Digital Wallets VS Mobile Wallets

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How To Accept Donations Online

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How to Accept Online Payments With Square

When you are ready to start selling online, Square (read our review) offers a wide variety of options depending on your skill level and needs. For example, if time is of the essence or you don’t want to fuss with code, build a free online store from Square’s templates and get up and running by the end of the day.

Already have a site? Choose a plugin integration from the Square Dashboard that solves your problem — without the need for code.

But those aren’t all of your options. If you do have developer expertise, you can build your checkout flow with Square Transactions API and start accepting all major credit cards with digital wallet support, too.  Square Checkout is yet another developer option that requires less coding with a pre-built payment form and digital wallet support.

In this post, we’ll explore each path so that you can get the facts and navigate to the choices right for you. Before you know it, you’ll have launched your own online store and can move on to more exciting business matters.

Note: If you’re also curious about in-store payments, check out our related post, How To Use Square To Accept Credit Cards In Person.

Webstore Integrations Developers

Build Your Webstore Quickly & Easily

Integrate With Popular eCommerce Software

Developer-Friendly Tools For Customization

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Highlights:

  • No coding required
  • Free personalized URL
  • Premade customizable themes
  • No hosting fees
  • Manage from your Dashboard
  • Mobile-ready storefront
  • Integrate with your in-person store

Integrate with:

  • WooCommerce
  • BigCommerce
  • Ecwid
  • 3dcart
  • OpenCart
  • Zen Cart
  • Weebly
  • WordPress.com
  • Wix
  • +More

Highlights:

  • API for custom solutions
  • In-person solutions
  • Online solutions
  • Card reader SDK
  • Customer management solutions
  • PCI and EMV compliance
  • End-to-end encryption
  • Dispute management
  • Fraud detection

Instant Account Setup

Fast Funding

No Monthly Fees

2.90% + $0.30 for online sales

Instant Account Setup

Fast Funding

No Monthly Fees

2.90% + $0.30 for online sales

Instant Account Setup

Fast Funding

No Monthly Fees

2.90% + $0.30 for online sales

How Much Does Square Charge For Online Payments?

The cost question can be a very loaded one when it comes to payment processing. The great news is that Square offers a transparent pricing model.

To process credit cards online with Square, you’ll pay 2.9% + $0.30 per transaction. The significant thing to note is that this flat fee encompasses much more than is typical with traditional merchant accounts. For instance, you don’t need to worry about a payment gateway (and the expenses that go with it) when you process through Square. Read on below to learn the differences between Square and a traditional merchant account — and why they matter.

Traditional Merchant Account Vs. Square

Square’s hardware and services encompass an end-to-end processing system that captures payment information and encrypts it through the payment chain with no need for a separate payment gateway.

What this means for you is cost-savings compared to a traditional merchant account. You won’t be paying initial set-up fees, PCI compliance fees, monthly account fees, batch fees, or higher rates for processing cards like American Express. Square also doesn’t assess any chargeback fees and offers merchants up to $250/month in chargeback protection. All of this is a pretty big deal because Square spares business owners from the laundry list of itemized charges that can come with traditional merchant accounts.

So if Square isn’t a traditional merchant account, what is it? Square is a third party processor. This means that instead of opening a merchant account directly, you are basically a sub-user on Square’s giant merchant account, along with all of Square’s other customers. Square acts as a payment processor and also assumes the financial risk associated with your business to do so. The whole premise behind Square is that it makes setting up a shop very easy for the busy entrepreneur. In fact, you can get an account set up and running to take payment the very same day. The Square sign-up process doesn’t even require a credit check!

While you don’t need to jump through a lot of hoops to open up an account with Square (as you would working directly with a bank), Square is more apt to terminate or put a hold on an account if certain red flags are raised. While the overwhelming majority of businesses will never have a problem with an account hold, it can be disconcerting if it happens to you. Check out our post How to Avoid Merchant Account Holds, Freezes, and Terminations to find out more. Again, most merchants will likely never have to face this issue, but it helps to cover your bases.

Now that we have covered Square Payments as a third party processor and the cost of processing, let’s dig into Square’s offerings when it comes to going live and selling online.

Option 1: Build A Free Square Online Store

Square Store Template

As I said in the introduction, you can get a free Square store up and running today with no technical expertise needed. This whole process is powered by Square Payments and Weebly (read our review). After creating a Square account, you can go back into your dashboard and select “Online Store” in the menu. Then, Square leads you through the process of selecting the categories that most closely apply to your business. You’ll get a suggested template, but you can choose a different one if you fancy another one better. You can also add your logo, choose from limited fonts, and have some color choices, but overall the design freedom here is limited to the template itself.

Again, for being free, there isn’t much to complain about. A Square store is the simplest solution to get your shop up and running. All you need to do is add your products — your eCommerce shop syncs with Square POS and all of the other Square software and tools. Your inventory automatically updates when you sell an item, too.

One potential drawback to the freemium option, however, is that you are bound to the Weebly logo in your domain name and the footer of your website, and your shipping options are minimal. The screenshot below shows the shipping options available when setting up the free Square store with Weebly. Note that you must upgrade your Weebly plan to calculate real-time shipping rates:

Square Free Store Shipping Setup

If you want a bit more customization and dynamic shipping calculations (among other upgrades), you can purchase a domain and upgrade to a professional or premium account through Weebly.

Square Online Store Upgrade Options

Square and Weebly

The free online store option, although robust in its own way, limits you a bit. As you can see from above, for example, if your company relies heavily on shipping items with large size or weight ranges, it may be worth it to you to go to the Premium eCommerce plan for the real-time shipping rate calculator and accurate rates for UPS, FedEx, or other third party carriers.

The free store also has a 500 MB storage space limit, which could limit the number of photos on your site. The paid tiers give you a considerable upgrade with unlimited space, along with website analytics and insights.

As far as accepting payment goes, you can accept all major credit cards. Digital wallets like Apple Pay are not supported at this time, but I suspect they will be soon. For more about the pros and cons of this solution, check out our Square Online Store and eCommerce Review.

Option 2: Connect Square To An eCommerce Platform

Square eCommerce Apps

Whether you already have your site up and running or you are building your site from the ground up (or somewhere in between), you can probably find what you need in the Square App Marketplace. Square integrates with many eCommerce platforms, including:

  • 3dcart (read our review)
  • Wix (read our review)
  • BigCommerce (read our review)
  • WooCommerce (read our review)
  • Ecwid (read our review)

And of course — let’s not forget that Square also integrates with Weebly, as well as WordPress and WP EasyCart.

