The Best Mobile Credit Card Readers For iPhone and iPad

If you’re in the market for a mobile card reader and a credit card processing app, there’s no shortage of options. The trick is finding the right option for a given business. One of the big factors that determine which apps are suitable is what kind of smartphone or tablet you have. Fortunately, if you have an iOS device — that is, an iPhone or an iPad — you have plenty of options.

Our Top Picks For iOS-Based Credit Card Readers & Mobile Apps

The first decision when choosing a card reader and mobile processing app is selecting the device itself. For the most part, iOS-compatible mobile apps and readers support iPhones and iPads alike with no major issues. But after you’ve narrowed down the list of apps based on supported devices, you’ve still got several other factors to consider — transaction costs, monthly fees, essential features, whether you want a standalone mobile app or something that supports invoicing and online payments… and that’s just to get the list started! The cost of the card reader and accepted payment methods are just as important as app features when you’re dealing with mobile processing.

So without further ado, here’s a list of our favorite card swipers and mobile apps for iPhones and iPads, as well as why we like them.

App Name Square Shopify Lite Payment Depot Mobile Fattmerchant Mobile

Payment Depot merchant services review

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In-Person Transaction Fees

2.75%

2.7%

2.6% + $0.10

Interchange + $0.15

Monthly Fee

$0

$9

$10

$99

Monthly Minimum

$0

$0

$0

$0

Type of Processor

Third-Party

Third-Party

Merchant Account

Merchant Account

Account Stability

Good

Good

Excellent

Excellent

Card Readers

Free magstripe reader (Contactless + Chip Reader $49)

Free Chip & Swipe Reader (retail price $29)

Free Swift B200 reader (chip and swipe)

BBPOS Chipper BT (chip and swipe, $75; swipe, chip and contactless, $100)

Payment Depot (Swipe Simple)

Payment Depot (read our review) offers a subscription-based pricing model for its merchant accounts, with a host of software options for businesses to choose from (including Clover). Standard pricing plans for Payment Depot start at $49/month, with transactions processing at interchange + $0.15. However, if you’re looking for a mobile solution that runs on an iPad or iPhone, Payment Depot offers the Swipe Simple app, and Merchant Maverick readers can get access to special pricing that’s competitive even for low-volume merchants.

With this exclusive plan, you’ll get the Swipe Simple app and payment processing at 2.6% + $0.10 per transaction, with only a $10 monthly account fee. Remember, this is a Merchant Maverick exclusive, so you’ll need to use our link in order to get the special pricing.

Swipe Simple is a very functional credit card processing app. It runs on iPhone and iPad devices, as well as Android hardware. It even comes with a demo mode so you can test out the app before you sign up, which is always nice to see. There’s limited inventory management, but you can track stock counts. There’s even an offline mode. Check out our Payment Depot Mobile/Swipe Simple review for a closer look at the software.

In addition to the app, Payment Depot offers a choice of two readers. The Swift B200, a Bluetooth-enabled reader that supports magstripe and chip card transactions, is available to merchants for free. If you’d like to add contactless payments, you can get the Swift B250 for just $25, which is a fantastic price for an all-in-one card reader.

Shopify Lite

Shopify (read our review) is mostly known for its ecommerce platform, but it has also developed a quite powerful POS app that integrates with its online shopping tools. Shopify POS is included for free in all standard Shopify ecommerce plans, but if you don’t plan to sell online or only need some very basic online sales tools, there’s another option: Shopify Lite (read our review), which lets you create “buy” buttons and run a Facebook store for online sales, as well as giving access to the Shopify POS.

Shopify Lite will run you $9/month and 2.7% per transaction, which is a reasonable cost. The POS app runs on both Android and iOS, but an iPad offers the best user experience and access to the most features. However, keep in mind that the Lite plan is still limited even with an iPad; specifically, there’s no support for a cash drawer, barcode scanner, or receipt printer. That feature is only accessible with the Shopify Basic plan, which costs $29/month and includes a full web store with unlimited products.

Shopify also offers a free Chip & Swipe Reader for its merchants. It retails for $29 normally, which is still a great price for a Bluetooth-enabled chip card reader. We’ve reviewed the Shopify Chip & Swipe reader already, and you can check that out for a closer look.

Square

Square’s mobile point-of-sale app, simply called Square Point of Sale, gets a lot of love, and rightfully so. The app is free to use and you only pay a per-transaction fee of 2.75%. Square’s pricing makes it very attractive for low-volume and startup businesses, and there is an assortment of hardware options available. The Square Point of Sale app supports both iOS and Android devices, but certain features are not universally supported. An iPad gives you access to the vast majority of these features, but the iPhone supports all of the core features and many of the secondary, non-universal features. Check out our in-depth Square POS review for a comprehensive look at the free POS app and its features. For a closer look at the rest of Square’s products, check out our complete Square review.

As far as hardware goes, let’s start with the basics. Square has been offering a free basic magstripe reader for a long time, and it still does. (Note: you can also get the Square reader in some retail stores for $10.) However, the removal of the 3.5mm headphone jack from newer iPhone models has complicated matters somewhat. Square responded by rolling out a Lightning port magstripe reader. When you sign up for your free Square account, you can choose which model of reader you need. Square no longer offers multiple free readers; after the first one, you’ll pay $10 per reader.

However, it’s important to also consider accepting EMV chip cards, especially if you’re doing a consistent volume of business or large transactions. Square’s Contactless + Chip Reader supports both EMV and contactless NFC payments. It includes a separate magstripe reader for swipe transactions.

The Contactless + Chip Reader sells for $49, but Square does offer financing for hardware purchases that cost at least $49 (convenient, isn’t it?). You can also purchase cash drawers, receipt printers, and even tablet stands directly from Square.

Want to know more about Square’s hardware? Check out A Guide to Square Credit Card Readers & POS Bundles for an in-depth look at your options.

Fattmerchant Mobile

Fattmerchant Mobile isn’t an option that I talk about a lot, mostly because it’s best targeted at high-volume businesses. However, until recently, it was an iOS-exclusive, and even now, the iOS platform is more robust than its Android counterpart. Fattmerchant (read our review) offers customers their own merchant accounts, which translates to a high degree of account stability. Its Omni platform, which includes the mobile processing app, invoicing, and a customer database and inventory management, combines many core features in a single platform. Check out our Fattmerchant Mobile review for a more comprehensive look at the app and its features.

Fattmerchant operates on a subscription pricing model, with a monthly fee that starts at $99/month. Mobile and invoice transactions cost interchange fees + $0.15 per transactions — there’s no percentage markup at all. However, if you opt for the mobile credit card carder, you’ll get the card-present rate of interchange fees + $0.08 per transaction. You can simply key in all the transactions if you prefer — just know that you’ll pay higher interchange fees in addition to the $0.15 markup.

Fattmerchant offers a choice of two different card readers, the BBPOS Chipper BT and the BBPOS Chipper X2 BT. The Chipper BT model supports both magstripe and chip card transactions and connects to your device via Bluetooth. It goes for $75. The Chipper X2 adds contactless payment support to the magstripe and chip card readers and also connects via Bluetooth. It goes for $100.

Honorable Mentions

While I have no qualms with saying the four options I’ve presented are the best of the best, there are a couple of other mobile apps and card readers that are good options for iPhone and iPad users. So let’s talk about them!

PayPal Here

PayPal Here integrates with the rest of PayPal’s services so that you can sell online and in person seamlessly, much like Square. While it doesn’t offer quite as many features as Square, it’s still a very functional mobile app. Check out our PayPal Here review for a closer look at all the features.

PayPal Here processes payments at 2.7% per transaction, with keyed entry at 3.5% + $0.15. PayPal no longer offers a free card reader. Instead, you’ll need to shell out $15 to get its magstripe reader. PayPal will also place limits on your account if you opt for the magstripe reader, making it viable mostly for very low-volume businesses. As an alternative, PayPal offers two Bluetooth enabled cardreaders, starting with the Chip and Swipe reader, for $24.99.

If you also want contactless support, PayPal’s Chip and Tap Reader (retail price $59.99; bundle with stand $79.99). However, there’s another option for iPad users who want a more robust software option: Vend (read our review) with a PayPal integration. You’ll get PayPal’s 2.7% rate for payment processing with no monthly fee from PayPal. Of course, you’ll have to choose your Vend plan as well — and get the appropriate hardware. You’ll need the PayPal Chip Card Reader, which goes for $99.

PayPal + Vend POS
Advanced POS software
Easy credit card processing integration
Get Started For $0

SumUp

SumUp (read our review) isn’t quite as complex or feature-laden as some of the other options on this list, but if you just need an iPad or iPhone credit card reader and app, SumUp will get the job done. Payments process at 2.65%, and there’s no monthly fee to use the software. For a better idea of how SumUp stacks up against the competition, I suggest checking out our Square vs SumUp comparison.

SumUp’s cardreader, at $69, is definitely a little expensive, but it’s a beautifully designed piece of hardware. It’s Bluetooth enabled and supports magstripe, chip card, and contactless payments. You can also occasionally catch it on sale for a reduced price. I suggest checking out our SumUp unboxing review for a closer look at the reader.

Which iPhone/iPad Credit Card Swiper Is Right For You?

In payment processing, especially mobile processing, it’s impossible to take a one-size-fits-all approach, so it’s really important that you, the business owner, spend some time figuring out what features you need in a credit card processing app. You should also consider what kind of pricing model works best for your business, and do the math to see what you’d really pay with each option on your short list. And of course, there’s the card swiper, too. While a free magstripe reader might be enticing, you should really consider upgrading to a chip card-capable reader to protect your business.

App Name Square Shopify Lite Payment Depot Mobile Fattmerchant Mobile

Payment Depot merchant services review

Review

Visit Site

Review

Visit Site

Review

Visit Site

Review

Visit Site

In-Person Transaction Fees

2.75%

2.7%

2.6% + $0.10

Interchange + $0.15

Monthly Fee

$0

$9

$10

$99

Monthly Minimum

$0

$0

$0

$0

Type of Processor

Third-Party

Third-Party

Merchant Account

Merchant Account

Account Stability

Good

Good

Excellent

Excellent

Card Readers

Free magstripe reader (Contactless + Chip Reader $49)

Free Chip & Swipe Reader (retail price $29)

Free Swift B200 reader (chip and swipe)

BBPOS Chipper BT (chip and swipe, $75; swipe, chip and contactless, $100)

The takeaway is that there is no shortage of great credit card processing apps for iPhone and iPad users! And you’ll get a great assortment of credit card readers to go with. Don’t forget to check out our companion article, The Best Credit Card Reader Apps to Android.

Thanks for reading! What’s your favorite credit card processing app and mobile card reader for iOS devices?

The post The Best Mobile Credit Card Readers For iPhone and iPad appeared first on Merchant Maverick.

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The Best Business Loan And Financing Resources For Ohio Small Businesses

Finding financing and other business resources can be a challenge for any small business. Maybe you don’t know where to look, or maybe there are just too many options and you have no idea where to begin. If you’re a small business owner in Ohio that needs help finding the right resources for your business, you’re in the right place.

