party processor such as Square, Stripe, or PayPal, then the question wonât be asked because there will be only one way to process the debit card–by using the credit method.

With the credit method, the debit card charge is processed like a credit card charge. This method is also called a signature debit or offline charge. For clarity, in this article, I will refer to this type of charge as a credit path debit charge.

If the merchant does have a point-of-sale terminal with a PIN pad, then the consumer has a choice of processing the charge as either a credit path debit charge or a true debit charge. The true debit charge is also sometimes called the PIN debit or online charge. Both the true debit charge and the credit path debit charge will be explained in more detail below.

What Happens When A Consumer Selects The Credit Path Debit Charge Option

When a consumer makes a credit path debit charge, the transaction is sent through the system like any regular credit card charge, except that it is flagged as a debit transaction. The payment request goes from the merchant to the processor to the acquirer to the issuer. The issuer — that is, the bank where the customer keeps the bank account tied to the debit card — puts a hold on that amount of money in the account and then authorizes the acquirer to release the money to the merchant.

The merchant is paid in the same way and in the same time frame as any typical credit card charge. However, from the consumerâs standpoint, there will be a hold on that amount of money in their bank account, usually for up to three business days, until the bank takes the money out.

A hold on the account means the money is still technically in the account but is earmarked to be taken out, so the consumer can no longer use that money to make other purchases. Sometimes, this hold can be larger or smaller than the actual charge. If itâs larger than the actual charge, it can cause non-sufficient funds (NSF) issues on a later charge. If itâs smaller than the actual charge, it can cause overdraft issues on a later charge.

So, with a credit path debit charge, it can take up to three days for the issuing bank to pay the acquiring bank for the money the acquiring bank already fronted to the merchant for the debit card charge. This payment timeline mainly has to do with the way credit card companies, acquirers, and issuers settle charges between themselves.

What Happens When A Consumer Selects The True Debit Charge Option

The behind-the-scenes money movement works differently with a true debit charge. Instead of borrowing the credit card companyâs communications network, the true debit charge uses various other communication networks for interbank money transfers. This is the same path used by ATM networks, wire transfer networks, electronic bill payment networks, or even direct deposit paychecks.

With a true debit charge, when the debit card issuing bank gets the payment request, it places a hold for that amount of money in the consumerâs account and transfers the money through normal interbank money transfer channels to the merchantâs bank. The hold on the consumerâs account is much shorter than it would be with a credit path debit charge because banks settle these transfers much more quickly — sometimes in just a matter of hours, and typically by the end of the business day.

Because money is transferred so quickly, the true debit charge typically requires an added layer of security in the form of a PIN. The PIN is encrypted and serves as additional evidence that the debit card holder has authorized the charge.

A merchant is charged differently when running a debit card transaction as a true debit charge or as a credit path debit charge. The reason is simple: it costs money to send information through these (typically computer) networks, and each network charges a different amount.

Even though the way the banks transfer the money to one other is the only real difference between a true debit charge and a credit path debit charge, the credit path debit charge is subject to different rules (set up by the credit card companies) and is treated differently under the law. We point out the key differences below.

Key Differences Between Credit & Debit Transactions

Whether your customer uses a credit or debit card, the money shows up in your bank account relatively quickly, but there are a few discrepancies between the different types of transactions that can affect your business. Keep in mind that we are actually looking at three types of transactions: (1) a true credit charge, (2) a true debit charge, and (3) a credit path debit charge. The answer will vary slightly for each.

Cost

Merchants are charged per credit or debit transaction, and the charges depend on whether the card is processed through a credit card network or the debit card network. If a cardâwhether credit or debitâis processed through a credit card network, it will be charged the typical credit card transaction fee. If a debit card is processed through the debit card network, the transaction is charged a debit card rate. Some processors, in an effort to compete for your business, might offer a fee for a credit path debit charge that falls between a standard credit card charge and a true debit charge.

For debit cards backed by banks in the US, the federal government has set a standard rate for banks with $10 billion or more in assets. (See the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act.) Currently, that rate is 0.05% + $0.21 per transaction ($0.22 if the transaction meets certain fraud criteria). Smaller banks can charge more, and processors who contract with the large banks can add to this government-set base charge. For banks outside of the US, the processing rates can be even lower. Check your processing agreement to see the amount that is applicable to you, and remember that it might be possible to negotiate this rate.

For credit cards, if youâre a frequent reader of this website, you already know that the rate varies, so be sure to check your credit card processing agreement for the precise amount. This charge typically applies to both your true credit card transactions and your credit path debit card transactions.

As between pure debit transactions and credit path debit transactions, the math works out that smaller charges cost less if processed as credit path debit charges. Larger ticket items cost less if processed as true debit charges. We have an article giving a very detailed explanation of the true cost of debit card transactions and credit path debit card transactions. We also have multiple articles comparing credit card rates. Be sure to check them out as you consider your options.

Dispute Process

Credit and debit card disputes are covered not only by different consumer protection laws, but they are also modified by credit company rules if the transaction is run through credit card companies. From a high level, both credit and debit card disputes will first show as a chargeback on a merchantâs statement. The merchant can respond to the chargeback (and pay appropriate fees) according to the procedure set out by the merchantâs processor.

Debit card disputes tend to show earlier in the chargeback cycle. Consumer protection laws covering stolen debit cards give the consumer a specific time frame to report a stolen card, and if the consumer reports outside of that time frame (i.e., more than 60 days after receiving a bank statement reflecting the unauthorized charge), then the consumer must pay for all the unauthorized charges, and the merchant gets to keep the money.

With credit card disputes, a different set of laws govern fraudulent charges, and the consumer is typically liable for only up to $50 of the charge. The consumer also has longer to dispute the charge, so the merchant might have to answer a dispute later into the chargeback cycle.

Minimum Amount/Surcharge

For a true credit card charge or a credit path debit charge, merchants can require a minimum amount a customer must charge for using a credit or debit card. Additionally, as long as a stateâs laws allow it, the merchant can attach a surcharge to the use of a credit card to recover processing fees for the card. Mostly, what the merchant can and cannot do depends on the credit card companyâs rules, and these rules discourage surcharges and encourage the use of the cards for transactions of any size.

With a debit card, the merchant cannot require a minimum amount nor can it add a surcharge for the use of the debit card. Debit cards are regulated by a very different set of laws than credit cards, and current laws forbid requiring a minimum charge or adding a surcharge to a true debit card transaction.

How To Accept Debit Card Payments

From a merchantâs perspective, if you can accept a credit card, then you can almost certainly accept a debit card. Naturally, you should check with your processor first, but even if you do not have a PIN pad at your point-of-sale terminal, you should be able to process a debit card using the credit path debit charge method.

If you do have a PIN pad at your point-of-sale terminal, then you have the hardware needed to accept credit card transactions, credit path debit transactions, and true debit transactions. Double-check with your processor that all three methods are allowed. If so, your customers can swipe, dip, or tap credit or debit cards as normal, and you will be charged depending on the type of card and the transaction path of the card.

As a side note, if you travel to Canada, the UK, or mainland Europe, you will see that having a PIN pad is fairly normal and both credit and debit cards can require a PIN before use.

How To Accept Debit Card Payments On A Phone

With the popularity of mobile point-of-sale devices, you might be wondering if you can accept a debit card with a phone-connected reader from, for instance, Square (read our review) or PayPal Here (read our review). These readers typically do not have PIN pads. In these cases, you can indeed accept a debit card because the transaction can be processed as a credit path debit charge.

Outside of the US, this is not the case. For example, Square can accept Interac debit transactions in Canada. iZettle (read our review) and SumUp (read our review) can also accept debit transactions in Europe.

Is The Difference Between Credit & Debit Transactions Important?

From a consumerâs standpoint, the difference between using a credit or debit card definitely matters because money is taken out of oneâs bank account at very different times after using a card. The dispute process for a credit card is typically less painful than for a debit card. After all, with a debit charge, the money has already been taken out of the bank account and the consumer protection laws for debit cards place a higher burden on the consumer to be vigilant for fraudulent charges.

From a merchantâs standpoint, the difference between a credit and a debit card matters less but still can be detectable because the transactions carry different costs. In fact, because a PIN pad is necessary to initiate a true debit charge, a merchant must invest in purchasing a point-of-sale terminal with a PIN pad before a true debit charge can be processed. For larger ticket items, a true debit charge can cost the merchant less to process than a credit charge or a credit path debit charge.

At the end of the day, a merchant typically wants a customer to have a smooth purchasing experience, which includes an easy checkout when paying for the purchase. This often translates to being able to accept any form of payment that is convenient to the customer. So, while there is a difference in the cost of processing debit and credit cards, this cost is likely minor when compared with keeping a customer satisfied so they come back to your store for more.

The post What’s the Difference Between Credit And Debit Transactions? appeared first on Merchant Maverick.