On the topic of app integrations and Square, it’s worth noting that Square can easily integrate with a range of different types of apps that you can shop for right from your dashboard. You can find everything from accounting to invoicing, employee management, loyalty and rewards, and marketing, to name a few. Pricing depends entirely on the apps themselves, but the Square App Marketplace is set up to compare costs easily.

All of Square’s basic eCommerce features integrate with these apps, so you’ll be able to enjoy the same payment processing rates, security protection, and inventory updates as you sell. Of course, each app platform has specific features and benefits, so the finished product (and look) varies depending on the integrated solution you choose. Check out The Best eCommerce Integrations That Work With Square Payments for our top picks!

Option 3: Build Your Own Checkout With Square APIs

If you already have your own site and you have developer expertise, then you have two more options thanks to Square API: Square Checkout and Transactions API. The most significant difference between the two is that Square Checkout is much closer to an out-of-the-box solution. With Square Checkout, Square is actually hosting the payment form, and the UI is already done for you. If you want more freedom in the checkout and payment UI and you want to host the payment form on your site with customized branding, you can opt for Square Transactions API.

Here is a handy side-by-side comparison chart to give you an overview of what you can expect with each solution. Note: All Square APIs and SDKs are free to use. As always, you pay only the payment processing fees.

Square Checkout Feature Square Transactions API
Yes Requires Developer Support Yes
No Can Customize Yes
Yes Square Hosted No (You host)
Yes Store Customer Data Yes (With integration)
No Card on File & Recurring Payments Yes (With integration)
Yes (Customer data
& itemization)
Detailed Dashboard Reports No (Transaction
amount only)
Recommended,
not required
SSL Needed Yes, with
separate integration
Yes Eligible for Chargeback Protection Yes (with conditions)
Yes Data Encryption Yes
Yes PCI Compliance Included Yes
Yes Itemization Yes, with Orders API
No Dynamic Shipping Calculations No
Yes Accept Google Pay Yes
Yes Accept Apple Pay Yes
No Accept MasterPass Yes
Yes Accept All Major Credit Cards Yes
Yes Inventory Syncing Yes, with Inventory API

The choice between Square API and Transactions API largely depends on your particular needs and what you find most important in the customer journey.

Other Ways To Accept Online Payments With Square

Square Developer In-App

Though we have explored several options in Square payments, there are yet a few more to keep in mind. Before we go on, it’s worth mentioning that you can’t add an embeddable “Buy Now” button to any site like you can with PayPal or even Shopify. However, there are still ways to take payments online — even without a website! Let’s check out the last two ways you can take payments via Square from your customer online — through invoices and in-app payments.

Invoices

Square Invoices

You don’t need an online store to send and collect payment from your customers if you use invoices. Square allows you to send one-off invoices for single orders, or to set up recurring invoices for subscriptions or even installments. It’s easy to track the status of invoices and follow up right from your Square Dashboard, too. Want more info on invoices? Check out How To Use Square Invoices To Ensure You Get Paid On Time so you can leverage this option for your business.

In-App Payments

With all the cash being exchanged through in-app purchases, it was only a matter of time before Square decided to join the party. That’s right; now Square offers in-app payment support with a few lines of code! You can update elements to match your app’s style and have the freedom to customize the look and feel however you want. It’s all in Square’s Transaction APIs and completely free for you to use with your Square account.

Is Square Online Payments Right For You?

Square offers solutions for both the tech-savvy and those who want something ready to run out of the box. With that being said, the more appropriate question is, “Which of Square Online Payment solutions are right for you?” And that answer comes down to your needs. From a quick-to-set up Square Store to Transaction APIs that are customizable and free to us, or plug-ins apps that add eCommerce to your existing site, there are many solutions to choose.

Keep in mind that you can add or subtract Square’s services and other integrations to scale up or down with you as needed, so you don’t have to make a final decision today. Setting up a Square account is the first step to get the ball rolling and see the options along the way. With no sign-up fees, binding contracts, or credit checks, Square is one of the least intimating companies to deal with if you are just checking things out.

The post How to Accept Online Payments With Square appeared first on Merchant Maverick.

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How to Use Square for Recurring Payments And Invoices

Subscription-based business models seem to be everywhere these days. Emerging wine clubs, personal care-in-a-box subscriptions, wardrobe-of-the-month sites — even supporting a favorite podcast! Clearly, these types of businesses are finding success as people jump into subscriptions to save money, time, or just for the fun of getting a box in the mail. And it’s not just cheese-of-the-month clubs anymore. Software as a Service (SaaS) subscriptions are booming in both business and personal markets. This environment is ripe for subscription business models, but you need the right tools to process recurring payments while protecting your business from security risks.

Of course, businesses that serve a local market with more traditional recurring products and services like gyms, childcare, or home improvement services also rely on recurring payments for their revenue stream — whether that’s automatically charging a credit card or manually sending an invoice.

Choosing a payment processor for this type of business is not a light decision, so let’s take a look at what Square has to offer in terms of solutions geared for the recurring payment model.

How To Set Up Recurring Payments With Square eCommerce

If you are about to launch an eCommerce subscription-based business or you are looking for a different payment processing setup than the one you have, Square should be on your radar. While Square doesn’t provide complete “out-of-the-box” solutions for eCommerce businesses, they offer three main options for you to get your shop live, with some flexibility under each.

Square Payment Form and Transaction API:

If you are a developer or have the in-house developer support, you can create a custom payment experience that resembles the rest of your site. That means you can save a card on file using the Square Payment Form and set up recurring billing using your own subscription logic. Square also has digital wallet support so you can add Apple Pay, Google Pay, or MasterPass for faster checkout. Here’s more information directly from Square if you opt to embed the payment form:

Square Payment Form provides secure, hosted components for payment data like card number and CVV, while enabling you to make it your own. It’s designed to help buyers enter their card data accurately and quickly. Card data is collected securely and tokenized, never hitting your servers, so you don’t have to worry about PCI compliance.

Pre-Built Workflow:

When you integrate Square Checkout, you can save a card on file safely, and you won’t need as much developer knowledge. This solution is a pre-built workflow that includes digital wallet support, and it’s all hosted on Square’s servers. You won’t have as much wiggle room in regards to customization, but it’s still going to give you a fast, streamlined checkout experience. Square provides a technical reference guide to assist you in building what you need, including setting up recurring billing.