In this post, we’ll explore the different financing resources available to your small business. We’ll review our picks for online business lenders that make the loan process faster and easier than ever. We’ll take a look at local banks, credit unions, and nonprofit lenders that offer financing to Ohio businesses. We’ll even explore small business grants that can put free money into your business. Whether you’re just starting a business in Ohio or your established business is ready to grow, there’s an option out there for you. And after reading this post, you’ll know exactly where to find it!

Online Business Lenders For Ohio Businesses

Small business owners are often strapped for time. From managing day-to-day operations to planning an expansion or gearing up for an upcoming busy season, it’s difficult to find enough hours to tackle your daily tasks, much less pile anything else on your plate. You need capital, but you just don’t have the time to sit on a phone with a lender or head into a bank to pitch your business.

Or maybe you have the time to get a loan, but you fall short in another area. Your credit score is low. Your time in business is too short. Your annual revenues aren’t where they need to be to qualify for a bank loan.

Whether it’s time, borrowing requirements, or some other issue that’s keeping you from applying for a small business loan, there’s an alternative: an online business loan.

You probably already use the internet to perform tasks for your business: bookkeeping, communicating with clients and suppliers, or ordering inventory, just to name a few. Why not leverage the internet to find the capital you need to start your business, grow your brand, or overcome a financial hurdle?

With online lenders, you can apply for your loan without ever stepping foot into a bank or office. You can shop your options, learn about requirements, and compare lenders from your computer or smartphone. Some lenders can even give immediate approvals and send over your funds in as little as one business day.

In addition to ease and speed, online lenders are opening up more opportunities than ever for small business owners. Bad credit? No business credit? Low revenues? Startup? No problem — there’s an option out there for you.

Ready to find an online lender? Instead of weeding through thousands of search engine results to find legitimate options, start your search with these lenders.

Lendio

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Lendio makes shopping for the best financial product easier than ever. This loan aggregator has over 75 financial partners that you can reach through one simple application. You can compare multiple lender offers to find the most affordable option for your Ohio small business. From long-term, low-interest Small Business Administration loans to merchant cash advances, Lendio has it all.

Some of the financial products offered to small businesses through Lendio’s network include:

  • SBA Loans: Up to $5 million with terms up to 25 years
  • Term Loans: Up to $2 million with terms up to 5 years
  • Commercial Mortgages: Up to $5 million with terms up to 25 years
  • Startup Loans: Up to $750,000 with terms up to 25 years
  • Lines Of Credit: Up to $150,000 with terms up to 2 years
  • Short-Term Loans: Up to $500,000 with terms up to 3 years
  • Equipment Financing: Up to $5 million with terms up to 5 years
  • Merchant Cash Advances: Up to $200,000 with terms up to 2 years
  • Accounts Receivable Financing: Up to 80% of receivables with terms up to 2 years
  • Business Acquisition Loans: Up to $5 million with terms up to 25 years
  • Business Credit Cards: Up to $500,000

Filling out the application is quick and easy, and there’s no impact to your credit until you accept an offer. Depending on the type of financing you select, you could have the capital you need in as little as 24 hours. Borrower requirements and required documentation vary based on the product selected. Rates and terms vary by lender.

SmartBiz

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If you’ve been in business for some time, you’re probably at least aware of the Small Business Administration. If not, you’re missing out on a very important resource. The SBA is not just an advocate for small businesses but also provides competitive, long-term loan options.

The SBA is not a direct lender. Instead, this organization guarantees small business loans distributed through its programs. Nonprofit organizations, banks, credit unions, and other lenders can feel more secure in taking on the risk of small business lending. Meanwhile, this opens the door for low-cost loan options for small business owners in Ohio, just like you.

Navigating the SBA loan process can be tricky, but smart business owners lean on SmartBiz to do the heavy lifting. SmartBiz simplifies SBA loans, removing the stress of the application process while putting money in your bank account faster than ever.

SmartBiz offers two SBA loan options for you. If you need to refinance high-interest debt or need extra money for working capital, marketing campaigns, inventory, equipment purchases, or operating expenses, you can apply for $30,000 to $350,000. You’ll have up to 10 years to repay your loan, and you’ll receive competitive interest rates of 8.25% to 9.25%.

To qualify, you must meet the requirements below:

  • Time in business of at least 2 years
  • U.S. citizen or permanent resident
  • Credit score of 640 or above
  • Sufficient cash flow
  • No bankruptcies or foreclosures within the last 3 years
  • No prior defaults on government-backed loans
  • No outstanding tax liens

If you need to purchase commercial real estate or refinance a commercial real estate loan, apply for the SBA 7(a) commercial real estate loan. You can receive between $500,000 to $5 million with repayment terms up to 25 years and interest rates of 7% to 8.25%.

The borrower requirements for SBA 7(a) commercial real estate loans are as follows:

  • Property must be at least 51% owner occupied
  • Purchase price must be more than $500,000
  • Time in business of at least 3 years
  • U.S. citizen or permanent resident
  • Credit score of 675 or above
  • Sufficient cash flow
  • Funds can’t be used to purchase investment properties or fund construction
  • No bankruptcies or foreclosures within the last 3 years
  • No prior defaults on government-backed loans
  • No outstanding tax liens

Credibly

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Credibly is an online lender that offers multiple financing options for small business owners. Credibly can preapprove you for up to $400,000 with final approvals in as little as 24 hours.

One of the financial products offered through Credibly is a working capital loan. You can qualify for up to $400,000 with repayment terms up to 18 months. These loans do not have traditional interest rates. Instead, Credibly’s working capital loans have factor rates that start at 1.15. Repayments on your loan are made daily or weekly.

To qualify for a working capital loan, you must have:

  • Time in business of at least 6 months
  • Personal credit score of 500 or above
  • At least $15,000 in monthly bank deposits

Need longer terms for your loan? Credibly’s business expansion loans have terms of up to 2 years. These loans are available in amounts up to $250,000 with interest rates starting at 9.99%. This loan is repaid through weekly payments.

To qualify for a business expansion loan, you must meet these requirements:

  • At least 3 years in business
  • Personal credit score of 600 or above
  • At least $3,000 in daily balances
  • At least $15,000 in monthly bank deposits

Another option to consider through Credibly is a merchant cash advance. With this financing, you’ll receive up to $400,000. The anticipated duration of Credibly’s MCAs are 3 to 18 months, and repayment is based upon your receivables. Factor rates for MCAs start at 1.15.

To qualify for this type of funding, you must:

  • Have a personal credit score of 500 or above
  • Be in business for at least 6 months
  • Have at least $15,000 in monthly bank deposits

Fundbox

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Wouldn’t it be a relief to have a source of funding available to you on-demand? If an emergency pops up, you’d have the funds to cover it. If you needed extra inventory or money to pay for operating expenses, you wouldn’t have to wait days (or weeks) for loan approval. If your Buckeye business would benefit from this type of funding, a line of credit from Fundbox may be just what you need.

Fundbox offers revolving lines of credit up to $100,000 for qualified businesses. You can make one or multiple draws on your line of credit up to your set limit. As you repay borrowed funds, they become available to draw again. You can select from 12- or 24-week terms, and fees start at just 4.66% of the draw amount. Weekly payments are automatically deducted from your business bank account.

Qualifying is simple, as Fundbox considers your business performance when approving lines of credit. To receive yours, you must have:

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

Prosper

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If you’re a new business with no (or very low) revenue, how are you going to qualify for a small business loan? Unfortunately, there will be many small business financing options unavailable to you if your business is brand new or hasn’t yet opened its doors. If this sounds familiar, you may have to get a little creative with your financing. One of the best options? A personal loan for business.

With a personal loan for business, your personal credit score and income can help you qualify for the funding you need. This is a great way to pay for startup costs or to cover any business expense when you don’t qualify for small business financing.

One lender to consider for personal loans is Prosper. You may qualify for up to $40,000 with APRs of 6.95% to 35.99%. You can select from terms of 3 years or 5 years.

To qualify for a Prosper personal loan, you must meet the following minimum eligibility requirements:

  • Source of income
  • Debt-to-income ratio below 50%
  • No bankruptcies within the last 12 months
  • Less than 5 credit inquiries within the last 6 months
  • At least 3 open trade accounts on your credit report

Amex Merchant Financing

American Express OptBlue

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If your business accepts American Express, you may qualify for Amex Merchant Financing. You can receive a loan of $5,000 up to $2 million for one fixed fee of 1.75% to 20%. A fixed amount is deducted daily, or you can opt to have a percentage of your daily receivables deducted.

Repayment terms are spread over 6, 12, or 24 months and automatic payments are deducted daily from your account. If you repay your loan early, you could get up to 25% of your fixed fee back, helping you save on the cost of your loan.

To qualify, you must:

  • Accept American Express cards
  • Have at least $50,000 in annual revenue
  • Have at least $12,000 in annual debit and credit receivables
  • Have been in business for at least 2 years

Banks, Credit Unions, & Nonprofit Lenders In Ohio

negotiating credit card processing fees

Online lenders are convenient, but maybe you prefer working with more traditional lenders. Banks, credit unions, and nonprofit lenders throughout Ohio provide loans and other financial products at competitive rates. You can also sign up for other business services, such as checking and savings accounts, payroll services, or employee benefits.

Huntington Bank

Huntington Bank has branches located in hundreds of cities in Ohio, including Akron, Canton, Cincinnati, Cleveland, and Columbus. Small business owners can open a checking and savings account through this bank. If you need extra capital to start or grow your business, Huntington Bank offers multiple financial products tailored to small businesses including:

  • Term Loans
  • Commercial Real Estate Loans
  • Lines Of Credit
  • Business Credit Cards
  • SBA Loans

Huntington Bank is a particularly good choice for SBA loans, as it has been ranked the top SBA lender in the region for the last 10 years.

Rates, terms, and borrower requirements vary by product. If you’re interested in getting financing through Huntington Bank, call their toll-free number or visit a branch near you to learn more.

Wright-Patt Credit Union

If you prefer more personalized service when seeking your small business financing, consider joining a credit union. In Ohio, Wright-Patt Credit Union is one of the largest with over 30 locations throughout the state.

As a member of Wright-Patt Credit Union, you’ll be able to handle all of your finances in one place. In addition to traditional financial products including business checking, savings, and money market accounts, members can also apply to receive financing through:

  • Commercial Real Estate Loans: Terms up to 25 years
  • SBA Loans: 7(a), Express, and 504
  • Commercial Auto Loans: Terms up to 84 months
  • Term Loans: Terms up to 10 years
  • Business Credit Cards
  • Lines Of Credit

Rates, terms, and borrower requirements vary by financial product. Some financing options, including auto loans and business credit cards, have online applications available to Wright-Patt members.

