Square is best known by online sellers and brick-and-mortar shops for its secure credit card processing solutions. With a free mobile point of sale app — and free credit card reader–, Square has made it easier for the everyday small business owner to start taking credit cards. Card readers like Square’s also make it more convenient for shoppers to buy without carrying cash. That can be a win-win for everyone involved with the sale.
Because a business owner no longer has to purchase an expensive POS system to process credit card payments, itâs no wonder that the use of Square has rapidly grown over the last few years. In fact, a surprising number of businesses still did not accept credit cards at the time Square was launched. For a solo entrepreneur or a smaller shop, it used to be a lot more expensive and time-consuming to get started (not to mention more than a little intimidating, given PCI compliance and other regulations). Nowadays, you can find these portable credit card readers everywhere â from your favorite ice cream place to high-end boutiques, salons, and even consulting agencies. If youâre buying at a local shop, there is a good chance that Square is the company processing your payment.
In typical Square fashion, Square Installments provides a more accessible option for businesses that want to offer financing to their clients. If your company sells higher ticket items â from $250 to $10,000 â and youâd like to offer on-the-spot approval and financing to your customers, read on to find out more about Square Installments. But first â a little primer on customer financing.
What Is Customer Financing?
Before we dig too deep into Square Installments, letâs cover the basics of customer financing. By financing a purchase, customers can take home a product or use a service right away without paying for it in full at the time of purchase.
A common example of customer financing would be heading to the dealership and leaving with a new-to-you car â and a payment plan for the next three years to pay it off. Getting the newest version of your phone and rolling payments into your mobile phone bill is also another (more painless) way to finance an upgrade for your phone with less sticker shock.
Financing makes things a little easier on your customer, but it shouldnât require you to wait for the cash. When you offer to finance through a third-party like Square Installments, you sell your product or service and permit payment to be settled directly between the lender (in this case Square Capital) and your customer. Square pays you in full at the time of purchase.
Financing customers is all about convenience and accessibility. For your customers, financing can make large ticket items easier to purchase with predictable monthly payments spread out over time. Instead of shelling out the entire lump sum, they have more time to pay. This makes for an easier sell for your salesperson and a more comfortable decision for your customer.
When a purchaser thinks about what they are buying in terms of monthly vs. the total amount of dollars, financing can significantly lower the âsticker shock.â Giving purchasing flexibility to your customers will make buying from you a more attractive and accessible option â and of course, thatâs good for your business, too.
Companies that invoice monthly payments for ongoing services are also offering a financing option to their clients, in a way. Yet anyone who has a business model based on retainers or monthly agreements knows that sometimes when the bill comes due, it doesnât always get paid â possibly because the person you invoiced has bad credit or is in financial trouble. These issues can be virtually nonexistent when you let Square Installments pre-screen and approve your clients â and take on the financial risk.
Read on to find out how Square Installments works and how much it costs so you can decide if Square Installments services are right for you.
How Does Square Installments Work?
There are two ways you can use Square Installments for your business: at the point of sale or via Square Invoices. Once you sign up for Square Installments, your business will get a custom URL. This web address is just for your business and is the link youâll send to every customer who wants to apply for financing.
The Square Installments Process For In-Store Sales
Once you share the link with your customer, they’ll follow the instructions from their smartphone and fill out a short online application. In almost all scenarios, customer approval happens in real time, right when theyâre ready to purchase at your shop.
If approved, they can accept one of the financing options on offer and will receive a one-time-use number for a digital card they use to pay you for their purchase. The number is valid for seven days, and your customer can only redeem it at your business.
When your customer is ready to buy, theyâll present you with the digital card number given to them by Square Installments; you will key that number directly into your Square Point of Sale app, online through Square API, or through your virtual terminal.
Square pays you in full for the amount at the time you process the approved application.
Square Invoices From Square Installments
Square Invoices allows you to send your customers invoices through Square as well. After you are approved and set up, the option for installment payments will appear on your invoice automatically. Once your customers receive your invoice, the process is similar to the one above â they fill out an online application, can pick a plan, and once approved, you get paid upfront and in full.
To spread the word, Square will also sendÂ you some free marketing material â both in print and in the form of a banner for your website so your customers wonât miss this new option for buying with you.
You Donât Need To Be A Financing Expert
Worried about the fine print and fielding financing questions? Donât be. If your customers have questions about Square Installments, they’ll contact Square directly. In fact, because this is considered a âhighly regulated financial product,â itâs essential to pass any questions or concerns off to Squareâs own customer service folks. And of course, this arrangement means youâre not burdened with the nitty-gritty details of financing or payment collection.
How Much Does Square Installments Cost?
If youâre a business owner considering whether or not the cost is worth the convenience of the service, here are some figures to help you crunch the math.
Square Installments for Square Invoices costs 2.9% of the purchase price plus $0.30 per transaction. Square Installments at your Point of Sale costs 3.5% of the purchase price plus $0.15 per transaction. If a custom rate applies to your business for keyed-in Square Invoices transactions, this rate also applies to any Square Installments transactions.
The good news is that there are no recurring monthly usage fees or long-term commitments. You can cancel the service any you time want with no fees or contracts for your business to worry about.
For a customer who is considering using Square Installments to pay for a purchase, the annual percentage rate will vary depending on a few different factors. However, every customer will have more three options when it comes to repaying the loan. Square makes things upfront and easy to understand for the borrower, with ease of use in mind.
Should You Use Square Installments?
The main benefit of Square Installments is that customers can pay over time — making them more likely to buy and making your business more likely to sell more inventory. Whether to break up payments for a big purchase that a customer normally couldnât afford, or simply to offer a convenient option other than cash or checks, financing through Square Installments can be a valuable tool for your sales team to leverage.
When the average business owner thinks about customer financing, one of the biggest concerns is that the customer gets possession of the product or service without paying in full. While that may be a concern if you offer in-store financing and manage it yourself, in this case, Square takes on the financial risk entirely. You get paid right away and let Square manage the installments.
There are some important things to keep in mind when you consider whether Square Installments services are right for your business, however. As noted above, Square Installments isnât free. Also, keep in mind that Square Installments is only applicable for purchases between $250 and $10,000 â so businesses that deal with higher ticket products or services will need to consider other options for financing.
When you make the final decision to use Square Installments, consider the benefits vs. the costs. Here are a few questions to ask:
Would your target market and current customers likely make the purchase anyway? (In other words: How âwarmâ or âcoldâ are the people who come to your online sales page or place of business?)
Does opening up financing options also open up the possibility of a new target customer or a larger final sale?
If you send out invoices, will Square Installments give you a more convenient or secure option to take secure payments and prescreen users, despite the cost?
For any business owner, the benefits and conveniences should outweigh the cost of Square Installments per sale. Because you donât need to sign any long-term contracts to use Square Installments, it might be worth it to try the service for a bit, see what you think, and compare sales over the next few sales cycles to be sure either way.
Learn More About Square
While you consider whether or not you want to jump in and offer Square Installments as an option for your customers, check out some of the other reviews for Square services. Find out how much Square charges for their primary services and get armed with more information about Square processing to see if these payment options are right for your business. If you want to see the service for yourself, sign up for a free Square account today and check it out!
Free App & Reader
Square for Retail
Square for Restaurants
Free, general-purpose POS software and reader for iOS and Android
Easy integration with popular platforms plus API for customization
Specialized software for more complex retail stores
Specialized software for full-service restaurants
The post How Does Customer Financing With Square Installments Work? appeared first on Merchant Maverick.
Square made its name offering a free mobile credit card swiper, but the company has expanded so much in the past few years that there is now a massive array of hardware options, catering to all types of businesses. You can still get mobile card readers from Square if you don’t need more than just a phone or tablet and a swiper, but you can also get a countertop POS system complete with a customer-facing display, or a slim, portable credit card terminal with a phone-sized high-resolution screen and built-in receipt printer. And if you’d like to print paper receipts and have an automated cash drawer, Square offers a wide range of compatible hardware. You can even save some money by opting for one of Square’s ready-made bundles of hardware.
Let’s take a look at Square’s hardware options, including its mobile readers, POS systems, and POS kits. We’ll start with simplest options and move on to the most comprehensive kits. We’ll also talk about what you can do to control your costs and manage your cash flow with Square’s financing.
If you’re still curious about Square’s offerings, we also recommend checking out our complete, in-depth review of Square, which covers hardware as well as the software.
Square Mobile Card Readers
Square’s mobile card readers are meant to work with smartphones and tablets — unlike with some of the company’s “all in one” hardware solutions, if you go with a card reader it’s a “bring your own device” situation. Square’s mobile readers are ideal for businesses that are always on the go — farmer’s market stalls, service businesses, food trucks, etc. These card readers work with any of Square’s POS apps as well. However, compatibility with specific tablets or smartphones will vary — and you should check before you buy that a card reader is compatible with your device. Square has a helpful compatibility checker tool on its website for this purpose.
Square Magstripe Readers
Square has been offering free basic magstripe readers for years. The boxy design hasn’t changed significantly over the years and it’s simple to use. Recently, the company added a Lightning connector variant in addition to the 3.5mm headphone jack connector.Â Square used to sell a 3.5mm adapter, but that’s no longer available (because it’s no longer necessary). However, I will say that adapters from other makers will work for the same purpose.
New Square merchants get 1 free card reader; additional card readers sell for a very reasonable $10. Unlike PayPal Here, Square doesn’t impose any limits or restrictions on transactions processed with a magstripe reader — there’s no limit to the number of swiped transactions you can process before you trigger a hold. That’s a nice touch. However, if you do process large transactions or do a significant volume of credit card payments you should definitely look at upgrading to a chip card-capable reader.
Magstripe Reader Quick FactsÂ
Free for new merchants
$10 retail price
3.5mm headphone jack or lightning port connectors
Supports magstripe transactions
Square Chip Card Reader
Square’s first chip card reader wasn’t particularly fancy, or even all that different from its elder sibling: it was boxy, with a headphone jack connector. And it has sinceÂ fallen out of favor — partly thanks to Apple and its removal of the headphone jack on its iPhones. However, this entry-level chip card reader is still available at a reasonable price — ideal for merchants who want to accept chip cards but also save some money.
Square doesn’t offer a lightning connector variant for the Chip Card Reader, but as I mentioned, a Lightning to 3.5mm headphone jack adapter would work for iPhone users. This reader also requires the occasional battery charge because of the addition of the chip reader.
Chip Card Reader Fast FactsÂ
3.5 mm headphone jack connector
Requires battery charging
Supports magstripe and chip card transactions
Square Contactless + Chip Reader
Square’s Contactless + Chip Reader is a departure from Square’s earlier mobile credit card readers. First, it connects via Bluetooth. Second, it doesn’t support magstripe transactions at all. Instead, Square includes one of its free magstripe reader in the box as well. (To be honest, this design kind of disappoints me, but I figure that the Contactless + Chip Reader was designed to add EMV support to the Square Stand, which already has an integrated magstripe reader. So building magstripe support into the Contactless + Chip Reader was a moot point. Still, for merchants who don’t have a Square Stand, this might prove to be a small annoyance if the chip reader can’t read a card properly.)
Square also sells a charging dock, which can be plugged into a wall, or into the Square Stand’s USB hub. It sells for $29 separately. You can use it in a countertop retail environment and let customers insert their payment cards themselves, or you can set the dock aside and grab the reader by itself whenever you need to make a transaction.
Contactless + Chip Reader Fast FactsÂ
Charging dock sold separately ($29)
Supports chip card and contactless transactions
Basic magstripe reader also included
Square CountertopÂ POS Devices
If you’d like something a little bit more permanent and stationary in your POS setup, Square offer options tailored to different environments. The offerings here get a little more complex, so bear with me!
The Square Stand has been one of the company’s core offerings for a long time — it is a tablet stand with a built-in card reader, all for a reasonable price (at launch, it cost $99). It swivels, it has minimal cords, and it looks good. Square has improved it slightly with the bundling of the Contactless + Chip Reader. That brings the price to $169.
Square doesn’t include a receipt printer for the Stand, but a printer is available in hardware bundles. Likewise, Square doesn’t include an iPad with the Stand, but you can purchase one directly from Square for an additional $329. Keep in mind that the current edition of the Square Stand only works for the most recent iPad models. If you have an older iPad, you can order a legacy stand from Square for $99, but the Contactless + Chip Reader requires iOS 9.3.5 or higher, and that version of iOS isn’t supported on an iPad 2 or other earlier models.
Because the Square Stand runs an iPad, it can also support merchants using Square Point of Sale, Square for Retail, or Square for Restaurants. There are an assortment of recommended hardware bundles for the Square stand, but if you prefer to build your own setup, you will be happy to know that the Square Stand supports USB, Ethernet, WiFi and Bluetooth printers, as well as other devices.
Square Stand Fast FactsÂ
Accepts magstripe, chip card, and contactless transactions
$169 (iPad sold separately)
Includes Contactless + Chip Reader (integrated magstripe reader in stand)
Compatible with Square Point of Sale, Square for Restaurants, Square for Retail, Square Appointments
Square Terminal (read our review), the newest addition to Square’s lineup of hardware, takes the concept of the Square Stand and the traditional credit card terminal and combines them into one portable machine. The display is large enough to be a fully functioning POS (it runs Square Point of Sale, the free app). It accepts magstripe, chip card, and contactless transactions. It even has a built-in thermal receipt printer.
While you can operate Terminal by keeping it plugged in, Square promises the battery will last all day if you prefer to go wireless. You also get a cleverly-designed power brick and USB hub to connect accessories, such as the USB barcode scanner and cash drawer. Bluetooth accessories aren’t supported, so the USB hub will be important for some merchants.
While Terminal runs Square Point of Sale, it also offers some compatibility with the iPad-based premium POS app, Square for Restaurants. Specifically, Terminal can be used for tableside ordering and payments. It doesn’t support all of Square for Restaurant’s features, though, so it’s important that you make sure Terminal will really fit your needs.
Square Terminal Fast FactsÂ
Accepts magstripe, chip card, and contactless transactions
$300 processing credit for new merchants
2.6% + $0.10 per transaction
Compatible with Square Point of Sale (limited compatibility with Square for Restaurants)
Square Register (read our review) definitely targets a higher-end market, with a price tag of $999 — not counting a cash drawer, receipt printer, or barcode scanner. However, for that price, you get a 13.25-inch screen running Square Point of Sale, as well as a 7-inch consumer-facing screen with integrated support for magstripe, chip card, and contactless transactions.
Square Register runs an Android-based version of Square Point of Sale, which means it’s not compatible with Square for Retail. However, you can take advantage of the back-end features if you opt to subscribe to Square for Retail. Specifically, that means access to the reporting features, including cost of goods sold and profitability reports. Square Register also integrates perfectly with Square LoyaltyÂ and allows customers to see the status of their loyalty accounts.
All in all, Square Register is an absolutely gorgeous piece of hardware that would look great in a retail space. The addition of the customer-facing display, combined with all of the supported hardware, brings Register on par with more traditional countertop POS systems.
Square Register Fast Facts
Accepts magstripe, chip card, and contactless transactions
2.5% + $0.10 per transaction
Compatible with Square Point of Sale (back end features compatible with Square for Retail)
Square POS Bundles
Square’s POS Kits are available for the Square Stand and Square Register — but if you’d prefer to use a different tablet stand for an iPad, Square also offers some alternatives. It would be a bit redundant and very overwhelming to go through every single bundle that Square offers, so let’s focus on what they offer, broadly speaking.
Square will first ask you to pick a category for your business. The options are limited — just food and beverages, beauty and wellness, or retail. However, those three categories cover a lot of industries. And honestly, you shouldn’t worry too much about picking the right category because the offerings will be similar. Check the options in each category and see which bundle you like.
After you’ve chosen an industry category, Square will also ask you about your Internet setup, specifically whether your business has a router. If you are relying on cellular data, obviously, there’s no router involved. But this question primarily affects what kind of printer Square includes in its bundles.
The biggest advantage to choosing a Square POS kit is the cost savings. Buying individual accessories from Square will cost more than buying a bundle. Square lists the prices asÂ “starting at” for most bundles, but that’s usually because you have the option of purchasing an iPad direct from Square. (Note that you can only get the most recent model of iPad. Square offers POS bundles that support the iPad 2, for example, but you’ll have to acquire the iPad separately.)
Let’s start by looking at what the Square Register and Square Stand bundles look like, versus the alternative tablet stands.
Square Stand POS Kit
Square Stand on its own is pretty affordable, but if you opt for the bundle with the stand over buying individual components, you’ll save a small amount. Square suggests running the Stand with a router setup, which includes a USB hub for accessories, rather than wireless options.Â Your Square Stand KitÂ includes the following:
Receipt printer paper (25 rolls)
USB Receipt Printer
16 in. Printer-Driven Cash Drawer
Square Stand for Contactless and Chip
If you decide against the Square Stand Kit, keep in mind that you can use any piece of hardware that works with an iPad running Square Point of Sale, as well as USB-enabled devices. That includes barcode scanners and receipt and kitchen printers in addition to cash drawers.
Square Register POS Kit
The POS kit for Square Register will add $530 to the cost, but it will save you $67 over buying the parts individually. (Also take note: You can’t order just the hardware bundle separate from the Register.)
In addition to the Register itself, the kit includes:
16 in. USB Cash Drawer
USB Receipt Printer
Receipt printer paper (25 rolls)
Square only recommends the Register kit for businesses with routers, not mobile setups. That’s not too surprising because it’s clearly not a mobile setup. Register does support some USB and Ethernet printers (and one WiFi printer), but it does not support as many devices as the Square Stand or just a standalone iPad. Square also offers compatible kitchen printers, which aren’t included in the bundles for food and beverage businesses, surprisingly.
Other Square POS Kits
If you’d still like to use Square on a tablet — but without the Register or Square Stand — you can get a selection of Heckler brand tablet stands designed for iPads, as well as Galaxy Tab A devices. They contain the following:
A tablet stand
A printer (Ethernet or Bluetooth)
Receipt printer paper
Card reader (Magstripe or Contactless + Chip)
Prices vary by the tablet stand model, as well as whether the kit includes an Ethernet or wireless printer. Which card reader Square includes depends on the model of iPad (remember, early models of iPad can’t upgrade to the iOS version required to support the Contactless + Chip Reader). And again, you can mix and match tablet stands and other devices to create a custom setup, though you will ultimately pay more than if you chose one of Square’s pre-made bundles.
Other Square Accessories
When you check out Square’s hardware shop, you can also browse standalone accessories for Square’s products. I like that the site has added the ability to filter compatible accessories by the POS device. The available accessories include kitchen printers, USB and Bluetooth barcode scanners, WiFi routers, and more. However, these are far from your only options. Square actually supports an extensive array of hardware in addition to the options available directly through its own shop. And it’s great about publishing that list of confirmed, supported devices.
Should You Finance Your Square Hardware Purchase?
There’s one last factor to consider when shopping for hardware from Square: the cost. If you are worried about the price of Square’s hardware, or the overall price of accessories, you’ll be glad to know that Square offers financing on purchases of $49 or more. Generally, the limit is $5,000, but you can apply for an increased limit. Depending on the total sum you’re financing, Square offers payback terms of 3, 6, 12 and 24 months.
Square will deduct your payments from your total processing volume before disbursing funds to your bank, so you don’t have to worry about making monthly payments. Eligibility depends on a credit check, and the financing program isn’t available in all U.S. states yet. However, if you are eligible, this could be a great option.
Square’s markup for financing is incredibly reasonable, and the program is managed by Square directly so you don’t have to worry about a shady third-party stepping in. If you can’t afford the upfront investment in hardware, Square’s financing can help you manage your cash flow better. And I like that it’s not a leasing program — when you’re done paying off the hardware, you own it.
Which Square Hardware Is Right For You?
If your business is primarily on the go, you can get a cheap, affordable mobile card reader. If you’d like a countertop setup, there’s Square Terminal with its very small profile, Square Stand for a good entry-level piece of hardware, and of course, Square Register. Plus, the bundled kits from Square allow you to easily add a cash drawer, receipt printer, and any other hardware you need. The number of options can seem overwhelming, but it really comes down to how portable you need your hardware to be and what you can afford.