Choose An Integration:

If you want a simpler solution that doesn’t require coding or technical expertise, a plug-in may be just the ticket for you to get up and running quickly. Of all the options available within the Square Dashboard, Chargify jumps out because it seems to offer everything a subscription service would need. According to Chargify:

Chargify bills your customer’s credit card on whatever schedule you define. In addition to processing one-time and recurring transactions, Chargify can handle free trial periods, one-time fees, promotions, refunds, email receipts, and even dunning (reminders for failed credit card payments) management.

Chargify plans start at $99 a month, but you can work your way up the scale when it comes to additional options. In general, Square plug-in selections abound, so you can shop to find the most promising solution for your business right from your Square Dashboard under Apps. Here’s a screenshot of a few options listed:

Square Integration Plug Ins

No matter which solution you decide on, you can rest assured that the burden of PCI compliance and security with payment processing sits on Square’s shoulders, not your own. And the free support you get from Square’s team if there is a chargeback issue also gives some much-needed peace of mind as well.

To find out more and shop eCommerce solutions, head to Square’s website and select eCommerce under the section, Software services to grow your business. If you want to learn more before signing up, read our post, The Best eCommerce Integrations That Work With Square Payments. And if you want to find out more about Square as an eCommerce solution in general, check out our Square Online Store and eCommerce Review.

How To Set Up Square Recurring Invoices

When you’re ready to set up a recurring invoice for your customer, Square makes it easy. You can create an invoice through your Square POS app or from the Square Dashboard. You can then set up the scheduling frequency of your recurring invoice, though you will need your customer to approve their card on file.

Whether you send a one-time or recurring invoice, enable Allow Customer to Save Card on File so your customer can approve. Then you’ll be all set for repeat billing.

Note: If you need to manually save a card on file from your Virtual Terminal at your computer, you’ll need to print out the approval form so your customer can sign it first.

Here’s a screenshot of what the setup looks like for recurring invoices within the Square Dashboard.

Square Recurring Invoice

With Square Invoices, you can also request a deposit, either due immediately or within a specific time-frame. So for you business owners that charge a sign-up or other set-up fee, you can seamlessly add in a deposit request and cover all the bases.

Getting Paid with Square Invoices

When your customer makes a payment, credit card payments update automatically in their invoice. Your customer follows the Pay Now prompt to enter their details and can also approve saving the card on file.

Did your customer send a check or pay you by cash? You can also record payment manually when you open up the invoice. If your customer wants to pay over the phone, you can process the amount on your computer through the Square Virtual Terminal located within the Square Dashboard. And finally, you can process in-person payments and apply them directly to the invoice by swiping, dipping, or tapping your customer’s card to your connected Square Reader. Just make sure you go into Invoices and apply the payment to the existing customer invoice.

Square Invoices (read our review) also makes it easy to track when your customer saw your invoice and any activity within the account. You can quickly send a message to follow up or edit the invoice any time from your Square Dashboard.

How To Use Square Installments For Invoices

Another solution that may boost sales is offering payment plans through Square Installments. Square Installments for Invoices finances the cost for your customer, so there’s no need for you to invoice repeatedly; instead, you are paid upfront and in full by Square. Square Installments is currently only available to select businesses, however. You’ll need to apply, and if you are approved, the Installments option automatically appears as a payment option on your invoices and Square POS.

When your customer chooses Installments (either via their invoice or your Square POS), they’ll apply directly with Square Capital at the time of the sale. If they are approved, the balance is reflected in your account. Also note that after the sale, Square Capital takes on the liability of the charge, so you won’t deal with collecting or processing payments. In fact, Square instructs any merchant to direct all questions or issues your customer may have with their installment payments to Square Installments directly. Find out more about it on our post, How Does Customer Financing Through Square Installment Work?

How Much Do Recurring Payments Cost With Square?

What is cheaper than Square?

Below is a breakdown of Square’s payment processing per transaction. When you crunch the numbers, keep in mind that you are getting an all-in-one solution as far as payment security with PCI compliance and chargeback support. Square doesn’t charge monthly service fees either, so what you see is what you get as far as costs go.

  • Invoice paid with card by customer: 2.9% + $0.30
  • Invoice paid with card on file: 3.5% + $0.15
  • eCommerce processing: 2.9% + $0.30
  • Square Installments for Invoices: 2.9% of the purchase price + $0.30
  • Square Installments at your Point of sale: 3.5% of the purchase price + $0.15
  • Square online payment API and SKIs: Free for developers to use + eCommerce processing fee
  • Plug-in apps integrated with Square: Price varies with each software provider

Should You Use Square’s Recurring Payments Tools?

Setting up recurring payments for your customers takes a little bit more forethought and prep than a one-off charge. However, Square makes recurring invoices accessible by offering a range of solutions for both eCommerce and brick-and-mortar shops.

As far as third-party processors and eCommerce go, Square offers similar solutions as its peers. In other words, you’ll likely need the help of a developer with any option you choose, including PayPal or Stripe — unless you opt for a plug-in app. That being said, Square enables you to get eCommerce up and running safely — whether that is through a pre-built workflow, easy integration with a plug-in app, or API developer tools. (If you do have the developer expertise and a bit more wiggle-room in your budget, it’s worth mentioning that Stripe affords greater freedom to customize the whole process, add advanced reporting features, and a lot more. But you can’t be shy with code!)

Still curious about Square? Why not give them a try and see for yourself? There is no fee to sign up and no binding contract required, so setting up an account may be the next step for you. You can also head over to our Square Review and read how it compares to the other solutions out there.

The post How to Use Square for Recurring Payments And Invoices appeared first on Merchant Maverick.

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What Is A Card-Not-Present Transaction?

It’s safe to say that nothing is ever free in payment processing (and if it claims to be, you should be very suspicious). But trying to understand why some types of transactions cost more than others to process can be a confusing and sometimes overwhelming process. For example, why does Square charge 3.5% + $0.15 for keyed transactions and just 2.75% for swiped, dipped, and tapped transactions, even though they both go through the Point of Sale app? Why do invoices and online orders cost more than payments processed with a POS app and credit card reader? The answer is that it matters whether a transaction is deemed “card-present” or “card-not-present” (CNP)  — in fact, it is a critical factor in payment processing costs.

A card-not-present sale is any transaction where the cardholder does not present their card to the merchant. While that general definition may seem pretty cut and dry, the reality is a bit muddier. Here’s what I mean: Even if your customer takes out their physical credit card, the transaction is not considered a “card-present sale” unless they actually swipe, dip, or tap it. Manually entering a card number throws the transaction into card-not-present territory.