To become a member, you must meet one of the following requirements:

  • Live, work, attend school, or worship in one of the Ohio counties serviced by the credit union
  • Be a military or civilian employee of Wright-Patterson Air Force Base
  • Live in the Fairborn area with no access to other credit unions
  • Be a student, faculty member, staff member, or alumnus of Wright State University
  • Have a family member that is a Wright-Patt member
  • Be in a group affiliated with Wright-Patt Credit Union

Finance Fund Capital Corporation

Finance Fund Capital Corporation (FCAP) is a nonprofit community development financial institution. Through FCAP, eligible Ohioans can apply for funding through the Small Business Loan Fund. Loans are available in amounts from $100,000 to $1 million. Funds can be used for the following business purposes:

  • Working Capital
  • Real Estate Acquisitions
  • Construction
  • Leasehold Improvements
  • Equipment

Loans come with terms up to 7 years. However, there are longer options for commercial real estate and fixed asset purchases. Rates are based on the creditworthiness of the borrower and the risk of the project being funded.

To qualify, a business must:

  • Be a for-profit sole proprietorship, partnership, or corporation
  • Provide vital services to the area
  • Operate in an underserved market
  • Have a viable business idea

Loans are also given through the SBA Community Advantage program. To learn more and to apply for the Small Business Loan Fund, call or email Finance Fund Capital Corporation.

Small Business Grants In Ohio

If your business needs capital, turning to a lender isn’t your only financing option. Your business may qualify for a small business grant. The best thing about small business grants is that funds don’t have to be repaid, so there’s no worrying about monthly payments, high interest rates, or fees.

On the flip side, scoring a small business grant isn’t just as simple as filling out an application, having a credit check performed, and getting the funds you requested. Small business grants are extremely competitive. You must also meet very specific requirements — such as operating in a certain industry, having a veteran-owned business, or being a woman business owner — for most grants.

In the state of Ohio, there are several grant programs to consider. Start with these options.

JobsOhio

JobsOhio is a nonprofit corporation that aims to create jobs and promote economic development in Ohio by attracting, retaining, and expanding businesses. Through JobsOhio, small business owners have access to grant and loan programs including:

  • Economic Development Grant: Focuses on fixed asset and infrastructure investment of companies, including site development, machinery and equipment, land, and buildings.
  • Revitalization Program: Provides funds for businesses, nonprofits, and governments for costs related to redevelopment projects, including demolition, building renovation, and site preparation.
  • Workforce Grant: Provides funding for company training costs including information technology, leadership skills, technical training, and on-the-job training.
  • Growth Loan Fund: While not a grant, the Growth Loan Fund provides low-cost loans for established businesses that have limited access to traditional funding sources. Loan funds can be used to purchase fixed assets including land, buildings, machinery, and equipment.

Ohio Development Services Agency

The Ohio Development Services Agency has multiple programs that are designed to help Ohio businesses grow and create jobs. These programs include small business grants, low-cost loans, tax credits, and bonds.

Programs available through the Ohio Development Services Agency include:

  • Alternative Fuel Transportation Program: Provides financial assistance to businesses that purchase and install alternative fuel facilities and terminals.
  • Energy Loan Fund: Provides low-cost financing to businesses and manufacturers for improvements that reduce fossil fuel emissions and energy usage.
  • Ohio Minority Business Direct Loan Program: Provides low-interest loans to minority-owned businesses

City Of Cleveland Green Technology Business Grant Program

New green technology businesses located or relocating to Cleveland, Ohio, may qualify for the Green Technology Business Grant Program. To qualify, a business must create at least five new jobs within its first year.

The grant provides up to 1% of new payroll for up to 3 years. An additional $5,000 is also available as a Moving Assistance Grant. Interested small business owners can apply online through the City of Cleveland Economic Development.

Loans & Resources For Startups In Ohio

Startup businesses may find it a challenge to get the capital and resources they need to grow. Fortunately, the state of Ohio offers multiple resources to help new businesses and startups succeed.

Minority Business Assistance Centers

The Ohio Development Services Agency offers assistance to minority-owned businesses through its Minority Business Assistance Centers. Through these centers, minority-owned and disadvantaged small businesses can receive services including accounting assistance, business management counseling, marketing plan development, and help identifying local resources.

SCORE

SCORE is one of the nation’s best resources for startup and small business owners. Through SCORE, you can receive free business counseling with an expert mentor. You can meet face-to-face with your mentor or you can receive counseling online.

SCORE also offers free and low-cost business training, workshops, and other resources such as business templates and guides.

SCORE chapters are located throughout the state of Ohio in cities including Mansfield, Columbus, Toledo, and Newark.

Ohio Small Business Development Centers

Whether you’re launching your business or taking your existing business to the next level, the Ohio Small Business Development Centers have resources for you. You can work with a Certified Business Advisor to get your business on the right track.

Services available through SBDC include business planning, one-on-one counseling, finding sources of capital, workshops, and training programs.

Offices are located throughout Ohio in cities including Akron, Cincinnati, Cleveland, and Columbus.

What To Consider When Choosing A Lender

Now that you know just a few of the options available to you, narrowing down your choices to just one lender can be tricky. However, there are a few factors to keep in mind to help you choose the right lender for your business.

Type Of Financing

What type of financing are you seeking? If you want a flexible line of credit, you can cross off any lenders that offer long-term loan options. Interested in SBA loans? Then don’t give short-term lenders a second glance. Determine what type of financing works best for your business, then select a lender that provides this type of funding.

Borrowing Amount

If you need $500,000 to purchase commercial real estate, a $10,000 loan isn’t going to get you very far. Consider the borrowing limits of each lender, then choose the lender that is able to provide the capital your business needs.

Affordability

When you receiving financing, you have to consider the overall cost of borrowing. Calculate the fees, interest, and other costs associated with each lender you’re considering. Working with one lender may be faster and easier, but the costs may be much higher … and could be too much of a burden for your business. Consider your options, don’t feel obligated to take the first offer, and know how much your business can afford. Remember, you want to grow your business, not slide into a cycle of debt.

Borrower Requirements

Do you meet all of the requirements of the lender? Lenders consider factors such as personal credit score, business credit score, past credit history, time in business, and annual revenue. If you don’t meet these requirements, you won’t get approved, so why waste your time? Grab your free credit score, read up on borrower requirements, and submit your application only when you know you meet all requirements. Also, please remember that meeting the minimum requirements of a lender is not a guarantee of approval.

Final Thoughts

Starting and operating a business is tough for even the most experienced entrepreneur. Luckily, you don’t have to go it alone. As a business owner in Ohio, there are multiple lending options and other resources available to you to keep your business on the path to success.

The post The Best Business Loan And Financing Resources For Ohio Small Businesses appeared first on Merchant Maverick.

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The Complete Guide To Stripe Pricing And Costs

Are you curious about what makes Stripe different than other third-party processors like Square and PayPal? And if the costs are comparable? Come along as we explore Stripe — a lesser-known payment processing option that has definite potential when it comes to eCommerce.

Even though Stripe has less name recognition than competitors Square and PayPal, Stripe has likely processed many of your recent online shopping transactions without you even realizing it. That’s because Stripe powers payment processing behind the scenes for some of the biggest retail chains around — places like Target, Lyft, Facebook, Adidas, and Under Armour. Yes, Stripe has one of the most respected and well-trusted platforms in the world, but instead of providing branded, customer-facing tools like its peers, it focuses on delivering developer-friendly solutions with extensive code libraries and lots of customization options.

If you are looking for a ready-made, polished solution for eCommerce payment processing, Stripe may not be the ideal choice. A solution like Square may be much better suited to your needs. If, however, you want to build your payment processing platform from the ground up (and have the technical resources to do so), you’ll find a range of robust, world-class developer tools.

In this post, we’ll talk about what kind of payment processing Stripe provides (and why it matters), and then dive into costs associated with transactions and/or other handy tools you may need.

Overview Of Stripe

Stripe is a third-party payment processor — just like PayPal and Square. Traditional merchant account providers vet and approve each individual merchant, creating a single account for that business. Third-party processors, on the other hand, make it much easier for a business to quickly access payment processing services because they combine many business accounts together into one giant account. Stripe’s processing model relies on maintaining account volume to reduce risk for the group as a whole; for that reason, it can become a bit of a numbers game for them to remain profitable. If something looks fishy, they are more likely to terminate, freeze, or put an account hold on a business without a lot of warning.

Now, most of us feel a bit squirmy when we imagine our hard-earned revenue potentially held ransom in a purgatory account, but the truth is, freezes and holds happen only to a tiny percentage of businesses — and typically only after certain red flags have been raised. If you want to learn more about how to avoid waving some of these red flags, check out our post: How to Avoid Merchant Account Holds, Freezes, and Terminations. The majority of business owners will not have to worry about a freeze or hold, so it’s important to keep that whole issue in perspective.

Now back to the good news. Stripe has a lot of features and benefits for a growing small business, such as:

  • Transparent pricing
  • No monthly or termination fee
  • Payment security using advanced machine learning  
  • Libraries in every language
  • Display multiple currencies (add 1% for automatic conversion)
  • Versioned API changes
  • Test-friendly environment
  • 24/7 live chat and phone support
  • iOS and Android dashboard apps

And when it comes to creating the finished solution, you don’t have to do it all. There is a workaround for those of us who may not have all of the coding skills (or time!) to build it all from the ground up. Stripe has established platform partners to integrate a range of small business tools from accounting, automation, form building, CRM, inventory management, and booking — just to scratch the surface.

One thing we like about Stripe is that, unlike some companies, Stripe offers support for safe and PCI compliant migration of credit card data whether you are coming or going. Some third-party processors don’t support exit migration at all, so this is a nice touch.

Now that you are a bit more familiar with this platform, let’s check out the costs associated with processing payments.

Stripe Payment Processing Costs

Most savvy business owners want to cut to the chase. “Great, so how much does it cost?”

Stripe’s payment processing costs are straightforward, but your per-transaction costs will largely depend on the type of transaction you’re processing. Discounts and some pricing differences apply, so stick with me as we go through some different scenarios.

Online Transactions

For any eCommerce transaction (including in-app and mobile web payments), you are going to pay 2.9% + $0.30 per successful card charge. It doesn’t matter whether you process Visa, MasterCard, American Express, JCB, etc. — all cards cost the same to process. You also pay the same price whether you build your own site or connect to a third-party shopping cart.

Another great thing about Stripe is that you can accept international cards (for an additional 1%). If you need to convert the currency, however, you’ll have to pay another 1% on top of that. This is great for businesses that sell internationally, especially combined with Stripe’s ability to present prices in the customer’s local currency. 

Stripe also allows merchants to accept more than just credit cards, providing the tools that allow you to manage ACH and other payment options. Here is what it’s going to cost you:

  • ACH Credit: Starting at $1.00 per ACH credit payment
  • ACH Direct Debit: 0.8% per transaction, capped at $5
  • Wire: $8.00 per wire payment

Stripe also allows you to verify your customers’ bank accounts at no extra charge. That’s a nice touch. However, if payment doesn’t go through, you are looking at $4 for failed ACH direct deposit payments and $15 for disputed ACH direct debit payments.