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January 17, 2018

Business Financing: Should You Take Out A Loan, A Credit Card, Or A Line Of Credit?

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When it comes to business financing, merchants have many options to choose from. Three of the most popular sources of financing are small business loans, business credit cards, and lines of credit. All are useful options, but each carries its own separate advantages and disadvantages.

Which is best for your business financing needs: a business loan, line of credit, or business credit card. Or should you get some kind of combination of the three? Keep reading to learn everything you need to know.

Table of Contents

Loan, Credit Line, & Credit Card Uses

Your ultimate intention for borrowed funds is very important when considering the right type of financial product for your business. While there is a lot of overlap, some financial products are better suited to different situations and uses than others.

Here is a table illustrating what each loan or credit card is typically used for:

Loan & Card Uses
Small Business Loan	Line Of Credit	Business Credit Card
• Business growth projects • Asset purchasing • Bridge loans • Working capital • Cash flow needs • Disaster assistance • Debt consolidation and refinancing	• Business growth projects • Bridge loans • Working capital • Cash flow needs • Disaster assistance • Emergency funds	• Everyday purchasing • Saving money by earning points or cash back • Working capital • Cash flow needs • Emergency funds

Small business loans are a very popular financing option, and it’s easy to see why — they can be used for many business purposes, such as asset purchasing, business growth projects, and debt consolidation or refinancing. However, there are times when lines of credit or a business credit card are better options for your business.

In particular, lines of credit and credit cards are better for situations where you need money quickly or need only a small sum of money. While you wouldn’t take out a business term loan without a fair amount of planning and a fairly long application process, lines of credit and business credit cards are designed so that you have the cash available when you need it; they are better for cash flow problems, emergency funds, and other situations where you don’t have time to apply for a business term loan.

Credit cards have an additional advantage because you can use them to solve cash flow problems by deferring everyday payments to a later date. And, because credit cards offer rewards programs for using the card, you might be able to save a little money via cash back or points simply by using your card.

Naturally, however, there are many overlaps between potential uses for these three types of financing — all are commonly used for working capital and other cash flow needs. You’ll need to consider the scope of your project, as well as the following advantages and disadvantages of each financial product, to decide which is best for your business.

Small Business Loan Pros & Cons

Small business loans are usually installment loans (also called “term loans”), but might also be short-term loans. Loans are dispersed as one lump sum, and repaid in installment over a set period of time.

Loans usually involve high borrowing amounts and lower rates than other options, but they also have long application processes and you might have to pledge a personal guarantee, lien, or other assets in exchange for funding.

Pros

High Borrowing Amounts: If you need a large amount of money, a small business loan is your best bet. At a minimum, small business lenders will offer 15% to 25% of your annual revenue, but many lenders are willing to offer more. The size of your loan will depend on your annual revenue and projected revenue, your intended use of proceeds, the creditworthiness of your business, and other factors.
Low Rates: Some business loans, such as those offered by a bank or the SBA, will have lower rates of borrowing than credit cards. For example, while credit cards have APRs from 10% to 25% or higher, interest rates for a 7(a) loan from the SBA currently range from about 6.7% to 9.75%. That said, some online loans will have higher fees; use our Small Business Term Loan Calculator to calculate the APRs (and other borrowing metrics) on your potential business loans.
Longer Time To Repay: Business term loans carry longer times to repay than lines of credit and business credit cards. Some loans, such as some SBA loans, carry term lengths up to 25 years. For this reason, small business loans can carry small incremental payments, even if you are borrowing a large sum of money.
Unsecured & Secured Options: Businesses with collateral can leverage it to borrow money with very low interest rates. On the other hand, if you don’t have specific collateral, you will still be able to find a business term loan; the fees will be a little higher than they would be with a secured loan, but you will still have the money you need to grow your business.

Cons

Long Application Process: Business term loans tend to have a more detailed application process than credit cards. You will need to submit a fair amount of documentation and spend some time talking to an underwriter before you’re approved for a loan. Non-traditional online loans tend to have shorter application processes, but you will have to pay higher rates and fees. The application process can take anywhere from a few days to a few months, depending on the lender you’re working with. As a general rule of thumb, the longer the application process, the better rates and fees you’ll receive.
Long-Term Debt: While a small business loan generally entails smaller payments than other options, it also means that you’ll be paying your debt off for a long time. Outstanding debt might make it more difficult to find financing in the future, and you risk not being able to pay it back if something goes wrong with your business.
Blanket Liens & Personal Guarantees Required: While you can find loans that don’t require you to put up specific collateral, you’ll likely have to sign a personal guarantee and/or agree to have a blanket lien placed on your business assets.

Head over to our guide to installment loans for more information on small business loans.

Line of Credit Pros & Cons

When you gain access to a credit line, you’ll be able to draw from a sum of money, up to your available limit, at any time — no application required. You only have to pay interest on the amount that you borrow, and once it’s repaid, you’re free to borrow that money again.

Despite the benefits, lines of credit carry some drawbacks: the initial application can be somewhat time-consuming, and if you have variable interest rates they could change over time.

Pros

No Application To Borrow: After you gain access to a credit line, you will not have to go through an application process whenever you need funds. Typically, you’ll receive access to requested funds between a few hours and two days, depending on how your lender transfers funds.
Low Rate Of Borrowing: Lines of credit have very affordable rates and fees. In general, these will be lower than credit card rates and fees, and might even be lower than those of many small business loans. As you might expect, however, some online lines of credit will carry higher fees than you would be charged by a bank, credit union, or the SBA. To get an idea of what sort of rates you can get from online lines of credit, which have shorter initial application processes but might have higher rates and fees, check out a comparison of our favorite business credit lines.
Only Pay Interest On Borrowed Funds: For most lenders, you will only have to pay interest on the money you have withdrawn from your credit line. You will not have to pay interest on the funds you are not using.

Cons

Long Initial Application: While you can typically receive requested funds from your credit line within a couple of days, the process to get access to a credit line might not be so easy. Lines of credit can have fairly long application processes, including gathering a lot of financial documents and possibly talking to an underwriter. Some online lenders have shorter application processes (some are even automated and only take a few minutes to complete), but they will have higher rates and smaller credit facilities.
Variable Interest Rates: Lines of credit often have variable interest rates, which means that your interest rate will change along with the prime rate or a similar metric. If the prime rate goes up, your interest rate will also increase, and you will have to pay more for borrowing.
Potential Revenue Checks Before Borrowing: If you don’t borrow very often, lenders might want to take a look at your finances before letting you draw from your line. This additional check might cause a delay in your funds because you have to gather and send in the documents and await the lender’s decision before you’re allowed to access funds.
Blanket Liens & Personal Guarantee Required: To be approved for a credit line, you might have to sign a personal guarantee or agree to a blanket lien placed on your business.

For more information on lines of credit, check out our guide to lines of credit.

Business Credit Card Pros & Cons

Business credit cards are credit cards used for business purposes. You can use these cards to pay for goods and services up to your available credit limit.

Credit cards can offer your business savings in the form of rewards programs, and they can make it easier to keep track of purchases and defer payments to a more convenient time. However, if you don’t pay your card off in a timely manner, interest rates can be quite high.

Pros

Rewards Programs: Credit card issuers reward businesses for using their card. Depending on the card you have, you could earn points for travel or other expenses, or earn cash back, simply by using your credit card. In other words, as long as you pay off your debt in a timely manner, using a credit card can save your business a little money.
Signup Bonuses: On top of rewards systems, many credit card issuers offer bonuses when you sign up for, including earn points or cash back for putting enough charges on your card within a certain time period, or a 0% APR for a certain amount of time.
More Time To Pay: Credit cards are the easiest way to defer payments for everyday purchases to a more convenient date. You can use credit cards to smooth out your cash flow and pay at a time more convenient to your business.
Emergency Funds: As long as you don’t make a habit of maxing out your credit card, you’ll always have a little money at your disposal when you happen to need it.

Cons

Low Credit Facilities: Credit card issuers don’t typically grant you as large a credit facility as you’d be able to get from a line of credit or business term loan. Additionally, utilizing too much of your credit line can have a negative impact on your credit score, so you will have to consider the consequences of using too much of your available credit line.
High Rates: Credit cards tend to have higher interest rates than you might be able to get from a loan or line of credit. Typically, credit card rates range from about 10% to 25%, and rates for credit card advances can be even higher. Additionally, credit card rates are variable, which means that your interest rate will fluctuate along with the prime rate.
Fees: Credit cards can carry fees in addition to the interest rate, such as annual fees, late payment fees, balance transfer fees, foreign transaction fees, advance fees, and others. These fees can add up over time, which could impact the amount you actually save by using the credit card.