And when a customer taps a credit card terminal with their phone at a coffee shop? That transaction is actually considered a card-present sale even though the merchant technically never sees a physical credit card!

Confused? Don’t worry. Keep reading; below, we’ll break down some more examples of card-not-present transactions and help you understand why they cost more to process. We’ll also talk about what — if anything — you need to change in your payment processing setup to protect your business.

The reality is, whether you have a brick-and-mortar store or you run an eCommerce business, you need to understand how CNP transactions affect your business, your customers, and your bottom line. There’s much more than meets the eye when it comes to distinguishing from a card-not-present and a card-present transaction, including how much it costs you and the security risks involved. Let’s dive in!

Card-Present VS Card-Not-Present Transactions

Let’s start by talking about what a card-not-present sale actually entails. Once we do that, these transactions will be a little easier for you to identify (and help your sales team navigate the whole issue as well.) A card-not-present sale is any sale processed that does not capture the electronic data of the card at the time of the sale.  

It’s not always super cut and dry. Sometimes merchants don’t understand that being handed a credit card doesn’t automatically qualify the transaction as a card-present sale. It all depends on how it is processed. For instance, say you are at a festival and decide to buy one-of-a-kind art from a vendor. You hand her your card, and she breaks out a little manual machine and makes a carbon copy. Even though you physically handed the vendor your card, this still counts as a card-not-present transaction. No electronic data was captured.

Another example involves Visa and Apple Pay. You can consider any in-store purchase made with Apple Pay a card-present sale, but any payments made using Apple Pay in-app are considered card-not-present. That’s because when a customer uses a digital wallet by tapping or scanning a QR in the store, the electronic data of the card is captured in real time. In-app purchases do not capture the electronic data at the time of the sale.

For the most part, the main thing to understand is that transaction categorization ultimately boils down to whether electronic data was captured.

Common Card-Not-Present Transactions:

  • Invoicing a client
  • eCommerce / online shopping
  • Phone orders
  • Recurring payments that are automatically billed (subscriptions)

Common Card-Present Transactions:

  • Countertop credit card terminals
  • Tapping or scanning digital wallets
  • Swiping via a card reader on a tablet or smartphone (e.g., Square)

If your revenue depends on processing payments with anything other than a POS app and credit card terminal or mobile card reader, it is worth your time to understand how to keep your transactions safe. Processing credit cards costs money whether you process in person or online, but you will face slightly higher fees for processing card-not-present transactions. 

Understanding The Cost Of Card-Not-Present Transactions

 

Why are you charged more for card-not-present transactions? It’s pretty simple, actually. Card-not-present transactions cost more because there are simply more ways for them to fail. From chargebacks, friendly fraud, and malicious fraud, there is more vulnerability and subsequent cost when things go wrong.  Granted, all credit card processing poses some risk — that’s why businesses have contracts with processors, and why high-risk merchant accounts exist. It comes down to which methods of payment processing (and sometimes even which businesses) present the most risk. 

With a merchant account that offers interchange-plus pricing, you will pay a higher interchange rate for card-not-present transactions because the card networks want a return in exchange for accepting some of the risk. Even third-party processors, which don’t overtly pass interchange costs directly to you, still build the costs in by adding a markup to their base rate.

It’s also important to understand that not all card-not-present transactions pose the same risks. For instance, you are generally going to pay a higher cost for a keyed-in entry than for an online transaction because there are typically some built-in security measures (like address and CVV verification) for online purchases, whereas there are no security measures for keyed transactions.

Want to know more about how credit card processing works? Check out The Complete Guide to Credit Card Processing Rates & Fees for an in-depth look. 

Below we talk more about card-not-present fraud and what you can do to protect your business. 

The Cost Of Fraud

Unfortunately, when it comes to CNP sales, the industry is currently seeing an increased rate of fraud for online transactions. The rollout of chip cards and the EMV liability shift in the US for card-present sales actually plays a major role in the increase of card-not-present fraud, and it’s something that financial experts predicted would happen based on EMV adoption in other parts of the world.

While we certainly don’t want to strike fear or dread into any of our readers, the fact is that card-not-present transactions make you more vulnerable to fraud because the physical card data can’t be verified. Not only can a card data breach turn into an embarrassing public relations issue, but the business owner is ultimately responsible for absorbing the cost of any fraudulent charges in a card-not-present sale.

A recent press release from LexisNexis demonstrates that the cost of fraud is rising. Last year, every dollar ($1) of fraud cost a merchant $2.77. This year, it’s predicted to cost $2.94 on average. And if you are in the digital space, the cost is even a bit higher.

Small businesses need to stay on guard just as much as any medium or large business. The unfortunate fact is that fraudsters are looking for vulnerabilities like outdated data security practices, and small businesses are very likely to be targeted.

There are some very sobering statistics from UPS Capital:

  • Nearly 90% of small and medium-sized businesses in the U.S. don’t use data protection for company and customer information.
  • Less than half have secure company email processes to prevent phishing scams.
  • 60% of smaller businesses are out of business within six months of suffering a cyber attack.

It is vitally important to be aware of the risks and know how to protect yourself.

Read on to learn more about fraud and what you can do to protect your business if you accept card-not-present transactions.

Protecting Your Business From Fraud

Merchant’s Guide to Preventing Card-Present Fraud image

Taking a proactive approach to preventing fraud is a smart move. In this post, we focus on understanding the risks and cost of card-not-present transactions, but card-present sales are certainly not exempt from fraud. If your business processes both types, check out the Merchant’s Guide to Preventing Card-Present Fraud for a great breakdown of information on how to protect your business from card-present security issues.

Your first defense against fraud will always be PCI compliance. PCI DSS is an acronym for Payment Card Industry Data Security Standard, which dictates the industry-standard procedures and security measures a business needs to make to protect customer data.

The good news is that unless you are dealing with homegrown software for your payment processing system, you are likely operating with PCI compliant equipment and software. That’s because all payment processing software and equipment vendors go through a strict certification process to ensure their products meet industry standards for security. 

That being said, you still need to take the time to read your contract and understand if there are any steps you need to take to ensure continued compliance. Third-party payment processors such as Square are automatically PCI compliant and do not require you to do anything specific to maintain compliance — at least not as far as the contract is concerned. (As a general rule, you should keep yourself informed on PCI compliance and what constitutes a suspicious transaction that could get your account flagged for fraud.) 

With merchant accounts, PCI compliance is a lot more varied and partially depends on whether you use the provided software or integrate with a third-party. You may be obligated to complete a scan or assessments, or potentially much more depending on your payment processing setup.