In-Person Transactions

 

Stripe POS

Want the same customization for your pop-up shop or brick-and-mortar store that Stripe brings to your online presence? Introducing the Stripe Terminal!

For in-person payment processing with the Square terminal, you’ll pay 2.7% + $0.05 for each successful card transaction. But before you get too excited, Stripe Terminal’s programmable point of sale is currently in beta and available upon invitation only. You can request approval now, and if you are approved, you can buy a developer kit to run in test mode until they begin supporting transactions in live mode (this is expected to roll out very soon).

When it comes time to choose your reader, you can integrate with the Stripe Terminal through a combination of an iOS SDK and mobile reader or a JavaScript SDK and countertop reader. Stripe suggests the latter if you’re looking for a fully branded experience and have a strong developer proficiency.

Payment Security Note: As far as payment security and PCI-DSS compliance go, the Stripe Terminal is EMV Levels 1,2, and 3 pre-certified. So it can help a wide range of businesses get started without having to dedicate extra resources to payment security. But for now, you’ll have to wait to process live payments until it graduates from beta testing.

Does Stripe Offer Alternative Pricing?

QuickBooks For Nonprofits

We do get a lot of comments about the fact that Stripe (and other third-party processors) can be expensive for some businesses. Fortunately, Stripe does offer volume-based discounts for large businesses. In addition, you may be able to qualify for custom pricing if you run a nonprofit or have a unique business model. Stripe doesn’t give any hard and fast details about alternative pricing, however, so you’ll have to contact the sales team and discuss your business model with them directly.

Does your business process very small transactions ($10 or less) on a regular basis? The $0.30 per-transaction fee might be prohibitively expensive, and an alternate payment model catering to these microtransactions can save you money. Here’s what Stripe says about support for microtransaction payment processing:

Microtransaction support varies from market to market. If you process more than $100,000 per month or have a unique business model such as marketplaces, microtransactions, or unusually large order values, reach out to us, and we can discuss availability and options. In markets where microtransactions aren’t available, a common approach is to batch together multiple transactions from the same customer and submit them as a single, larger charge.

Stripe Pricing For Other Tools

Stipe offers a healthy selection of additional tools and add-ons. Below, we break them down for you and include information about pricing to help you make an informed decision.

Billing

Stripe Billing offers recurring payments and subscription tools built around the customer experience. For the recurring business model, you will have a lot of tools to help you engage customers and reduce turnover (more on that below). And as far as billing your customers with one-off invoices or setting them up for automatic recurring payments, there are no limits on how many invoices you can send, ever.

To be clear, all Stripe Billing fees are charged in addition to the processing fee (2.9% + $0.30 per successful charge).

If you’re only expecting to process a small volume of recurring payments, or you’re new to Stripe, the Starter Plan has everything you need. Your cost for using the Billing tools is 0% for the first $1 million of recurring charges, and then 0.4% after that. Stripe doesn’t charge anything extra for one-off invoices. 

For businesses that are billing at large volumes and want advanced features to manage billing from order cash, Stripe offers the Scale plan. You will pay 0.7% on recurring charges, in addition to the payment fees of 2.9% + 30 cents per successful charge to a card. However, Stripe also offers discounted ACH to businesses on the Scale plan, so there are potential cost savings.

Here is a screenshot from Stripe’s comparison of their Starter and Scale packages:

Stripe

The above is a long list of out-of-the-box tools you can put to use pretty quickly. Even just the business analytics, reporting, recovery tools, and webhooks make a compelling case of high value to cost ratio. Stripe touts that its recovery tools have “reduced payment declines for users by 45% on average and increased revenue by 10% on average.”

All-in-all, any SaaS or subscription-based business could benefit from the features in Stripe Billing — and Stripe offers a free trial with no setup or fixed monthly fees, so there doesn’t seem to be a downside to trying it out.

Connect

Connect is “the payments platform for platforms.” If you are a marketplace or a platform, you can utilize Stripe Connect to accept money and pay third parties. Connect is API-first, meaning you have the freedom to design a unique experience including onboarding, set payout timing, and integrated financial reporting, to name a few.

Connect has three account options including Standard, Express, and Custom. The cost for Connect Standard is included with Stripe — you have no additional platform-specific fees to add payments to your platform. Additionally, you’ll get a full Stripe Dashboard, dynamic risk-based KYC/AML checks, international support in over 25 countries, and hosted onboarding and verification.

Custom and Express Connect costs $2 per active account per month + 0.25% of account volume. With these accounts you can do things like build branded onboarding flows, control payout timing and funds flow, automate 1099 tax form generation and delivery, and have a platform management dashboard. The difference between Express and Custom is revealed in the names themselves. Express is a faster option requiring low integration effort to onboard recipients quickly and at scale (e.g., an on-demand marketplace), while Custom is an option for platforms to completely customize the user experience.

International connected accounts will run an extra 0.25% cross-border charge on monthly account volume. Additional fees also apply if you utilize Connect tools such as account debits (1.5%) and payouts ($0.25 per payout). However, as with Stripe’s other pricing models, the company is always up for discussing volume pricing for large platforms and alternative pricing options for low volume accounts. And if you’re a startup affiliated with Stripe Atlas Network, you can contact Stripe to learn about their custom startup package.

Stripe Connect

Sigma

Sigma connects you to your business data with a wide range of applications from business operations to finance, data analysis, and product management. Sigma doesn’t require any setup or ETLs; all you need to do is write SQL queries to create the custom reports on your dashboard. Pricing for Sigma is based on how many charges, authorizations, and application fees your business processed in the previous month. Fees start at $0.02/charge for 1-500 charges and incrementally decrease with charge volume.  

Radar For Teams

While all of Stripe’s payment processing software is fully PCI compliant and therefore meets global payment security standards, Radar is available as well. Radar bolsters your defenses through advanced machine learning. Radar learns from “hundreds of billions of data points across the Stripe network to help millions of businesses fight fraud.”

Radar is included with your standard and custom pricing plans. However, Radar for Fraud Teams is also available for an additional cost of $0.02/per transaction. Radar utilizes data and tools that support the detection and blocking of fraud, and it can decrease the false positives that block legitimate customers, too. Stripe has done a very good job at creating layers of security and data insights into their product — and you don’t need to dig into the code to make use of it because it all happens at your dashboard!

Is Stripe A Good Fit For You?

It’s pretty clear that Stripe goes far beyond your run-of-the-mill payment processing solution. The real meat of Stripe is its rich developer tools that give you the power to customize everything about the payment experience while giving you deep insights and analytical data you can use right away.

Businesses that want a fully branded, ready-to-scale solution — as well as subscription-based businesses, marketplaces, and tech-focused companies — will likely find all the tools they need and then some. However, for the eCommerce business that simply needs a reliable and secure payment processor, Stripe may be overkill. If you don’t have the technical expertise or don’t have developers on staff, you may never tap into Stripe’s potential. An option like Square may be a better fit. Square offers fast setup, no recurring fees, and up-front pricing that suits most small businesses nicely. Additionally, Square provides an extensive dashboard that reveals basic business and financial analytics with no integration required.

Not sure what you need? Check out our Stripe vs Square comparison or read our Stripe Review for an in-depth analysis. Or if you want to explore your options even further, check out How to Choose an eCommerce Merchant Account.

The post The Complete Guide To Stripe Pricing And Costs appeared first on Merchant Maverick.

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How To Set Up A Free Square Account

Thinking about using Square to process payments for your business? Whether you are a solopreneur or a busy boss running multiple locations, you can quickly set up an account with Square with little to no fuss. Square offers several time-saving benefits for the small business owner looking to start processing payments, including no credit checks, a free magstripe reader to get you started, and a free Square POS app which enables you to start taking credit card payments right away. Not only that, but the Square dashboard offers analytics reporting, inventory management, alerts, and (with optional add-on software) even the ability to plan email marketing campaigns!

With all of these conveniences and freebies, you can expect slightly higher transaction fees than you’d get with a traditional merchant account. However, as a third-party processor, Square offers a very transparent pricing plan that starts at 2.75% per swipe dip or tap, and 3.5% + 15 cents for keyed-in transactions. You won’t be surprised with hidden fees or contracts, and you can enjoy the same processing rate for all major credit cards. Square also offers payment dispute assistance, chargeback protection, and secure, PCI compliant software — all included.

If your interest in Square is piqued, but you need a little more information before getting started, then you’ve landed on the right post! Below, we’ll take you step-by-step through the process of signing up for a new Square account. As you will see, setting up your Square account is relatively straightforward. And the best part? It’s completely free and requires no commitment on your part whatsoever.

What Do You Need To Get Started?

Before we get started, here is the main information you’ll need to set up your Square account:

  • Email address
  • Last four digits of your Social Security number (to confirm your name)
  • Home address
  • Shipping address
  • Legal name
  • Phone number
  • Bank account number to set up your direct deposit schedule

You don’t need:

  • Bank statements
  • Proof of revenue
  • Your full social security number
  • Tax documents
  • A credit check

We are going to get pretty detailed in this tutorial, but rest assured, the application itself takes less than ten minutes. Follow along with the guide below to discover how to set up and make the most of your new Square account!

How To Create A Free Square Account

First, visit Square’s sign-up page and hit the “Sign Up With Square” button.

Sign up with Square

 

The first step asks for your email address and prompts you to create a password and choose your country. You also must agree to Square’s terms, privacy policy and e-sign consent policy. We strongly suggest that as with any contract, you take the time to click on, read, and understand the details before agreeing to them.

 

Square set up account

 

The next screen is straightforward and asks if you are an individual or represent a larger business, charity, or religious organization. Enter in your business name or another title that you would like to appear on your receipts. I’m typing in “Blue Heron Content” as my business name.

Create an individual square account for business

 

Now we are getting closer to the meat — Square wants to know where you plan on processing payments. In this example, I don’t want to limit myself, so I am choosing all of the possibilities!

 

Square processes payments mobile online and square invoices

It’s important to mention that even if you don’t plan to use some of these options right away, you can still access them later at any time.

Next, Square asks what else they can help you manage. I am also going to select all of the options again to get a better idea of what Square may suggest right off the bat. I don’t personally need employee tracking for my business, but let’s see what it can do!

Now it’s time to make decisions. Because I selected that I was interested in restaurant-related products, I am offered a free 30-day trial of Square for Restaurants, one of Square’s premium iPad POS apps. (Check out our full review of Square for Restaurants for a more detailed look at pricing and features.) If you are a restaurant owner, check out some of the perks Square lists below. For this particular tutorial, though, we are going to stick with the free POS system.

Square Point of Sale and Square for Restaurants

 

Now that I have selected Square Point of Sale as my preferred POS app, I’ve made it to the “Let’s talk about you” page. This is the place to plug in the rest of your information. Note that Square is not going to perform a credit check on you or your business, they just need the last four digits of your social security number or ITIN, your legal name, street address, and phone number. They use this information to verify your identity.

I’ve finished filling in this form, so I am going to hit “continue” and see what’s next on our journey.