Final Thoughts

The financing option that’s best for you will depend on the needs and eligibility of the business. Small business loans are most appropriate for business growth projects and other situations in which you need a relatively large sum of money, whereas lines of credit and credit cards work well for situations in which you need a smaller amount of money quickly for business maintenance or growth. You might even find that your business would benefit from a combination of two or even three of these financing options.

Ready to find a loan, credit line, or credit card for your business? Check out these resources:

Bianca is a writer from the Pacific Northwest. As a product of the digital age, she likes absorbing large amounts of information and figures she might as well pass it on. When not staring at a screen, she is probably foraging for food outside, playing board games, or harassing somebody with theories about that movie she just watched.

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July 7, 2017

Everything You Need to Know About Alternative Payment Methods

Being able to accept credit and debit cards is the lifeblood of any business. For brick-and-mortar locations, it’s worth knowing this: About half of all Americans carry just $20 in cash with them on a daily basis, and about 80% of Americans carry less than $50 daily. This means if you don’t accept credit cards, you could be missing out on sales.

If you sell online, you have to have a way to accept credit and debit cards, period. And it’s crucial that you have a professional system that shoppers will trust with their payment details. For most people that means a merchant account with an established payment gateway.

But are cards and cash â and all the traditional ways of doing business â the only options?

Of course not. There’s no shortage of companies devoted to changing the way we think about paying for things. New technology is bringing concepts like using phones to make payments into the mainstream. Having multiple ways for customers to pay is a good thing, but it shouldn’t come at the cost of convenience to you â or higher fees!

Let’s take a look at some alternative payment methods that you can integrate into your business now, what it’ll take to do so, how secure they are, and how popular they are.

1. Apple Pay

Apple Pay was not the first company to offerÂ contactless mobile payments, but it was the first to make them popular. Apple Pay uses NFC (learn more about this technology here) and the TouchID fingerprint reader to enable contactless in-store payments, as well as in-app purchases. With iOS 9, it also supports loyalty cards and rewards programs.

Compatible devices:

iPhone 6, iPhone 6 Plus, and later models
Apple Watch (with iPhone 5 and later models)
iPad Pro, iPad Air 2, iPad mini 4, iPad mini 3

Apple claims to support credit and debit cards from most major banks in the U.S. and the U.K. (A press release from Apple says that with support for Discover added this fall, the app supports 98% of credit card purchase volume.) That’s good news. The launchÂ of the iPhone 6s and 6s Plus is also good, because it means consumers with older iPhones will likely startÂ upgrading their older devices, expanding the potential user base.

Unfortunately, Apple doesn’t actually publish usage statistics. A survey done in June 2015 found that 13 percent of users with an Apple Pay-capable phone had used the feature; another 11 percent had plans to do so. We know that Apple sold 74.5 million iPhones in the first quarter of its 2015 fiscal year (the first quarter Apple Pay was available) â but not all of those were necessarily the 6 or 6 Plus. Still, it’s safe to say there are likely several million Apple Pay users across the country, even if some studies suggest that Apple Pay adoption rates are decreasing.

You’re still going to have to have a way to process credit cards to accept Apple Pay, so you’ll need a merchant account, a functioning POS, and an NFC-enabled terminal. The good news is Apple doesn’t charge any fees for Apple Pay transactions, so you only pay the standard credit and debit card processing fees.

Mobile payments like this have several measures for security. First, merchants never actually handle buyers’ credit card numbers. Instead, Apple Pay generates a single-use codeÂ (this is called tokenization). Even if a hacker gets the information, it’s useless because the number is good for one timeÂ only. Second, when consumers tap their phones to the terminal, they have to confirm the purchase with the TouchID fingerprint sensor.

Finally, the phone itself provides some security. The card numbers aren’t stored on the device â they’re kept in the cloud and the device can be locked remotely if it’s ever stolen. The CPU never handles the processing of the NFC transaction, either. A secure element or a separate chip bypass the rest of the system to communicate directly with the NFC-capable unit.

2. Samsung Pay

Samsung Pay is (you guessed it!) the Korean company’s response to Apply Pay. It is also an NFC-powered contactless payments app. It works on a handful of Samsung Galaxy devices:

Galaxy S6, Galaxy S6 Edge, Galaxy S6 Edge+, and later models.
Galaxy Note 5 and later models.

Samsung Pay just launched in September of 2015, which means it’s quiteÂ new. We’ll update you with usage numbers when we have something reliable and representative to report. But we do know that Samsung had sold an estimated 45 million Galaxy S6 phones (including the Edge and Edge+ variants), plus the Note 5 (for which sales numbers aren’t available right now). The potential user base is very large, but we’ll see how it pans out.

At this point it’s worth noting that the app requires consumers to be on one of fiveÂ networks (Verizon, AT&T, Sprint, T-Mobile, or U.S. Cellular) and have a Visa, MasterCard, or American Express card issued by Bank of America, U.S. Bank, or Citi. The app also accepts merchant credit cards issued by Synchrony Financial. You still earn any rewards or points linked to those cards, but specific loyalty cards and coupons aren’t supported. There’s no in-app payments feature either, though Samsung hasn’t ruled it out.

Again, you need an established way to process credit cards and a compatible POS, and you won’t pay any additional fees for Samsung Pay transactions. But your existing credit card terminal might already accept this particular type of payment. That’s because Samsung Pay uses both NFC and something called magnetic secure transmission (MST). Basically, it allows the phone to emulate a traditional card with a magnetic stripe. That means you don’t need an NFC-capable terminal â but if you don’t have NFC, you can’t accept Apple Pay or Android Pay (next on this list), which limits your options.

Most EMV terminals are also equipped for NFC, so the machine you just got as a result of the liability shift most likely supports these contactless payments. But if your terminal isn’t EMV capable, that’s another issue entirely.

Samsung Pay relies on aÂ fingerprint scanner as well. Users need to launch the app, swipe their fingerprint, and then pass their devices close to the terminal. That’s not quite as intuitive as Apple Pay from a user-friendliness standpoint, but apps evolve and change. At this point it’s just too early to say anything definitively.

3. Android Pay / Google Wallet

Android Pay, like Samsung Pay, is very new, launching in September 2015. At the same time, it’s much older than that: Android Pay is the successor to Google Wallet, Google’s contactless payment solution/mobile wallet, which launched in 2011.

Android Pay works on any Android smartphone (Samsung, HTC, LG, and Motorola, just to name a few) running the KitKatÂ OS (Android 4.4)Â or higher. It’s NFC-powered, with support for debit and credit cards as well as loyalty/rewards programs. An in-app payments feature is set to launch later.

These days, Google Wallet has become a P2P payments appÂ â an easy way to send money to friends and family for free.

The wallet supports Visa, MasterCard, American Express, and Discover cards from a handful of banks, including Bank of America, U.S. Bank, Citi, PNC, Wells Fargo, and USAA (check out the full list here; more banks will be added as time goes on).

By now, you should have a good idea of what to expect as a merchant: You need a way to process credit cards, a compatible POS, and of course, an NFC-capable terminal. Payments are kept secure with tokenization. Users also need to enable the lock screens on their phones â which can then be unlocked using fingerprint readers, PINs, swipe patterns, and more.

4. LevelUp

The alternative mobile payments technique to NFC is the QR code. QR codes work a lot like traditional barcodes, but they can hold a lot more information â like payment data. The biggest difference is that instead of an NFC-enabled terminal, you need a barcode reader.

LevelUp is the leader in QR code-based mobile payments with its app, but it also builds custom white-label apps for businesses. In addition to the QR codes, LevelUp works with NFC and iBeacon. The LevelUp app works for both iOS and Android. In addition to phone-based payments, LevelUp also supports loyalty programs. You can even link any loyalty programs you have set up through Apple Pay into LevelUp (there’s also support for one-touch signups using TouchID).

Despite having been around for a while (it launched in 2011), LevelUp is admittedly a small player. It has some 14,000 partner businesses, including some major names. The app has over 100,000 downloads in Google Play, which isn’t much compared to a lot of other apps. But the company does have white-label solutions, so it’s difficult to accurately gauge numbers.

LevelUp is a little bit vague on pricing, but if you dig around, you’ll find that payments are processed for a flat 2% fee. That’s good, considering Square charges 2.75% and PayPal 2.7% per swipe. It’s not necessarily as low as you’ll get with merchant accounts, but rates vary a lot based on the type of business you run and what kind of cards you process. A flat 2% should be convenient for most people. LevelUp will also charge a 25% cut of any incentives you offer through its campaigns feature.

To accept payments, you need a compatible POS and LevelUp’s proprietary scanner ($50 each). If your POS isn’t compatible, you can get the LevelUp tablet for $100 according to the pricing page on the website.

As far as security goes, LevelUp offers PCI compliance and encryption, as well as tokenization. In fact, LevelUp uses a triple token system: the token your phone generates goes to a token on the LevelUp servers, which in turn routes to a token on the Braintree servers, which is the payments service LevelUp uses to store credit card data.