The key takeaway is this: PCI compliance is never a one-time event. Assessment, remediation, and reporting is a continual process with best-practices changing each year. Even if your processor doesn’t require you to do anything to maintain compliance, it’s important to make sure you know what security best practices are.

According to the PCI DSS Quick Reference Guide, some habits can put you and your customers at risk for fraud. Within the guide, the PCI cites activities that are common across the board in all types of U.S. and European businesses (page 4):

  • 81% store payment card numbers
  • 73% store payment card expiration dates
  • 71% store payment verification codes
  • 57% store customer data from the payment card magnetic strip
  • 16% store other personal data

Let’s break down that first statistic. The majority of business owners store their customers’ credit card numbers. But where? Unless you’re using PCI compliant software with a secure credit card vault, you could be exposing yourself to risk and liability — big time. 

Following best practices and keeping yourself up-to-date with PCI compliance is one of the most important things you can do to prevent fraud. Another thing to remember is that it is up to you to ensure your team knows what not to do, too. A retail employee who keys in the majority of her transactions may be helping others commit fraud — or she may simply have trouble getting the credit card terminal’s card readers to work. But you won’t know until you check up on her. 

Once your bases are covered with PCI compliance, you can rest easy knowing that your legal and liability concerns have at least been reasonably mitigated.

Additional layers of security may be worth looking into as well, especially if your livelihood involves online sales

  • Address Verification System (AVS): This system checks to see if your customer’s address is the same as the person who owns the credit card. Verifying the billing address or zip code against Visa or MasterCard billing information of the cardholder can prevent misuse and protect your business from fraud.
  • CVV Checks: A CVV check requires your customers to enter in the additional three numbers at the back of the card (four digits for American Express). Since this information can be stored (and also stolen), it also makes sense to require customers to re-enter the card code whenever there is an unrecognized device or change to a shipping address.
  • 3-D Secure: This provides an extra layer of security for online transactions. If you have heard of MasterCard SecureCode, Verified by Visa, or American Express Safekey, then you are familiar with 3-D Secure. MasterCard SecureCode, for instance, requires a PIN code to be entered into an inline window that is securely hosted by the issuing bank. The code is never shared with you directly. This authentication step is designed to reduce your liability and improve security. Many processors that cater specifically to online businesses, such as Stripe, offer 3D Secure bundled with their services.

Final Thoughts

Fully grasping the nuances of credit card processing can be difficult. However, it’s definitely worth taking a bit of time to understand how and why card-not-present transactions are different from card-present payment processing.

Even merchants who run brick-and-mortar shops have to deal with the cost of CNP payments. If you have a storefront shop, taking the time to train your team to spot the difference between the two types of transactions and keeping up with the latest compliant software/EMV readers will go a long way towards keeping your costs down —and your payment security tighter.

If you run an online business, your focus should be on making sure you have the appropriate security measures enabled with a good payment processor — preferably one that does the bulk of the work for you! At the end of the day, you will take the hit from chargebacks and fraud if you don’t have the right protections. 

Shopping around for eCommerce businesses solutions? Read How To Choose An eCommerce Merchant Account.

The post What Is A Card-Not-Present Transaction? appeared first on Merchant Maverick.

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Square’s Customer Service: Why It Works So Well And How To Use It

If you’re considering whether the Square payment processing solution is best for your business, it makes sense to ask about their customer service. For many of us, the customer service experience makes or breaks the way we feel about a company, even if we love everything else about the product. And the truth is that positive — and negative — interactions with customer service can have serious repercussions — especially when you’re trying to run an efficient, successful business and keep your own customers happy.

Not too long ago, Square suffered from a less-than-stellar reputation for customer service, but that is changing. Any company that can identify a pattern in user issues and beef up their service is one that values user experience and trust. And that is a good sign for current users.

For this post, we examined all the negative complaints about Square’s customer service in our complete Square Review and found that the biggest issue that has since been improved is Square’s phone support (more on that below).

We also dug deep into the Square customer service experience to form our own impressions. (Keep in mind that we are looking here at Square’s business products, not the Square Cash App, which has an entirely different support team. But if you’re looking for information on that, we have you covered there, too. Check out our Square Cash App Review.)

When it comes to Square Support, the user experience has clearly been well thought out. When you visit the Support page, you will immediately see a lot of ways to find the help you need, and the available material is straightforward to navigate and easy to understand.

Below, we break it all down for you so that you can make the most of Square’s help features and find what you need in a crunch.

Note: To keep things in perspective, the vast majority of Square users (over 2 million) are happy with their experience, including customer service. We spend a lot of time sifting through information (including reviews) and understand that negativity bias can affect any anyone. We talk a lot more about that and how we handle the phenomenon here at Merchant Maverick in our post, Understanding Negativity Bias. 

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Free App & Reader Square eCommerce Square for Retail Square for Restaurants
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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
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Square’s Support Center

When you have a question, you can probably find what you need through the prompts and easy-to-digest information within Square’s troubleshooting articles. They provide a wealth of information on everything from setting up your Square account to tips for using your card reader, troubleshooting any issues, and changing settings.

Support material is laid out in a table of contents, and each section is expandable. You don’t have to wade through a ton of text or scroll to find what you need because everything is organized by topic. Already know exactly what you need? You can just type in what you are looking for and simplify your hunt even more. It’s also possible to enter a question or search keywords and topics from any page in the help section. The search feature is very intelligent and can auto-suggest articles for you to explore. 

Square Compatibility Checker

Wondering if your smartphone or tablet will work with Square? Rather than searching the knowledgebase for a list, you can use Square’s Compatibility checker. Just enter in the make and model of your device and Square will tell you which card readers and other pieces of hardware are compatible (and which aren’t). This is a great way to make sure you don’t unnecessarily buy new devices even before you sign up with Square, or you can check whether the new device you’re planning to buy will actually still work with your hardware.

Issue Tracking

Having trouble using one of Square’s products? If you are looking for a quick way to see if everything on Square’s end checks out, you can head to https://www.issquareup.com/ and see whether an issue is on your end or theirs. 

Square Community Forum

 

Square has set up an excellent and unusually active hub for sellers to collaborate, get ideas, and problem-solve with its community forum, known as the Seller Community. You need to be a Square user to join, but once you’ve signed in, you can post your questions. And you’ll probably get a response more quickly than you expect! The forum is organized by popular topics, and directly below the fold you can jump right in and view recent discussions. 