One of my absolute favorite things about Square is that the company offers a huge array of very affordable hardware for all types of businesses. Some companies might only offer a few options, use expensive leases, or charge anÂ arm and a leg just for a single terminal. You don’t have to worry about that with Square. The price is right and there are hardware options to suit every business that work with all of Square’s Point of Sale apps. That’s a very powerful reason to go with Square already. Throw in the affordable credit card processing and the great customer service, and it’s easy to see why Square is a favorite among small businesses.
If you’re still just learning about Square, be sure to read our complete Square Review! You can also check out our Square Point of Sale, Square for Retail, and Square for Restaurants reviews to learn more about the point of sale systems.
Thanks for reading! Leave us your thoughts and your questions in the comments below!
The post A Guide To Square Credit Card Readers And POS Bundles appeared first on Merchant Maverick.
As a consumer mobile wallet, PayPal is darn-near ubiquitous. But with more than 17 million merchants worldwide calling PayPal their payments processor, it’s alsoÂ a massive force in the merchant services industry. So if you’re looking for a quick and easy way to get set up with credit card payments, whether for a POS system or online, PayPal is probably going to be on your radar, and with good reason.
But should you choose PayPal as your payments processor, and what will it cost? The good news is that PayPal offers transparent, pay-as-you-go pricing with no monthly fees, no account termination fees, or other hidden costs. You can predict fairly well what you’ll pay with PayPal, and all payment processing fees are deducted before PayPal deposits funds in your account.
The one major drawback is that PayPal is a third-party processor, also referred to as an aggregator. That means the company essentially onboards merchants as sub-users of one, giant merchant account that includes the entirety of PayPal’s merchant base. This means that the company does minimal underwriting before approving an account. You don’t need to provide much info beyond confirming your identity to open an account. However, this does mean you face a greater amount of scrutiny after opening an account, and PayPal can terminate your account or place a hold on funds with no notice to you.
That sounds worrisome, but the reality is it only happens to a small percentage of merchants. You can also take steps to protect yourself by recognizing the common red flags that processors look for and avoiding them. Check out our article on how to avoid merchant accounts holds and terminations to learn more.
PayPal obviously isn’t the right choice for everyone. There are restrictions on the types of products merchants can offer, and it doesn’t support certain business models. High-risk businesses should look somewhere else for a merchant account. However, most merchants should be fine with a PayPal account for payment processing.
Read on for a closer look at what you can expect to pay with PayPal as your business’ credit card processor! You can also check out our PayPal and PayPal Here reviews for a focused look at the products and services.
Payment Processing Fees
The major concern for most merchants who use (or are considering using) PayPal are the payment processing costs, so we’ll start there. PayPal offers predictable, flat-rate pricing for all merchants. You don’t have to worry about higher interchange for American Express cards, or MCCs, or qualified vs non-qualified transactions. Your exact rate will depend on the type of transaction.
Merchants who use PayPal’s mPOS app, PayPal Here, or integrate with one of PayPal’s POS partners (such as Vend), will pay the following for in-person transactions:
2.7% per swiped, dipped or tapped transaction
3.5 + $0.15 per keyed transaction
For online transactions, including monthly subscription charges, donations,Â and digital invoices, PayPal charges the following:
2.9% + $0.30 per online transaction
That’s it. Really. The simplicity of PayPal’s pricing is one of the biggest draws for merchants. You can predict fairly easily what your pricing will be and, because PayPal deducts its fees before depositing funds in your account, you don’t have to worry about an end-of-the-month invoice or going over a limit and incurring additional fees.
What About Alternative Payment Processing Rates?
If you’re wondering whether PayPal offers any sort of alternative payment plans, the answer is yes. Merchants with an average transaction size under $10 can opt for the micropayments plan. PayPal also offers a nonprofit discount for online transactions to qualified 501(c)(3) nonprofits.
Micropayments Plan: 5% + $0.05 per transaction. (Note: This rate applies to all transactions, even those above $10)
Nonprofit Discount (Online Only): 2.2% + $0.30 per transaction
If you integrate with one of PayPal’s partner POS systems, such as Vend or TouchBistro, you may be eligible for special discountsÂ (presumably volume-based) or other promotions. However, these offers aren’t clearly disclosed, just advertised on the POS software sites.
Other PayPal Fees For Payment Processing
While PayPal does charge a few extra fees relating to payment processing, they aren’t many. But these are what you might come across:
1.5% Cross-Border Transaction Fee: For US merchants who accept online payments from buyers out of the country, or in-person transactions involving a card from outside the US, PayPal charges a 1.5% cross-border fee. That means, for example, that a US merchant accepting a Canadian card at a POS terminal will pay 4% of the transaction value to PayPal.
2.5% Currency Conversion Fee:Â If PayPal has to convert the currency before it deposits the funds in your account, you’ll pay another 2.5% conversion fee. Whether you have to pay the conversion fee depends on the customer’s bank and whether it will handle the currency conversion (usually at a cost to the customer).
$20 Chargeback Fee: Chargeback fees are pretty standard, and if a customer files a chargeback against you, PayPal will assess a $20 fee in addition to withdrawing the funds to cover the transaction amount.
Refund Fee:Â In the event of a refund, PayPal will refund the percentage-based fee from the transaction to you, but keep the fixed fee. For most in-person transactions that means you’ll pay nothing. However, refunds on keyed transactions mean you’ll pay $0.15. Refunds on online or invoiced transactions will cost $0.30. PayPal can be a bit confusing about how this works in its transaction summaries, but be aware that you will pay a fee for most refunded transactions, albeit a small one.
1% Instant Transfer Fee: If you’d like to move your PayPal balance to a bank account immediately, you can do that — for a fee. PayPal charges merchants 1% of the transfer value, capped at $10 per transfer, but your funds will be available typically within 30 minutes (s0 long as your bank’s system isn’t incredibly slow). You’ll have to connect an eligible debit card to support instant transfers as well. However, if you prefer to have instant access to funds without paying a fee, don’t forget that PayPal offers a business debit card that’s linked to your PayPal balance, too.
One of the big draws for PayPal is the lack of software fees. Instead of paying a monthly fee for PayPal’s ecommerce features, you pay only the payment transaction costs (in most circumstances — but we’ll come back to this in a moment). While you’ll need to arrange for your own domain and web hosting, you can implement PayPal’s “buy” and “donate” buttons with no additional costs. You can send digital invoices for free and only pay the transaction cost when the invoice is paid.
Likewise, access to PayPal’s mPOS app, PayPal Here (read our review) is also free. However, if you opt to integrate PayPal into a POS app, invoicing software, or another platform, you’ll be responsible for those software costs. PayPal doesn’t charge anything for use of the integration.
Also, take note: PayPal doesn’t charge merchants any PCI compliance fees, account maintenance fees, customer service fees, or termination/account closure fees.
However, PayPal does offer a couple of advanced software options that come with additional costs:
PayPal Payments Pro: The “Pro” plan from PayPal has two advantages. One, it includes a virtual terminal to accept payments over the phone by keying in a card from a browser window.Â Two, it allows merchants to keep the checkout process on their own website rather than redirecting to PayPal to complete a transaction. This does come with a couple of concerns. For one, you’re not automatically PCI compliant and you’ll need to take additional steps to handle your PCI compliance. Two, $30/month for a virtual terminal is pretty pricey considering you’ll still pay higher rates than swiped/dipped/tapped transactions. Square and Shopify both offer free virtual terminals. Also, opting for PayPal Payments Pro and the Virtual Terminal will mean a few different transaction fees to worry about:
3.5% American Express Fee: Any Amex cards will process at the higher 3.5% rate if you’re on the Pro plan.
3.1% + $0.30 Virtual Terminal Fee: Any transactions processed through PayPal’s Virtual Terminal process at 3.1% + $0.30, plus the international transaction fee if applicable.
Recurring Billing: If you’d like to sell subscriptions (software, gift boxes, etc.), PayPal does offer a set of recurring billing tools. Recurring payments are available with PayPal’s Express Checkout Option at no additional charge, but if you have PayPal Payments Pro and want advanced tools, they’ll cost youÂ $10/month. This doesn’t apply to “Donate” buttons, which have their own option for donors to choose between a one-time or recurring donation.
Mass Payouts:Â If you need to distribute funds to multiple parties, PayPal’s Mass Payouts feature might be an appealing option. You have two options here: using PayPal’s API to handle the command, or uploading a spreadsheet. Which method you choose affects how much you pay — if you opt to upload a spreadsheet through PayPal’s website, you’ll pay 2% per transaction, capped at a maximum $1 USD, which is pretty reasonable. If you opt for the API, you’ll pay a flat fee of $0.25 USD per payment. This is a great way to distribute payments to contractors, for example, or manage marketplace payments if you use PayPal’s platform.
PayPal Hardware Costs
Unless you’re integrating PayPal with a POS system or using the free mPOS, PayPal Here, you won’t have to worry about hardware costs. But if you do, you’ll have a few options for card readers:
Chip & Swipe Reader: PayPal’s entry-level chip reader sells for $24.99. In addition to EMV capabilities it supports magstripe transactions, but no contactless payments. However, it does connect to phones and tablets via Bluetooth and comes with a convenient mounting clip.
Chip & Tap Reader: To get a credit card reader that supports magstripe, EMV, and contactless payments, you’ll need the Chip and Tap reader, which sells for $59.99. We’ve already reviewed this reader as well as the optional charging dock ($30 separately, or bundled for $79.99), with a very positive rating. Again, the Chip and Tap reader connects via Bluetooth. In addition to the charging dock, it comes with a convenient mounting clip.
Chip Card Reader: The Chip Card Reader was the first EMV-enabled card reader PayPal offered, and it’s still the only hardware option for merchants who want to integrate with one of PayPal’s POS partners. It sells for $99 on the PayPal site, with an optional charging dock. Given the price point, it shouldn’t surprise you to learn that this all-in-one reader connects via Bluetooth.
Mobile Card Reader: PayPal used to offer its entry-level swipe-only reader for free, but now it sells for $15 because PayPal, like most processors, really wants you to start accepting EMV. Use of the mobile reader comes with limitations on accounts, so if you do a decent volume of credit card transactions and don’t want to encounter any holds on your funds, you should avoid the mobile reader at all costs:
*Key-in transactions and sales over $500 in a 7-day period made with the Mobile Card Reader are subject to an automatic 30-day reserve where funds are held in your PayPal account to cover the high risk associated with these types of transactions. For increased protection from fraudulent transactions, we recommend using a chip card reader. All PayPal accounts are subject to policies that can lead to account restrictions in the form of holds, limitations, or reserves. Additional information about these policies can be found in theÂ PayPal User Agreement.
Apart from the cardreaders, PayPal doesn’t offer any proprietary hardware. If you need a countertop register setup, you can choose from an array of tablet stands, receipt printers, and cash drawers. A few select models are confirmed to work, while many others are “unofficially supported” in that they’re likely to work in most cases. The PayPal Here app doesn’t officially support any external barcode scanners (it supports in-app scanning using the device’s camera), but Bluetooth-enabled scanners may work with your setup.
Is PayPal Actually a Good Value?
We’ve talked pretty extensively about the cost of using PayPal, but we haven’t really talked about value. Because value is so much more than just the actual, physical cost. Value encompasses convenience, customer service, and other extra factors that could easily justify paying more than the absolute lowest prices.
PayPal isn’t the absolute cheapest processor out there — especially not for businesses that handle more than $10,000/month in credit card transactions. Larger businesses may be eligible for merchant accounts with volume discounts.Â For low-volume businesses, PayPal often does offer more competitive pricing because of the lack of monthly fees. The flat-rate pricing, especially for in-person transactions, can mean cost savings over interchange-plus.
But the real value in PayPal is the massive consumer trust and convenience. Just about everyone recognizes the PayPal name, and with 200+ million consumer users around the world, it’s safe to say a lot of people have PayPal accounts. The barriers to entry are minimal — you don’t need a huge amount of technological experience to implement PayPal for in-person or online payments. As long as you aren’t using PayPal Payments Pro, you don’t even have to worry about PCI compliance. PayPal handles it for you, at no additional cost.
Apart from the issue of account terminations or funding holds, the only other consistent complaint about PayPal is its customer service, and reports vary. Some merchants say they’ve never had a problem with customer service. Others say that their support reps have been downright unhelpful when they’ve called in. Fortunately, PayPal offers extensive self-help resources so you should be able to deal with most technical issues without having to contact PayPal directly.
I can’t say unequivocally that PayPal is right for everyone. It’s not. But it is a really good option for a lot of merchants, especially low-volume businesses that are just starting out. For a closer look at PayPal and all its services, we recommend checking out our PayPal and PayPal Here reviews.
If you’re not sure PayPal is right for you, I suggest looking at our Square vs. PayPal article, as the two companies are fairly similar in their business models and offerings.
Thanks for reading! If you have any questions or comments, we’d love to hear from you, so please drop us a comment!
The post The Complete Guide to PayPal’s Fees, Rates, and Pricing appeared first on Merchant Maverick.
Ordinary payment processing is complicated. But finding good offshore, international, or high-risk payment solutions can be a real nightmare. If you fall into one of these categories, youâve likely had your merchant account applications denied at least a few times. Even worse, perhaps youâve had your processing service terminated and your money withheld from you for months. We understand your struggle. Weâve seen hundreds of businesses go through the exact same thing, and weâre here to help you find the perfect offshore merchant account for your high-risk business.
If youâre just looking for a run-of-the-mill high-risk merchant account for your business, youâll want to check out our article The Best High-Risk Merchant Account Providers. The high-risk category often includes business types that you wouldnât normally associate with the term âhigh-risk,â such as airlines or online furniture sales. While these types of businesses are usually treated as high-risk by banks and processors, they can usually be approved for a domestic merchant account by working with a high-risk specialist.
For our purposes, weâll use the terms offshore merchant account and international merchant account interchangeably, as they mean the same thing. Both terms refer to a merchant account that is underwritten by a bank or processor that is situated in a different country from the one where the business is located. The most common reasons for needing an offshore account include the following:
You do a significant amount of business in a foreign country and need to accept payments in the local currency.
Your business has offices in multiple countries, and you need separate merchant accounts for each location.
Your business is considered to be so risky that you cannot obtain a regular high-risk merchant account in your own country.
Below, weâll discuss the factors to evaluate when considering an offshore merchant account and several special features that youâll want to include in your service. Weâll also profile four offshore merchant account providers that we feel offer superior service and overall value in comparison to their competitors.
Factors To Consider When Selecting An Offshore Merchant Account
While many offshore merchant account providers also specialize in high-risk accounts more generally, not all high-risk processors work with international merchants or provide offshore accounts for domestic merchants. Many high-risk specialists only work with US-based businesses, and only provide accounts through US-based banks and processors. Before you apply for an offshore account, youâll want to confirm that the company youâre considering works with businesses located in your country. This information might be spelled out explicitly on the providerâs website, or you might have to talk to their sales staff to get a confirmation.
Providers that specialize in setting up offshore merchant accounts can usually get you an account in just about any country around the world, though obviously, there are exceptions. As a US-based merchant, donât expect to set up your offshore account in a place like Afghanistan or North Korea. Itâs simply not going to happen. With the exception of countries limited by political considerations or a high level of instability, however, the possibilities are wide open.
In most cases, you should aim to get an account in a country where you expect to do a significant amount of business. On the other hand, if your business is going to operate exclusively in the United States, an offshore account serves mainly as a last resort for getting a merchant account when you simply canât get approved for a domestic high-risk account. Banking regulations are more relaxed in certain other countries, and the willingness on the part of banks and processors to work with high-risk businesses is also more favorable. At the same time, you should be aware that setting up an offshore account under these circumstances, while it might be your only option for accepting credit cards, can present some serious risks to you as well. Your ability to pursue a legal remedy against a foreign bank or processor might be severely limited â or even nonexistent. At a minimum, you should consider legally registering your business in the country where your account will be located. Even with legal standing in the country, however, be aware that it might be extremely inconvenient and expensive to pursue a legal action outside of your own country.
Thereâs also an increased risk that you could become the victim of fraud or identity theft. Banks in other countries collect the same personal data about you and your business that US-based banks do, but they donât always do as good a job of protecting it. Youâll want to keep an especially close eye on your merchant account, your business account, and any personal accounts about which youâve released information to get approved for an offshore merchant account.
High-risk merchant accounts are notorious for including higher processing rates and account fees, and offshore accounts can be even worse. Providers know youâre particularly desperate and some, but not all, will take advantage of your situation by charging you as much as they think they can get away with. We recommend that you shop around and compare multiple quotes when looking for an offshore account. Donât accept the first offer from a bank or processor just because theyâre the first one that hasnât rejected your application due to the nature of your business.
Note that merchant account providers who market offshore accounts often downplay or fail to mention these risk factors, so itâs up to you to look out for yourself. Do your own independent research, compare multiple offers, and thoroughly review all contract documents before you sign up for an account.
Special Features Of Offshore Merchant Accounts
For the most part, youâll want the same services and features for an offshore account that you would want for a traditional merchant account. This includes processing hardware such as credit card terminals and POS systems for retail merchants, and a robust payment gateway for eCommerce merchants. Youâll also want an online account dashboard of some kind that allows you to monitor your sales in real-time. While online account access is now a standard feature in the United States, you might not always find this feature with an offshore account. Mail-order and telephone-order (MOTO) businesses often find a virtual terminal to be the most cost-effective method for inputting transactions. Depending on the needs of your business, a smartphone- or tablet-based mobile processing system might also be important. Almost all providers offer some type of mobile processing system these days, either as a proprietary product or through a partnership with a third-party provider. Be aware that very few mobile processing systems have begun to offer EMV-compatible card readers, and youâll often be stuck with a magstripe-only reader.
In addition to these basic merchant account features, there are several special features that your offshore merchant account might (or might not) include. How important these features are to your business will be determined by how you intend to use your account. Extra features to look for in an offshore merchant account include the following:
Multi-Currency Support:Â If youâre going to do business in a foreign country, it only makes sense that youâll want your customers to be able to pay in their local currency. Multi-currency accounts allow you to maintain balances in multiple currencies and can save you a ton of money in currency conversion costs.
Currency Conversion Services:Â Having an offshore account will invariably require you to convert funds into your own local currency at some point. Most offshore account providers include built-in currency conversion services that allow you to convert foreign funds when it comes time to transfer them to your business account. While these services can sometimes offer you much lower conversion fees than what a bank would charge you, it still pays to shop around for the best deal on this service. You might save money by using an international transfer service such as TransferWise or OFX.
Expanded Anti-Fraud Features:Â Offshore merchant accounts invariably involve a higher degree of risk of fraud than their traditional counterparts, so youâll want as many extra services to avoid it as you can get. Most offshore account providers offer a number of enhanced anti-fraud features as a standard part of their service. These features automatically detect suspicious activity, hopefully stopping any fraudulent activity before it can affect your business. Providers are increasingly turning to artificial intelligence (AI) features to improve their ability to detect potential fraud beyond what would be possible with a traditional algorithm.
With these considerations in mind, letâs take a brief look at four of our overall favorite offshore merchant account providers:
Durango Merchant Services
Durango Merchant Services is a small merchant account provider headquartered in Durango, Colorado. Established in 1999, the company specializes in providing high-risk and offshore merchant accounts to hard-to-place businesses. They work with a wide variety of banks and processors to find a suitable account for almost any business. While they canât place 100% of the merchants who apply to them, their track record is very good, and their sales process is so transparent and honest that weâve even seen praise for the company from merchants whoâve been turned down for an account.
If you need an offshore account, Durango has you covered. Their accounts include multicurrency support as well as enhanced anti-fraud features to keep you protected. They can set up accounts in countries as diverse as Germany, Panama, Spain, and many others.
Durango doesnât try to set you up with expensive leases when it comes to processing equipment. Instead, they offer a variety of terminals for sale right on their website. Options include both wired and wireless models, with some offerings that support NFC payments. They also sell the iPS Mobile Card Terminal, which connects to a smartphone to provide mobile payments capability in conjunction with the iProcess mobile app. If youâre using a virtual terminal, they sell the MagTek DynaMag, a USB-connected magstripe card reader that attaches to your computer. Unfortunately, itâs Windows-only. Durango currently doesnât offer any POS systems for sale.