5. CurrentC

CurrentC is another QR code-based payments method. It’s developed by the Consumer Merchant Exchange, led by Walmart and some other heavy-hitters in the retail business. Unlike LevelUp, users can pay using either their bank accounts, store cards, or gift cards. For merchants, that means significantly lower fees. (It’s not well advertised, but you can also add merchant credit and debit cards.) CurrentC also links up with loyalty cards and lets you redeem coupons and discounts in the app.

CurrentC is still in test mode, but the website promises it’ll be ready to roll out across the country soon. One advantage for CurrentC is that it’s widely available for consumers â whereas Apple Pay and Samsung Pay are only available for the most recent smartphone models, and Android Pay requires a recent version of Android (which not all smartphones get), CurrentC should be available for download even on budget smartphones.

In terms of user experience, CurrentC is a bit clunky. Depending on the location, users have to scan a QR code generated by the register, or the cashier has to scan one generated by the user’s phone. If that doesn’t work, then you’ll have to enter a code. With some retailers, you can use Bluetooth Beacons instead of QR codes.

As far as security goes, CurrentC requires you to put in a PINÂ every time you open the app or switch between apps. You can also lock the device remotely if it ever goes missing. Like the other services we’ve discussed here, the app uses tokenization â it generates a random one-time use transaction ID and doesn’t pass personal data onto the merchants.

CurrentC is odd in that it also collects some personal health information â it’s disclosed in the privacy policy, which you can read here. While it seems fairly innocuous, I highly recommend that you understand what data is collected and how it’s used.

As far as requirements to accept CurrentC go, you’re really just going to need a POS and barcode scanner capable of reading QR codes. CurrentC also has a way to allow gas stations to accept payments at the pump by inputting a code. Restaurants can use the app too, with a feature that enables consumers to leave a tip.

I’m hoping when CurrentC gets a broader release that the MCX will be a bit more forthcoming about information. There’s no disclosure of processing fees, for example. The support website, which is hidden from the main site, has much more information about how the app works, which I find a bit frustrating because it took some digging to uncover it.

6. PayPal

As a retailer, accepting PayPal has a huge advantage for you. It’s widely recognized by consumers, so they feel secure paying with it. In fact, PayPal has more than 170 million users worldwide, and it’s the payment method of choice on eBay. PayPal lets users link credit cards, debit cards, or bank accounts to make their payments. There’s also a free P2P payments tool, so consumers can send money to friends and family for free.

Merchants can use PayPal to accept payments on a website andÂ through a smartphone or tablet when they’re on the goÂ orÂ in stores.

For retailers, PayPal doesn’t offer a full POS in its own right â it has a decent set of features, but if you need more capabilities, you can always turn to one of PayPal’s partner POS systems, which you can learn more about here. You can build a register out of a tablet, a cash drawer, and a receipt printer, if you want one. You’ll pay just 2.7% per swipe.

For online retail, PayPal integrates with a lot of shopping carts. For most online transactions, the company charges 2.9% + $0.30. That’s higher than you’ll pay with a solid deal from a merchant account provider in most circumstances, but it comes with a super easy setup. (Just beware that you’re at a higher risk of potential holds or freezes on your account given the nature of PayPal’s businessÂ â no contracts, available to everyone, pay as you go.

You can also build a “Pay with PayPal” feature into apps, with PayPal’s One Touch Feature included so that users don’t have to re-enter their usernames and passwords, which adds to the convenience of usingÂ PayPal.

However, if you want a hosted payment page, you’re going to have to shell out $30 a month for the PayPal Payments Pro plan. You’ll also get a virtual terminal for that cost. If you have the standard PayPal plan (which has no monthly fees), your customers will be directed to the PayPal page to complete the payment, then back to your site.

If you’re using PayPal Here, the company’s mobile solution, you should know that PayPal does offer an EMV reader that also supports NFC payments. It’s $150, but you can get $100 in rebates when you process $3,000 in 3 months. That’s not the best deal â Square is able to offer an EMV capable reader for $30, or an EMV/NFC-capable reader for $49, with a rebate available for select retailers. Even if you don’t qualify for Square’s rebates, Square’s EMV/NFC reader at full price is the same as PayPal’s reader when it’s discounted.

Like PayPal, Square lets merchants accept credit card payments on the go and in stores. You can also accept Square online, provided you use either the Square marketplace or build a site using one of Square’s 2 (yup, that’s right, 2) partners. Square’s rates are comparable to PayPal â just a flat 2.75%, no per-transaction fees.

7. Pay with Amazon

Like PayPal, Pay with Amazon (also known as the bulkier “Login and Pay with Amazon”) lets users pay on your site using their login credentials for another site â in this case, Amazon. They can use whatever payment methods they have stored on their Amazon accounts.

While PayPal is universally known, Pay with Amazon seems to be less common â but that doesn’t mean you should discount it. Amazon had 244 million active users in 2014. That’sÂ roughlyÂ 70 million MORE users than PayPal. You won’t be limiting your audience if you choose Pay with Amazon over PayPal.

Pay with Amazon charges you 2.9% + $0.30 per online transaction. That’s identical to PayPal’s rates for online transactions. You can even do recurring billing for subscription packages. Plus, Pay with Amazon is entirely pay-as-you-go: no contract, no early termination fee, no monthly fees.

However, it’s worth mentioning that there’s no mobile support, so if you also sell in person, either at events or in a store, you’re going to have to look elsewhere for a solution. To accept Login and Pay with Amazon, you just need a compatible shopping cart. Fortunately, you have several great options: You can choose from Xcart, Magento, and Shopify, among others. Check out the full list here.

There are some other advantages here. First, Amazon offers a growth guarantee: If you sign up for the service, and you don’t see an increase in sales over the course of 30 days, the company will refund your processing fees up to $100,000. That’s a nice option if you’re really not sure about switching.

Plus, the Login and Pay with Amazon feature gives you a hosted payment page for free. More good news: You get the same fraud protection used by the Amazon.com site, so you’re not liable for any fraud-related chargebacks. (However, that’s not to say you’re protected against everything; you can still expect a $20 fee for any service-related chargebacks.)

One downside is the time it takes to get your money, which has been a pain point for a long time for sellers on the Amazon marketplace. First, there’s an initial 2-week holding period. After that, Amazon will settle your account daily â but it still takes 3-5 days to transfer funds from your account to your bank. With PayPal, your money is available pretty much immediatelyâ¦and if you have the PayPal debit card, you can spend it anywhere at any time, not just online.

8. Bitcoin

Out of all the alternative payments here, Bitcoin is most definitely the most “alternative” option. Unlike cash or credit, Bitcoins don’t have any physical form. No coins, no paper money. Bitcoin exists solely on the web. Unlike other currencies,which are centralized and controlled by governments, it is entirely self regulated. A network of computers handles the processing and records the transactions in a public register (more on that in a moment).

There’s a lot of info available about what Bitcoin is and how it works. You can start here to learn more. In the meantime, here’s what you need to know to accept Bitcoin.

First, not accepting Bitcoin certainly won’t cost you any business. The estimated userbase is 5-10 million people worldwide, with an estimated 110,000 daily Bitcoin transactions as of June 2015 (nearly double the approximate 60,600 daily transactions in June of 2014).Â However, if your target demographic is young and hip to the digital scene, that’s certainly a reason for you to consider accepting Bitcoin.

One nice advantage to accepting Bitcoin is that generally speaking, the fees are incredibly low, especially compared to PayPal or credit card processing rates. Some processors can even take Bitcoin and convert it into US dollars and deposit it in your bank account. However, the fees also vary, and the value of Bitcoin fluctuates. From October 2014 to October 2015, the value of 1 Bitcoin has hit as low as $177.28 USD and spiked as high as $427.24.

Security works much differently with Bitcoin, too. Every transaction is kept as part of a public ledger, but the users’ personal details are anonymous, which makes it harder to steal someone’s identity. No PCI compliance is required. There’s no opportunity for chargebacks, but at the same time merchants can’t alter charges, either. And you can encrypt and secure your Bitcoin wallet in other ways as well.

To accept Bitcoin, you just need to find a processor. Good news is, there are a lot of them. Even PayPal has a way to accept Bitcoin, through the PayPal Payments Hub. Braintree, a PayPal-owned company, also accepts Bitcoin via a partnership with Coinbase.

9. E-Check/ACH

Cash, debit, and credit are the most popular kids on the block when it comes to payments. Checks lag far behind other options â an April 2014 report by the Fed found that just 3% of people prefer to pay primarily with check, compared to 43% of people who favor debit cards.

That’s not to say checks are totally irrelevant. Some people don’t have debit cards. Or sometimes your debit card gets cancelled and you’re stuck waiting for the new one to arrive, but you need to make a purchase. And you can (sort of) use checks to pay online, thanks to e-checks. Those type of transactions are also called ACH transactions because they’re routed through the Automated Clearing House, which is an electronic network of banks that also handles direct deposit and electronic bill payments. You don’t have an explicit check number with e-checks, but you still have to provide your routing and account numbers, much like the old-fashioned bit of paper.