 

Square setup form

 

Choose A Magstripe Reader

Great news! By the time you arrive at the next screen below (3-5 seconds, give or take), Square will have successfully verified your identity. Now it’s time to select a credit card reader to accept in-person payments. For my part, while the Contactless + Chip Reader looks very enticing at $49, I am going to accept the free reader for now.

Square Reader

 

Now there’s another choice to make. Square would like to know if I would like the 3.5mm magstripe reader that is compatible with the traditional headphone jack, or the Lightning connector version for iOS devices. I’m choosing the reader that plugs into a conventional audio jack. You’ll obviously choose the option that works best for your business setup.

Compatibility Note: Square’s magstripe and chip card readers and the Square Point of Sale (POS app) are compatible with most Apple iOS and Android devices running the latest software updates. After this tutorial, check out our Square POS Review for more about system requirements, integrations, and a lot more details about Square POS.

Free Square Reader

After selecting the type of magstripe reader that fits your needs, Square will give you the options to find a retailer close to you and pick up the reader or have it mailed. Personally, I’m opting for Square to send me the reader in the mail. After entering my shipping details, I am one step closer to getting my own Square reader. Oh, and shipping is free, too! Just note that it could take up to 10 days for yours to arrive. 

Order A Square Reader

After entering my information and clicking continue, the setup process is officially complete! That was very easy. Square has already sent me an email letting me know when to expect my reader and another to confirm my email address.

It’s time to head to the new dashboard to set up the backend. 

How To Set Up Your Square Dashboard

Right away, you can see that the dashboard has a clean layout and is pretty straightforward. Since this is the first time I am visiting this new dashboard, Square is offering up these green bubbles as a setup guide. Let’s explore the dashboard and start setting up inventory, customizing the layout, and checking out the reporting features.

Square Dashboard setup

 

Compatibility Note: You’ll be able to access the full Square dashboard from any web browser, but the Square Dashboard app is only compatible with iPhones at this time. You can still take payments on any compatible iOS and Android device with the Square POS app, however.

Add Items & Build Your Inventory

From your home screen, you will see the teal Items button (pictured in the screenshot above). The place to add inventory is under Items>Item Library. To the right on the screenshot below, note the blue button that says “Create an Item”:

Adding an Item in Square Inventory

Here is what the “Create an Item” screen looks like in the Square Dashboard before adding a product:

Create an Item Screen in Square Dashboard

I went ahead and uploaded a product image and filled out my first item below. I can add the amount of stock I have, a price, and set up low-stock alerts for myself here, too! Square will even let me color-code items if I prefer to group categories by colors. 

It’s also possible to create variant items if you sell the same product in different colors and/or sizes. Plus, for cafes and restaurants, there’s a “modifier” option. Say, for example, that you want to offer coconut, soy, and almond milk alternatives for customers in your coffee shop. You can do that, and even set an upcharge fee for these items using the modifier feature. There’s also an option to specify at which locations an item is available if you have more than one shop. 

Add an Item in Square Inventory

Create & Manage Locations

You can create multiple locations from within your Square Dashboard by going to “Accounts and Settings” and then to “Business” and selecting “Locations.” Square will even let you specify a mix of physical locations with a set address and mobile locations without one.

Square’s location management features can help you manage inventory and gather data from multiple stores — and it is totally free:

  • Linked locations and deposit options
  • Per-location item libraries
  • Device management for security
  • Reporting tools to compare/contrast sales or other data

Square also offers advanced tracking and reporting tools for individual employees across your locations. More on those features and cost in the Employee Management section.

Manage Sales Tax Settings

You will find Square’s sales tax settings nestled under the Items menu in your dashboard.

When you create a tax at your Square Dashboard, the tax will automatically sync to every device in your account, and you can specify which taxes apply to which locations. You can even build the tax into the price of the item if you prefer, rather than adding the tax to the price afterward. Square also lets you modify tax settings from within the mobile POS app as well, which is useful when you need to make changes on the fly.

In addition to multiple tax rates, you can create conditional tax rules, which are preset conditions in which a tax won’t be applied — whether you need that to apply to one item or the entire order. This is especially helpful for restaurants that handle online orders.

Now, let’s head back to the home screen and customize our dashboard layout, and then check out the reporting features!

Customize Your Dashboard Layout

Customizing the layout of your Square Dashboard is super easy. First, you can get rid of anything you know you won’t need right off the bat by scrolling through and unchecking anything in the drop-down menu (pictured on the right-hand side of the screenshot below). Don’t worry about making the wrong decision, because you can reset the whole thing or click to re-check one box.

Square Dashboard Customize

The other way to easily adjust your view is by dragging and dropping the tiles to configure them exactly how you want them. For my store, I switched tiles to move the feedback tile up from the last row. This drag-and-drop feature makes it easy to get the information you prioritize first, and then scroll to other options whenever needed.

Moving Square Tiles in Dashboard

As you can see, it’s simple to move things around, and if you change your mind, just as easy to change it back.

Review Square’s Reporting Features

The extensive, user-friendly and (mostly) free reporting features are what make Square a fantastic, no-fuss choice for any small business. As you can see in the screenshot below, there is a long list of possible reports. Every business has unique needs, and Square does a good job of supporting a wide range of small businesses with various options and features.

Square reports

All of the sales reports, such as Sales Summary, Sales Trends, Items Sales, and Modifier Sales, are free. Custom Reports is another handy and entirely free reporting tool that can help you combine and compare your reporting data. Custom Reports allows you to aggregate reports with multiple filtering options. This feature makes it easy work to create a report that breaks the data down for a single location, or you can pick and choose certain pieces of data and compare them across different locations. For instance, you could create one report that compares Gross Sales and Returns for a particular device and/or location. 

To find out even more about what Square’s dashboard can offer you in terms of reporting features, check out our post Why We Like Square’s Online Dashboard and Analytics App.

If you are looking for even more robust reporting and tracking across multiple locations for your employees, it may be worth it to you to learn more about the Employee Management tools, featured below.

Manage Your Employees 

Within the Dashboard, you’ll find the Employee section, which is the foundation for Square’s Employee Management feature set. Adding a new employee into your dashboard is easy — and adding in separate email logins for Square POS is entirely free. However, if you want advanced reporting on timekeeping, individual employee sales, and sales vs. labor costs, you need to subscribe to Employee Management, which will cost you $5 per employee. 

Square Employee Reporting Tool

Here, I have chosen to select the free “Mobile Staff” option to show you that you can invite employees using the email address that they will then use to log into the Square app. You can also enable or disable permissions for accepting payments in Offline Mode and set or remove Issue Refunds permissions.

It’s important to note that employees assigned to mobile staff can only access their own sales data in the Square POS app. 

Square Employee Permissions Mobile Staff Free

If you want something a bit more substantial in terms of employee reporting, Square offers that, too.  To track individual employee sales through the day, keep better performance accountability across multiple locations, and closely monitor administrative permissions, the $5/mo per employee cost for the advanced Employee Management feature seems like a pretty fair deal. You also get timekeeping, so your employees can clock into their shifts through the Square POS app. 

If you want to get started with Employee Management, there are a few ways to do it: Head to Employee Sales or Labor vs. Sales under Reports and start adding employees. It’s free to try for 30 days!

Employee Management Sales Reporting

 

How To Set Up Square Deposits & Funding

When it’s time to get all of that revenue into your bank account, Square has several options for getting your money, all found under Deposits.

Square Instant Deposit and Deposit Schedule Tutorial

Square will automatically deposit your funds on the next business day. You can also change your ‘close of day’ to adjust for your time zone or business hours if you would like. The close of day determines when Square cuts off payment deposits for the next business day. If you need your money even faster, Square offers Instant Deposits that transfer your current Sales Balance immediately — whether it’s a business day or a weekend. This faster service will cost you 1% of the transfer amount. You can even use Scheduled Deposits to get your money deposited at each day’s close of business. 

Find out all the details about the instant deposit feature, and more about how Square’s deposit options work in general, by checking out our post, How Does Square’s Instant Deposit Work?

To set up your deposit schedule or choose an instant transfer, you’ll need to link your debit card (in addition to your bank account). However, you have yet another option for disbursement. You can request your very own Square Card, a personalized business debit card that holds your Square balance.

Square Card Small Business

You can use your card anywhere MasterCard is accepted. If you’d like to order one, you’ll find “Square Card” tucked right under the Deposits tab. To be clear, you can request a Square Card and also choose to have funds deposited into your bank account.

Explore More Square Software Options

Square offers a myriad of specialized software options to make business more productive. Here are some of your options:

  • Customer Engagement: Square’s customer engagement tools include a customer database, feedback management, and CRM software. The database and feedback tools are free, but the CRM starts at $15 month. The image above is a sample CRM campaign I could send to my lapsed customer list. Email campaigns are easy to customize and segment for those reachable-by-email customers.
  • Loyalty Program: This tool starts at $25/month. Read our Square Loyalty Program Review for an in-depth analysis.
  • Advanced Employee Management: As outlined in a previous section, pay $5/month per employee for advanced reporting and employee management tools.
  • Payroll: Square Employee and Contractor payroll starts at $29/month plus $5/employee. Contractor-Only Payroll is just $5/month per contractor.
  • eCommerce: Square offers free space and setup for an online store, and you can integrate with major shopping carts. Read our Square Online Store and eCommerce Review.
  • Invoicing: Invoices are always free to send, pay 2.9% + 30 cents per invoice when your customer pays with credit or debit online. For more on the pros and cons, pricing, and an in-depth look at invoicing with Square, check out our Square Invoices Review.

Choose Another Square Point of Sale App

While the free Square POS app will likely fit the bill for many small businesses, Square has developed more specialized tools for retail, restaurants, and appointment-based businesses.

Square For Retail:

This POS system works with an iPad and has a redesigned interface and usability geared for retail businesses that have substantial inventory. Instead of scrolling to an item in your inventory, an item is easily searchable by name. The barcode scanning and printing features make keeping up with inventory a bit easier, too. Check out our Square Retail Review for more on price, pros and cons, and all a lot more details.

Square for Restaurants:

If you are familiar with Square’s POS system, you may be surprised to see how different Square for Restaurants really is. And it has to be. Sit-down restaurants usually require more specialized tools to cover their everyday business needs, and this POS delivers — from table mapping, menu creation, table management, and reporting tools — there are a lot of specialized features here. Check out our full Square for Restaurants review to find out if this is the right choice for your restaurant.

Square Appointments:

If your business relies on creating and maintaining appointments for just yourself or an entire team, Square Appointments might be just what you need. Note that this POS option is an iOS exclusive. It’s free for individual users, and pricing starts at $50 a month beyond that. Check out our in-depth Square Appointments Review, including functionality, customization, and features.

Choose Hardware Options

Square has expanded to offer so much more than the free magstripe credit card reader. As I mentioned earlier, Square offers a Contactless + Chip reader that lets you accept chip card and contactless payments for $49, which is a smart move to improve payment security.  