Within the Seller Community, you can also search by keyword or for specific community members. There are spots dedicated to those who are new to Square, as well as a general discussion page, a dedicated forum for questions, and a place just for Square staff to share product updates (so you can stay in the know about any new features).

You’ll see that the Square staff are quite active on the forum, answering questions and even encouraging members to submit feature requests to the development team. It’s a pretty happening place when you start digging in.

Email & Social Media

If you have a question that requires a bit more personalized assistance, of course, you can still send Square’s support team a message through email or social media. Square has a dedicated Twitter support page, @SqSupport, for technical questions, or you can message the company’s Facebook page.

You can email Square even if you aren’t a Square user, but if you do have an account, Square will ask you to sign in and then choose the reason for reaching out.

After signing in and connecting to the service that applies to you, they provide you with contact details to get you matched with the right person.  In the meantime, you still have the option of checking out the Seller Community or looking through the support topics Square has published on its site.

Phone Support

Square has made a smart move by having actual employees (who collaborate with Square engineers) handle customer service questions. Speaking to a customer service rep who has inherent knowledge about a product can make a big difference when it comes to technical or even workflow questions. A few short years ago that wasn’t the case at Square, but we are glad that they responded to give the people what they wanted. 

To get your more complicated questions answered, you can access live help when you need it. This live support is only available to existing customers, however. You’ll get a customer code on the Square help page which you can use to patch you through to a person. 

Square’s phone support is active between the hours of 6 am to 6 pm Pacific time, Monday through Friday.

It’s comforting to know that phone support is an option, but thanks to the exhaustive help sections on their site, including the Square Seller Community, you’ll likely get the answers you need without having to call in.

Learn More About Square

If you already use Square, it might be a good idea to check out some of the resources in the help sections and even connect with other sellers in the community forum. Not only does ‘iron sharpen iron’ when it comes to running a business, but you might also discover how to take advantage of built-in features, like the Square Dashboard, to make your experience even better.

If you’re considering using Square to accept payments, you can sign up for a free account. With no monthly charges or hidden fees, chargeback protection, and full PCI compliance included, it’s easy to evaluate whether Square is right for you without external pressures influencing your choice.

Still not sure? Get more information by digging into Is Square a Secure Way to Accept Credit Cards or reading our full Square review.

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
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
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

The post Square’s Customer Service: Why It Works So Well And How To Use It appeared first on Merchant Maverick.

“”

Why Square Is A Great Free POS For Markets And Grocery Stores

As a small business owner who is launching a new shop or exploring your payment processing options, finding the right POS to accept payments is not a decision to be made lightly. You probably already know that the grocery industry has its own unique rewards and challenges. Keeping up with supply and demand, getting your name out there, competing with the bigger brands, and strengthening your own brand recognition takes time, energy, and a lot of know-how. Fortunately, Square offers a fantastic POS option for markets and grocery stores that goes way beyond just the swipe.

Read on to find out how Square payment processing tools can benefit your business whether you are opening a pop-up shop, have a brick-and-mortar store, or take your culinary delights on the go to farmer’s markets and trade shows.

Square’s Free Point-Of-Sale Reader & App

Square is best known for the free Square Point of Sale app and the free Square Reader. Square’s iconic white reader plugs into a smartphone or tablet to make mobile payments possible. The Square Point of Sale app allows you to “swipe, dip, or tap payments” whether or not you have an internet signal. If you run into a spotty WiFi connection or have a service interruption, you don’t have to worry about a line bottleneck because the app can securely save data offline.

For the smaller to mid-size shop, the Square Point of Sale app has everything you will need and then some. We dive into all of these features below, so keep reading for a closer look at how Square gives you better control over more parts of your business, from inventory management to sales, employees, and even more.

We’ll also take a look at how Square can also help you completely run or supplement your marketing campaigns with an all-in-one solution that can integrate a loyalty program and private customer feedback. Most of these perks (except for the loyalty program option) are all “in-the-box” features that you won’t pay anything more to use with your free POS Square reader.  Let’s dig in!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
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
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

Track Inventory

One thing will never change — people love to eat. However, keeping your supply up-to-date can be a challenge when it comes to balancing the ebb and flow of demand. Your customers come in for a specific product or ingredient; making sure it’s always there for them builds loyalty and trust. Managing inventory can be tricky if you don’t have the right tools.

Thankfully, Square builds inventory management right into their product, so you don’t ever have to think twice about shopping around for a suite of tools. It’s easy to set up your inventory — you can bulk import all of your products with a CSV spreadsheet and make any adjustments to name, prices, or quantities as needed. Once your inventory is saved, you can also set low-stock alerts so that Square will let you know if you’re running low on a product. The best part is that you can determine what constitutes “low stock,” whether that’s six of an item, or 100! You’ll also always be able to take a peek in real time at what — and how much — of your products are selling.

Square’s inventory also supports variants and modifiers. Variants are helpful if you carry a product that comes in different flavors or sizes — you can keep the item listing centralized, but still track quantities of each flavor or size and see which ones are most popular. You can even set different pricing for each variant, as appropriate. Modifiers are more applicable to restaurants and cafes, but if you run a small boutique store and want to upsell customers on special bundles or extra discounted products, you could add them as modifiers.

Square’s inventory system allows you to upload photos for each product, and on a tablet you can configure the layout of products. However, if you don’t like browsing for the right item, you can also attach a barcode scanner. While the free Point of Sale App doesn’t have native label printing, you can find several viable workarounds.

Also, if you sell products in bulk, it’s important to know that Square doesn’t currently support tracking partial increments of a product, or selling by weight. Again, you can find workarounds for this, one of them being the variable price point feature. With the variable price point, you can create an item and track sales, but the POS app will prompt you to enter an amount for the sale when you select the item.

Finally, if you have more than one shop, you can take advantage of the free multi-location inventory management tools. Square allows you to set up individual preferences for each location, including taxes. You can build your inventory from Square’s centralized item catalog and adjust pricing and availability as appropriate. Plus, you can run reports to see sales by location, POS device, or even by individual employee (you’ll need an Employee Management subscription for that last report.) 

The best part is that you can control all of this — every location, all of your inventory, all of your devices — from your Square Dashboard, which is a free web portal. Below we also cover a little bit more about the dashboard — including how it helps you keep track of employee sales, tips, peak sales times, and more.