The company supports eCommerce through its proprietary Durango Pay payment gateway, which integrates with the numerous processors the company uses and includes support for most of the popular online shopping carts. Durangoâs gateway also features an Authorize.Net Emulator, which allows it to interface with any shopping cart that works with Authorize.Net (see our review).
Because Durango works with such a wide variety of third-party processors to set you up with an offshore merchant account, they donât list rates or fees on their website. These will vary tremendously depending on which processor they set you up with. While we normally like to see more transparency from merchant account providers, in this case, itâs understandable. Depending on your qualifications, you can expect either an interchange-plus pricing plan or a tiered one. Merchant accounts through Durango donât seem to have standardized fees. Again, these will depend on the terms that your backend processor imposes.
Durango assigns a dedicated account manager to every one of their merchants, which means youâll be talking to the same person every time you have an issue. While this can sometimes be problematic outside of regular business hours and when your account manager isnât available, overall it provides a much higher level of service than youâll get from a random customer service representative.
Direct sales of processing equipment
Reasonable rates and fees based on your business and your backend processor
Dedicated account manager for customer service and support
No support for POS systems
USB card reader not compatible with Mac computers
For more information about Durango Merchant Services,Â read our complete review.
SMB Global is a new high-risk provider that was spun off from one of our favorite providers, Payline DataÂ in 2016. Headquartered in South Jordan, Utah, the company specializes in providing merchant accounts to high-risk and offshore businesses. Using a variety of backend processors, theyâre able to approve a merchant account for almost any high-risk business (including those selling CBD oils). They have an excellent reputation for fair prices and top-notch customer service.
As a newly-established business, SMB Global is still a little rough around the edges, lacking a mobile processing system and credit card terminals for retail merchants. At the same time, they offer a full range of services for eCommerce merchants, including a choice between the NMI Gateway and Authorize.Net.
Because they work with so many banks and processors to get you approved for an account, the company doesnât offer any pricing information. Processing rates, account fees, and contract terms will all vary widely depending on which backend processor is handling your account. While we highly recommend that you request an interchange-plus pricing plan, be prepared to have to accept a tiered plan instead, particularly if you havenât been in business for very long. Likewise, you can also expect to have a standard three-year contract with an automatic renewal clause and an early termination fee if you close your account early. As a high-risk merchant, you should be prepared to have a rolling reserve included in your account agreement.
SMB Global requires a minimum processing volume of $50,000 per month for an offshore merchant account, although they will occasionally waive this requirement if your business has a very strong financial history. Offshore accounts support multi-currency processing, allowing you to avoid cross-border fees. They also feature dynamic currency conversion, letting your customers pay in either their local currency or the currency in which you bill them.
Offers international merchant accounts to a wide variety of industries
Reasonable pricing and contract terms
Excellent customer service
No mobile app
No information available about credit card terminals or POS systems
For a more detailed look at SMB Global, be sure to check out our full review.
Host Merchant Services
Host Merchant Services is a relative newcomer to the merchant accounts business, first opening in 2009. The company is headquartered in Newark, Delaware and has a second office in Naples, Florida. While they primarily cater to traditional, low-risk businesses, they can accommodate several categories of high-risk businesses and also offer offshore accounts. Their interchange-plus-only pricing and a full range of products and services make them an excellent choice â if you can get approved. A former web hosting company, HMS is ideally suited for eCommerce merchants. They use TSYS as their primary backend processor, but can also work with several international banks and processors to get you an account.
For retail merchants, HMS offers a variety of Verifone and Equinox (formerly Hypercom) terminals. Terminals are offered for sale, and the company does not lease its equipment. While prices are not disclosed on the HMS website, you should be able to negotiate a very reasonable deal on terminals, especially if you need more than one. If you already have a compatible terminal, theyâll reprogram it for free.
HMS also offers a variety of POS systems that utilize either tablets or touchscreen displays. Choices range from an 8â tablet-based system up to a 17â touchscreen monitor. The companyâs Starter, Plus, TouchStation Plus, and Custom POS options should meet the requirements of just about any business that needs or wants a POS system.
If you need a mobile processing capability for your business, HMS has you covered, offering the ProcessNow mobile payments system via a partnership with TSYS. ProcessNow works with either iOS or Android phones, but the current card reader is magstripe-only and requires a headphone jack to plug into.
As a tech-focused company, eCommerce is HMSâ specialty. The company has recently introduced their proprietary Transaction Express payment gateway, which includes a free virtual terminal. HMS also supports a large number of third-party gateways, including Authorize.Net.
HMS uses interchange-plus pricing exclusively for its low-risk merchants, but you might have to pay tiered rates if you have an offshore account. While they donât disclose their rates on their website, theyâre based primarily on monthly processing volume and are very competitive. Fees are not disclosed either, but include a $24.00 annual fee, a $14.99 monthly account fee (which includes PCI compliance), a variable payment gateway fee ($5.00 per month for Transaction Express, $7.50 per month plus $0.05 per transaction for Authorize.Net) and the usual incidental fees (i.e., chargebacks, voice authorizations, etc.). High-risk and offshore merchants should expect to pay higher fees than these, and possibly additional fees as well. In particular, be prepared to have a rolling reserve included as part of your account.
HMS provides customer service and support via 24/7 telephone and email. Chat is available via the HMS website during regular business hours. They also feature an extensive collection of articles and blog posts on their site for customer education. Support quality appears to be well-above-average, based on the almost complete absence of complaints about it on the BBB and other consumer protection websites. If your business falls into one of the categories of high-risk activities that the company can accommodate, HMS is an excellent choice for an offshore merchant account.
Full range of products and services for retail and eCommerce businesses
Can only accommodate a small number of high-risk business categories
Mobile card reader not EMV-compliant
For more information, see our complete review.
Easy Pay Direct
Easy Pay Direct is headquartered in Austin, Texas and has been in business since 2000. The companyâs primary product is their proprietary EPD Gateway, but they also provide full-service merchant accounts for international, high-risk, and traditional non-high-risk merchants. High-risk merchants will have to pay a premium in terms of processing rates and account fees, whether they’re partnered with a domestic or offshore bank or processor. However, the additional expense is entirely reasonable under the circumstances.
Like most offshore merchant account specialists, Easy Pay Direct works with a variety of banks and processors, both domestic and international, to find one thatâs a match for the needs of your business. Youâll have to pay a $99 account setup fee to get started, but considering the extra effort required to underwrite a high-risk or offshore account, we feel the expense is justified in this case. Processing rates will be under a tiered pricing plan, but you should still have some room to negotiate your rates, especially if you have a high monthly processing volume. Contracts generally follow the industry standard, or a three-year initial term that automatically renews for one-year periods after that. One very positive feature about Easy Pay Directâs contracts is that they do not have an early termination fee, even for high-risk businesses. While this isnât quite the same thing as true month-to-month billing, it does make it much easier to close your account without penalty if you have to.
One helpful feature offered by Easy Pay Direct is called load balancing, where a business can divide its incoming funds among multiple merchant accounts. This is particularly helpful for high-risk businesses that often exceed the monthly processing volume limits imposed by the processor underwriting their account. Just be aware that youâll usually have to pay separate monthly fees for each account, so it might not be cost-effective for some merchants. Also, be aware that you might not need this feature if you opt for an offshore account. Underwriting guidelines in some (but by no means all) foreign countries are more relaxed, and you might not have a monthly processing limit imposed on your account at all.
Although Easy Pay Direct doesnât get as much attention as other, better-known processors, itâs a solid choice for merchants in the high-risk category or those who need an offshore account. We particularly recommend the company for high-risk eCommerce businesses due to the robust feature set of their EPD Gateway.
Load balancing feature for high-risk merchants
No equipment leases
No early termination fee
$99 account setup fee
Three-year contract with automatic renewal clause
Check out our full review of Easy Pay Direct for more information.
Having a hard-to-place business doesnât mean you have to run your company through Bitcoin. You can accept credit card payments just like any other business by finding a payment processor that will set you up with the right acquiring banks. At the same time, you need to be fully aware that, for a US-based business, signing up for an offshore merchant account is a risky endeavor. Youâll want to be very cautious and carefully research any provider you consider, even the ones weâve recommended above. Take extra care to protect your sensitive personal financial data and be sure your account includes additional fraud prevention features. You might also want to consider registering your business in the country where your merchant account is located â just in case. Having a merchant account in Panama might sound very tempting if youâve been repeatedly turned down by domestic providers, but it will be very expensive to have to travel there in person if you later run into legal troubles with your account provider.
Of the four offshore merchant account providers weâve reviewed above, Durango Merchant Services is undoubtedly the best all-around provider of the group. They disclose more detailed information about offshore accounts than any of the other providers. SMB Global is also an excellent choice. While the company itself is very new, they have an impressive track record from their days operating as the high-risk division of Payline Data. Finally, both Easy Pay Direct and Host Merchant Services offer a solid line-up of products and services for both eCommerce and retail merchants. If you need an offshore account to break into the world of accepting credit cards, they both have everything you need to get started.
Finally, we canât caution you strongly enough that selecting and setting up an offshore merchant account involves a higher level of risk on your part, and youâll need to be extra cautious in choosing a company to go with. Relaxed underwriting guidelines and a general lack of monthly processing limits make offshore accounts very tempting to merchants whoâve had a hard time getting their business approved for a traditional account, but these advantages come at a price. If anything goes wrong in your relationship with your provider, you might face some real challenges in pursuing a legal remedy. You should also be aware that if this happens, the US-based provider that brokered your account will not be able to help you in most cases.
Do your homework! Research your provider thoroughly and review all contract documents very carefully before signing up. While these steps wonât eliminate the chance of things going sideways somewhere down the road, they will shift the odds considerably in your favor.
The post The Best Offshore Merchant Account Providers appeared first on Merchant Maverick.
Business owners today know that itâs more important than ever to be able to accept credit cards. Customers carry less cash, and rely on credit and debit cards for the majority of their purchases. If youâre an eCommerce merchant selling online, taking âplasticâ is just about your only option. Unfortunately, you canât accept credit cards unless you have a merchant account, and merchant accounts arenât free. In fact, they can be very expensive â especially for a small business â if you choose the wrong provider.
The credit card processing industry can be very bewildering, especially for a first-time business owner. There are dozens of companies providing processing services, and each of them offers different processing rates, fees, and contract terms. A provider thatâs a good deal for a very small business might be prohibitively expensive for a larger one, and vice versa. Naturally, merchants want to cut through the confusion and get a quick answer to the question âWhich one is the cheapest?â Thereâs nothing wrong with wanting to save money, especially for a new business that has to count every penny. However, if you look up âcheapâ in the Merriam-Webster Dictionary, youâll note that while cheap can mean âcharging or obtainable at a low price,â it can also mean âof inferior quality or worth.â If youâve ever been disappointed with a product purchase when you thought you were getting a good deal, you know that these two definitions often go together.
Here’s a quick look at some of our favorite low-cost credit card processors. Some are free to use. You just pay for the transaction you process. We don’t cover all of these in-depth in this post, but you can check out our complete reviews for all the details.Â
The Overall Cheapest Credit Card Processing Companies for 2018
Best Choice For
Small-ticket, Canada,Â Mobile, eCommerceÂ
All businesses, Mobile, Retail
Large-ticket, All-in-one, Recurring billing
POS and Other Features Included
Rate Matching/ Negotiable
0.30% + $0.10
0.20% + $0.10
0.00% + $0.08
Basic Monthly Fee
Before we delve into specific processors, there are two important points that you need to understand:
The company offering the lowest processing rates or fees isnât necessarily the cheapest. The total percentage of your credit card sales that youâll have to fork over to your merchant account provider isnât an easy thing to calculate in advance with any precision. Variable processing rates and hidden (or at least unanticipated) fees can easily result in you paying much more than you thought you were going to for processing. Companies offering flat-rate pricing fare much better in this regard, as their simple pricing structure makes it relatively easy to estimate your monthly processing costs.
The âcheapestâ processor isnât necessarily the best one for your business. While you naturally want to be able to accept credit cards while paying the least amount of money for the privilege, companies offering the lowest rates often cut corners in other aspects of their service to make those low rates possible. Poor customer service, for example, is a common problem among the least-expensive processors. If you want the best overall, you might also check out our top picks for small business credit card processing.
Types Of Providers
With the advent of new, low-cost providers, there are now two broad categories of companies providing credit card processing services. These include traditional (or full-service) merchant account providers, and payment services providers, who offer credit card processing, but without some of the features of a full-service merchant account. Itâs very important that you understand the difference between the two.
Payment service providers (PSPs) can process your credit card transactions, but they donât provide you with a unique merchant ID number for your business. Instead, your account is aggregated together with other merchants. This lowers the cost of things like monthly account fees and PCI compliance, but it also means that your account is much more vulnerable to being suddenly frozen or shut down for the slightest hint of fraud. Getting your account working again is complicated by the fact that most PSPs provide little in the way of one-on-one customer service. For a very small business, a PSP may very well be more affordable than a full-service merchant account, especially since you wonât have to pay so many recurring fees just to keep your account open. Be aware, however, that youâll constantly be running the risk of suddenly losing access to your account and not being able to accept credit cards at all with a PSP. If your business processes a high number of credit card transactions on a daily basis, the loss of business youâll incur if your account is frozen is quite high. Popular PSPs include PayPal, Square, and Stripe.
Traditional merchant accounts include a number of features you wonât find with most PSPs. The primary distinction is that you will be assigned a merchant identification number that is unique to your business. This number automatically identifies you to processors, issuing banks, and credit card associations. While it might not sound like much, having a unique merchant ID number helps to lower the risk of fraud and improves the stability of your account. While you still might have to endure a hold on funds for an unusually large transaction, the chances of your account being completely frozen for no apparent reason are much less than they are with a PSP. Merchant account providers also offer a host of ancillary services, including PCI security scans, customizable payment gateways for online payments, support for ACH (eCheck) payments, and many others. These bells and whistles donât come cheap, of course. Youâll pay more in monthly fees than you will for an account with a PSP. However, youâll also pay lower processing rates, especially if your merchant account provider offers interchange-plus pricing. For many medium-sized and larger businesses, a full-service merchant account will actually be less expensive than a PSP.
How We Chose
We used a number of criteria to determine which processors offered the lowest overall costs and the best service in most situations, including the following:
Pricing: Since weâre profiling the cheapest processors in the industry, it should come as no surprise that pricing would be our top criterion. It isnât that simple, however. Pricing can be very complex, and there are a lot of variables to analyze in making a cost comparison between one provider and another. Fortunately, flat-rate pricing is relatively easy to analyze, as thereâs usually little or no variability in the processing rates. Interchange-plus pricing, on the other hand, is very complex, as there are a bewildering number of possible rates charged under the âinterchangeâ portion of the processing rate formula. To get a better idea of just how complicated processing rates can be, check out our Complete Guide to Credit Card Processing Rates & Fees.
Contracts: No one wants to be stuck in a long-term contract with an expensive early termination fee if you close your account early, but thatâs what many traditional merchant account providers will offer you. All the companies profiled here â including both PSPs and full-service merchant account providers â offer month-to-month contracts. You can close your account and switch to a different provider any time you want, and with no penalty.
Hardware: Unless youâre running an eCommerce-only business, youâre going to need some equipment to process your customersâ credit cards. Most of the companies profiled here offer a variety of EMV-compliant credit card terminals, POS systems, and mobile card swipers. Equipment is offered for sale at competitive prices â sometimes itâs even free! You can also buy your own equipment and have it reprogrammed to work with your providerâs service. Note that Stripe is eCommerce-only and PayPal only offers a mobile payment solution through their ancillary service, PayPal Here.
eCommerce support: Buying online continues to overtake traditional retail shopping, and all our profiled providers offer support for eCommerce. This includes both a payment gateway to send payment data to the processor and a virtual terminal to allow you to enter transactions on your computer or mobile device. Each provider also offers options for integrating your website with online shopping carts and developer tools for customizing the interface between your site and their services.
Customer support: While every provider offers customer support and service, some do a much better job at it than others. We looked for vendors that provided 24/7 telephone support, as well as an online knowledgebase that allows merchants to troubleshoot common problems on their own. As weâve noted, some PSPs donât provide very good customer support at all. Thatâs one of the trade-offs youâll have to be aware of if you want to go with the âcheapestâ option for credit card processing.
Remember, there isnât a single processor out there that can offer the lowest costs to every merchant. What might be a very inexpensive solution for you might not be such a good deal for someone else. Also, paying the least amount of money for processing wonât be of much use to you if you have to worry about your account suddenly being frozen or shut down, or if the customer service behind your account isnât adequate to solve technical problems for you when they arise. That said, here are our six top choices for the cheapest credit card processing companies:
Everyone has heard of Square (see our review) by now. With its free Square Reader, app-based payment system, and simple pricing structure, itâs one of the most popular processing services on the market for small businesses. Squareâs pay-as-you-go system allows businesses that ordinarily couldnât afford a merchant account to accept credit cards.
Retail businesses love Square for its low-priced card readers, which replace traditional credit card terminals with a smartphone-based system thatâs both affordable and mobile. In addition to a card reader, youâll need the free Square app, a smartphone, and an Internet connection. Squareâs original card reader is free and youâll receive one when you open your account. However, it can only read magstripe cards and requires a headphone jack to function. Most users will want to shell out a few extra bucks for a newer, EMV-compliant reader. The Square reader is only $49.00, and supports both EMV and NFC-based payment methods. It also uses Bluetooth to connect to your smartphone or tablet â no headphone jack required.
Cheapest Mobile Credit Card Processing Company
â $0 monthly fee
â 2.75% for all card-present transactions
â Exceptional POS app included free
â Free credit card reader available Proprietary software suite includes:
â¢ Point of sale software
â¢ Inventory management
â¢ Mobile app
â¢ Virtual terminal
â¢ API for custom solutions
Visit the Square website
Read our Square review
Squareâs pricing structure is about as simple as it gets. There are no monthly fees whatsoever for a basic account, and none of the types of âhiddenâ fees that traditional merchant account providers like to tack on. While some advanced features require a monthly subscription, these are entirely optional, and most businesses probably wonât need them. Squareâs processing rates are also very simple:
2.75% for all card-present transactions (including magstripe, EMV, and NFC)
2.90% + $0.30 for all invoices and eCommerce transactions
3.50% + $0.15 for all virtual terminal and keyed-in transactions
Thatâs it! You donât have to worry about non-qualified transactions, batch fees, or anything else. Funds are deposited into the userâs account within 1-2 business days in most cases. Billing is month-to-month, so you donât have to worry about long-term contracts and early termination fees. You can quit anytime you want without penalty.
This all sounds great â and it is â if youâre a small business that has to watch every penny and canât afford to shell out a significant amount of money every month just to have a merchant account. For a larger business, however, Squareâs pricing actually isnât the best deal available. Flat-rate pricing is deliberately on the high side because it has to pay for all the other services that most providers bill you separately for. At a certain point (roughly $10,000 per month in processing volume), youâre actually better off going with a full-service merchant account provider that offers interchange-plus pricing. Yes, youâll have to pay those pesky account fees, but your processing rates will be so much lower that youâll save money overall.
Besides high processing rates, Square has a few other drawbacks as well. Weâve already mentioned that your account is much more likely to be frozen or terminated unexpectedly, but what makes this situation worse is that Squareâs customer service isnât so great. The company didnât even have telephone support for several years after it launched, but it does now. Unfortunately, itâs only available during business hours, and the large number of complaints about it suggests that the quality of support youâll receive if you call in with a problem is inconsistent at best.
But is it really the cheapest way to go? Well, it depends. For a very small business that doesnât have a high processing volume, Squareâs lack of account fees and predictable pricing can make it very affordable. On the other hand, a larger business with a high processing volume will end up paying much more under those flat-rate prices than it would with an interchange-plus pricing plan.
Square keeps costs low by aggregating accounts together rather than issuing each user a unique Merchant ID number. Because of this, you wonât get a true full-service merchant account. The trade-off is that thereâs a much higher chance that your account will be frozen or terminated without notice if fraud is suspected. This might be a minor inconvenience to a retail business that mostly deals in cash and only occasionally takes credit cards, but itâs catastrophic to an eCommerce business where cash isnât an option.