If you need something more robust in terms of hardware, however, you can probably find what you need. Square offers countertop POS systems with customer-friendly displays, and if you want to toe the line between countertop vs. mobile, Square also offers a fully portable credit card terminal with a built-in receipt printer.

Square’s countertop POS devices include:

  • Square Stand: This hardware option is a tablet stand with a built-in card reader (along with contactless and chip reader) with an affordable price tag, minimal cords, and a swivel stand.
  • Square Terminal: A more portable option, Square Terminal accepts magstripe, chip card, and contactless transactions. It’s sleek design, built-in receipt printer, and generous display size make it a nice, versatile option.
  • Square Register: Need something more robust? The Square Register offers a 13.25-inch display to run your Square Point of Sale, and on the opposite side, you have a 7-inch customer display ready for magstripe, chip card, and contactless transactions.

For an in-depth look at each of the POS options or to take a gander at all the Square POS kits and bundles, head over to A Guide To Square Credit Card Readers And POS Bundles.

Where To Go Next With Square?

When you consider that Square is a secure, PCI compliant option with a transparent pricing plan and offers lots of bells and whistles, it truly is an excellent solution for any small business. I like that it’s so easy to set up an account with Square, and that they don’t ask for much in terms of personal information. When it is time to get set up or find reports, the dashboard is intuitive and easy to navigate. I also love that Square offers affordable hardware and software when it comes time to scale the business.

Not quite ready to make a decision? Check out our Square Review or head over to Square and set up your own account to see for yourself.

Already have an account? Square support provides great resources to help answer your questions as you navigate your options.

Have questions, comments? Leave us your thoughts below! (Just make sure you check our comment guidelines, first!)

The post How To Set Up A Free Square Account appeared first on Merchant Maverick.

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How To Choose An Equipment Leasing Company

Selecting equipment
One of the most common expenses a business can encounter is the need to purchase or upgrade equipment, but choosing an equipment leasing company can be a challenge. Choosing one that will give you a good deal that fits the specific needs of your company can be downright daunting.

Don’t know a TRAC lease from a leaseback? A tax lease from a synthetic lease? Not sure where to start looking? The equipment leasing industry’s websites are notoriously full of opaque, specialized terms … and that’s when specific terms are offered at all.

We’ll try to demystify the process below, and hopefully put you on the right track.

Financing Need Best Product Type Recommended Lender
Financing Platform Any Currency Capital
Equipment Purchasing Loan Lendio
Renting Operating Lease Crest Capital
Big Ticket Items Any TCF Equipment Financing
Purchasing w/Lease Capital Lease CIT Direct Capital

Find A Lessor Who Will Work With You

The easiest way to rule out a potential lessor (the company that finances the lease) is to see if they serve your industry. Most lessors, particularly those that work with resales, specialize in specific industries. Even the least transparent lessors tend to be upfront about the industries they’re able to finance, so it’s not a bad place to start. If possible, you’ll also want to see if they finance the specific type of item you’re looking for.

Next, you’ll want to take stock of your own profile as an applicant. How good is your credit? How long have you been in business? What’s your revenue? How much debt have you taken on?

Lessors don’t always advertise their minimum qualifications. Since your time is limited and valuable, if you have reasonable doubts about your ability to qualify with a particular lender, I would recommend prioritizing more transparent lenders. You don’t want to waste time filling out a long application only to be rejected. To save yourself some headache, take advantage of online screening/pre-qualifying tools the lessor might offer.

Choose The Right Leasing Arrangement

This is where it gets a little complicated.

Because you’re dealing with a tangible asset, when making a deal with a lessor, you’ll need to be prepared to work through an enormous number of lease variations covering different possible ownership arrangements.

The simplest leases function as loan replacements. That is to say, the lessor finances your equipment, which you are considered to have ownership of either immediately or by the end of the lease. You’ll make regular payments, typically monthly, for the length of your lease, at the end of which you’ll pay a small residual fee to close it out. These are called capital leases.

Why would you want a capital lease instead of a straightforward loan? While the interest rate is usually higher than it would be with a comparable loan, a capital lease covers the full cost of the equipment you’re buying and, very often, associated transportation and installation costs as well. These leases also tend to be easier to get than traditional loans.

But what if you don’t want to own the equipment long-term?

In that case, you may want to look for an operating lease. Operating leases are more like rentals with the option to buy. The lessor will retain official ownership of the asset, but you’ll have possession of it for the length of the lease. At the end of the term, you’ll have the option to return the equipment to the lessor or purchase it for a residual — typically fair market value (FMV).

There are a huge number of variations on both operating and capital leases, as well as tax advantages and disadvantages to both which you should discuss with an accountant. But generally:

  • If the equipment you’re considering will not become obsolete quickly and you’d like to own it, choose some form of capital lease.
  • If the equipment you’re considering depreciates quickly or becomes obsolete within a couple years, you probably want an operating lease.

Once you know what type of lease you want, you can narrow down your list of eligible lessors.

What About Equipment Loans?

Nothing wrong with them! If you’re looking at capital leases, you should also consider getting an equipment loan.

Equipment loans usually cover around 85 percent of the cost of the item, so be prepared to make a downpayment unless your lender specifies that they cover the full price.

One nice thing about equipment loans is that the purchase itself can serve as collateral (or security) for the loan, which means you’ll generally see lower interest rates than you would with an equivalent unsecured loan.

Check out our equipment financing resources if that sounds interesting.

Lender Borrowing Amount Term Interest/Factor Rate Additional Fees Next Steps

$2K – $5M Varies As low as 2% Varies Visit Site

$5K – $500K 24 – 72 months Starts at 5% Yes Compare

Up to $250K 1 – 72 months Starts at 5.49% Varies Compare

Compare Rates & Fees

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While the ability to get financing is great, you don’t want to pay more than you have to for the pleasure. This is much easier when you’re dealing with transparent lenders who lay all their cards on the table.

What terms and fees should you be aware of when looking into an equipment lease?

  • Interest Rates: The biggest cost you’ll run into with financing should be the interest rate. Generally, lower is better, but make sure you know how often and in what way the interest rate is applied.
  • Origination Fee: Common with loans, but unusual with leases, this is a fee that’s applied upfront. In most cases, it is deducted from the amount of money you receive when you get your capital.
  • Administrative Fee: This can be rationalized in any number of ways by your equipment financer, but it is a fee charged for servicing your account. It may be charged once, or at specific intervals.
  • Downpayment: The percentage you’re expected to pay out of pocket towards the equipment you’re buying. Common with equipment loans. With leases, there generally isn’t a downpayment, but you may be expected to pony up the first and last month’s payment up front.
  • Monthly Payment: The amount of money you’re expected to pay each billing cycle, usually monthly. In the case of leases, the higher your payment, the lower your residual will be.
  • Residual: An amount leftover at the end of your lease that you pay if you decide you want own your equipment. The lower your residual, the higher your payments will be.

The Best Equipment Leasing Companies

Not ready to build a spreadsheet comparing every equipment leasing company on the market? No worries. We can get you started.

Note that you’ll also want to consider leasing from banks or credit unions with which you’ve already built a relationship, as many times they can offer you the best rates (assuming you make the credit cut). If you’re dealing with a major brand, you may also want to consider working with a captive lessor.

Lendio

Review

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One of the most efficient ways to seek equipment financing is through an aggregator service like Lendio. With one application, you’ll effectively have access to Lendio’s 75+ affiliates.  One nice thing about this service is that it’s free on the borrower’s end, so you’ll only have to worry about fees charged by the company Lendio ultimately connects you with.

Be aware that, although Lendio can work with customers with credit as low as 550, for equipment financing you’ll usually need to have a credit rating over 650.

For those who successfully apply, Lendio’s partners will finance the full cost of your equipment.

Currency Capital

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Another aggregator option for equipment financing is Currency Capital.

While online lenders have taken great pains to streamline application processes for working capital loans, equipment financing tends to be more traditional. Currency set out to change that, developing an API they compare to Amazon’s 1-click shopping experience.

Getting setup with Currency is a bit more laborious than, say, working with Lendio, but if you’re thinking ahead to future purchases, it may be worth the investment.

Crest Capital

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Want to skip the middle men? Check out Crest Capital.

Crest deals in just about every kind of lease you could think of, whether you want to own your equipment or just operate it for a little while. Additionally, they’re able to work with a wide variety of industries including agriculture, manufacturing, automative, and medical, as well as office equipment and software.

You will need to have been in business for at least two years, however, and have a credit rating of 650 or better.

TCF Equipment Finance

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TCF Equipment Finance, as the name implies, is the equipment financing and resale wing of TCF Bank. As a bank, their lending practices are as conservative as their pockets are deep. That means TCF is a good solution for mature businesses with excellent credit.

TCF offers many variations on capital and operating leases and works with most industries.

CIT Direct Capital

Review

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Another good option for those with solid credit ratings is CIT Direct Capital. Their equipment financing division doesn’t have quite as broad a variety of lease types of some of the other options here, but it’s easier to meet their qualifications than those of many banks.

Both capital and operating leases are offered.

Final Thoughts

Between the hundreds of equipment leasing companies out there and the often strict qualifications needed to get financing, it can be a challenge to find a lessor who meets your needs. Hopefully you now have a better sense of what to look for when choosing an equipment leasing company.

Having trouble meeting the high lending standards for equipment financing? Don’t panic! Many other types of financing can be used to purchase equipment. For smaller items you can pay off quickly, you may want to consider a business credit card. For larger items, check out installment loans.

The post How To Choose An Equipment Leasing Company appeared first on Merchant Maverick.

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What Are Verified By Visa And 3D Secure?

If you’ve heard about Verified by Visa through the grapevine — or more than likely in your checkout process — and you’ve got some questions, you are in the right place. Come along as we take a look at the good, bad, and the ugly when it comes to the evolution of Verified by Visa and 3D Secure.

What is Verified by Visa? Simply put, it’s a program to help ensure that cards are used only by the owner of the Visa account, thereby making online purchases more secure. 

The premise may be simple, but the details can be a little complex. Buckle up for a bit of a bumpy ride. In this post, we’ll look at where the industry used to be in terms of security protocols and talk about how far we have come thanks to solutions like Verified by Visa and its companion, 3D Secure.

3D Secure stands for 3-Domain Secure, which reflects the fact that the checkout process involves three separate domains to protect cardholders and merchants. 3D Secure encompasses both Visa and MasterCard’s security programs, as well as programs offered by JCB and American Express in select parts of the world. Merchants can add 3D Secure authentication on their site as an additional way to prevent card fraud. 

As we dig in the post, we are also going to explore some sobering realities that every eCommerce business must face when it comes to fraud — and discuss how 3D Secure technologies can protect you as a merchant.

What Is Verified By Visa?