The numbers on the popularity of ACH are a bit sketchy. In 2014, the ACH handled more than 23 billion electronic payments totaling more than $40 trillion. The problem with that number is that it includes all those direct deposits and bill payments â mortgages and utilities, especially. It’s not a completely accurate depiction of the eCommerce scene.

One of the big advantages to this payment method is how much more affordable it is compared to standard credit card processing rates. ACH fees, depending on who processes them, might be a percentage of 0.5% or 1%, or a flat fee, which is typically in the range of $0.25 to $0.75. That’s not bad at all, especially if you get the flat fee. Assuming a 1.85% rate on credit card processing fees for a $250 transaction, that’s $4.63 in fees compared to a maximum of $2.50 with a 1% rate for ACH.

There are a lot of ways to accept ACH. For one, both Amazon and PayPal allow customers to link and pay with their bank accounts, though you, as the merchant, will end up paying the standard 2.9% + $0.30 per transaction (for a $250 transaction, that means $7.55).

If you have a virtual terminal, you should be able to enable this feature, but fees will vary based on your provider. Some of the services that we’ve reviewed that support ACH/e-checks include:

PayJunction
PaySimple
Forte Payment Systems

Another merchant account provider that supports e-checks is PayStand. We haven’t reviewed PayStand in depth (partly because it just launched publicly in 2014), but right off the bat we’re impressed by the level of transparency on the site and the depth of information available. We’re less impressed by the claim that its credit card rates â 2.49% + $0.30 â are wholesale, especially given the additional $99 monthly fee for the basic plan. However, PayStand also gives you very low-cost ACH transactions and free Bitcoin processing, as well as mobile processing. The service is promising and some merchants are sure to find value in Paystand’s offerings.

You also don’t need to sell exclusively online to accept ACH. If you have a retail setup, you can get a scanner to convert checks into e-checks. That means transactions will be a bit easier â there’s no forwarding checks to banks and waiting to find out if they clear.

ACH is definitely a great backup option to have, but probably not the best choice for a sole payment option. There are a couple of reasons not everyone will want to use ACH payments:

One, ACH takes a bit longer to process than debit or credit. So it takes longer for you to get your money and consumers have to wait longer for the transaction to process.
Two, it’s not the most secure for consumers, because they have to provide both their account numbers and routing numbers. While the rate of fraudulent transactions is low â just 3 of every 10,000 ACH transactions are rejected for being unauthorized â online payments are the least secure form of ACH transfers (compared with direct deposits, P2P transfers, and online bill pay).

And frankly it’s easier for a lot of people to plug in a card number and a 3-digit security code than it is to root around for your checkbook to get the account and routing numbers.

10. Dwolla

Dwolla is technically a third-party ACH service, but it’s a standout in the field for a few reasons. One, Dwolla’s basic features are entirely free to use. That means ACH payments, recurring payments, and the ability to distribute large numbers of payments (e.g., employee paychecks). And there’s an option of sending money to family or friends, as well, so there’s definitely a consumer base.

Two, with the tiered service plans (starting at $25/month and going up to $1500/month) you get a range of extra features that make Dwolla even more attractive. That includes next-day transfers (a big plus) and the option for white-label payments. That means, basically, you’ll get a hosted payment page. Customers don’t leave your site and don’t get any indication that they’re using Dwolla.

Paying $1,500 per month for the service sounds outrageous, until you consider that you’re not paying any transaction fees. If you’re doing substantial business with ACH payments, you could easily wind up saving money in the long run. And having a hosted payment page is nothing to sneeze at â or the next-day transfers, the higher limits, payment profiles, etc. (There’s also a $250/month option that gives you more than the basic package but not quite as many perks. That’s good if your business isn’t quite enterprise-scale.)

Now, if you don’t want to shell out $250 or $1,500 monthly for all the fancy tools, or don’t care about a hosted payment page, theÂ basic $25/month plan still gives you next-day transfers. If you want to keep your fees even lower, you can forgo the next-day payments all together.

Customers have the option to create a full-fledged Dwolla account or use the simpler Dwolla Direct. The Direct account is a lot less involved compared to Dwolla’s original setup. Customers can get themselves set up in under a minute and they can link their online banking credentials to pay instead of linking their accounts directly.

As far as security goes, Dwolla uses tokenization and TLS 128-bit encryption. There’s also two-factor authentication â and you’ll have to enter your PIN whenever you move money or make a change to an account.

Adding Dwolla to your options for online payments is easy with the custom API, and creating an account is free, so you can give it a try and get a feel for it before you even set up Dwolla for your business.

Alternative Payment Methods: So Where to Now?

If you are looking for alternatives to credit cards and traditional merchant accounts, there’s no better time to get started. Technology is changing the way we think about payments and how we handle money in general: everything from mobile wallets that replace credit cards to decentralized digital currency. There are alternative payment methods to appeal to every market segment, and optionsÂ to appeal to every sort of business. It’s just a matter of finding what works for you and your customers.

Have questions about your options for payment processing? Leave a comment and let us know. We’re always happy to hear from you! We can also help you lower your processing fees or even choose a processor.

The post Everything You Need to Know About Alternative Payment Methods appeared first on Merchant Maverick.

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May 8, 2017

What Exactly Are Basis Points And How Can You Calculate Them?

There&#8217s a great deal which goes into negotiating having a charge card processor. You have to make certain you&#8217re getting favorable terms and also the best rates. At Merchant Maverick, which means per month-to-month agreement (or at best one without any early termination fee), affordable hardware without any overpriced leases as well as an interchange-plus plan having a low markup.

Negotiating charge card processing rates could be a daunting prospect for any merchant. The answer to success is understanding. You must know exactly what a fair cost for processing it, particularly in your unique industry and according to your company model. You should be capable of taking the rates you&#8217re quoted and set them into real-world figures. You&#8217re most likely acquainted with percentages and percentage points already &#8212 but you could also hearÂ the phraseÂ basis points (BPS) inside your negotiations. Should you&#8217re not really a finance whiz, this may throw you off a little.

The good thing is basis points are really simple to understand. I&#8217m here to describe these to you and also demonstrate the way they affect your processing.

Warning: Math ahead! (Disclaimer: It&#8217s not frightening math.)Â

Exactly what is a Basis Point Anyway?

The groundwork point is equivalent to one-hundredth of the percentage point:Â 0.01% (or .0001 designed in decimal form). It&#8217s the smallestÂ unit of measurement accustomed to describe rates of interest, processing rates, and yields on lending options (for example bonds).

A hundred basis points equal 1%.

Yes, it&#8217s that easy.

Among the arguments in support of basis points is it&#8217sÂ a method of removing ambiguity from statements involving figures, and alterations in figures. Say for instance, the conventional yield rates are 8.5% also it increases 3.5%. Is the fact that now 12%, or 8.85%?

Basis points eliminate room for misinterpretation of statistical statements: when the yield rates are 8.5% and increases 350 basis points, that&#8217s a rise to 12% &#8212 whether it&#8217s 35 basis points, that might be 8.85%.

(The previous journalism copy editor within me would like to help remind you there&#8217s a noticeable difference between 3.5% and three.5 percentage points, and making the excellence has got the same effect.)

So How Exactly Does This Affect Charge Card Processing?

Where charge card processing is worried, you&#8217re more prone to encounter basis points in discussions of card processing rates. However, there’s a couple items to bear in mind:

Should you&#8217re with an interchange-plus plan, the speed your processor is quoting you isn&#8217t the whole of the items you&#8217ll pay &#8212 you still need pay interchange charges, what are rates set through the card systems &#8212 Visa, MasterCard, Uncover, American Express.

(Should you&#8217re on the tiered prices model, you could also be quoted a markup percentage.)

You&#8217ll likely pay a set-fee towards the tune of $.10 to $.25 for every transaction additionally towards the percentage markup. This will be significant because a general change in basis points may be easily offset by a general change in this flat rate.

Here are a handful of contexts that you might see basis points referenced:

AÂ company might provide you with an interchange-plus plan in which you pay 35 basis points over interchange along with a $.20 per-transaction fee. That comes down to interchange + .35% + $.20.
You could also get observe that your processing rates are going to increase 8 basis points. In case your current rates are .35%, which means your brand-new rates are .43%.

It&#8217s time for you to have fun with some figures and find out how changes throughout this might affect just how much you have to pay!

Let&#8217s set an interchange rate of just one.8% + $.10 (note: interchange rates vary by card network, kind of card, and kind of transaction. case an example). Your processor provides you with b .25% markup (that&#8217s 25 basis points) plus a set amount of $.20 per transaction, getting your overall processing cost to two.05% + $.30.Â Your average transaction dimensions are $12.