Square Dashboard

The Square dashboard gives you an integrated look at many aspects of your store — and these reporting and analytics features are all free. You can view your stats in real time and see what is going on in your store — or stores — simply by visiting the Sales tab in the dashboard. Whether you want to dig into the data or you just want a quick visual representation of sales, you can find what you need, fast. You can access reports, view all types of transactions, and keep track of deposits all by quickly scanning the three tabs at the top of your dashboard.

The reports tab breaks all of your data down into simple graphs and data to view aspects of your shop, including:

  • Sales Summary: Your sales summary report is updated in real time and can be viewed by day, month, or year.
  • Sales Trends: See your sales performance in daily, weekly, or yearly views.
  • Payments Methods: This report displays how your customers pay and any fees associated with the transaction.
  • Item Sales: Allows you to find out how well any individual product is selling.
  • Category Sales: Get a quick pie-chart view of which categories are bringing in the most sales such as appetizers, side dishes, or drinks, for example.
  • Employee Sales: This report breaks down tips, hours worked, and when an employee’s sales peaked for the day. (Note: You need to subscribe to Square’s Employee Management to access these features)
  • Discounts: Running a promotion? This report tells you how often your customers use a discount, coupon, or another offer when they buy. (More about loyalty programs through Square later in the post.)
  • Taxes: This report breaks all of your tax information down by the type, amount, and records any non-taxable sales in one spot.

Square also allows you to create your own custom reports, so if you want to see certain pieces of information together, you can tell Square to compile that report for you, and even how often to send it.

Don’t forget that the Dashboard is also the centralized management hub for all of your other Square services, including invoicing, employee management or payroll, and any other tools you might be using.

Built-In Marketing Engagement

One of the interesting aspects of Square’s platform is its customer engagement tools, the foundation of which is the customer directory. With Square POS, you can keep a record of all your customers, with their name, phone number, email, purchase history, and even card details, if you prefer (and your customers agree to store the card on file). You don’t need to have Square’s loyalty program to activate this feature, and it comes at no charge. It’s a great way to keep notes on regular customers and their preferences, to see who your most loyal customers are and who spends the most money in your store. 

If you’d like to build marketing campaigns to reach out to your regulars, your new customers, or even lapsed customers, Square has the tools built right in, plus all of the data right at your fingertips. Square’s marketing services start at $15/month, which is a pretty reasonable price. The price will scale with your use of the marketing services.

With the marketing tools, you can segment your customer list and target people automatically with offers to get them in the door. So whether you are welcoming a new customer or re-engaging a customer you haven’t seen in a while with a with a special discount, Square lets you tailor your marketing message to people at different spots in the buying journey.

The email tools are simple — you don’t have to understand how to set up multiple campaigns because Square streamlines the creation process for you through prompts. They give you a lot of template designs to choose from and even have some holiday and special occasion suggestions. You can send out a one-time email for a birthday or set up recurring email campaigns that encourage more interaction and more opportunities to buy from you — it all depends on how you want to run your business. 

Finally, when it’s time to review the success of your email campaigns, Square reports show you how many opens and clicks you get, as well as how many people redeem your offer.

Receive & Manage Feedback Privately

The Feedback feature can be helpful if you want a way to take charge of the customer experience and try to eliminate the troubles they encounter. It allows you to personally engage your customers — while keeping everything private. When you enable feedback management, customers who receive digital receipts also receive an invite to provide private feedback about their experience.

You can then resolve any issues between just you and your customer and hopefully make them happier and engaged. The idea behind this is that it is much easier to respond to private feedback than having to keep track of and respond to negative public feedback. Most customers appreciate being acknowledged whether the experience was good or bad, and if you do have an unhappy customer, you can make it right with a full/partial refund or a coupon for a discount on their next purchase. You can check the customer database to see what their purchase history is like and make a determination of the best offer to send. 

Best of all, the feedback management feature is totally free to use!

Square Loyalty Program

Square encourages customer engagement and sales in yet another way — a loyalty program. The pricing structure of Square’s loyalty program is based on the number of loyalty visits, starting at $25/month. Costs automatically adjust with the participation of your customers, and you can always track the success of any program at your dashboard to see if you’re getting your money’s worth.

Square’s loyalty program is very flexible and allows you to tailor rewards to your business and your branding. You can opt for something as simple as a digital punch card, where customers earn a reward after so many purchases, or you can structure a more advanced reward system that allows your customers to collect points and cash in their rewards when they want. You can even let them choose from multiple tiers — they could opt for two lower-tier rewards, or spend all their points on a single higher-tiered reward. 

However you choose to structure your rewards program, you can track the performance on your dashboard. You can see how many customers enroll, how often customers redeem rewards, and how many subsequent repeat visits you’re getting. 

According to Square, customers who join their loyalty programs spend 37% more after they join it. Across the board, loyalty programs continue to work for businesses of every size to encourage repeat business, and we think that it’s definitely worth giving it a try for a while and seeing if it works for your business.

Fully PCI Compliant & Secure

When dealing with credit card processing companies, one of the biggest questions most business owners have has to do with safety and security. You want to know that your data is secure and your customer’s payment information isn’t going to be compromised, because when it all boils down, the burden is on you to make sure that you are PCI compliant. “PCI” is shorthand for the Payment Card Industry Data Security Standard (also sometimes called PCI DSS). No matter how big or small your business is, if you accept credit cards, you have to follow the best practices of the industry when it comes to security — and you can face penalties if you don’t.

To remain secure and compliant for each credit card you take, you have to follow the security guidelines when you swipe, key in, store, or transmit their card data. For starters, data must be encrypted properly at each stage of processing and storage, and each year the standards change.

The whole security and compliance issue can be expensive for the smaller to midsize business, and for some, the issue is intimidating enough that they avoid credit card payments altogether.

The great news is that when Square offers you their product or service, they are taking the burden of PCI compliance on themselves when it comes to their hardware and app. Square is an industry leader in security and compliance. Their team participates on the PCI board itself and has an inside view into the ever-changing world of data security. What that means for you is that when you use Square, you don’t have to jump through any other security hoops — Square maintains PCI compliance and does the work for you. You won’t even need to pay any PCI compliance fees. 

Cost Per Swipe & Getting Started With Square

Getting started with the Square POS app and the reader you will use to swipe your customer’s cards is entirely free. Square continues to remain a favorite among small business owners because they don’t charge sign-on or monthly fees for their free POS reader or app — and they don’t make you sign contracts and punish you with charges if you decide it’s not for you.