No monthly account fees
Low-cost EMV-compliant card readers available
No long-term contracts or early termination fees
Not a full-service merchant account; no unique Merchant ID number
Frequent account holds and terminations
Flat-rate pricing is more expensive than interchange-plus for larger businesses
For a more detailed look at Square, be sure to check out our full review.
Payline DataÂ (see our review) covers all the bases for small business transactions, from mobile and online payments to in-store sales. They offer easy-to-understand pricing plans that are very affordable, especially for low-volume sellers. However, the company’s website fully explains all of the extra features and their associated costs, so you know up front what you’ll have to pay. Payline also stands out from the crowd for their corporate philosophy of charitable giving and support for non-profits through discounted pricing and their “Commercial Co-Venture” program.
Cheapest Merchant Account Provider
â No early termination fees
â Transparent interchange-plus pass-through pricing
â Outstanding $0 monthly fee option
â Exceptional ecommerce shopping cart compatibility Proprietary software suite includes:
â¢ Excellent mobile processing app
â¢ Easy integration API for customization
â¢ Virtual terminal
â¢ Billing management
Visit the Payline website
Read our Payline review
For brand-new or mobile businesses, Payline Start is the most affordable plan. Thereâs no monthly fee, and pass-through markup rates are set atÂ 0.30% + $0.10 per transaction. In addition to the free virtual terminal, youâll also receive a free Ingenico GX5 card reader and the Payline Mobile app to go with it. If youâre looking for value, but want better equipment and lower rates, the Payline Shop plan might be right for you. This plan includes the same features as the Payline Start plan, but lowers your processing rate. The plan costs $10 per month, and markup rates are set atÂ 0.20% + $0.10 per transaction. Mobile businesses and small to medium retailers will benefit the most from this plan.
For more information, see our complete Payline Data review.
No account setup fees. No PCI compliance fees. No gateway fees. No monthly minimums, either. Thereâs a lot of things that CDGcommerce (see our review) doesnât charge you for, making them a very affordable option for small businesses and those just getting off the ground. They also offer month-to-month contracts with no early termination fee, so in the unlikely event that you arenât happy with their service, you can close your account without penalty.
So, what do you pay for? Besides processing charges, youâll only have to pay a $10.00 monthly account fee. This gets you both a full-service merchant account and a payment gateway. You can select either CDGâs own proprietary Quantum gateway or Authorize.Net. Either way, thereâs no fee for using the gateway, and no additional per-transaction processing fee. While this is a great deal, you also have the option of adding the cdg360 security package for an extra $15.00 per month. It comes with customized security alerts, PCI-DSS vulnerability scans, and $100,000 in data breach/theft protection. Itâs well worth paying a little extra for, especially for eCommerce merchants.
Good Option for Online Payment Processing
â No early termination fees
â Transparent interchange-plus pass-through pricing
â Free payment gateway option with activation within an hour
â Exceptional ecommerce shopping cart compatibility
â Over 20 years with excellent reputation Proprietary fraud prevention suite includes:
â¢ Automatic high-risk order detection
â¢ Dialverify phone order verification
â¢ Cardholder authentication (VbV/MSC)
â¢ Chargeback defender
â¢ Easy integration and API for customization
Visit the CDGcommerce website
Read our CDGcommerce review
We donât recommend leasing a credit card terminal, but CDG has a program thatâs very different from traditional leases, and is actually a good deal. For only $79 per year (for terminal insurance), CDG will provide you with a terminal and keep it updated. This works out to $6.58 per month, a fraction of what most terminal leasing companies will charge you. If you need a wireless terminal, youâll also have to pay $20.00 per month for wireless data and an additional $0.05 per transaction in processing fees.
You wonât need to negotiate with CDG to figure out your processing rates. All their rate plans are interchange-plus and are fully disclosed on their website. The company offers a choice between Simplified and Advanced pricing plans, with Simplified pricing being designed for merchants processing less than $10,000 per month, and Advanced pricing being for those processing $10,000 or more per month. Here are their current rates:
Online: interchange + 0.30% + $0.15 per transaction
Retail (swipe or POS): interchange + 0.25% + $0.10 per transaction
Mobile: interchange + 0.25% + $0.10 per transaction
Non-profit: interchange + 0.20% + $0.10 per transaction
With very low account fees and competitive interchange-plus processing rates, CDGcommerce offers a great combination of price and value. If youâve been using Square or PayPal and want to upgrade to a full-service merchant account, theyâre an excellent option.
Month-to-month billing with no long-term contracts or early termination fees
Free payment gateway with virtual terminal
Excellent customer service
Only available to US-based merchants
For more information, see our complete review here.
Dharma Merchant Services
Headquartered in downtown San Francisco, California, it should come as no surprise that Dharma Merchant ServicesÂ (see our review) is far more socially responsible than just about any other merchant account provider in the industry. For you, that enlightened corporate philosophy translates into fair and transparent pricing, reasonable contract terms, and excellent customer support.
Because they donât try to squeeze extra money out of struggling small business owners, you wonât have to pay an account setup fee or an annual fee. Thereâs no monthly minimum, either. You will pay a $10.00 monthly fee and a $7.95 per month fee for PCI compliance. Other fees (most of which are per-occurrence, such as chargeback fees) are fully disclosed on their website. Like many of our other favorite processors, Dharma doesnât have long-term contracts, either. Billing is month-to-month, and thereâs no early termination fee if you close your account.
Good Option for Nonprofits and B2B Payments
â Provides discounted rates for nonprofits
â Exceptional customer service
â Transparent interchange-plus pass-through pricing
â Proven track record with nonprofits Free MX Merchant Software includes:
â¢ Level 2 and level 3 data for lower interchange rates on B2B processing
â¢ Virtual terminal
The company uses interchange-plus pricing exclusively and lists their rates right on their website. Hereâs their current processing rate information:
Storefront: interchange + 0.25% + $0.10 per transaction
Virtual: interchange + 0.35% + $0.15 per transaction
Restaurant: interchange + 0.20% + $0.07 per transaction
If you need a terminal, Dharma will sell you either the First Data FD-130 or Verifone Vx520. Theyâll also reprogram your existing terminal, if you have one. Need a POS system? Dharma offers the Clover Mini, and will sell it to you outright rather than leasing it. If you need a mobile payments system instead, Dharma offers the Clover Go for $99.00, plus a $10.00 monthly fee. For $139, you can upgrade to the Clover Go Contactless, which connects via Bluetooth instead of your phoneâs headphone jack.
Dharma doesnât have a minimum monthly volume requirement, but they do acknowledge that their fees and rates arenât the lowest on the market for businesses that process less than $10,000 per month. Youâre still free to sign up if you need a full-service merchant account, but they recommend either PayPal or Square if you donât.
Transparent interchange-plus pricing
Minimal account fees
Full range of services and equipment for both retail and online businesses
Great customer support
Not a good fit for low-volume (less than $10,000 per month) accounts
For more information on Dharma, see our complete review here.
Headquartered up in the Great White North, Helcim (see our review) provides outstanding service and affordable prices to both Canadian and US-based merchants. They offer interchange-plus pricing exclusively, and their website features one of the most detailed and transparent explanations of their rates and fees that youâll find anywhere.
Transparency and honesty are major themes with Helcim, which is something you wonât often find with many other providers. Reading their website will give you a quick education on all the sneaky, misleading tricks that other companies use to squeeze more money out of their merchants. Fortunately, you wonât have to worry about this kind of behavior with Helcim. Not only do they fully disclose their processing rates, account fees, and contract terms, but they also provide all their services at fair, competitive prices.
Good Option for Canadian Businesses
â No early termination fees
â Transparent interchange-plus pricing
â Exceptional reputation in Canada
â High-quality all-in-one payment platform
â Great educational material Proprietary Helcim Commerce solution includes:
â¢ Point of sale software
â¢ Inventory management
â¢ Billing and invoicing
â¢ Virtual terminal
Visit the Helcim website
Read our Helcim review
Unlike many of their competitors, Helcim encourages merchants to buy their credit card terminals outright rather than leasing them. The company offers a number of popular models, most of which are EMV-compliant. For a little extra cash up front, you can also get an NFC-capable terminal that supports Apple Pay and other similar mobile payment methods. If you already have a terminal, theyâll reprogram it to work with their system for free. Unfortunately, Canadian EMV-compliant terminals are not designed to be transferred or resold, so Canadian customers will have to use the rental option or buy a new machine. Renting on a month-to-month basis (which is not the same as leasing) is usually the best choice for Canadian merchants.
Helcim offers three basic pricing plans: a Retail Plan, an eCommerce Plan, and a combined Retail + eCommerce Plan. The Retail Plan costs a flat $15.00 per month. This fee covers PCI compliance, and there are no account setup or statement fees. Thereâs also no monthly minimum. All swiped transactions are processed at a rate of interchange + 0.25% + $0.08 per transaction.
Helcimâs eCommerce Plan works the same way, but it costs $35.00 per month. This gives you access to the companyâs proprietary Helcim Payment Gateway, which includes support for recurring billing, a customer information storage system, shopping cart integration, and a customizable payment gateway API. The plan also includes a virtual terminal that allows mail order or telephone order businesses to key in transactions on any computer. All online (i.e., card-not-present) transactions are processed at a rate of interchange + 0.45% + $0.25 per transaction.
The Retail + eCommerce Plan includes all features of the other two plans, and costs $50.00 per month. Processing rates are the same as for the other two plans.
There are few downsides to Helcimâs services. One way theyâre able to keep costs so low is to exclude high-risk merchants from signing up. This policy lowers the companyâs overall risk profile, but it also means youâll be out of luck if you meet their high-risk criteria. Because they charge a monthly fee (albeit a very reasonable one), theyâre also not quite as affordable as Square, PayPal, etc. if youâre processing below $2,500 per month. Weâre also still waiting for the company to introduce an EMV-compliant mobile card reader. They currently offer a basic, magstripe-only reader that requires a headphone jack to communicate with your smartphone or tablet.
Extremely transparent fee structure
Very competitive rates for businesses processing over $1,500 per month
Excellent customer service and support
Not suited for very small businesses processing less than $1,500 per month
Not available for high-risk merchants
Mobile card reader isnât EMV-compatible
For more information, see our complete review here.
Popular (But Less Reliable) Inexpensive Options
Everyone has heard of PayPal (see our review). And just about everyone uses it. With an active user base of almost 200 million customers in 200 markets around the world, itâs a good bet that most of your customers use it, too. But can the company fill all your processing needs? The short answer is yes. PayPal has all the features you would need to run a business â either retail or eCommerce â using just their payment processing services and equipment. But would this be cost-effective? Hereâs where it gets complicated. While the company offers flat-rate pricing and no monthly fees for its basic accounts, those flat-rate prices are kind of on the high side. Also, if you need features such as a virtual terminal, your account isnât free. Instead, itâs $30.00 per month, plus your processing charges.
PayPal doesnât offer true, full-service merchant accounts. Instead, they function as a payment service provider (PSP), which keeps costs relatively low, but also means that theyâre quick on the trigger to freeze your account if they suspect that fraud has occurred. Like most PSPs, they donât have long-term contracts and donât charge early termination fees. Billing is month-to-month, and an account that doesnât have a monthly fee is good for a business that only processes credit card transactions occasionally.
PayPalâs basic rate for online transactions is 2.9% + $0.30 per transaction. International payments and transactions processed through their virtual terminal cost more, while registered charities and mobile payments get a discount. PayPal fully discloses their rates on their website, so youâll always know in advance what youâll be paying.
While PayPal is designed primarily for eCommerce businesses, the company also supports retailers through integration with numerous third-party mobile POS systems and their own mobile payments system, PayPal Here. The latter now includes a Bluetooth-enabled EMV card reader. While many companies offer a free virtual terminal, but charge a monthly fee for the payment gateway needed to use it, PayPal does just the opposite. Their PayFlow Payment Gateway comes with no monthly fee, but if you also need a virtual terminal, youâll pay $30.00 per month for it. Thereâs also a small additional per-transaction processing charge.
While these are all great features, there are also some not-so-great things about PayPal that you should be aware of before you sign up. Customer support through their telephone support line is very inconsistent. Some customer service representatives are quite knowledgeable and helpful, while others are not. Fortunately, the company provides an online knowledgebase that should help you solve common problems on your own. As weâve mentioned, sudden account holds or terminations are also a possibility. If you simply canât afford to lose access to your account temporarily, consider a different option.
For some businesses, PayPal is really all you need. If you donât need a virtual terminal or any of the other features of the $30 PayPal Payments Pro plan, you can avoid monthly fees altogether and operate on a pay-as-you-go basis. For larger businesses and those with more specialized needs, PayPal makes an excellent secondary payment option on top of your regular merchant account.
No monthly fees (for standard account)
Transparent flat-rate pricing
Most customers have a PayPal account
High flat-rate processing charges
Frequent account freezes, holds, and terminations
Inconsistent customer support
For more detailed information about PayPal, see our complete review here.
Just like Square is popular with small retail businesses, Stripe (see our review) is the darling of the eCommerce world. The company functions as a payment service provider (PSP), aggregating accounts and keeping costs low for their clients. There are no monthly fees, and their flat-rate processing plan is extremely simple.
Stripe is so focused on eCommerce that they donât offer much of anything to retailers. There are no credit card terminals, POS systems, or even mobile payments systems for your smartphone or tablet. So, if youâre a retailer, you can skip right on ahead to the next company profiled below. Stripe is not for you.
eCommerce-only merchants, on the other hand, will find a very robust variety of services to help them sell online. Integration is the name of the game at Stripe, and their payments processing service works with just about every online shopping cart on the market. They also have a vast library of APIs that allow businesses to customize the interface between Stripe and their websites. If youâd like to sell your products through your own app as well as on your website, they offer an impressive in-app purchasing capability.
So, how much does all this techy goodness cost? The short answer is not much â at least under certain circumstances. Since all your transactions will be processed online without a physical card being swiped or dipped, Stripe charges a flat 2.9% + $0.30 for all credit and debit card transactions. eCheck (ACH) and Bitcoin payments are charged a mere 0.8% per transaction. This is the same rate that Square and PayPal also charge for online transactions. There are no additional account fees, although you will be charged $15.00 for each chargeback. Chargeback fees are unavoidable with any processor, but unlike most companies, Stripe will refund your money if the chargeback investigation comes out in your favor.
You also wonât have to worry about long-term contracts or early termination fees, as Stripe bills on a month-to-month basis. This is a useful feature for a growing eCommerce business, as Stripeâs flat-rate pricing suffers the same flaw that plagues Square and PayPal: for a high-volume business, their flat-rate pricing is actually more expensive than what a full-service merchant account can provide through interchange-plus pricing.
While Stripe has some very impressive features, it also has a few serious drawbacks. Like other payment service providers (PSPs), account holds and terminations occur frequently and without notice. Stripe uses a machine learning-enabled algorithm to scan accounts for possible fraud, and itâs definitely programmed to err on the side of caution. This wouldnât be so bad if you could call up a human customer service representative on the phone and resolve the situation. Unfortunately, you canât â Stripe doesnât offer telephone support at all. Instead, youâll have to contact the company through email and wait for a response. Judging from the many complaints about Stripeâs customer service, the quality of those responses leaves a lot to be desired.
Despite its shortcomings, Stripe is a good choice for a new eCommerce venture. Youâll enjoy pay-as-you-go service with no monthly fees, and you wonât have to worry about long-term contracts. The companyâs extensive library of developer tools can offer you options that you might not be able to find with other providers. Just be aware that when your business grows beyond a certain point, youâll need the security and reliability of a full-service merchant account. Youâll also save money on processing charges by switching to interchange-plus pricing.
Simple flat-rate pricing structure
No additional fees or long-term contracts
Huge API library for developers
Flat-rate pricing is more expensive than interchange-plus for high-volume merchants
Frequent account holds and terminations
No telephone customer support
For more information, see our complete review here.
As youâve probably noticed by now, pricing for credit card processing is a ridiculously complicated subject. With dozens of interchange rates and a wild assortment of fees, trying to figure out how much accepting credit cards is going to cost your business inevitably comes down to guesswork. While you can make a reasonable estimation based on your processing history and your business type, itâs not realistic to expect that youâll be able to come up with a precise figure. Fortunately, the companies weâve profiled here fully disclose their processing rates and fees, making your job of estimating your costs much easier.
Weâve only listed six of the most popular and most affordable processors here, so be aware that the cheapest processor for your particular business might not be one of them. There are plenty of other providers out there who are also competing for your business, so check them out, too!
Here are a few very general rules of thumb regarding merchant account pricing:
If your business has a low processing volume, youâll want to find a provider with low monthly and annual fees. One of the most appealing aspects of Square or PayPal is that they donât charge any monthly fees. This is a great feature if your business is seasonal or you only occasionally have a need to accept credit cards. Processing rates wonât be as important for low-volume merchants.
If your business has a high processing volume, fees arenât as important, and youâll want to get the lowest processing rates you can find. Paying one or more monthly fees for a merchant account is an insignificant expense for a larger business, but higher processing rates can make a serious dent in your profits.
Carefully analyze both the percentage rate and the per-transaction processing fee when evaluating rates. While youâd ideally like them both to be low, which one is more important will depend on your average transaction size. If you process a lot of smaller transactions, a $0.30 per transaction fee can add up quickly. On the other hand, if your transactions are usually larger, you wonât need to be as concerned with the per-transaction fee, and should try to get the lowest percentage rate you can find.
While all the companies weâve profiled here provide excellent service at an affordable cost, some are better suited to particular types of businesses than others. Square, for example, works best for very small retail businesses. PayPal and Stripe, on the other hand, are a better fit for small eCommerce merchants. Full-service merchant account providers like Helcim, CDGcommerce, and Dharma are more well-rounded, but CDG is a better fit for smaller businesses, while Helcim and Dharma work better with larger ones. For a side-by-side comparison of some of the companies listed here (and a few other excellent providers), please see our Merchant Account Comparison Chart.
Best Choice For
Small-ticket, Canada,Â Mobile, eCommerceÂ
All businesses, Mobile, Retail
Large-ticket, All-in-one, Recurring billing
The post The Cheapest Credit Card Processing Companies appeared first on Merchant Maverick.
When you scan or insert your debit or credit card at the mall or your local convenience store, you probably donât put a lot of thought into what type of machine is reading and processing your payment. And really, why should you? To consumers, theyâre all pretty much the same (except for maybe those machines that angrily beep at you to remove your card. Why is that sound so aggressive?) That said, if youâre a retailer and youâre not paying attention to what type of credit card machine youâre using, it could cost you. An unreliable or even just a slow machine can impact your bottom line. It’s imperative to know what you want and need from a credit card machine when youâre purchasing your hardware.
Let’s start out by defining some terms. This post will specifically talk about credit card machines and terminals as opposed to credit card readers. A credit card machine is a device that connects directly to or is integrated with your point of sale system, whereas a reader is a smaller, mobile device that generally connects to phones and tablets and can be used with an app.
While many terminals look similar (big buttons, a place to slide or insert your card etcâ¦) there are a number of other features you should be looking for when you make your purchase.
Credit Card Machine Features
First off, youâll need to make sure your machine is compatible with your processor. Some companies sell hardware that can only be used with their own processing plans. However, there are many universal options available that will sync up with any processor and will give you more flexibility. Some credit card processors will charge reprogramming fees for hardware not purchased directly, so keep this in mind.Â
Your level of connectivity is also crucial as any downtime or lag that impedes your ability to process payments is going to have a significantly negative impact on your business. Most newer machines have both a phone and an internet connection and many are now equipped with wireless capabilities in case your landline connection fails or you are in a place where only WiFi is available.
Youâll also want to assess the type of payments youâll be accepting. In this day and age, you will almost certainly need to process debit card payments, in which case youâll want a PIN pad (either separately or built-in) for customers to type in their number. Depending on your industry, you may also need a device that handles EBT (electronic benefits transfer). If youâre accepting checks, youâll want a device that can process them electronically — the same goes for gift cards if thatâs an option your business offers. A more modern way to accept payment, like a tap terminal that allows customers to pay via their phone with a service like Google Pay, may also be advisable.