12 x .0205 = .246

Put together, that&#8217s $.25 + $.30, or $.55 in processing costs for any $12 transaction, departing you with $11.45.

What in the event that altered? Say your processor decreased your markup to fifteen basis points (.15% over interchange) but elevated your per-transaction costs 10 cents to $.30. Your brand-new rate, with interchange, could be 1.95% + $.40. Wouldso would that change that which you pay?

So within this example, despite a lesser percentage, your savings are offset just by a $.10 rise in your per-transaction costs. Watch out for this problem &#8212 perform the math rather of just presuming it’ll mean bigger savings!

However that&#8217s only one transaction. So how exactly does this engage in on the bigger scale?Â Let&#8217s return to our original example, but additionally take a look at what goes on whenever you in the average transaction size, or reduce the markup percentage but boost the flat rate.

As you can tell here, altering simply one variable within the equation may have a dramatic impact on your processing rates. And when your average ticket dimensions are small, the flat per-transaction fee could be more pricey compared to interchange and percentage markup.Â That causes it to be necessary for perform the math in your processing costs.

Keep in mind that interchange rates change from one card network to another, and from one sort of transaction to another. So that your rates will be different according to your industry, as well as which kind of card you swipe (business card printing and rewards cards are more expensive than standard charge cards, for instance).

Would like to get a concept of what interchange rates you&#8217ll pay? You should check out Visa&#8217s printed interchange rates here, and MasterCard interchange rates here.

Where you can Came From Here?

Educated retailers alllow for good retailers. That&#8217s why we&#8217re here &#8212 to talk about our expertise and provide you with the understanding you have to succeed.

If the majority of what we should&#8217ve covered to date just made your vision glaze over, Â here&#8217s the large takeaway: You must know that which you&#8217re having to pay for charge card processing, regardless of how your bank account repetition explains it. Â

Should you don&#8217t know how your rates work, do your homework or ask anyone to explain it for you. In case your processor can&#8217t do this, you most likely wish to start searching for a replacement. You can begin by looking into our top-rated credit card merchant account providers.

Even if you’re a little merchant, you’ve power. You don’t have to simply accept the very first offer a free account provider provides you with. Become knowledgeable regarding your options. Be aware of risks inside your industry. If you want help securingÂ a great deal on processing, take a look at our help guide to negotiating with card processors.

Thank you for studying, and best of luck!

The publish What Exactly Are Basis Points And How Can You Calculate Them? made an appearance first on Merchant Maverick.

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April 22, 2017

25 Must-Have Accounting Software Integrations for 2017

Is your accounting or invoicing software missing something? Does your current feature set not quite meet the mark?

You may be tempted to throw in the towel, but before giving up on your software completely (and dealing with the hassle of transferring all your data over to a new solution), itâs time to consider the advantage of using your current programâs integrations and add-ons.

Integrations are an excellent way to supplement your existing software; all good accounting solutions come with a number of integrations (if yours doesnât then maybe it really is time to switch). These integrations can encompass everything from payment gateways and CRM to receipt management and tax support.

We get it—in situations like this it’s difficult to even know where to begin. So to help you get started, we have put together a list of the top 25 integrations to boost your software’s functionality and help your small business succeed in the new year. We chose integrations that are common across multiple accounting and invoicing software platforms and have divided them into categories to make everything even easier for you.

But first, let’s get some basics out of the way.

How Do Integrations (and Add-ons) Work?

The integration process is really quite simple. If it’s even remotely worth its salt, your accounting or invoicing software is already fast friends with other apps or software; like any good business partner, your accounting software should work to introduce you its third-party buddies so you can all shake hands, play nice, and begin working together. Note: Healthy (and legal) human friendships do not usually involve anÂ exchange of money, but you will usually have to pay an extra fee for 3rd-party integrations.

Most often, there is a place to access potential integrations within your accounting dashboard. Once you’ve set up an account with the 3rd-party selection of your choice, data will automatically sync between the applications.

Makes sense, right? Okay, time to move on to the actual list…

Payment Gateways:

Between Stripe, Square, PayPal, Forte, Authorize.net, WePay, and countless other payment gateways, itâs easy to get overwhelmed by all your choices. Which is the best for your company? Itâs hard for me to say without knowing your exact situation, but it is easy for me to share our Merchant Maverick favorites.

1. Braintree

Compatible accounting solutions: FreshBooks, Hiveage, and Invoicera. There is also API for developers.

Braintree is a popular payment gateway and merchant account service and one of our top choices at Merchant Maverick (we’ve given it a full 5/5 stars). Braintree offers great customer service, as well as a good selection of merchant account features. Some of these features include recurring billing, international account support, buyable pins on Pinterest (still in beta), and strong mobile apps.

Pricing:

Credit Card â 2.9% + $0.30/per transaction

If you are interested in Braintree, check out our full Braintree review for more details.

2. PayPal

Compatible accounting solutions: Xero, QuickBooks Online, QuickBooks Pro, Invoice2go, Harvest, GoDaddy Online Bookkeeping, AND CO, Invoicely, LessAccounting, Saasu, KashFlow, ClearBooks, BillingOrchard, Sage One, Â Zoho Invoice, Zoho Books, and Wave.

You knew it was coming. PayPal is a world-renowned payment gateway and merchant account used by over 192,000,000 people. The service is easy to use and is available with virtually every accounting and invoicing software. PayPal offers a mobile app as well as free invoice creation.

Pricing:

In Store â 2.7%/per US swipe
Online & Invoicing â 2.9% +$0.30/per transaction

Price discounts are available for nonprofits and charities.

There is a history of user complaints about PayPal withholding funds, so our recommendation is that you may not want to rely solelyÂ on PayPal for your processing needs. For the most part, though, the company is well-liked. To read our full review, go here. If you are interested, we’ve also written a comprehensive review of the mobile version of PayPal.

Payroll:

Your company is growing, but your accounting software canât keep pace—not in terms of payroll. What’s a business owner to do? Never fear; check out the following integration before throwing your current software out with the bathwater.

3. Gusto Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

Compatible accounting solutions: FreshBooks, Xero, QuickBooks Online, and QuickBooks Pro. There is API for developers.

Gusto is a full-fledged Payroll processor (we actually use it for our own payroll here at Merchant Maverick). This software works to manage part-time, full-time, hourly, and salary employees, as well as contractors (or any combination of the five). In terms of features, you canât beat Gusto. The complete payroll package includes benefits, health insurance, 401ks, reimbursements, vacation days, and sick days. You can even organize employees and contractors by team and pay everyone via direct deposit.

Pricing:

Base Price â $39/mo + $6/per employee

Gusto offers a free 30-day trial. To learn more visit the Gusto site.

Project Management:

Project management can be one of the most useful features in an accounting solution (and one of my personal favorites). Sadly, very few software companies offer project management tools—not even Xero or QuickBooks Online. This is when project management integrations come in very handy.

4. Basecamp

Compatible accounting solutions: Blinksale, Harvest, LessAccounting, FreeAgent, and Invoicely. There is API for developers.

Basecamp is used by over 100,000 business owners, just like yourself. The software is completely cloud-based and very user-friendly; it comes with all the features you would expectâprojects, tasks, job costing reportsâbut also includes a lot of unexpected but very welcomed surprises. Some of these extra features include team communication tools and group chat, scheduling, to-do lists, automatic check-ins, reminders, client reviews, and gift certificates. The software also offers mobile apps for both iPhone and Android.

Pricing:

$99/mo

Teachers and students can actually access this software for free, and non-profits get a 50% discount. You can also receive a discount for paying annually. Basecamp offers a free 30-day trial.

To learn more about Basecamp, read our full review and/or watch this How It Works video.

5. WorkflowMax

Compatible accounting solutions: Xero, MYOB, and MoneyWorks. There is API for developers.

If you are looking for something on the cheaper side, WorkflowMax, a project management and time management hybrid, might be a better choice for your business. For such a small scale software, it is surprisingly common amongst accounting software integrations. Workflow Maxâs features include jobs, tasks, timelines, quotes, invoicing, job costing reports, automated notification, and the ability to track time. Pricing is broken up by number of users.

Pricing:

1 user â $15/mo
2-5 users â $49/mo
6-10 usersâ $110/mo
11-20 users â$170/mo
21-50 users â $250/mo

Learn more about WorkflowMax on their websiteÂ or read our full review and see why we gave the software 4/5 stars.

Time Management:

Another integral feature often overlooked by accounting and invoicing software is the ability to track time. But hey, thatâs what integrations are for!

6. Temponia

Compatible accounting solutions: Xero, Zoho Invoice, Zoho Books, QuickBooks Online, and QuickBooks Pro.