Verified by Visa 3-D Secure 2.0

As we mentioned above, Verified by Visa is a program designed to reduce fraud and make online purchases more secure, but that definition is fairly ambiguous. The truth is that Verified by Visa is always evolving to adapt to how it accomplishes the goal of security, and this program will likely continue to change to stay one step ahead of online fraud. A shopper’s experience with Verified by Visa will largely depend on who issued their card as well as the merchant’s online security protocols. For example, a shopper with one particular Verified by Visa card may be prompted to enter in a personal PIN every time they buy at their favorite eCommerce shop. Another shopper with a Verified by Visa card issued from a different bank may go through the checkout seamlessly and not be aware that there are layers of risk assessment happening with data in the background to ensure the order is legitimate. 

This difference in shopping experiences is because there are two versions of Verified by Visa with varying levels of participation from issuing banks. This variance is in part due to the rollout of the new protocol 3D Secure 2.0. The update addressed some of the significant problems with the original 3D Secure, version 1.0. In the light of the risks presented by card-not-present transactions, most merchants (and shoppers!) would agree that adding layers of security is a good thing. But as I mentioned above, there were some big complaints with the original version of Verified by Visa when it rolled off the lot.

Verified by Visa and 3-D Secure 1.0

Screenshot of “Online Shopping is Easy and Secure With Visa” Video

3D Secure 1.0

Before we dig in, let me first say that it is completely normal to experience a certain to amount of negativity bias when we experience something new. As humans, we tend to focus on the negative and often approach new situations with suspicion. That can be a good thing or bad thing, depending on the situation.

Unfortunately, some shoppers who were initially exposed to Verified by Visa and 3D Secure version 1.0 mistakenly thought the pop-up authentication screen prompting them to enter their secure personal PIN was a malicious attempt at gathering their credit card data, and they jumped ship. These customers abandoned their carts or were locked out, resulting in lost sales for merchants. The situation was not good for shoppers, and certainly not good for businesses.

Verified by Visa spoof

Third-party pop-up screens demanding passwords or other sensitive information are a red flag, for obvious reasons. And as predicted by naysayers, several reported malware pop-ups spoofed the whole scheme. Verified by Visa and the banks soon worked out these kinds, fortunately. Now, the authentication step for Verified by Visa 1.0 (yes, that version still exists) happens in an in-line window. Pop-ups are a thing of the past.

But this improvement still doesn’t change the fact that many people don’t like having to remember yet another PIN number, code, or password for every purchase they make, big or small. There’s always a delicate balance between payment security and user experience in the world of payment security. Shoppers expect convenience and ease while also needing a high level of trust.

The newer 3D Secure technology utilized by Verified by Visa continues rolling out to eCommerce shops, and it does an exceptional job of addressing payment security and usability. 

3D Secure 2.0

3-D Secure 2.0 Verified by Visa

Just like 3D Secure 1.0, the newer 3D Secure 2.0 provides an additional layer of security for online transactions before final authorization. However, the updated version of Verified by Visa included in 3D Secure 2.0 uses a data stream to provide more robust risk assessments instead of relying on a PIN or passcode for authentication.

Verified by Visa and the original 3D Secure technology came on the market 15 years ago, but Version 2.0 is being managed and implemented by EMVCo, the same organization responsible for certifying hardware and software to accept chip card payments.

The important thing to note for any merchant considering Verified by Visa and 3D Secure is this: 3D Secure 2.0 represents the latest global standard in payment security.

The touted improvements are:

  • Cross-Device Support: 3D Secure 2.0 brings better usability and support for transactions across several types of devices.
  • Better Risk Analysis: Enhanced risk-based, decision-making for issuers utilizes 10X the data (e.g., time zone, device ID, purchase history, and geo-location data).
  • Improved Usability: A faster behind-the-scenes makes for happier customers.
  • Less Customer Intrusion: Authentication is only required directly from a shopper if the transaction is flagged high risk.

Visa says it best:

The new 2.0 version of the technology enables a real-time, secure, information-sharing pipeline that merchants can use to send an unprecedented number of transaction attributes that the issuer can use to authenticate customers more accurately without asking for a static password or slowing down commerce.

One of the best improvements from a shopper’s standpoint is that they won’t be asked for additional information unless the transaction waves some red flags. Data powers the risk assessment behind the scenes to more accurately identify a genuine vs. fraudulent transaction. As touched on above, 3D Secure 2.0 uses different types of data to analyze the purchase and protect shoppers and merchants from fraud, including but not limited to:

  • Purchase history
  • Device ID
  • Purchase amount
  • Geo location
  • Email address
  • Merchant history
  • Time of day
  • Unusual IP address
  • Unknown device
  • First time purchase of merchant
  • Excessively large purchase amount

And unlike Verified by Visa’s 3D Secure 1.0, users are not required to opt-in or register. If a cardholder’s issuing bank makes use of 3D Secure 2.0, the bank automatically enrolls the card at no charge to the customer.

Verified by Visa Registration

Fewer passwords and no need for registration means that most cardholders will not even necessarily be aware of all the fraud protection happening behind the scenes.

But what about merchants? What does a merchant do if they want to utilize 3D Secure technology in their checkout process? Read on for merchant information and some sobering fraud statistics that fueled the race to better technology.

How Verified By Visa & 3D Secure 2.0 Protect Merchants

Everyone understands that fraud is costly, but many may not know how the EMV chip protections for card-present transactions have caused fraudsters to focus more on eCommerce fraud. After the rollout of EMV, it was harder than ever to clone a user’s card or steal their credit card data. So the target has changed.

Fraudsters identify vulnerabilities in the payment security landscape, and that’s why we see eCommerce businesses hit harder than ever. When companies don’t understand how to protect themselves, they open themselves up to data breaches and big problems ensue. According to UPS Capital, 60% of small businesses are out of business within six months of suffering a cyber attack.

Every ecommerce merchant should do what they can to provide more protection for these transactions. We cover more about the risks of online payments and how you can protect your business in What Is A Card-Not-Present Transaction?, but 3D Secure technology is one excellent way you can defend your eCommerce business.

Here’s how it works in a nutshell:

How 3-D Secure Verified by Visa works

Instead of asking every customer for extra information, Verified by Visa and 3D Secure 2.0 use multiple layers of data to identify a high-risk transaction. Your shoppers are only asked to complete an extra step (e.g., entering in a verification number delivered via text) if there is a high risk of fraud.

All of this is important because merchants not only need to protect themselves from fraud, they need to protect themselves from lost sales due to frustrated customers. A behind-the-scenes risk-management approach means that convenience and user experience remain intact.

EMVCo reports that the data-driven authentication of 3D Secure 2.0 leads to a 70% reduction in cart abandonment. So as a savvy merchant, making it easier for your customers to complete a purchase while reducing the risk of fraud to your business is a no-brainer! 

Verified by Visa 3-D Secure 2.0

How Merchants Can Implement 3D Secure Technology

As mentioned earlier, Visa recommends that issuers and merchants support both the 1.0 and the 2.0 specifications. If you currently have a merchant account, give your provider a call to find out if they offer 3D Secure and how to start utilizing it in your online shop.

If you are in the market to find a high-quality, affordable processor that offers built-in excellent security tools (including 3D Secure) for eCommerce business, check out our other post, How to Choose an eCommerce Merchant Account.

Best Online Credit Card Processing Companies

Heading CDGcommerce Shopify Square Fattmerchant Payline
 
Review
Visit Site
ReviewVisit Site Review
Visit Site
Review
Visit Site
ReviewVisit Site
Key Features Free Gateway Included Advanced Shopping Cart Basic Webstore, All-in-one Advanced Billing & Invoicing Versatile Service
Shopping Cart Compatibility Many Shopify Only Many Many Many
Gateway Compatibility Many Many Square Only Many Many
Pricing Model Cost-Plus Flat Rate Flat Rate Subscription Cost-Plus
Standard eCommerce Rates 0.30% + $0.10 markup 2.90% + $0.30 2.90% + $0.30 0.00% + $0.10 markup 0.50 + $0.10 markup
Entry-Level Monthly Fee $10 $29 $0 $99 $0

Final Thoughts

The Verified by Visa experience for both shoppers and merchants has come a long way since it was first introduced more than fifteen years ago. Because the threat of fraud is continually evolving, we are likely to see this technology continue to get smarter as well.  That’s because eCommerce businesses today face increasing threats from fraudsters who target vulnerabilities in the digital space.

Staying up-to-date with the latest payment security technology is crucial to protect your business and the shoppers who buy from you. Verified by Visa and 3D Secure 2.0 work behind the scenes to authenticate a sale without a lot of intrusive requests to the shopper, making it an excellent way to combat fraud.

The post What Are Verified By Visa And 3D Secure? appeared first on Merchant Maverick.

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WooCommerce VS Shopify

WooCommerce VS Shopify

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Pricing

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Cloud-Based Or Locally-Installed

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Specific Size Of Business

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Hardware & Software Requirements

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Ease Of Use

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Features

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Web Design

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Integrations & Add-Ons

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Payment Processing

Customer Service & Technical Support

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User Reviews

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Security

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Final Verdict

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Review

Visit Site

Review

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WooCommerce and Shopify are both wildly popular software systems that can help you build a thriving online store. Behind-the-scenes, however, the two platforms work quite differently from one another. Before we jump into comparing these juggernauts of the ecommerce software realm, let’s quickly get oriented on the basics of each.

At its core, Shopify (read our review) is a SaaS (software as a service) online shopping cart platform. Starting at just $9/month, you can upload products to an online catalog and sell them on Facebook, or post them on an existing website of your own via embeddable “buy” buttons. You can even sell your products in-person with the Shopify POS app. Then, beginning at $29/month, Shopify facilitates the creation and hosting of a fully-fledged ecommerce website.

By contrast, WooCommerce (read our review), is a free and open-source ecommerce shopping cart plugin that was created specifically for installation inside the WordPress dashboard. The WooCommerce plugin turns a WordPress website or blog into an ecommerce storefront. In other words, WooCommerce has no actual website-building capabilities of its own — WordPress handles that part.

To understand WooCommerce and how it works, you need a little familiarity with WordPress itself. To put it simply, WordPress is a website builder/CMS (content management system) that exists in two forms: WordPress.org and WordPress.com. WordPress.org is the self-hosted version, whereas WordPress.com uses the same basic software as WordPress.org, but provides web hosting for your site as part of its services. Either WordPress version can actually be combined with WooCommerce, but each setup has different implications for cost, site maintenance, etc.

For the purposes of our Shopify versus WooCommerce comparison, we’ll focus on combining WooCommerce with WordPress.org, the self-hosted option. Most ecommerce sellers are attracted to WooCommerce because they already use WordPress.org for their websites, and/or they like the WooCommerce plugin’s “free” price tag in conjunction with WordPress.org. While the WooCommerce plugin itself is always free, you can only add plugins to the dot-com version of WordPress if you’re on the $25/month WordPress.com subscription.

Now that you know the basics, we’ll break down the two platforms into their various components — usability, features, comprehensive cost, and more. It’s basically the same old compare-and-contrast essay we were all forced to write in middle school. The stakes are a bit higher with this particular essay, however. By the time we’re done, you’ll hopefully have a good sense of which ecommerce platform (if either) is best for your online business.