If youâre buying a new machine or terminal, youâll almost certainly want to make sure that your system can accept EMV chip cards. These cards are becoming the standard in the industry (as of 2015) for their superior level of security; any quality processing machine should be compliant at this point.
What Do Credit Card Terminals Cost?
Now letâs get into what everyone is really interested in: the cost. Credit card machines are generally a bit more expensive than your standard credit card readers which simply hook up to a phone or mobile device. But, with that added expense, youâre also getting added security. To put it in broad terms, machines can run from anywhere between $50 for a bare bones terminal that simply takes card payments, to upwards of $500 depending on what features you want or need.
Each added feature will typically send the price a little higher. If you want to be capable of accepting mobile payments, like Apple Pay or Google Pay, expect a slightly higher cost. If you need a built-in printer for receipts, expect to pay a little more. If wireless capability is a must, that will also result in a slightly higher cost alongside the expense of a data plan. However, many companies offer payment plans and, depending on what services youâre signing up for, some companies run promotions where you can get hardware thrown in for free or at a discount.
Credit Card Hardware Options
When youâre shopping around for a credit card machine, you wonât be hurting for options. However, there are a handful of companies that you will want to check out.
Ingenico and Verifone have long been the gold standard in the credit card terminal industry, and for good reason. They both offer a wide variety of products that are reliable, durable, and competitively priced.
Ingenico:Â Chances are good youâve used multiple Ingenico products, perhaps in just the past week. Itâs difficult to recommend a specific item as they range from very basic readers with built-in PIN pads to others that accept virtually all forms of payment and can print directly all from a device small enough to fit in your hand. Ingenicoâs products thrive on their user-friendliness, from set-up to the customer experience, and they have a highly-rated customer service department. Ingenico is also an international company with products that can function all over the world.
Verifone:Â Verifone is equally user-friendly and has an exceptionally sleek and modern interface in many of its credit card machines. Like Ingenico, they offer a wide range of products from a fully integrated POS to mobile and desktop devices. Verifone prides itself on the speed of its transactions and its versatility. The VX520 has been one of its most popular models and should be able to handle most small business needs for under $300. Verifone packs a lot into its devices and they are highly durable and built to handle large numbers of transactions.
Pax:Â Another company to keep an eye on in the credit card terminal game is Pax. While not as ubiquitous as Ingenico or Verifone, Pax is a cost-effective solution with many of the same features. Paxâs products are brightly colored and aesthetically pleasing. The S80 CounterTop terminal has an inbuilt contactless processor and can handle multiple payment types. Paxâs products offer speed and strong memory capabilities while featuring state of the art security measures. They also offer a wide variety of PIN pad options.
A current trend in the world of processing is fully integrated systems. These systems are ultra-modern with the ability to accept nearly any form of payment. They can connect to existing hardware but theyâre also on the more costly side.
Poynt:Â Poynt has become a major player in the past few years. It currently offers a two-screen desktop system and a mobile device that allows customers to make payments from anywhere in your store. Poynt accepts gift cards, EBT,Â and mobile payments — among others — and has features like signature encryption, EMV, and a receipt printer built in. The system is incredibly simple to use and lets the customer see exactly what is happening with his or her transaction.
Clover:Â A similar product to Poynt is Clover Station, which also features a dual screen model. Clover has been extremely popular since its release. With Clover, you are locked into First Data processing, a fact that is still holding Cloverâs devices back in our ratings here at Merchant Maverick. However, thereâs still a lot to like with this hardware. The ability to customize your experience with Clover is a huge benefit and Station comes with 20 preloaded apps. There is also fingerprint log-in for employees to increase security. Clover accepts EMV cards and comes with an optional NFC printer, 4 GBs of memory, and access to the Clover app store.
Square:Â One of the newest integrated processing products on the market is Square Register. Squareâs reputation and popularity speaks for itself and this rollout doesnât disappoint. With the same dual-screen format as Poynt and Clover, customers can make payments seamlessly with a recognizable and simple interface. Square offers a simple and consistent plan for processing fees and pairs with existing hardware in seconds. You can literally be up and running in a matter of minutes once youâre registered with Square and it comes with a two-year limited warranty.
Itâs likely that youâll find multiple credit card machines that can offer you the functions and features youâll need to successfully run your business. Thatâs why itâs important to go with a trusted company and a product thatâs proven to be reliable. Having a credit card machine that processes payments quickly and runs smoothly is one less thing a busy merchant needs to worry about.
Make sure that youâre always staying on top of current payment trends. Hardware companies constantly update to make sure that their clients always have access to the latest technology. New ways to give and accept payment are constantly hitting the marketplace, and whether itâs a new app for making payments or the ability to accept crypto-currency, credit card terminals are adapting quickly and many low-cost credit card readers are now on the market as well. Hopefully, this post has made your credit card processing hardware search just a little easier.Â
Want more information? Read our Complete Guide To Credit Card Machines and Terminals.
The post The Best Credit Card Machines And Terminals appeared first on Merchant Maverick.
Touchscreens are everywhere, and the point-of-sale industry is no exception. Touchscreen POS systems are more intuitive and easy to learn than traditional legacy POS software, and many cloud-based systems employ the same kind of iPad and Android tablets that your employees already use every day at home. Whether you’re running a restaurant, a retail outlet, or another type of business, a modern touchscreen POS system helps keep your sales moving and your business data secure. Besides simple point-of-sale features, most of these cloud-based systems also have advanced reporting capabilities, business management features, and integrations with other popular business software.
Arguably, the only problem with touchscreen point of sale systems is that there are so many different products to choose from. Do you go with a proprietary-hardware solution like Clover, an AndroidÂ POS system like Toast, anÂ iPad POS like Revel, or an open-source POS like Vend? In my opinion, the most important consideration when choosing a touchscreen POS is not just iPad vs. Android. More important are your industry type, your specific business needs, and user reviews. To help you get started in your search, I’ve put together this list of my favorite highly rated touchscreen POS systems, sorted by industry. Most of these are iPad-based, though I included some Android and open-source options as well.
To make it easier to find the best touchscreen system for your business type, I’ve sorted the following 15 POS systems into restaurant, retail, and hybrid (systems that can be used for either restaurant or retail) categories. Be advised that the order in which I’m listing these excellent systems does not indicate their ranking.
Restaurant POS Systems
The following restaurant point of sale systems can be used by just about any type ofÂ food industry business, from drive-thrus to fine dining:
iPad POS for restaurants
Pricing starts $99/month/location
Must use with Upserve payments (interchange plus $0.15 fee)
Cloud-based Breadcrumb POS by Upserve (see our review) is a highly versatile restaurant POS, suitable for full-service restaurants, take-out, delivery, bars, and multi-location eateries. With Breadcrumb’s acquisition by Upserve in 2016 (Breadcrumb was previously owned by GroupOn), the company has expanded its restaurant management infrastructure, making this POS a complete business management system for just about any type of restaurant.
Breadcrumb is not the cheapest restaurant POS in town, but nor is it short on features. Some of the system’s strongest features include table management, employee management, customer management, and tableside ordering. Breadcrumb also recently teamed up with GrubHub to offer online ordering and delivery (at the $249/month/location “Pro” subscription level).
One thing Breadcrumb users really like about this system is that it is specifically designed with restaurant employees in mind. While we find Breadcrumb to be a very solid all-around POS/restaurant management system, a couple potential downsides are 1) you can’t use your own merchant account (you need to use Upserve Payments) and 2) there are occasional issues with outages. Learn more in our Breadcrumb by Upserve review.
Android POS for restaurants
Pricing starts at $79/month
Must use with Toast credit card processing
Exceptional customer service
Android-based Toast POS (see our review) is another robust, cloud-based POS systemÂ for restaurants. It can accommodate any size or type ofÂ restaurant, and features like tableside ordering, labor management, and inventory management make Toast a force to be reckoned with on both the front and back end. Toast is intuitive and easy to use for servers, while also providing detailed reporting, customer data, and menu options.
Although we love Toast’s strong feature set and the fact that it uses Android tablets instead of iPads (cheaper hardware costs, less of a theft risk), keep in mind that if you want every single feature Toast offers, it’s gonna cost ya. For example, online ordering, table management, delivery management, and gift card support all carry an extra monthly charge. You also can’t choose your own credit card processor to use with this POS and must use Toast’s in-house processor (which Toast users seem to like, at least). What really sets Toast apart from a lot of other cloud-based POS systems, however, is their excellent customer support â an indispensable quality in any POS, given the inherent complexity of a system that lets you take payments, process orders, and manage almost all aspects of your business.
iPad POS for restaurants
Pricing starts at $69/month
Compatible with multiple payment gateways
Best for single-location businesses
Locally installed system (not cloud-based)
Elegant and easy to use, Ontario-based TouchBistro (see our review) has the distinction of being the top-grossing POS Application on Appleâs App Store in over 35 countries. TouchBistro is one of the few systems on our list that, while tablet-based, is not cloud-based; rather, your store data is stored locally on your restaurant’s iPad or Mac.
TouchBistro is not a full “restaurant management system” like Toast or Breadcrumb, but it’s good at what it does, and can readily handle the POS needs of just about any size/type of eatery, from a food truck to a full-service restaurant. Since TouchBistro stores data on local servers, it’s probably best for single-location restaurants (if coordinating data between locations is important to you). Keep in mind, though, that you will need an internet connection to process credit cards.
Some great features of TouchBistro include table management, menu management, kiosk option, tableside ordering, split-payment option, bar tabs, and sales reports. Customer service doesn’t seem to be as responsive as some users would like, though 24/7 support via phone and email is included in the standard cost. TouchBistro is compatible with Mercury, Cayan, Moneris, PayPal and several other gateways.
iPad POS for restaurants
Pricing starts at $69/month with annual contract or $79/month without
Can use in-house payment processing orÂ BridgePay,Â Heartland,Â PayPal,Â Nets, orÂ Vantiv Integrated Payments
Option to installÂ in-house server backup in case you lose your wireless connection
Lavu (see our review) is yet another highly popular iPad POS system for restaurants, used in more than 20,000 restaurant terminals across 88 countries.
Lavu is not the most advanced restaurant POS there is, but it is equipped to handle the needs of most small-to-medium restaurants (or cafes, bars, coffee stands, etc.). Some features that make this POS system a hit include its customizable table layout and menus, easy employee management, advanced menu management, and useful integrations. Lavu also has renowned customer service, which is included in the standard monthly fee.Â You can add both a loyalty program and gift cards onto your subscription for just $40 a month.
Customers have complained about occasional glitches with the Lavu software, but the company releases frequent updates to solve any bugs or complaints. Affordable and highly customizable, Lavu is a strong and growing contender in tablet POS systems for restaurants.
Retail POS Systems
The following POS systems are suitable for retail store establishments, such as clothing boutiques, toy stores, electronics shops, and many others.
Lightspeed Retail (see our review) is one of the most fully featured tablet POS systems out there for retail. While Lightspeed can support up to enterprise-level size businesses, this cloud-based system is ideal for small and medium-sized businesses that want powerful functionality — think unlimited inventory, integrated eCommerce, work order management, and customer relationship management. Lightspeed Retail also makes it easy to transfer inventory between different store locations.
Lightspeed is among the pricier systems on this list, and various integrations to extend its functionality, such as eCommerce, can make it even more expensive. So, it’s not going to be the right POS every business. But if you want a super robust POS that you can operate from any desktop browser (meaning, you don’t have to buy expensive iPad registers), Lightspeed Retail might just be right for you. The POS is especially suited for apparel businesses but can accommodate virtually any type of retail setup, including rentals.
Note that there are several Lightspeed products in addition to Lightspeed Retail. These include Lightspeed Onsite, Lightspeed Restaurant, and Lightspeed eCommerce.
iPad and web browser POS for retail
Pricing starts at $69/month
Compatible withÂ Vantiv,Â PayPal, andÂ Square
VendÂ (see our review) was actually the very first web browser-based POS system when it was introduced back in 2010. Today, it is still a big force to be reckoned with in the retail POS world, used by more than 20,000 businesses in 100 countries.
Cloud-based and scaleable for retail stores both small and large, Vend uses an HTML5 browser (such as Google Chrome), or an HTML5 iPad app, for all operations. If the internet goes down, Vend can keep operating locally using the cacheÂ and will sync back up with the cloud once the connection resumes. Being browser-based means you can run Vend on a PC, Mac, or iPad. Some features on Vend we really like include customer management, eCommerce, built-in loyalty program, inventory management, and aÂ good selection of third-party software integrations. Vend doesn’t have as much functionality as a POS like Lightspeed or Revel â for example, Vend doesn’t have item modifiers â but it is cost-effective and a good choice for a store (or even chain of stores) that doesn’t need every single “business management” feature out there.
Note that Vend’s email support is free, but 24/7 phone support costs an extra $19 per month, unless you have the multi outlet subscription ($199/month billed annually).
7. Shopify POS
iPad POS system for retail (Also supports mobile sales on iPhone and Android phones)
Pricing starts at $9/month for mobile and Facebook sales, or $54/month to also include Retail Package for in-store sales
Integrates with Shopify Payments and many outside processors
Instant syncing with your Shopify online store
Shopify (see our review) started as an online shopping cart for businesses who wanted an easy way to sell their products online. Eventually, Shopify extended their offering to include a POS system for in-person sales. As you might expect, Shopify POS does a great job integrating online and offline sales for retail businesses that also do eCommerce with Shopify.
iPad POS for independent fashion retailers
Pricing starts at $75/month per location
Integrates withÂ Evo Payments International,Â Velocity, CardSmith,Â National Discount Merchant Services,Â Vantiv, andÂ Moneris
Multi-store support (max. 10 locations)
With its exclusive focus on fashion retailers, Quetzal (see our review) is an iPad POS that’s tailor-made (ha-ha) for stores that sell clothing, shoes, and/or accessories. This aesthetically appealing system has a streamlined iOS aesthetic; the interface seriously looks like it could have been designed by Apple itself, and Quetzal even has an iTunes app that lets managers check in on their store from their Apple Watch. Quetzal also uses a compact, sleek register, Star MicronicsâÂ mPOP system.
Of course, functionality is more important than aesthetics when it comes to a POS, but Quetzal doesn’t come up short in terms of function either. We like the clothing/shoe matrix, in-depth sales reports, “tag cloud,” loyalty program, employee leaderboard, and “sales thermometer,” in particular. At only $75/location price is right as well, especially as there is no charge for additional users or terminals. A couple downsides are that after setup and installation, customer support costs extra, and also there is no QuickBooks integration.
While it doesn’t have a huge marketshare of the overall retail POS segment, Quetzal’s niche focus makes it a functional, affordable, and visually appealing choice for emerging independent clothing brands.
Hybrid POS Systems
These POS systems are flexible in that they are equally suited to retail and restaurant environments. Service-based industries such as beauty salons, rental businesses, and hospitality businesses also often use hybrid POS systems.
iPad POS for retail and quick serve restaurants
$69/month/register ($29/month/register for fourth register and beyond)
Integrates with Shopkeep Payments and outside processors
Matrix inventory feature
Shopkeep (see our review) is an affordable and enjoyable-to-use POS system that runs locally from an iPad and syncs data back to the cloud. Shopkeep is used in both retail and restaurant environments, and while it’s more feature-rich on the retail side of things, it will more than meet the needs of most quick-service/coffee carts/food truck businesses.
10. Revel Systems
iPad POS for retail, restaurants, hospitality, and more
Supports numerous payment processors
Custom pricing based on industry and individual business needs
Ethernet internet connection
Revel Systems (see our review) is arguably the holy grail of iPad POS systems. Revel is powerful enough that franchises like Cinnabon use it, and flexible enough that it can support businesses in virtually any industry, from brewpubs to gas stations. It’s also the only iPad POS system that offers a “wired” ethernet connection for a faster an more reliable internet.
Revel POS pricing is determined by which industry-specific package you choose, but depending on your needs, you can expect to pay about $80 to $200/month per location. Myriad add-on applications and integrations extend Revel’s functionality to make it do just about anything you can imagine, though this naturally increases the system’s cost as well. Some of Revel’s more impressive features include its kiosk mode, digital menu board, and ability to accept mobile payments (including ApplePay, PayPal, Bitcoin, and others). Because Revel is so powerful and customizable, initial system setup can take a while.
Web browser/iPad/Android/Windows POS for retail and restaurants
Pricing starts at $200/month/location
Compatible with all big-name payment processors, (though currently promoting PayPal as a preferred processor)
Strong inventory features
ERPLY (see our review) originated in 2009 as a retail POS system, though it has eventually expanded support to food service too, now offering food-centric features such as kitchen printing and sell by weight. Whether you run a retail business or restaurant, ERPLY is especially powerful in the inventory management department, with functions like automated ordering, supplier management, and multichannel (online, in-store, phone, email) inventory tracking and transfers.
ERPLY gives you a lot of flexibility as a business owner. Using just about any payment processor under the sun, you can accept traditional swipe, chip card, and mobile payments, including Apple Pay, PayPal, and Android Pay. You also have the option to use pretty much whatever device you want, even without a reliable internet connection, or run ERPLY right from your browser.
It’s actually kind of hard to come up with a feature ERPLY doesn’t have. An open API architecture allows customizability and the ability to develop your own software integrations and customize it to meet your needs (or, have ERPLY make these integrations/customizations for you). Being such a versatile piece of software, it’s one of the pricier cloud-based POS systems. If you have a larger or franchise business, or you just want the flexibility and horsepower this system offers, you might try ERPLY out for size.
iPad POS for retail and restaurants
Standard subscription is $62/month/location (billed annually upfront)
Compatible with multiple payment processors
talech (see our review) is a smaller player in the iPad POS world, but with their affordable price point and impressive set of more than 100 features, they can certainly give their larger competitors a run for their money. talech is used by both retail and restaurant businesses, but restaurants,Â in particular, will find a lot of useful features, including table management, coursing, and the ability to split the check by table positioning (seat).
Advanced inventory management, self-service (kiosk) mode, and the ability to generate purchase orders are some more features that set talech apart from some of its competitors in both the retail and restaurant spheres. talech also made it possible for restaurant owners to integrate an online ordering system so that you can manage in-person and online orders all from your iPad POS terminal.
iPad POS for retail and restaurants
Custom pricing depends on industry and number of SKUs
Works with nearly any payment processor
“Favorites” grid displays most popular items as register buttons
Bindo (see our review) is a hybrid POS whose varied and easy-to-use features make it suitable for retail or restaurant environments. A reasonable pricetag, clean interface, robust eCommerce storefront, andÂ thoughtful inventory reporting suite make this an especially versatile touchscreen POS option. While fewer than 5,000 businesses use new-ish POS, customer support (included at all price levels) is responsive to these customers’ needs and tech support (also included) issues frequent updates to fix any software glitches.
As with most other fully cloud-based systems, you’ll need fast internet to experience the best functionality. More than one customer has also complained about being stuck in a leasing contract with Bindo for equipment they were not satisfied with (though in general, we do not recommend leasing POS equipment). Since Bindo works with most standard iPad POS equipment and offers a 14-day free trial, it is likely that you’ll be able to test out Bindo using your current equipment before you commit to purchasing.
iPad POS for restaurant and retail
Basic restaurant and retail packages start at $75/month
Works with Vantiv, Evo, and WorldPay
Allows items to be charged by decimal and fractional quantities
SalesVu (see our review) is another affordable and feature-rich iPad POS system that can be used in many industries, including service industries and traditional retail and restaurant environments. Since this system allows you to ring up transactions in fractional amounts, it’s especially useful for hourly professionals such as therapists or dog walkers, and businesses that sell items based on weight, like fro-yo shops. SalesVu also has an appointment booking system that health, beauty, and hospitality businesses will appreciate. Like the majority of touchscreen POS’s on this list, SalesVu is best suited for smaller to medium-sized businesses, though it has the capacity to scale up if you open a second or third location.
SalesVu runs locally on iPad registers and syncs all your data to your account in the cloud. Though you can use the SalesVu POS app without an internet connection, you’ll need internet to process credit card transactions; however, you can use a specialized router with a 4G wireless modem with a data plan so that you can switch to 4G without any interruption if your main internet connection goes down.