âWhen tracking time becomes saving time.â

Thatâs the motto of Temponia, a cloud-based time management software. Temponia offers an incredibly beautiful UI as well as scalable pricing plans. The softwareâs features are well laid-out and organized with a calendar interface. When you sign up for Temponia, you’ll get time tracking, budgeting, reports, reminders, timers, projects, and invoicing (that is better than even some invoicing software).

Pricing:

Starter â $5.90/mo
Team â $28/mo
Business â $49/mo
Enterprise â $122.50/mo

You can see pricing details and sign up for a free live demo here.

7. T-sheets

Compatible accounting solutions: Xero, QuickBooks Online, and QuickBooks Pro. There is API for developers.

Another time management option is T-sheetsâa time tracking software with an optional booking component. This software is cloud-based and provides additional mobile apps. T-sheets differs from Temponia in a few key areas. In addition to time tracking and projects, T-sheets supports job-costing, POT (paid time off) tracking, approvals, shift scheduling, employee alerts and reminders, and a see-whoâs-working feature. It is a time management, project management, and booking software all in one. Pricing varies depending on number of users.

Pricing:

1 user â free
2-99 users â Base fee of $16/mo + $5/mo per user
100+ users â Base fee of $100/mo + $5/mo per user

You can receive a discount by paying annually, and a free trial of the software is available for those interested. Check out the T-sheets website for further details.

Point of Sale (POS) Software:

Outgrowing your invoicing tools and looking for a way to take your businessâs sales to the next level? Here are our top 5/5 star POS recommendations.

8. Vend

Compatible accounting solutions: Xero, QuickBooks Online, and KashFlow. There is API for developers.

Vend, an intuitive SaaS program with great customer service, takes the cake for retail POS, especially for iPad users. Even though Vend is cloud-based, during internet outages the software will continue to work; it simply syncs stored data when the internet returns, which is pretty sweet if you ask me. In addition to operating as a basic POS system, Vend offers reports, inventory, stock control, customer profiles, and gift cards. Here is a basic summation of Vendâs pricing, but be sure to look at each plan in more detail to see which features youâre getting.

Pricing:

Free
Starter â $69/mo
Advanced â $99/mo
Multi-Outlet â $249/mo

There is a discount available for paying annually rather than monthly. It’s worth noting that Vend offers no API, so you won’t be able to design custom integrations. Learn more about why we love Vend in our full review and take the software for a spin with this free trial.

9. SalesVu

Compatible accounting solutions: QuickBooks Online and QuickBooks Pro. There is API available for developers.

Unlike Vend, SalesVu offers retail, restaurant, and service-industry POSâso whatever your business may be, SalesVu most likely has options for you. Like Vend, the software is easy to use and has good customer service. The system is designed for iPads and iPhones; features vary significantly depending on which type of POS you chooseÂ and include inventory, contact management, table reservations, online appointment scheduling, gift cards; you get the drift. The pricing plan is a bit confusing so bear with me.

Pricing:

Basic Restaurant Bundle â $75/mo
Basic Retail Bundle â $75/mo
Basic Beauty and Wellness Bundle â $75/mo
SalesVu for Restaurants â $150/mo
SalesVu for Retail â $150/mo
SalesVu for Beauty and Wellness â $150/mo
SalesVu for Professional Services â $150/mo
SalesVu for Wineries â $150/mo
SalesVu for Health Clubs â $150/mo

There is also an individual pricing module option. For those interested in SalesVu, check out our full review or contact SalesVu to schedule a demo.

Email Marketing:

Thereâs no monkeying around when it comes to email marketing. Okay, well maybe there is. Save yourself some valuable time and automate your email process with…

10. MailChimp

Compatible accounting solutions: FreshBooks, KashFlow, Harvest, Xero, QuickBooks Online, Sage One, Sage 50 (for Canada and US), e-conomic, Saasu, and ClearBooks. There is API for developers.

MailChimp is a powerful email marketing software combined with basic CRM features. The company processes over 5,000,000 emails every single month and is scalable for any size business. It offers an unbelievable amount of features, including analytic reports, email campaigns, contact lists, API, and a custom email designer. You can also organize contacts by different criteria (like location) and deliver emails by timezone. MailChimp supports multiple users and strong user permissions.

Pricing:

Forever Free
Growing Business â starts at $10/mo
Pro Marketer â additional $199/mo

To learn more about these pricing plans and to see pay-as-you-go options, clickÂ here. Check out our full MailChimp review and see why we gave it 4.5/5 stars.

eCommerce:

With more and more small businesses owners selling online, the world needs an eCommerce platform that can keep up. Weâve found just that.

11. Shopify

Compatible accounting solutions: QuickBooks Online, Bench Accounting, Xero, Sufio, Billy, AccountEdge, KashFlow, e-conomic, FreshBooks, Debitoor, and Sage 50. There is API for developers.

If you hadnât heard of Shopify before, you have now—and I promise you will never live to regret it. Shopify is one of the biggest names in the eCommerce world, and for good reason. The company hosts over 325,000 online stores; it is easy to use and mobile-friendly. We often recommend it here at Merchant Maverick, especially because of the great features and scalable pricing plans. With Shopify, you get 100+ online store themes, branding, marketing and SEO, a shopping cart with secure checkout, payment gateway, store management, basic CRM, social media integrations, inventory management, and analytic reports.

Pricing:

Shopify Lite â $9/mo
Basic Shopify â $29/mo
Shopify â $79/mo
Advanced Shopify â $299/mo
Shopify Plus â call for pricing

The bigger the plan, the bigger the savings on credit card rates and transaction fees. Check Shopify pricing for more details.

Take advantage of the free 14-day trial or read our full Shopify review for more details.

Expense Tracking:

You probably got accounting or invoicing software so you could rid yourself of your Excel sheet/receipt box bookkeeping habits. So why do those receipts keep piling up? Why is your shoebox still overflowing? The answer is simple: you havenât tried these expense tracking tools yet.

12. Receipt Bank

Compatible accounting solutions: Sage One, Xero, Twinfield, QuickBooks Online, KashFlow, FreshBooks, and FreeAgent. There is API for developers.

Receipt Bank is one of the most common expense management integrations on the market. Over 60,000 users rely on Receipt Bank to make uploading expenses easier. How does it work? Well, you simply use Receipt Bankâs mobile apps to snap a picture of your receipt. The app then extracts the important information and saves it to the expenses section of your accounting software. Pretty neat, huh? You can also set automation rules to streamline the process even more.

Single User Pricing:

50 Items â $14.99/mo
100 Items â $29.98/mo
150 Items â $44.97/mo

Multi-User Pricing:

50 Items â $25/mo
100 Items â $40/mo
150 Items â $55/mo

There are two larger plans available upon request. Receipt Bank also realizes that anticipating items is tricky and offers a flexible item limit policy. Additionally, you can take advantage of a 14-day free trial of the software so you can become better acquainted with this time-saving tool.

13. Shoeboxed

Compatible accounting solutions: QuickBooks Pro, QuickBooks Online, Xero, GoDaddy Online Bookkeeping, and Wave. There is API for developers.

Shoeboxed is another big player in the receipt management world. It is just intuitive as ReceiptBank, albeit a little different. Instead of taking pictures of your receipts, you place them in a free âmagic envelope,â send them off, and everything is taken care of for you. Shoeboxed takes the data from your receipts and archives them for you automatically. In addition to expense management, Shoeboxed also offers basic CRM features and reporting. For a full list of features, go here.

Pricing:

Lite â $9.95/mo
Classic â $29.95/mo
Business â $49.95/mo

Learn more about Shoeboxed here.

Customer Relationship Management (CRM):

Almost all accounting and invoicing software programs come with CRM features, but the quality of these tools varies significantly between companies. If youâre looking for CRM capabilities your current software doesnât provide, it might be worth investing in a CRM-focused add-on.

14. Insightly

Compatible accounting solutions: Xero, QuickBooks Online, and QuickBooks Pro. There is API for developers.

I donât know if I believe this company when they claim âour CRM gives you super powers,â but I do believe Insightly is a super powerful CRM. Not only does Insightly handle contact and lead management, it also boasts strong project management, a beautiful UI, and well-developed mobile apps. One of the coolest ways Insightly helps generate sales and new customers is by integrating directly with your email, social media site, and website to automatically create an address book of leads. Other features include a calendar, mass emailing features, email templates, support, reports, and the ability to track new sale opportunities.

Pricing:

Free
Basic â $15/mo per user
Plus â $35/mo per user
Professional â $59/mo per user
Enterprise â $129/mo per user

Insightly offers a free 14-day trial of any of the paid plans and a discount for annual subscriptions. Check out Insightly here or watch a quick overview video.

15. Capsule

Compatible accounting solutions: Xero, FreshBooks, FreeAgent, KashFlow, Billiving, and ClearBooks. There is API for developers.