If you bring your own smartphone or tablet and combine it with one of Square’s mobile card readers, you’ll pay 2.75% for each swiped, dipped, or tapped transaction. If you opt for one of Square’s all-in-one hardware systems, such as Square Terminal or Square Register, you’ll pay slightly different rates. With Square Terminal, swiped, dipped, or tapped transactions process at 2.6% + $0.10 per transaction.  If you want to know more about all of Square’s different card readers and hardware, check out A Guide to Square’s Credit Card Readers and POS Bundles.

Considering that these are pretty low rates to begin with, and there are so many additional built-in features like dashboard analytics, invoicing, the customer database, and inventory management, we think that is a pretty sweet deal for any grocery store looking to expand.

If you are curious and want to dig even deeper, check out our Square review or visit the Square Point of Sale page and sign up for free to see how it all works for yourself!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
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
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

The post Why Square Is A Great Free POS For Markets And Grocery Stores appeared first on Merchant Maverick.

“”

How Does Customer Financing With Square Installments Work?

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, it’s 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 — from your favorite ice cream place to high-end boutiques, salons, and even consulting agencies. If you’re 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 — from $250 to $10,000 — and you’d like to offer on-the-spot approval and financing to your customers, read on to find out more about Square Installments. But first — a little primer on customer financing.

What Is Customer Financing?

Before we dig too deep into Square Installments, let’s 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 — 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 shouldn’t 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 “sticker shock.” Giving purchasing flexibility to your customers will make buying from you a more attractive and accessible option — and of course, that’s 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 doesn’t always get paid — 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 — 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 you’ll 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 they’re 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, they’ll 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 — 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 send you some free marketing material — both in print and in the form of a banner for your website so your customers won’t miss this new option for buying with you.

You Don’t Need To Be A Financing Expert

Worried about the fine print and fielding financing questions? Don’t be. If your customers have questions about Square Installments, they’ll contact Square directly. In fact, because this is considered a “highly regulated financial product,” it’s essential to pass any questions or concerns off to Square’s own customer service folks. And of course, this arrangement means you’re not burdened with the nitty-gritty details of financing or payment collection.

How Much Does Square Installments Cost?

If you’re 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?

Small Business Owner Using Square Customer Service

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 couldn’t 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 isn’t free. Also, keep in mind that Square Installments is only applicable for purchases between $250 and $10,000 — 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 “warm” or “cold” 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 don’t 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!

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
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The Complete Guide to PayPal’s Fees, Rates, and Pricing

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 also 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, 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 discounts  (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:  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: 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.

Software Fees

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.  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 you $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: 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 the 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. 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!

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The Best Offshore Merchant Account Providers

Offshore Merchant Account Providers

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, you’ve likely had your merchant account applications denied at least a few times. Even worse, perhaps you’ve had your processing service terminated and your money withheld from you for months. We understand your struggle. We’ve seen hundreds of businesses go through the exact same thing, and we’re here to help you find the perfect offshore merchant account for your high-risk business.

If you’re just looking for a run-of-the-mill high-risk merchant account for your business, you’ll want to check out our article The Best High-Risk Merchant Account Providers. The high-risk category often includes business types that you wouldn’t normally associate with the term “high-risk,” 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, we’ll 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, we’ll discuss the factors to evaluate when considering an offshore merchant account and several special features that you’ll want to include in your service. We’ll 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, you’ll want to confirm that the company you’re considering works with businesses located in your country. This information might be spelled out explicitly on the provider’s 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, don’t expect to set up your offshore account in a place like Afghanistan or North Korea. It’s 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 can’t 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 – 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.

There’s 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 don’t always do as good a job of protecting it. You’ll want to keep an especially close eye on your merchant account, your business account, and any personal accounts about which you’ve 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 you’re 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. Don’t accept the first offer from a bank or processor just because they’re the first one that hasn’t 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 it’s 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, you’ll 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. You’ll 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 you’ll 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: If you’re going to do business in a foreign country, it only makes sense that you’ll 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: 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: Offshore merchant accounts invariably involve a higher degree of risk of fraud than their traditional counterparts, so you’ll 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, let’s 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 can’t 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 we’ve even seen praise for the company from merchants who’ve 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 doesn’t 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 you’re using a virtual terminal, they sell the MagTek DynaMag, a USB-connected magstripe card reader that attaches to your computer. Unfortunately, it’s Windows-only. Durango currently doesn’t 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. Durango’s 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 don’t 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, it’s understandable. Depending on your qualifications, you can expect either an interchange-plus pricing plan or a tiered one. Merchant accounts through Durango don’t 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 you’ll 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 isn’t available, overall it provides a much higher level of service than you’ll get from a random customer service representative.

Pros

  • 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

Cons

  • No support for POS systems
  • USB card reader not compatible with Mac computers

For more information about Durango Merchant Services, read our complete review.

SMB Global

SMB Global logo

SMB Global is a new high-risk provider that was spun off from one of our favorite providers, Payline Data 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, they’re 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 doesn’t 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 haven’t 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.

Pros

  • Offers international merchant accounts to a wide variety of industries
  • Reasonable pricing and contract terms
  • Excellent customer service

Cons

  • 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 – 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, they’ll reprogram it for free.

HMS also offers a variety of POS systems that utilize either tablets or touchscreen displays. Choices range from an 8” tablet-based system up to a 17” touchscreen monitor. The company’s 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 HMS’ 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 don’t disclose their rates on their website, they’re 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.

Pros

  • Full range of products and services for retail and eCommerce businesses
  • Exclusive interchange-plus pricing plans (for low-risk businesses)
  • Excellent customer service and support

Cons

  • Rates and fees not disclosed on website
  • 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 logo

Easy Pay Direct is headquartered in Austin, Texas and has been in business since 2000. The company’s 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 that’s a match for the needs of your business. You’ll 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 Direct’s contracts is that they do not have an early termination fee, even for high-risk businesses. While this isn’t 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 you’ll 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 doesn’t get as much attention as other, better-known processors, it’s 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.

Pros

  • Load balancing feature for high-risk merchants
  • No equipment leases
  • No early termination fee

Cons

  • $99 account setup fee
  • Three-year contract with automatic renewal clause

Check out our full review of Easy Pay Direct for more information.

Final Thoughts

Having a hard-to-place business doesn’t 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. You’ll want to be very cautious and carefully research any provider you consider, even the ones we’ve 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 – just in case. Having a merchant account in Panama might sound very tempting if you’ve 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 we’ve 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 can’t caution you strongly enough that selecting and setting up an offshore merchant account involves a higher level of risk on your part, and you’ll 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 who’ve 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 won’t eliminate the chance of things going sideways somewhere down the road, they will shift the odds considerably in your favor.

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