Another cool thing about SalesVu is that it will run on an iPhone, allowing you to take mobile sales on the go. The basic mobile POS app without any frills is free, similar to Square. Which brings us to the final favorite touchscreen POS on our list …
15. Square Register
Proprietary POS hardware with free cloud software for retail, restaurants, service industry
Hardware costs $49/month for 24 months or $999 one-time payment
In-house credit card processing is 2.5% + $0.10/transaction or lower for high-volume businesses
Best for businesses with average transaction of $40 or higher
Ethernet support for more reliable internet connection
While Square‘s popular free POS mobile app has been around for some time, the Square Register is a relatively new product, released in October 2017. There are still no monthly service fees, but rather than selling on your smartphone or iPad, you’re ringing up sales on fully featured POS hardware that you purchase as a complete package from Square. With a concept similar to that of Clover Station (which I didn’t include on this list because it is locked into First Data’s less than stellar payment processing), the Square Register is sleek, proprietary POS hardware that works right out of the box, complete with a customer facing screen and built-in credit card terminal. The Square Register hardware itself costs $49/month for 24 months, or you can simply purchase the system outright for $999.
Note that Square Register users have a different credit card processing rate than the standard Square mobile processing rate. With Square Register, businesses are charged 2.5% + $0.10 on every transaction, vs. 2.75% (+ $0.00) with regular Square.Â This pricing setup may at first blush look like Square Register has cheaper rates, but if you have a lot of small transactions you’ll actually pay more with Square Register than with the Square mobile POS. For this reason, Square Register is a more appropriate solution for larger businesses with average ticket sizes of $40 or higher. Larger businesses processing more than $250,000 per year and with an average ticket size of $15 or higher may also qualify for lower rates.
As for the specific business type, 100% cloud-based Square can work with just about any industry. Square has a built-in 24/7 online booking system for service-based industries, as well as restaurant-centric features such as suggested tipping amounts and online food orders.
Finally, Square Register is not to be confused with Square’s iPad-only, $60/month solution, Square for Retail (see our review).
When sorting through your options for touchscreen POS systems, the plethora of choices may at first seem overwhelming. But that’s why we’re here to help you sort out the stinkers and lead you to the very best tablet point of sale systems. And really, you can’t go wrong with any of the POS software systems on this list. Just check that the touchscreen POS system you’re considering meets your business’s needs in terms of functionality and budget, and test it out with a free trial before purchasing. And of course, don’t forget to check user reviews and complaints on the BBB and other consumer review sites. If you need further help choosing a touchscreen POS system, please contact me in the comments section and I’ll give you some further guidance.
The post 15 Best Touchscreen POS Systems appeared first on Merchant Maverick.
Spend a little bit of time reading up on Stripe (read our review) and Square (read our review) and you’ll start to see the similarities. They’re both giants in the payment industry, media darlings that have transformed the way people pay for things and the way merchants accept payments. They’re both on the leading edge of technology and rely heavily on machine learning to drive their payment processing systems.
Most importantly, both Square and Stripe offer huge assortments of commerce tools that make it easy for merchants to run their businesses. With the various APIs and integrations available, there are almost limitless possibilities for creating a custom system with everything from invoicing to email marketing and more.
But that’s where I stop pointing out the similarities. Once you get past that point, it becomes harder to draw apples-to-apples comparisons because Square’s offerings are much more varied. Square really is an all-in-one processor that can handle in-person and eCommerce payments, as well as inventory management, customer databases, and more. Stripe is more limited to eCommerce, both for websites and for mobile apps, but it has powerful tools for global enterprises, subscription-based businesses, and other online companies.
To keep things fair and within a manageable scope, we’re going to limit the scope of this comparison to each companies’ online and mobile commerce tools. That means, for the most part, we’re not going to look atÂ mPOS apps, POS integrations, appointment booking, or email marketing…except to say if you need them, Square is the better choice.That also means we’ll be ignoring Stripe Atlas, the company’s service for helping international merchants establish themselves in the US.
If you want to sell online and Square and Stripe have made your shortlist, you should start by asking yourself some questions:
What features do you absolutely need? Which features aren’t essential, but would be very nice to have?
What percentage of your transactions are from outside the US?
Do you have a developer or advanced coding knowledge yourself?
Do you have limited tech knowledge and need an easy solution?
Are you looking for specific integrations?
What industry is your business part of?
How advanced are your subscription tool needs?
Once you have the answers to these questions, you can sit down and look at each company in more detail. Read on for our comparison of Stripe vs. Square!
Products & Services
It’s so important to have a list of must-have features before you set about choosing any sort of payments or eCommerce software because you don’t want to make the decision and then find out that you’re missing a very important function. But it’s also important to think about where you want your business to go and what tools you want to invest in as your business scales up. If you pick the right service, it could mean you never need to switch. But if you don’t think about growth, you may wind up having to make a complicated switchover later in the future once you’ve outgrown a solution.
The good news is that for the most part, Stripe and Square are both very good solutions that scale up as a business grows. It just comes down to in which direction a business wants to grow.
Square Tools and Services for Online Merchants
Square initially stood out among mobile competitors by offering a free webstore to its merchants. Since then, the company has branched out considerably to include eCommerce integrations as well as developer tools. For a more in-depth review of all of Square’s offerings, check out our full review.
Online Store: Square’s free online store is very basic. There are only four templates to choose from, and you can only customize portions of the site (such as filling in your business name and address in the footer) in addition to loading your products. This is not a good solution for anyone with a large and diverse inventory, especially if your shipping costs vary significantly or if you’re looking for a particular visual aesthetic.
eCommerce Integrations:Â When you first take a look at Square’s eCommerce offerings, you’ll see that Square very conveniently groups everything by a merchant’s level of technical expertise. I think this is a really helpful approach.
The easiest integrations are listed on the site and Square lets you know that you can choose from an assortment of templates.
The intermediate level includes eCommerce integrations that require a bit more work and technical knowledge to get set up.
Square’s list of integrations includes some of the best shopping cart options, and the list keeps growing. That makes me happy, but if your preferred integration isn’t on the list yet and you do have the technical knowledge (or an eager developer on your payroll), there are more tools at your disposal. You can check out the list of Square integrations in the app marketplace.
Developer Tools: Square’s dev tools make it possible for you to create almost any custom integration you could need. For eCommerce, there are two APIs, Checkout and Transactions.Â Square Checkout is a premade form that can be dropped into a site with minimal fuss. Using Checkout means merchants are eligible for some perks, like next-day deposits and chargeback protection. The Transaction API, combined with Square’s payment form, is more customizable. Square has other APIs to handle other aspects of commerce, but you’ll find that Square doesn’t readily support in-app payments.
Dashboard Reporting: Square’s reporting tools are fairly advanced, especially for a company that started as an mPOS. They’re very popular with merchants who want to know what’s selling and how much they’re processing and need standard business data. The dashboard is actually quite intuitive, as well. However, Square doesn’t allow for a huge amount of customization in reports unless you get into the Reporting API, which allows you to create real-time notifications using webhooks.
Additionally, Square offers the following tools:
Advanced Inventory: Square will reconcile online and in-person sales and give you an up-to-date count on your inventory, including low-stock alerts when you hit a specified threshold. Plus, you can bulk upload products and generate SKUs, create variants, and more.
Fraud Protection Tools: Square uses machine learning to analyze transactions and identify and flag possible fraudulent transactions.
Customer Database: Save customers’ contact information and build a database with records of their purchases so that you can market to them later.
Invoicing:Â Create invoices from within the Square dashboard or from within the mPOS app. Square also allows customers to store their cards to automatically pay invoices (using this Card on File will cost you a bit more). You can also create recurring invoices. However, if you want extensive subscription management tools, you’ll need an integration with a service like Chargify, which will add to your costs.
Free Virtual Terminal: If you want to process payments over the phone or you don’t have access to the mPOS, you can use Square’s virtual terminal. Transactions will be processed at the manual entry rate (3.5% + $0.15) rather than the eCommerce rate, but the solution is PCI compliant and is designed for regular use.
All in all, while it’s worth noting that Square really is an omnichannel solution for merchants who want to sell anywhere without needing to build a complicated system of integrations. But it has some shortcomings, especially for digital merchants. Subscription tools are nearly nonexistent, and fraud protection doesn’t compare to the tools Stripe offers. If you want advanced, custom reports, you’ll be better served by Stripe. However, Square’s tools and overall design are incredibly easy to use, especially for business owners who don’t have a lot of technical expertise or a large budget to hire someone. And it has very strong tools for merchants who sell physical products in particular.
StripeÂ Tools and Services for Online Merchants
Stripe has earned its name as a developer-friendly option, but you can also integrate with a host of third-party apps to accept payments with ease. The company focuses on internet and mobile commerce, but developers have extended Square’s power to include mobile payments and more. Just take note, there’s no free storefront option here. For a more detailed look at different features, check out our complete Stripe review.
eCommerce Integrations & Plug-Ins:Â Stripe outclasses Square in terms of shopping cart integrations by virtue of sheer numbers. In addition to integrations with major eCommerce software providers, developers have created an assortment of plug-ins for businesses operating on WordPress, Magento, and other websites. If you’re not really sure where you start, you might end up doing a lot of research to decide the best course of action, but you can at least take heart in knowing that there’ll be something that will meet your needs. You can check out the full list of eCommerce integrations on Stripe’s “Works With” page.
Developer Tools: Stripe is much loved by developers for its flexibility, its extensive documentation and its support for multiple programming languages. Its APIs allow you to create invoices and subscriptions along with many other features.
Stripe Sigma: Stripe offers your standard user dashboard with some general sales reports at no charge. But if your business is heavily data-driven, Sigma’s customizable reporting is the perfect solution for you: you can generate reports based on SQL queries. This is pretty cool, and it’s a great way to make sure that anyone on your team can get the reports they need without creating an information bottleneck. Pricing is based on a sliding scale rather than a set additional monthly see.
Stripe’s additional tools include:
Stripe Billing: Stripe’s subscription tools are industry-leading, with the ability to charge clients based on a recurring quantity or metered usage, to set free trial periods, and much more. You can also create invoices or set up recurring billing tools. However, new businesses will pay a small additional charge per transaction to use these tools.
Stripe Radar: Stripe makes a big deal of its fraud monitoring tools, bundled under the very-apt name Radar. The system uses machine learning and a host of criteria to analyze every transaction and decide whether it is legitimate or possibly fraudulent. Radar also lets merchants set custom criteria for rejecting transactions and review flagged transactions to decide whether to accept or reject them.
Marketplace Tools: Merchants who want to operate a marketplace can use Stripe to build the platform. Stripe’s marketplace tools are grouped under the moniker “Stripe Connect.”
Multiple Currency Displays & Dynamic Currency Conversion: These tools are a major reason why Stripe is such a powerful tool for global businesses. Whereas Stripe will automatically convert transactions to USD (usually at the cost of a fee toÂ the cardholder), Stripe will allow you to display prices in local currencies based on where the customer is located. Stripe then automatically converts them for the merchant, charging a small markup over the exchange rate. This makes a business more appealing to international customers.
There’s no doubt that Stripe is very powerful. It can handle all sorts of payments, from digital subscriptions to retail goods. It’s one of the best solutions for global businesses with its currency tools. But it does have some limitations. If you plan to sell across multiple channels, there’s no option for in-person payments unless you have an integration like Flint Mobile (read our review), but it’s still more costly than other mPOS options. There’s no virtual terminal, either. While Stripe does allow you to manually enter a transaction if all else fails, it’s a last resort rather than a tool to be used on the regular because of PCI compliance issues.
Stripe’s inventory tools aren’t on the level of Square. They’re powerful, but if you want advanced inventory management, you’ll need to tack on an integration. I also don’t think that Stripe’s inventory tools are even half as intuitive as Square’s. But I think part of that is Stripe’s focus on online payments and tools for digital merchants, compared to Square’s omnichannel approach.
All in all, it’s really hard to say one of these companies is inherently better than the other. Both have a good assortment of integrations for shopping carts and other tools, though Stripe has a greater number of supported integrations. If you want ease of use, especially if you sell physical goods,Â Square is the standout option. But if you need flexibility, robust tools, and advanced data, Stripe is the better choice. So it ultimately comes down to your business’ needs.
Fees & Rates
I am happy to say that pricing for both Square and Stripe is mostly straightforward:
2.9% + $0.30 per online card transaction
There are no monthly fees, no monthly minimums, no statement fees. That’s very nice to see.
I do want to point out thatÂ Square charges different rates for its card-present and keyed transactions (2.7% and 3.5% + $0.15, respectively).Â However, invoices process at the same rate as eCommerce transactions unless you’re using Card on File, which process at the keyed transaction rate.
Square also has no chargeback fees, which is very unusual. Not only that, but the company has rolled out Chargeback Protection, which will cover the actual chargeback costs on qualifying disputes up to $250 per month. This doesn’t apply to merchants who use the Transactions API, but it is available for those who use Stripe Checkout.
You can getÂ volume discounts if you process above $250k per year AND have an average ticket size exceeding $15. That’s a mark in Square’s favor for large businesses. However, nonprofits don’t get any sort of special discount, which you can often find with other processors.
Stripe’s pricing has become a tiny bit more complicated. In addition to card transactions processed at 2.9% + $0.30, you can also accept ACH transactions for 0.8%, capped at $5 maximum.
The base fee per transaction is simple. And for each chargeback, Stripe will assess a $15 fee, unless the chargeback is decided in your favor. In that case, you’ll pay absolutely nothing.
Stripe’s subscription tools, lumped under the name “Stripe Billing” along with invoicing, will cost you a small percentage fee (between 0.04% and 0.07%) on top of your transaction.
Existing Stripe merchants are grandfathered out of this new pricing. Large businesses will actually pay the higher 0.7% markup, but it seems Stripe has compromised by offering lower transaction fees.
You’ll also pay a monthly fee for access to Stripe Sigma. The cost is a sliding scale based on the number of transactions you process each month, which is a great way for very small businesses to still get crucial data. But for a company that built its reputation on not charging any fees beyond transaction processing, it’s a little bit disappointing to see that model disappearing. You can estimate your cost with Stripe’s tool.
Stripe does offer enterprise pricing for very large businesses, andÂ some nonprofits may be eligible for a special rate. Stripe doesn’t make any promises about nonprofit pricing apart from “let us know and we’ll see what we can do.” So you shouldn’t assume it’s guaranteed.
With Stripe, you may also be able to negotiate for micro-transaction rates.Â Whereas per-transaction fees like the $0.30 Stripe and Square charge can eat up fees from small transactions (less than $10 in particular), micro-transaction rates typically include a higher percentage and a lower per-transaction fee that can save merchants money. This is ideal for anyone who sells digital goods and other low-cost items.
Because it’s something offered as part of a custom package, Stripe may not offer this deal to everyone. If you’re unable to get a micro-transaction plan from Stripe, it might be worth looking at a third option — PayPal (read our review) — instead. The 5% + $0.05 fee could save you quite a bit of money in the long run.
All in all, Stripe and Square are fairly evenly matched in pricing. Some merchants might enjoy the lack of chargeback fees and included chargeback protection that Square offers. But Stripe might be a bigger draw for other companies, despite the additional charges for using its subscription tools or Sigma reporting.
Contract Length & Cancellation
Both Stripe and Square offerÂ pay-as-you-go processing with no locked-in contracts or early termination fees. It really is that simple. Stripe will even help you transfer your customer data to another processor in a PCI compliant way.
If you’re using any of Square’s monthly services in addition to eCommerce processing, you can get a free 30-day trial, and then if you choose to continue with the service, you can cancel at any time. Square doesn’t bill annually for those services the way many SaaS providers do. (Conversely, you also don’t get any discounts for paying annually, either.)
Sales & Advertising Transparency
One of the reasons I like pay-as-you-go processors is that they are, on the whole, very upfront and transparent. They tend to not have extensive sales teams, and if they do have a sales team, they’re all in-house. They’re very clear about their pricing and terms, and they’re applied fairly to all merchants.
Square and Stripe both fit this pattern to a T. You won’t see reports of misleading sales pitches or rates not as promised here, which is always nice to see. You can find Stripe’s terms of service on the site, both the general user agreement and the Stripe Payments agreement. Like Stripe, Square has separate agreementsÂ applying to general use, payments, and other services. I do recommend you be cautious and check that your business doesn’t fall on either list of “prohibited businesses,” because that’s an easy path to account termination.
Overall, I’m really happy with both companies in this category, and you shouldn’t have any worries about whether you’re being told the truth or whether you’ll pay what you were quoted.
Customer Service & Technical Support
I think it’s fairly clear that Square outshines Stripe in terms of its customer support — both in quality and in the number of channels available.
Square offers merchantsÂ phone and email support, as well as an extensive knowledgebase. That’s pretty typical of any processor, but on top of that, Square operates the Seller Community, a community forum about all-things Square.
You can get answers from other Square merchants as well as from Square support reps. It’s a pretty powerful tool. But on top of that, Square’s team monitors Stack Overflow for questions about Square products and responds to them.
And that’s not even talking about Square’s dedicated Twitter support handle (@SqSupport), or the developer portal and documentation.
I can’t say that Square customer support is all sunshine and rainbows, because I do see customer complaints about the quality. However, without a doubt the biggest complaint about the quality of customer support comes from merchants whose accounts have been terminated. In that case, Square cuts off access to phone support and will only communicate via email. This is unfortunate and I don’t know if it’s actually a good solution. But I am sure part of the reason to reduce the odds of a customer support rep saying something they shouldn’t, and to prevent support resources from being tied up dealing with complaints from terminated merchants whose accounts won’t be reinstated.
Stripe is more limited in its support options. Its primary support channel is email. However, Stripe also operates an IRC Freenode chat (#Stripe) that developers may find useful.Â There’s no dedicated social media support with Stripe, but you can follow the general @Stripe twitter feed.
Stripe also maintains a self-service knowledgebase, though I don’t think it’s as extensive or detailed as Square’s.Â But I will say that Stripe’s documentation is pretty legendary, and so it’s going to be one of the best resources you can get.Â You can also find questions about Stripe on Stack Overflow, but I am not able to ascertain whether Stripe’s team is active on the forum at all the way that Square is.
I do see comments from merchants that the support is pretty good. But I also see a lot of complaints from frustrated merchants about the lack of phone support. That complaint has actually become one of the biggest marks against Stripe. I’ve seen one mention that Stripe might be rolling out phone support to “select merchants” (presumably high-value clients). However, take this with a grain of salt. I wasn’t able to verify it through any sort of authoritative source.
Negative Reviews & Complaints
As far as complaints go, the single biggest issue for both Square and Stripe is a common one:
Account Holds And Terminations: This is unsurprising (understatement of the year, right there) because it’s a common issue with any third-party processor. Because these payment systems are usually open to almost anyone right away and they are all lumped into one large merchant account, there’s a greater risk that some of those accounts will be terminated for risky behavior. There’s very little scrutiny done before a sub-account with one of these processors is approved, which stands in contrast to merchant accounts, where the processing company will do a lot of underwriting and investigation before approving your application. Both Square and Stripe use a lot of machine learning to analyze transactions and flag suspicious behaviors. This potential for account holds or terminations is universal — you will encounter it with any third-party processor. If you want to avoid it, your only alternative is to seek out a traditional merchant account.
The other big complaint that I see with both is also a pretty common one:
Poor Customer Support: If I’m honest, reports about the quality of customer service conflict. But because of how common the complaints are, I’m listing it here. With Stripe, the most common issues are the lack of phone support and slow response times for email. With Square, a lot of the complaints about poor customer service come from terminated merchants, but I’ve seen a few complaints about slow or unhelpful email responses.
Additional frequent complaints about Stripe include:
Lack Of Fraud Protection: I want to be clear: Stripe does have fraud management tools and a system to help merchants fight chargebacks. But I have seen complaints from merchants who don’t think these are adequate. Chargebacks are not settled by Stripe, so there’s not much the company can do beyond pass the requested documents on. But for fraud prevention, merchants need to make sure they have the appropriate tools enabled.
Not User-Friendly: There’s a lot of testimonials from users (especially developers) who really like Stripe and find it simple to set up. There are plenty of others who disagree with that idea. I’m inclined to think most people with a decent technical backing will get along fine with Stripe, but for some people, especially those with less technical knowledge, it’s not going to be a good choice.