âThereâs something to be said of the small business which caters to small business.â

Capsule is another CRM option that could be a good choice for smaller operations. Like Insightly, Capsule is easy to use and offers mobile apps. The company maintains strong security and is competitively priced. The Capsule feature set includes contact management, lead management, vendor management, sales pipeline, task management, recurring tasks, and file storage.

Pricing:

Free
Premium – $12/mo per user

Important:Â Capsule is not designed for large businesses. If you are interested in the software, peruse our full Capsule review and take the free 30-day trial for a run.

Booking:

Keep forgetting your day planner? Unsatisfied with the calendar app on your phone? Tired of losing post-it note scribbled appointments on your desk? Welcome to the world of booking software.

16. Full Slate

Compatible accounting solutions: QuickBooks Online and QuickBooks Pro.

Full Slate is cloud-based booking software that makes it easy to both schedule your own appointments and enable your clients to set up appointments with you. The UI is designed nicely, and everything is color coded for maximum organization. Full Slate offers different calendars for appointments, classes, and personal events (some users might hate this separation, but others seem to love it). In addition to these booking features, Full Slate also has CRM, sales tracking, basic reports, and the ability to set recurring appointments.

Pricing:

Just You â $29.95/mo
Up to 5 Staff â $49.95/mo
Up to 10 Staff â $79.95/mo

Have more than 10 staff members? Call for pricing.

Full Slate doesnât offer a free trial; instead, the software is free until you exceed 10 booked appointments or 100 events. Read our full review of Full Slate to see why we gave the software 4.5/5 stars.

17. Acuity Scheduling

Compatible accounting solutions: FreshBooks, Xero, QuickBooks Pro, QuickBooks Online, Invoice2go, Zoho Books, and Saasu. There is API for developers.

Over 500,000 people currently useÂ Acuity Scheduling, and for good reason. It is an easy to use, customizable booking software with a strong feature set and single calendar. And to top it off, itâs affordable. Like Full Slate, Acuity Scheduling offers CRM and recurring appointments. But in contrast to Full Slate, Acuity Scheduling supports inventory, company promos, coupons, two-way Google calendar sync, and payment gateways, as well as the ability to track order history and manage time zones.

Pricing:

Free
Emerging Entrepreneur â $10/mo
Growing Business â $19/mo
Powerhouse Player â $34/mo

Acuity Scheduling offers a free 14-day trial of any of the paid plans. Read our full review to see why Acuity Scheduling also gets 4.5/5 stars.

Customer Service:

Nothing beats service from the boss himself, but if your company is growing faster than you expect, or if you are spending more time answering customer questions than running your business, it may be time for to pass the baton.

18. Zendesk

Compatible accounting solutions: Harvest, QuickBooks Online, and Xero. There is API for developers.

Zendesk is actually the customer service tool used by several major accounting and invoicing software companies. (If itâs good for them itâs good for you right?). Zendesk offers support in the forms of phone, chat, message, text, social media, email, knowledge bases, and help desks. Pricing plans vary in the types of support service offered, so be sure to check out the pricing page before making any decisions.

Pricing:

Essential â $5/mo per agent
Team â $19/mo per agent
Professional â $49/mo per agent
Enterprise â $99/mo per agent
Elite â $199/mo per agent

Zendesk offers a free 30-day trialÂ and demos that you can schedule at any time. To learn more about how Zendesk works, watch this video and check out Zendeskâs services.

Tax Tools:

Letâs face it, nobody likes tax season. You probably even cringed reading those words. But these integrations can help.

19. Track1099

Compatible accounting solutions: Xero, QuickBooks Online, QuickBooks Pro, Xero, Zoho Books, Zoho Invoice, and Intacct. There is API for developers.

Track1099 is a robust tax support tool that allows small businesses to e-file necessary tax forms (the most notable being 1099s, W-2âs, W-4âs, and W-BENS). Come tax time, simply send the proper forms to your employees via email. They will fill them out in an incredibly user-friendly portal (Iâve done it myself and the process is easy as can be). Then you receive a copy of the form, and voila! Youâve completed your taxes as fast as Augustus Gloop can eat a pool of chocolate.

Pricing:

25 Forms â $9/year
150 Forms â $59/year
5000 Forms â $199/year

Note: The type of form you can purchase on these plans is dependent on the plan you buy, so be sure your necessary forms are supported before purchasing. Learn more here.

20. Avalara

Compatible accounting solutions: Sage, Sage 100, Sage 500, QuickBooks Online, QuickBooks Pro, Zoho Invoice, Zoho Books, Xero, and Intacct. There is API available for developers.

Avalara is a sales tax solution for small businesses. A few accounting software companies have made Avalara a part of their system out-of-the-box, while many others offer it as an optional integration. Basically, this add-on automatically determines the sales tax for your clients based on geolocation, saving you time (and since time is money, well itâs saving you that too).

The worst part about Avalara is that they do not post prices on their site and request interested persons to call them instead. Youâre probably thinking,Â “So I have to make a phone call? Big whoop!” Well, it wouldnât be an issue except that the Avalara representatives are incredibly pushy and pricing can be a bit steep.

That being said, this add-on may still be worth it for the ease of automated sales tax. Thatâs up to you to decide. You can learn more by watching this video and the visiting the Avalara site.

Specialty Integrations:

Still havenât found what youâre looking for? Here are a few more specialized integrations that might be the perfect fit for you.

21. For Nonprofits â Sumac

Compatible accounting solutions: QuickBooks Online and QuickBooks Pro.

While many software companies offer nonprofit discounts, there are few software options that are designed specifically for nonprofits. Thatâs what makes Sumac so great. Sumac is a locally installed program (though you can pay an extra $25/mo for use with the cloud). The software begins with basic CRM (the Bronze plan below) that is tailored to manage and store nonprofit information specifically. The feature set of the software depends on the specific plan you choose, but your choice in features can include time tracking, invoicing, email marketing, donation management, event management, grant management, booking, auctions, and more. Check the pricing plan for more details.

Pricing:

Bronze â Free
Silver â $20/mo
Gold â CustomÂ price, calculate here
Platinum â Starts at $400/mo

Sumac offers a free trial of their software. Watch this video or proceed to their site to learn more about how this software works.

22. For Freelancers â Cushion

Compatible accounting solutions: Xero.

Cushion is a simple, easy to use freelancing solution that helps you keep track of your work. The features are limited but effective and the pricing is competitive. With a Cushion plan, you get the ability to track invoices, track jobs, view monthly income, set goals, track expenses, and to view and organize all of you projects in a calendar.

Pricing:

Moonlighter â $6/mo
Freelancer â $12/mo
Studio â coming soon

Check out Cushion if you are interested in this organization solution.

23. For Team Communication â Slack

Compatible accounting solutions: Zoho Invoice and Zoho Books. There is API for developers.

Communication is hard. But Slack has found a way to make it easy. Slack is a powerful communication platform (we use it here at Merchant Maverick, in fact). It allows you to have private or public team conversations, send direct messages, attach images and documents, as well as make calls.

Pricing:

Free
Standard â $8/mo per user
Plus â $15/mo per user

If youâre tired of jumping between emails and texts, Slack is a great, affordable solution. You can learn more here.

24. For Partial Payments â Partial.ly

Compatible accounting solutions: FreshBooks and QuickBooks Online.

As you probably guessed from the title, Partial.ly is a payment solution that allows customers to make partial payments on products or services. You can create custom payment plans for your clients who then get access to a personal client portal. The software uses Stripe as its payment gateway. Note: Before you freak out at the credit card rate below, understand that Partial.ly uses this fee to cover all Stripe fees, so you are only charged once.

Pricing:

Credit Card Rate â 5% + $0.30/per transaction

Learn more about how Partial.ly can work with your business here.

25. For Everything Else â Zapier

Compatible accounting solutions: Xero, QuickBooks Online, QuickBooks Pro, FreshBooks, Wave, FreeAgent, Zoho Invoice, Zoho Books, Saasu, LessAccounting, Hiveage, Proposify, QuoteRoller, and InvoiceNinja. There is API for developers.

I promise Iâm not kidding. If your accounting or invoicing software has a Zapier integration, that means you have access to over 750+ apps and integrations. Zapier works as its own sort of API in that it gives you endless connections to apps you otherwise may not have been able to access.

Pricing:

Free
For Work â $20/mo
For Teams â $125/mo

Learn more about how Zapier works and how to maximize your business with Zapier here.

The End

While this may be the end of a post, there is no end to the number of accounting and invoicing integrations out there. I hope that in 2017 you are able to make the most of these powerful tools.

My own New Yearâs Resolution is to continue helping business owners like you as much as I canâand preaching the gospel of these 25 hidden gems is the best way I know how. But I can always use more help getting the word out! Let me know which accounting integrations have helped you succeed and if I have missed any of your favorites!

The post 25 Must-Have Accounting Software Integrations for 2017 appeared first on Merchant Maverick.

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