For Square, there is one other common complaint:
Lack of advanced features: It’s not that Square doesn’t have enough features, or that it’s missing anything important. The complaints about Square often focus on the lack of very particular advanced features that you typically find in full-scale POS systems. In this case, I think Square’s lack of extensive subscription tools would fit the bill. Some merchants have been upset for quite a while over the lack of Cost of Goods Sold (COGS) reporting. Square added this feature with its Square for Retail app, but not for online sales or its free POS. Square has some very powerful reporting tools, but in the end, they won’t hold a candle to Stripe’s Sigma offering.
I think, yet again, that the two companies are pretty evenly matched in this category. The largest complaints are identical, and that’s because they’re the same complaints we see with third-party processors. To be entirely honest, poor customer service is a common complaint across the entire payments industry. It’s frustrating, for sure. But you can take steps to better inform yourself — read our article on how to prevent holds, freezes, and account terminations. And please take reports of poor customer service with a grain of salt, because I see conflicting accounts there.
Positive Reviews & Testimonials
As media darlings, both Stripe and Square have gotten lots of press. They’re both lauded for the way they’ve transformed payments.
I usually feel a little bit silly comparing two businesses in this category because it almost feels like a bit of a popularity contest. But in this case, we’re dealing with two companies who have both gotten a LOT of positive press over the years, not to mention high-profile clients. And the bits of each service that merchants love most are pretty similar, too.
Square merchants love how easy the service is to use. And I tend to agree — Square is one of the most intuitive options out there as far as payments and using the dashboard. Merchants also really like the predictable pricing and lack of fees. Other than that, the integrated invoicing feature and the seamless omnichannel commerce experience are big draws.
Stripe also wins merchants over with its pricing, and its tools are very much loved by developers. While if you don’t have a lot of technical knowledge, Stripe may feel foreign to you, developers say it’s incredibly easy to use. Also on the dev side of things, it seems like the quality ofÂ customer service is great, even if business owners don’t always like the lack of phone support. And unsurprisingly, merchants really seem to love Stripe’s robust subscription tools. The predictable pricing and lack of monthly fees are also appealing.
Stripe and Square have some very important core similarities: they’re both third-party processors with an assortment of tools that allow merchants to sell online. Neither one is suited to high-risk industries, and there’s a lengthy list of businesses neither company can work with. But despite that, both Stripe and Square offer tools that cater to a huge assortment of industries. They’ll both grow with your business, making it easy to scale up.
But despite their similarities in terms of business model, it’s also pretty clear that what each company does best is completely different.
Square is a spectacular all-in-one processor. You can sell in a store, on the go, and online and get all of your information and payments and orders collected in one simply, intuitive dashboard. There’s a huge array of add-on products that allow you consolidate a host of business functions under one name, and they’re guaranteed to work together perfect. eCommerce support is really the newest branch of Square’s offerings, and it’s a work in progress as the company establishes more partnerships and integrations with other major players.
If you have limited technical knowledge, Square is going to be much easier to get started with and to navigate through the different features. It’s free advanced inventory tools are also very well suited to retailers and other businesses that sell primarily physical goods.
Stripe focuses only on Internet payments (both on the web and in-app), but its tools make it possible for businesses to cater to customers all over the globe. The international appeal — from the local currency displays to the sheer breadth of payment methods accepted — make it clear that Stripe is already a global player.Not only that, but with Stripe’s APIs and documentation, a savvy developer could create all kinds of payments platforms for a business. Business owners who don’t have a developer on staff, and who don’t have a lot of technical knowledge themselves, might struggle with understanding how to use Stripe, especially if you want to do anything more than integrate it with some sort of shopping cart software.
You also get a far more limited scope of features. There’s no native support for omnichannel commerce. No mPOS app, no POS integration to support card-present pricing, no invoicing. If you need more than online payments on a regular basis, Stripe isn’t a suitable choice. But if that’s all you need, Stripe isn’t just a good option — it’s one of the best out there, period. If your business has a global reach, again you’ll find that Stripe once again tops the lists of best solutions.
I’m not comfortable saying that one of these solutions is better than the other because it really comes down to what your priorities are. Do you need something easy to use? Do you want to embrace multiple sales channels? Or are you limited to online sales and want best-in-class tools to reach a global audience, manage subscriptions, and even drive mobile commerce? Square can get the job done, and it’ll be the easier solution, but Stripe offers far more tools.
Sit down, think about what features are absolutely mandatory for you to have — and then look at which ones you’d like to have, but aren’t necessarily required. From there, it should be fairly clear which solution is right for you! Don’t forget to check out our complete reviews of Stripe and Square for more insights into how they function.
Have questions? Leave us a comment and we’ll help! Have experience using either of these tools? We’d love to hear from you.
As always, thanks for reading!
The post Stripe VS Square appeared first on Merchant Maverick.
So you want to use your cell phone or tablet to start accepting payments for your business. Whether this is your first time around or you’re just wondering if it’s time to update that old credit card reader you’ve had for four years, there’s certainly a lot to consider. What kind of technology is out there? How much does a cell phone credit card reader cost? Should I get a credit card machine and POS instead? Which are the best credit card readers?
I’ve seen a lot of mobile card readers in my time. And the first thing to understand is that the card reader is tied to the mobile processing app (mobile point of sale, or mPOS for short). Sadly, we can’t just mix and match one card reader with another app. So before anything, you need to look at the software and make sure it’s a good fit for your needs. You should also check the processing rates and the cost of the hardware.
Apart from aesthetics, the reality is there aren’t a lot of differences between one card reader and the next. They all have the same core features, and they all use the same sort of security. Reliability is as much a product of the app design as it is the hardware design, sometimes moreso. So while you do want a good, affordably priced credit card reader, you should first narrow down the list of potentials using the software as your main criteria. Once that’s done, you can take a closer look at all the hardware.
If you are curious about what your hardware options are, read on! I’ve compiled a list of the most popular credit card readers and their specs. Make sure you read our reviews for each mobile app so that you understand the drawbacks and shortcomings of each as well as all the advantages.
But first, let’s set the record straight.
Credit Card Reader vs. Credit Card Machine: Know Your Terms
So what’s the difference between a credit card reader and a credit card machine? While it’s certainly possible that you might encounter some people who use the terms interchangeably, “credit card reader” is generally the term for small mobile devices that connect to smartphones and tablets and process transactions through a mobile app. This connection can be physical or wireless. However, the smartphone or tablet typically has to also have either cellular signal or a Wi-Fi connection.
A credit card machine (also called a credit card terminal) is larger, not mobile, and generally connects to a full-fledged POS. They may or may not have an integrated receipt printer or a PIN pad device for customers. Credit card machines require a connection to either a phone line or the Internet to function. Some machines are capable of wireless Internet connections, but they do add to the cost.
The biggest difference between a credit card reader and a credit card machine is price, though. A mobile card reader can cost anything from $10 to about $80, whereas the typical entry-level price for a machine is about $120. However, depending on what features are included, a credit card terminal can cost $600 or more.
Types of Credit Card Readers for Phone & Tablet
When categorizing credit card readers, you need to consider two criteria: how the device connects to your phone or tablet, and which payment methods the device accepts (we’re not talking about manual entry options just yet).
Phone Connection Options:
3.5mm/Headphone Jack: Most of your entry-level credit card readers will connect to a phone or tablet via the 3.5mm headphone jack. However, it’s worth noting that this design is slowly fading out. Part of the driving force is Apple’s removal of the headphone jack from its iPhones, but I think it’s also a result of our overall shift toward wireless. It’s worth pointing out that both Square and PayPal have Lighting to 3.5mm headphone jack adapters that will allow you to continue to use their magstripe readers.
Bluetooth: Bluetooth readers are becoming increasingly common. They’re compatible with both iOS systems, they’re secure, and they allow for some sophisticated card reader designs. The one downside to Bluetooth readers is that they can run low on power quickly if they’re always connected without a “sleep” mode.
Generally speaking, credit card readers for smartphones and tablets support one of these connection methods, but not both. There’s always an exception to the rule, however. With Apple moving toward Lightning ports for everything, it’s worth getting a Bluetooth device, which will ensure that no matter what smartphone or tablet you get in the future, the card reader will be able to connect.
Supported Payment Methods
Magstripe: Until 2015, magstripe transactions were the only form of credit card payment commonly accepted in the US. Magstripe transactions (also referred to as swipe transactions because they are made by swiping the card through a terminal or card reader) are still supported, but becoming superfluous as other, more secure payment methods become available.
EMV: In October 2015, a major liability shift occurred, shifting responsibility for fraudulent swipe transactions onto merchants, if that card had an EMV chip and the merchant did not have an EMV-enabled credit card reader. As a result, you probably saw a surge of chip cards appear, and payment processors rushed to introduced new hardware capable of processing chip card transactions. Chip cards are more secure and can help reduce in-person fraudulent transactions.
NFC/Contactless: Apple Pay, Android Pay, Samsung Pay, and all of the other “Pay” apps you’ve seen rely on NFC (near-field communication) technology. Transactions are often called contactless or “tap” transactions.
All mobile card readers on the market accept some combination of these three payment methods. As a merchant, it’s important that you are able to process EMV transactions to protect yourself against liability for fraudulent transactions.
Card Readers for iOS vs. Card Readers for Android: Is There a Difference?
Generally speaking, mPOS apps tend to offer more features to tablet users, especially iPads. But apart from enhanced features for tablets, there usually isn’t much difference between apps for iOS vs. apps for Android.
The same goes for mobile card readers. Unless the app itself is built to function only on one operating system, a card reader for iPhone or iPad works with an Android phone or tablet. So if your business has a mix of Android and iOS devices, you can use your hardware on both. You’ll just have to worry about pairing and re-pairing any Bluetooth devices as needed.
Now that we’ve identified the defining traits of credit card readers, let’s look at the mobile card readers from the most popular mPOS systems: Square and PayPal.
Square Credit Card Readers
Square (read our review) is definitely a leader in the mPOS industry, both for its software and hardware. It was one of the first mobile systems to embrace chip cards and it seems to put a high priority on keeping its hardware affordable.
The one piece of Square hardware that we haven’t included here is the Square Register, which is more of a full-fledged POS than a mobile system. Check out our full review of Square Register for a closer look at the system.
Square Magstripe Reader
If I wanted to be extremely hyperbolic, I would say that Square’s magstripe reader is synonymous with mobile processing. Instead, I’ll just say that the white and boxy device certainly is iconic. The overall design hasn’t changed in years. Available for free if you order directly from Square or $9.99 at retail stores such as Staples (Square will reimburse you later), this entry-level device connects via the headphone jack, and as the name says, handles magstripe transactions only.
Cost: Free ($9.99 reimbursed if bought at a retail location)
Payment Types Supported: Magstripe
Square Chip Card Reader
If you just glance at the Square Chip Card Reader (read our unboxing review), you might not notice any immediate differences between the magstripe reader and the chip card reader. That’s because Square didn’t exactly reinvent the wheel. The Chip Card Reader is slightly thicker than the original, with an extra slot for inserting the chip end of a credit or debit card. Unlike the magstripe reader, you need to periodically charge this model. Square sells the Chip Card reader for $29, which is, all considered, a pretty good price for a device that can handle magstripe and EMV transactions.
Payment Types Supported:Â Magstripe, EMV
Square Contactless & Chip Card Reader
The Contactless and Chip Card Reader from Square doesn’t exactly break the mold as far as design: White, boxy, with Square’s logo set into it. What’s that expression? If it isn’t broke, don’t fix it?
Unlike the previous two card readers, the contactless and chip card reader relies on a Bluetooth connection to process transactions. And it doesn’t support magstripe cards at all. To get around this, Square includes a magstripe reader in the package as well.
The contactless and chip reader sells for a very reasonable $49, but if the upfront investment makes you cringe a bit, Square also offers an installment plan that will allow you to pay off a portion of the cost each week. Expect to pay a little bit more in the long term as a trade-off for the convenience of the installment plan, but it’s nowhere near as bad a hardware lease program from a traditional merchant account.
The contactless and chip reader is a slim, slick little device and you can certainly use it in a handheld mobile situation. But Square also sells a clever little dock to charge the device and still allow you to use it. The dock goes for $29 on its own, but it is optional.
The Square Stand isn’t really a card reader — it’s an iPad stand with an integrated magstripe reader. But it was one of the devices that helped make Square so popular with merchants. These days Square sells the stand with a contactless and chip card reader plus the dock.Â But it merits a mention here because it shows that mobile card readers can also be used in countertop/retail setups. Square even sells bundles and kits with everything you need to get set up.
The Square Stand plus the card readers will run you $169, which is less than you’d pay for all the individual components — the stand ($99 originally). The contactless and chip card reader ($49), and the dock ($29). Bundles that include a cash drawer and receipt printer start upwards of $500, not including the iPad.
Payment Types Supported: EMV, NFC, Magstripe (integrated into tablet stand)
PayPal Credit Card Readers
The other major name in the mPOS space (and commerce in general) is PayPal. The company’s mobile processing app, PayPal Here (read our review), isn’t quite as full-featured as Square, but you’ll find a lot of similarities between the two, especially as far as business model.
PayPal Mobile Card Reader
PayPal’s mobile card reader is a standard magstripe reader with a headphone jack connector. While the color has changed from PayPal blues to black, the overall shape hasn’t: it’s still a simple and quite stable triangle that connects via a headphone jack. There’s no frills or fuss here.
PayPal used to offer the mobile card reader for free through its website, but that’s no longer the case. It’ll cost you $14.99 to get started, though it’s worth the extra money to upgrade to at least an EMV reader.
Payment Types Supported: Magstripe
PayPal Chip & Swipe Reader
PayPal’s Chip and Swipe reader is a step up from its Mobile Card Reader, with a sleek rectangular design. It’s about the size of a credit card and slim at just half an inch thick. Plus, $24.99 for a Bluetooth device that accepts both EMV and magstripe, makes it one of the more affordable options for card readers, especially if all you need is mobile support.
Payment Types Supported: Magstripe, EMV
PayPal Chip & Tap Reader
If you want more than just magstripe and EMV support, PayPal also sells a Chip and Tap reader that allows you to accept Apple Pay, Android Pay, and other contactless methods. The Chip and Tap reader looks quite a bit different from the Chip and Swipe reader. Though it’s still black, it’s boxy and measures 0.75 inches in depth.
I actually hate to say this, but the PayPal reader reminds me a bit of Clover Go’s all-in-one reader, just more refined. And unlike the Chip and Swipe reader, this design is meant for both mobile and countertop use — and PayPal offers a charging dock for those who are interested in a countertop setup.
Alone, the reader sells for $59.99, but a bundled kit with the reader and dock sells for $80 (PayPal indicates that’s a markdown from $89.99 on its website). I don’t see the dock listed for sale separately, but I would assume it would sell for $30 on its own.
PayPal’s Chip Card Reader was actually the first EMV-enabled reader the company offered, and it wasn’t PayPal’s own design. The reader is actually a branded Miura M010, which has also previously been offered by Square, and is still available from Shopify as well.
The Chip Card Reader is a handy little mobile reader, but you can get a dock for it and mount it in a countertop setup (at least, until PayPal possibly phases this device out of its lineup). Despite its rather bland name, this reader accepts magstripe, EMV, and NFC/contactless payments. However, it comes at a steep price $79, which is still less than the original $150 it sold for. It’s worth noting that despite the PIN pad, it doesn’t support PIN entry because PayPal Here doesn’t support debit transactions.
While Square and PayPal are certainly two of the biggest names, they’re not the only options if you need a mobile credit card reader. Let’s take a look at some of the other processors and what hardware they offer.
Shopify is mostly associated with eCommerce, but it’s moved toward an all-in-one approach that includes a POS (read our review). The full-fledged POS package is designed for a countertop setup and syncs with your Shopify store. However, for a very reasonable $9/month, you can get the Shopify Lite plan, which supports sales through social media and a buy button on your own website, as well as access to the mobile POS. Keep in mind that this is designed almost exclusively for retail environments. For mobile users, though, Shopify offers two readers.
Shopify Tap, Chip & Swipe ReaderÂ
I mentioned before that PayPal’s Chip Card Reader is actually made by another company and is called the Miura M010. Shopify licenses the same device and calls it the Tap, Chip and Swipe reader.
Again, you have a Bluetooth connection with support for magstripe, EMV, and contactless transactions. Shopify sells the reader for $89, which is on the higher end of things. The dock sells for $39. However, the reader is well designed and very functional, and if you want to accept Apple Pay and other “Pay” apps with Shopify, it’s the only option.
Shopify’s Chip and Swipe Reader is a sleek white device. As the name implies, the reader can handle both magstripe and EMV transactions, but not contactless/NFC. I like that it comes with a dock charging dock by default, instead of as a pricey add-on.
The retail price for the reader is listed as $29, but as I am writing this, Shopify is offering it for free.Â The Chip and Swipe Reader is easily one of the more beautiful card readers I’ve seen, as well as innovative and well priced.
Payment Types Supported: Magstripe, EMV
Payline Data is a traditional merchant account processor, but its Payline Mobile app (read our review) is actually a viable standalone processing option even for low-volume and seasonal merchants. The company offers a standard magstripe reader (the Ingenico G5X) that isn’t particularly interesting. Its other mobile reader, though, is the Ingenico RP457c, and it is definitely one of the more innovative card reader designs I’ve ever seen.
For starters, the RP457c can connect to cell phones and tablets through the headphone jack or Bluetooth, which is very uncommon. It also supports magstripe, EMV, and NFC transactions all in one. The device is designed to clamp onto phones or rest in a dock for use as a wireless reader.
Payline doesn’t disclose its current pricing for the RP457c, in part because some merchants may be eligible for a free device. However, I was able to confirm that the reader retails for $150, which is quite expensive.
SumUpÂ (read our review) is a European company that opened up processing for US merchants in 2017. While it’s not as comprehensive as other mPOS options, it does everything most merchants will need to do. It’s also worth pointing out that the SumUp mobile card reader, called the SumUp Air, actually won an award for its innovative design.
The SumUp Air shows its European sophistication with its sleek white minimalist design. It relies on a Bluetooth connection to process magstripe, EMV, and contactless transactions. If you want more information,Â check out our unboxing review of the SumUp card reader.
Clover Go (read our review) is the mobile extension to the Clover family of POS products developed by First Data. It functions best as an extension of Clover, but it can be a standalone POS option. However, pricing for the hardware as well as payment processing can vary significantly depending on which reseller you go through, and you should be wary of sales gimmicks and possible contracts with early termination fees.Â However, don’t forget that anyone selling Clover products is just reselling First Data’s processing services.
Clover Go ReaderÂ
Clover’s basic “entry level” reader is a headphone jack reader that supports magstripe and EMV transactions. The design is overall larger than most comparable devices, but Clover does include a clamp to help stabilize the card reader while attached to a phone or tablet.
Pricing for the Clover Go reader will depend on resellers. Some may even offer it for free. Unlike its all-in-one sibling, you can’t get this reader through the Apple Store and if you sign up with First Data directly you’ll probably be offered the All-In-One Reader first and foremost.
Cost: Varies according to reseller
Payment Types Supported: Magstripe, EMV
Clover All-In-One Reader
I said earlier that the PayPal Chip and Tap Reader reminded me of Clover Go. That’s because Clover Go is also a square, boxy device with very similar dimensions. However, whereas PayPal’s is black, Clover Go’s is white.
You’ll also find the All-In-One Reader comes with a dock. It’s not the most elegant design, but it will allow you to charge the device or keep it on a countertop while still processing card transactions.
Unfortunately, pricing for this card reader varies depending on which company a merchant chooses to sign up with. You can get it direct from First Data (or the Apple Store) for $39.95, not counting the dock, which sells for $34.Â Â
Cost:Â $39.95 (through First Data or Apple Store; other prices vary according to reseller)
Intuit’s mobile payment solution, QuickBooks GoPayment (read our review) appeals mostly to a small but viable niche — QuickBooks Online customers who need an easy way to take payments in person. While the app isn’t loaded with advanced features, it will work pretty well for merchants with simple needs. Intuit offers two readers to address merchant needs.
Chip and Magstripe Reader
Intuit’s Chip and Magstripe reader is a small, gray, unassuming device. It doesn’t have quite the sophistication of some other readers (I might even call it bland), but the design is overall good. The curves have a sort of friendliness about them rather and prevent it from looking boxy like other devices.Â As the name implies, this card reader supports magstripe and EMV transactions. It connects to a phone or tablet via Bluetooth.
The Chip and Magstripe Reader goes for $19 normally, but Intuit is offering the reader free for new merchants. That puts it at the lower price end, especially for a Bluetooth enabled device with EMV. You can also connect the device to computers running QuickBooks Desktop Pro 2018 and future versions of the software.
Cost: $19 (free with signup for new merchants)
Payment Types Supported: Magstripe, EMV
All-In-One Card Reader
Intuit’s newer card reader is an all-in-one device that connects via Bluetooth. But unlike its sibling, this device supports magstripe, chip card, and contactless transactions. By default, it’s meant to nest in a charging dock.
Intuit sells the all-in-one reader for $49, which is not a bad price at all considering that the dock/cradle is included at no extra charge. It has the same sort of nondescript gray finish, but Intuit has embraced a curvy aesthetic that is easy on the eyes.
Last on the list is PayAnywhere (read our review). While the name isn’t as recognizable as some of the alternatives, PayAnywhere’s mPOS does have some good features and interesting hardware. Its biggest shortcoming is simply the quality of customer service and some practices involving its Storefront plan.
PayAnywhere offers merchants a choice of two readers for merchants, though they still leave me a bit perplexed in terms of design.
PayAnywhere 2-In-1 Reader
PayAnywhere’s entry-level reader is a 2-in-1 device with magstripe and EMV support and Bluetooth connectivity. It looks pretty simple, and it actually reminds me of PayPal’s Chip and Tap reader with its shape and coloring.
There’s not much more to say about this little device except that PayAnywhere offers it free for new merchants. Additional 2-in-1 readers run for $30.
Cost: $29.95 (free for new merchants)
Payment Types Supported: Magstripe, EMV
PayAnywhere 3-In-1 Reader
I think the most interesting thing about PayAnywhere’s 3-In-1 Reader is that it’s the only mobile card reader I’ve seen that supports NFC and connects via a headphone jack. (The Ingenico RP457c can connect via headphone jack OR Bluetooth, so I don’t count it in the same category.) It looks shiny and futuristic with its black finish and lights, which is ironic for a device that uses a dying connection method.
PayAnywhere offers its 3-in-1 device for $40, but on the website you’ll also see an offer for free processing on your first $5,000 in Apple Pay transactions (valued at $135). However, an offer like that should not be the deciding factor in choosing a processor.
Is a Mobile Credit Card Reader Absolutely Necessary?
You don’t actually have to have a mobile credit card reader to process payments with a mobile POS system.
Flint Mobile, a mobile processor that works through Stripe, has no credit card readers at all. Instead, the app relies on a device’s camera to scan cards. The camera doesn’t actually snap a photo of the card, which would be a huge security issue. But the app is able to open the camera and scan a card the same way QR code readers are able to access the camera to open QR code links. Flint has a couple of filters it applies to the camera for added security.
That said, Flint isn’t the only mobile option with this ability. PayPal Here and Intuit GoPayment also include the camera scanning feature.
Not only that, but most mPOS apps also include a feature that allows you to manually key in transactions. These process at a higher rate that swiped/dipped/tapped transactions because they’re processed as card-not-present, like ecommerce transactions. But it’s a useful alternative when the card reader is being glitchy or the card is very worn. The notable exception to all this is SumUp, a company that started in Europe and doesn’t support manual entry for cards except through its virtual terminal.
Of course, if you don’t want to pay extra for manually entering transactions, it might be best to spend a little extra money and buy a backup card reader or two in case one starts to misbehave.
Are Free Credit Card Readers Worth It?
Several mobile POS options (including Square) provide an incentive for potential customers in the form of a free credit card reader. This can certainly make it more tempting to try out a payment processing service, but it shouldn’t be the deciding factor.
For one, free card readers tend to be pretty basic. Some have EMV support, but none of the free card readers on this list support contactless payments. Contactless support may not be mandatory for everyone, but EMV support should be a mandatory feature for every merchant. A reader with a Bluetooth connection will also ensure it’s future-proof no matter what phone or tablet you upgrade to later on.
Two, a free mobile card reader will absolutely not offset a processor’s shortcomings, such as poor customer service or missing features. It’s smarter for merchants to make a decision based on the quality of the mobile app, its features, and the processor’s customer support.
So while the ability to try some mPOS options without any upfront investment is nice, please don’t let a free credit card reader be the reason you pick one processor over another. Make sure you explore all of your options.
Don’t let a free reader be the determining factor in choosing an mPOS.
I’m not going to try and convince you that mobile credit card readers are the world’s most fascinating subject (even if I could probably talk your ear off for a couple of hours about all the different designs and features and how they embody the philosophies of the companies that sell them).
But if nothing else, you should take away a few key ideas that will prepare you to choose a mobile point of sale app and a credit card reader:
Software is more important than the hardware. Make sure the app has what features you need before you set your heart on a device.
Make sure the card reader you choose has EMV support. In 2018, there’s no reason why you shouldn’t be taking such a basic step to protect yourself and your business.
Prices for credit card readers range from totally free to upwards of $75. How much you want to spend is entirely up to you, but you will generally pay more for Bluetooth connectivity and for NFC support. Don’t be suckered in by the offer of a free reader, because there are lots of other criteria you should consider first.
You don’t technically need a mobile reader to take payments on a phone or tablet. However, you will pay more to process manually entered transactions in your mPOS app, so it’s a good idea to get one anyway.
Thanks for reading! If you’re ready to choose an mPOS app, a great place to start is our mobile processing comparison chart! Otherwise, if you have questions, feel free to leave us a comment!
The post The Best Credit Card Reader For Your Small Business appeared first on Merchant Maverick.
If youâre a business owner searching for a merchant account provider, youâre going to hear about First Data sooner or later. Theyâre rather hard to ignore, as theyâre the largest provider in the United States. The company currently processes 45% of all credit and debit card transactions in the US, either directly or through a network of sub-ISOs and third-party partners. There are several really large providers in the processing industry, but First Data is simply huge.
The company dominates the processing industry in the same way that Amazon and Walmart dominate the retail sector. Unfortunately, First Dataâs outsized chunk of the market share is the only thing they have in common with these two retail giants. While Amazon and Walmart have succeeded by offering lower prices than their competitors, First Data is more like the Apple of the processing industry. They provide a high-quality product, but youâll pay top dollar for it, and they make no effort to lower their prices to accommodate customers of more modest means.
Weâve reviewed First Data and found that their products and services are generally quite good. However, their prices and contract terms are geared toward the top end of the market. If youâre a large business processing over $100,000 per month, they can offer you very competitive rates. Theyâll also charge you high account fees, but youâll still save money overall. Small businesses, on the other hand, will be far more impacted by the higher fees, and wonât qualify for the lowest possible rates. First Data also continues to push outrageously expensive terminal leases through their subsidiary, First Data Global Leasing.
If youâre a small business owner, youâll want to consider several alternatives to signing up with First Data. Below, weâve presented four alternative processors that work better for smaller businesses. One (Dharma Merchant Services) is a merchant account provider that uses First Data as their backend processor. This relationship gives you access to many of First Dataâs powerful features, but at a much lower cost and with far more personal customer support. The others (Helcim, Fattmerchant, and Chase Merchant Services) offer services similar to First Data but are much more affordable for small businesses. Of these four alternatives, only Chase Merchant Services is a direct processor, able to manage your merchant account and process your transactions.
Overview of First Data
If youâre still thinking about signing up with First Data, youâll want to read our in-depth review of the company before making a decision. While weâve given them a decent score overall, the fact remains that their services are geared (and priced) more toward big businesses. Theyâre not a good deal for smaller companies, and merchants who only occasionally need to process credit or debit card transactions should steer clear altogether due to their high account fees.
First Dataâs standard contract imposes a four-year term, with an automatic renewal clause that extends the contract for one-year periods after that. The contract is enforced through an early termination fee (ETF). Rather than charge a fixed amount for breaking your contract, First Data adds your monthly minimum, monthly customer service fee, and monthly account fee together, then multiplies this amount by the number of months remaining in your contract to calculate your ETF. This amount can easily exceed $1000 in the first year or two of your contract â far more than most providers charge for an early termination fee. While the company is sometimes willing to waive this fee altogether, you might prefer to avoid liability for this fee entirely by choosing one of our alternative providers, none of whom charge early termination fees at all.
First Data doesnât disclose any information about processing rates on their website, but they offer a combination of both tiered and interchange-plus pricing plans. Of these two, tiered pricing is almost always more expensive. Because it brings in more revenue for First Data, youâre likely to be offered this type of pricing if you donât ask for interchange-plus. Sales representatives have some leeway to negotiate the kind of pricing plan youâll receive and the rates youâll pay, but very small businesses or those without an established processing history might have no choice but to accept a tiered plan. You can avoid the uncertainty and the possibility of overpaying for processing by looking into one of our alternative providers. Dharma and Helcim offer fully-disclosed interchange-plus rates exclusively, while Fattmerchant uses a unique subscription-based pricing system that offers very low interchange-plus rates in exchange for a higher monthly account fee. Chase Merchant Services offers a combination of both tiered and interchange-plus rates, but seems more amenable to offering interchange-plus rates to smaller businesses than First Data.
First Data also charges a number of monthly, annual, and incidental account fees to maintain your merchant account. While none of these fees are directly disclosed on their website, you can find information about most of them in the sample contract. While some of these fees may be waived or reduced through negotiation, theyâre generally higher than industry averages. If you donât want to pay extra just to maintain your merchant account, youâll be happy to know that our preferred alternatives charge lower fees than the industry average. Better yet, Dharma, Helcim, and Fattmerchant fully disclose their fee schedule right on their website. You wonât have to talk to a sales representative or sift through pages of fine print to figure out what your fees will be for your merchant account. Chase doesnât disclose their fees in such a transparent manner, but merchant feedback indicates that theyâre reasonable and in line with industry averages.
While pricing is understandably the most important concern for most merchants when choosing a provider, customer support and service after the sale should also be an important consideration. All our suggested alternative providers offer excellent customer support. First Data has a surprisingly good reputation in this area despite their huge size, but weâve found that smaller providers generally offer better, more personalized service than the larger companies. With these considerations in mind, letâs take a closer look at our recommended alternatives to First Data:
Dharma Merchant Services
If you want to harness the power of First Dataâs specialized services and products, but at a lower cost, take a look at Dharma Merchant Services (see our review). While the company uses First Data as one of its backend processors, they have a completely different pricing structure and a unique corporate philosophy. Dharma Merchant Services takes its name from the term dharma, which is found in several Eastern religions and roughly translates to a “right way of living.” The folks at Dharma take this concept seriously, offering a full spectrum of credit card processing services for a fair and reasonable price. Their fee structure is completely transparent, with all fees and charges disclosed on their website. All merchants receive interchange-plus pricing, and there are no annual fees. They also don’t charge account setup fees, early termination fees, or have a monthly minimum. Fees that they do charge (including PCI compliance fees) are fully disclosed. Dharma is unique in the world of credit card processing companies in that they donate a significant percentage of their profits to charity, living up to their motto “Commerce with Compassion.”
In addition to merchant accounts, Dharma offers a variety of wired and wireless countertop terminals for in-store use, including the First Data FD130. Their terminals are EMV-compliant and support Apple Pay. If you need a full-featured POS system, they offer the popular Clover Mini. Dharma also offers their proprietary MX Merchant system, which integrates a payment gateway, virtual terminal, and mobile processing solution into a single product.
Dharma easily offers the fairest and most transparent fee structure in the industry. In addition to a flat $10.00 per month fee for storefront and eCommerce accounts, transactions are billed according to an interchange-plus pricing model. In-person transactions are charged interchange + 0.25% + $0.10 per transaction, while eCommerce transactions are charged interchange + 0.35% + $0.15 per transaction. For restaurants, Dharma offers a special discounted rate of interchange + 0.20% + $0.07 per transaction. Other additional fees (such as PCI compliance fees) are clearly spelled out on Dharma’s website.
While there is no minimum monthly volume requirement, Dharma openly acknowledges that their full-service merchant accounts donât make financial sense for low-volume businesses processing less than several thousand dollars per month in transactions. If your business falls into that category, they recommend either PayPal or Square.
“Trust, transparency, and fair pricing” is Helcim’s motto, and they live up to it by providing the most up-front, clearly-explained pricing structure of any of the credit card processing companies we’ve reviewed. A Canadian company, they also have an office in Seattle and provide full support to US-based merchants.
Helcim (seeÂ our review) offers a full gamut of services and equipment for both storefront and online businesses. Their website features a variety of EMV-compliant and NFC-capable credit card terminals, starting at $199. Unlike many of their competitors, they encourage US customers to buy their terminals outright, rather than renting or leasing. Helcim will reprogram your current equipment for free if it’s up-to-date. If your current terminal isnât compatible, theyâll exchange it for a refurbished model for $75.00. Unfortunately, Canadian EMV-compliant terminals are not designed to be transferred or resold, so Canadian customers will have to use the rental option or buy a new machine. Renting on a month-to-month basis (which is not the same as leasing) is usually the best option for Canadian merchants.
Helcim has recently introduced their Helcim Commerce system, a web-based solution that processes both online and manual payments on your computer or with a traditional terminal, generating receipts that can be emailed or printed. This system includes a virtual terminal, payment gateway with API, support for recurring billing, billing information vault storage, e-invoicing, shopping cart integration, and hosted payment pages. Best of all, you get all these features for a flat $15.00 per month for retail users or $35.00 per month for eCommerce merchants.
Mobile payments are supported through the free Helcim Commerce Mobile app for iOS and Android. To use the app, youâll need the Helcim Mobile Reader, which supports magstripe swiping and plugs into your smartphone’s audio jack. Readers cost $30 each.
Helcim uses an interchange-plus pricing model for all merchants. Rates for retail merchants range from as high as interchange + 0.25% + $0.08 per transaction to as low as interchange + 0.10% + $0.05 per transaction, depending on your monthly processing volume. Online rates range from as high as interchange + 0.45% + $0.25 per transaction to as low as interchange + 0.10% + $0.10 per transaction, again depending on monthly processing volume. Helcim doesn’t charge fees for account setup or termination, and PCI compliance is included in the monthly subscription fee. All contracts are month-to-month, with no early termination fees. For small businesses processing at least $1500 per month, Helcim will save you a significant amount of money over First Data through lower interchange-plus rates and lower account fees.
Fattmerchant (see our review) is a newcomer to the merchant account industry, starting up in 2014. Focusing on transparency and lower costs for merchants, the company offers several subscription-based pricing plans. Under these plans, youâll pay a higher monthly fee, but you wonât pay any markup percentage on your processing costs. With a high enough processing volume, this can lead to significant savings in overall costs over traditional interchange-plus pricing plans. Your monthly subscription fee also covers things like PCI compliance, eliminating most of the additional fees that traditional processors like to add to your bill.
With Fattmerchant, youâre encouraged to buy your own terminals, and theyâll re-program them to work with their services for free. They also offer EMV-compliant terminals and POS systems with some of their pricing plans. For mobile payments, the company offers their free Fattmerchant Payments Mobile app, which is currently available for iOS only. An Android version is under development.
Fattmerchant offers a choice between two subscription-based pricing plans. The $99 per month plan is available for businesses that process up to $1 million annually. Larger businesses processing over that amount pay $199 per month for their subscription. With the $99 per month plan, retail merchants pay interchange + 0% + $0.08 per transaction. Enterprise users on the $199 per month plan pay interchange + 0% + $0.06 per transaction. Online and mobile transactions cost interchange + 0% + $0.15 per transaction under the $99 per month plan, and interchange + 0% + $0.12 per transaction under the $199 per month plan. As you might have guessed, the bulk of your monthly subscription fee goes to covering the markup that traditional interchange-plus pricing plans charge. If your processing volume is high enough, you could save quite a bit in processing charges with one of these plans. On the other hand, itâs probably not cost-effective for low volume or seasonal businesses. Fattmerchant doesnât charge PCI compliance fees, batch fees, or statement fees, as these are all covered by your monthly subscription fee.
While Fattmerchant claims that there are no contracts, what they really mean is that there are no long-term contracts. Their merchant accounts are billed month-to-month, and there is no early termination fee if you close your account.
Fattmerchant offers an intriguing alternative to traditional merchant accounts. Their processing rates are extremely low, although this is offset by the high monthly subscription costs. Youâll want to run the numbers carefully and compare your current processing costs to what youâd pay with them to see if their plans make sense for your business. While mid-sized companies could save as much as 40% over the cost of a First Data merchant account, smaller businesses might find the subscription cost to be too high to save money overall on processing costs.
Chase Merchant Services
While all the alternatives to First Data weâve discussed so far have been smaller providers, Chase Merchant Services (see our review) is one of the larger merchant services providers in the industry. Theyâre large enough to be a direct processor, much like First Data itself. As such, they can offer you many of the same powerful features that First Data can. However, their pricing and terms are more competitive, and they have a much better reputation for customer service.
Like First Data, Chase doesnât disclose any pricing information on their website. However, they offer a similar combination of both tiered and interchange-plus pricing rates. Merchant feedback suggests that theyâre more likely to provide you with interchange-plus pricing, and that their account fees are reasonable. They also sell their equipment rather than leasing terminals, which is a big plus.
While the company doesnât appear to offer true month-to-month billing, they no longer include an early termination fee in their contracts. So, while you might still be bound by a three-year contract with an automatic renewal clause, it will be much easier to close your account early, and you wonât be charged a penalty for doing so. As always, we strongly advise you to read your entire contract thoroughly before signing up, and donât rely on any verbal assurances from sales representatives.
Chase Merchant Services is a good choice for both retail and eCommerce merchants. They offer several EMV-compliant credit card terminals, which you can purchase outright rather than leasing. Their Orbital Payment Gateway is one of the best in the industry. They also have a solid mobile payments system, which uses their Chase Mobile Checkout app (available for both iOS and Android) and an EMV-compliant mobile card reader. Note that, as of this writing, theyâre one of the few providers in the industry to offer an EMV-capable mobile card reader.
Chase Merchant Services is also a good choice for companies that do business overseas or process a lot of B2B transactions, offering payments in over 120 currencies and providing the ability to process Level II and Level III card data.
While you wonât find the same high level of transparency that our other alternative providers offer, Chase Merchant Services is a good choice for mid-sized and larger businesses looking for a provider that can match First Dataâs services, but at a more competitive price. The company also has a remarkably low complaint volume relative to its size. As a point of comparison, Chase Merchant Services has 37 complaints within the last three years, while First Data has over 1000.
With nearly half the market share in the United States, itâs impossible to ignore First Data in your search for an ideal merchant services provider. However, bigger isnât always better, and First Data is really only a good choice if youâre already very successful in your business and experienced in negotiating with providers. Smaller businesses and merchants who are just starting out should steer clear of First Data and consider one of our preferred alternatives instead.
One of the significant advantages offered by Dharma, Helcim, and Fattmerchant is that they fully disclose their pricing upfront. Not only does this eliminate the need to negotiate with a sales representative, but it also allows you to make a far more accurate estimate of your anticipated processing costs before you ever contact their sales department. While you wonât be able to do this with Chase Merchant Services, a price quote from them will allow you to make an accurate estimate of how their costs stack up against our other, more transparent, providers.
In selecting between these four alternatives, Dharma and Helcim are best for nonprofit businesses, as they offer discounted pricing for qualified nonprofits. Dharma is also an excellent choice for restaurants, being one of the few providers in the industry to provide lower pricing just for restaurant owners. Helcim is a great all-around choice for small or newly-established businesses. Fattmerchant can offer the most significant savings over more traditional providers to businesses that are large enough to afford their subscription rates. Finally, if your business needs the power of a direct processor and you can negotiate a good deal, Chase Merchant Services is a great alternative to First Data. If your business is too small to afford any of these alternatives, we recommend that you look into a payment service provider (PSP), such as Square or PayPal.
The post The Best First Data Credit Card Processing Alternatives appeared first on Merchant Maverick.