Pricing

Winner: WooCommerce

You might be tempted to think WooCommerce immediately takes this category without contest. After all, both the WooCommerce plugin and the WordPress.org software download are free, whereas Shopify automatically involves a monthly subscription. In reality, you need to invest in a few services (e.g., web hosting) to get a WooCommerce + WordPress.org ecommerce store off the ground. The bottom line is, WooCommerce may be a bit cheaper at the outset, but it’s not 100% free. Just wanted to clear that up first!

Before we run a more detailed cost comparison of the two platforms, here’s a quick look at why WooCommerce wins this category:

  • You can launch an online storefront up for well under $29/month, which is the starting price for a full online store with Shopify.
  • All WooCommerce features are included with the free plugin. You don’t automatically need to jump to higher subscription levels for additional features or staff accounts (you just may need some add-ons as time goes on). In other words, you pay only for exactly what you need.
  • Neither WordPress nor WooCommerce charge any additional transaction fees per sale, beyond those charged by your credit card processor. Shopify only waives its extra transaction fees (that start at 2%) if you use Shopify Payments as your credit card processor, and not everyone is eligible for Shopify Payments.

WooCommerce is the budget option of the two, but only if you have the skills to run your own website and don’t need to hire extra help for web development, site maintenance, security, backups, etc. If you do need lots of extra help, you could still end up paying more with WooCommerce + WordPress in the long run. Fair warning.

That’s the summary explanation. Now, here’s a more detailed pricing breakdown if you’re interested:

Shopify Pricing

  • Monthly Subscription Fee: $9 (no standalone storefront), $29, $79 or $299/month.
  • Domain: Unless you want your store URLs to end in “myshopify.com” (and you probably don’t), you’ll need to purchase or connect a custom domain. Domains from Shopify start at $11/year, or there are lots of third-party options.
  • Web Hosting: Included
  • SSL/TLS Certificate: Included
  • Additional Transaction Fees: 0.5%-2.0% depending on your Shopify subscription — unless you use the in-house payment processor (Shopify Payments), in which case these extra fees are waived. Note: these transaction fees are on top of regular credit card processing fees you must pay per sale with any processor.
  • Additional Cost: Primarily add-ons from the marketplace, and perhaps a one-time purchase of a premium theme.

WooCommerce + WordPress.org Pricing

  • Monthly Subscription Fee: None if you set up a free WordPress.org site. The WooCommerce plugin itself is always free.
  • Domain: Varies, but can start at less than a dollar per month from third-parties.
  • Web Hosting: Rock-bottom hosting can cost as low as around $3/month, but most people end up paying at least $10 per month, depending on the size and traffic levels of their stores.
  • SSL/TLS Certificate: Often included with your hosting or domain provider, but may need to be purchased separately. Basic certificates cost just a few dollars per month.
  • Additional Transaction Fees: None. Neither WooCommerce or WordPress charge a commission per sale.
  • Additional Cost: Add-ons, themes, and any web development and ongoing site maintenance if you’re not taking care of all that yourself.

Sample WooCommerce + WordPress.org hosting

Cloud-Based Or Locally-Installed

Winner: Tie

As we’ve mentioned, a major difference between Shopify and WooCommerce is that your Shopify subscription includes web hosting. No downloads or installations are required. To use WooCommerce, however, you first must download the WordPress.org software and install it on a web hosting server. Then, you add the WooCommerce plugin to that setup. Some web hosts do offer preloaded WordPress + WooCommerce packages or “one-click” installations.

Is the Shopify or WooCommerce method better? This one really comes down to personal preference and ability. The self-hosted setup of WooCommerce requires more hands-on involvement and skill from the user, but you may be just fine with that.

Specific Size Of Business

Winner: Tie

Both WooCommerce and Shopify are scalable, working for small to enterprise-level businesses.

Shopify has predetermined subscription brackets. While none of these put hard limits on your revenue, number of products, bandwidth, or storage, the implication is that you’ll increase your subscription as your store grows. The exception is the jump to Shopify Plus, which is required if your revenue reaches over $1 million per year. These plans cost a couple thousand a month to start, but it can be worth the investment in return for a service that’s tailored specifically for enterprise-level merchants.

You will also need to change your Shopify subscription as you add more staff accounts to your store. For example, the $29/month plan accommodates two admin seats in addition to the owner’s account, while the $299/month plan gives you 15 spots.

WooCommerce also has the potential to grow with your store, but the system is much more fluid. You have 100% flexibility to expand your operation (and perhaps employ more help with your site) in a piecemeal fashion, exactly when and how you see fit. As your site traffic increases, for example, you’ll want to adjust your hosting service accordingly to accommodate more bandwidth.

Hardware & Software Requirements

Winner: Shopify

As a fully-hosted, SaaS platform, Shopify takes care of nearly all technology requirements on your behalf. All you really need is an internet connection and an up-to-date web browser.

With WooCommerce and WordPress.org, most of the hardware and software requirements are functions of your hosting environment. Your server needs to support specific versions of PHP and MYSQL, for example. You’re responsible for staying on top of the evolving requirements for both WooCommerce and WordPress.org when you set up a WooCommerce store. This includes installing updates of both the Worpress.org and WooCommerce software as they are released. Plugins are available to help automate some of these steps for you, but you’re still ultimately responsible for finding and updating those plugins!

Because dealing with hardware and software issues with WooCommerce is more nuanced and requires more vigilance from the user than Shopify’s arrangement, we award Shopify the win.

Ease Of Use

Winner: Shopify

It’s hard to beat Shopify in terms of user-friendliness. Even compared with other all-in-one SaaS platforms designed with the complete ecommerce novice in mind, Shopify usually comes out on top. Open-source software like WooCommerce, on the other hand, is not generally known for its ease of use. You’re trading some degree of ease and simplicity for increased flexibility and customization.

It should be noted, however, that WooCommerce actually isn’t all that bad when it comes to ease of use, especially compared with most open-source solutions. For starters, many folks are already somewhat familiar with WordPress, which gives them a head start in navigating WooCommerce. (Keep in mind that the reverse will apply if you’re not already familiar with WordPress — you’ll be learning two systems at once.)  Once you get everything installed and up and running, day-to-day operations and manipulation of features are all pretty straightforward with WooCommerce.

Still, as we’ve already touched on, it can be quite overwhelming to stay on top of updates, extension compatibility, security issues, and the various tertiary systems underpinning your WooCommerce store. The cliché I’ve often read about WooCommerce is true — you have to be willing to get your hands dirty. Shopify is a much more plug-and-play, hands-free system.

WooCommerce offers to install some additional free plugins (like Jetpack and WooCommerce Services) from the get-go that help bring the system more in line with a fully-hosted solution like Shopify, but you still end up with a sort of cobbled-together setup that is more difficult to manage than an all-inclusive platform.

Have a look at our full Shopify and WooCommerce reviews if you’d like more information on the topic of ease-of-use, but I’ve included just a quick peek at the dashboards of each platform, as well as what it’s like to add a product.

Shopify Dashboard:

After signing up for a free 14-day trial, you’re taken to a clean and easy-to-navigate dashboard, with all your major functions in the left menu, and a few tips to get started in the center:

Shopify — Add A Product:

Shopify has a super-simple product interface. All fields are completed simply by scrolling down the page.

WooCommerce Dashboard:

Below I’ve shown a WordPress dashboard with WooCommerce already installed. If you look closely at the left menu, you’ll see that WooCommerce is just one item of many. I haven’t even expanded its own menu yet, nor the “Products” menu right below. In the center of the dashboard, I’m faced with additional suggested configurations and plugin choices. Do I need them all? Should I set them up now? Just “Dismiss?” It’s certainly all doable, but I find it bit cluttered and overwhelming to get started. Plus, this is all after I completed the setup wizard.

WooCommerce — Add A Product:

Once you scroll past the plugin suggestions, adding a product is quite straightforward with WooCommerce. If you’ve ever used WordPress, it’s a lot like creating a blog post. You’ll just need to configure ecommerce settings like price and inventory levels.

Another aspect to consider is that you won’t be able to test WooCommerce (like you can test Shopify with its free trial) unless you have a host and server already set up to install WordPress.org. Ease of use is always a bit subjective, and it’s hard to get a good feel for usability without testing the software yourself.

Features

Winner: Tie

Although one is software-as-a-service and the other is open-source, both Shopify and WooCommerce actually take a similar approach to features. The basic components to get a store launched and managed on a day-to-day basis are included with the software, but you’re expected to add a few extensions and integrations to either platform in order to tailor your store to your exact specifications.

With Shopify, this occasionally even means bumping up your subscription level, whereas with WooCommerce, features are always expanded through separate add-ons. WooCommerce has also been known to test new features by treating them as extensions first, and then eventually incorporating the features into the core offering once all the kinks are worked out by users. It’s really a community effort with Woo.

However you slice it, a common complaint about both platforms is that extra plugins can cause extra cost and extra headaches. Each system is kept as simple (yet functional) as can be from the outset, so that new users are not immediately overwhelmed by all that’s ultimately possible with these powerful software programs.

Let’s do a couple of quick sample feature comparisons. WooCommerce lets you add unlimited product variations, sell digital products, and incorporate product reviews without separate extensions, while Shopify requires (free) add-ons for each of these functions. Meanwhile, Shopify already includes abandoned cart recovery, invoice creation, and pre-integrated shipping software (Shopify Shipping). You’ll need extensions for these features in WooCommerce.

I’m tempted to give Shopify the win because I feel it comes with a slightly more well-rounded ecommerce feature set out-of-the-box without any plugins. And yet I also don’t want to overlook the enormous capability that comes with an entire WordPress.org ecosystem at your fingertips, nor dismiss the potential to customize each feature to your liking in an open-source environment. There are just too many factors at play to declare a clear winner here. The best advice I can give is to check for the features you need, as well as how they are obtained with each platform.

Web Design

Winner: Tie

I know this makes our compare-and-contrast essay less exciting, but it’s difficult to call a winner in this category as well. Each platform has advantages and disadvantages, and your own perception of what actually qualifies as an advantage or disadvantage will differ depending on your situation.

Below is a quick summary of each system’s approach to the design and customization of your storefront, along with some screenshots to help illustrate.

Shopify Overview:

  • 67 total templates, most with 2-4 style variations
  • 10 templates are free and supported by Shopify developers
  • Remaining third-party themes cost $140-$180
  • Built-in theme editor with drag-and-drop capability
  • Additional customization available with HTML, CSS, and Shopify’s own theme coding language (Liquid)

Shopify Theme Marketplace:

Shopify Theme Editor:

The Shopify theme editor consists of two elements: “Theme Settings” (for changing fonts, colors, etc.) and “Sections” (for dragging and dropping widget blocks up and down your pages).

WooCommerce Overview:

  • Access to thousands of free and commercial/supported WordPress.org themes (over 900 show up when filtering for “ecommerce” in the marketplace)
  • WooCommerce recommends its free “Storefront” theme for foolproof compatibility and web ticket support
  • 14 Storefront “child” themes available (two free, premium are $39 each)
  • Theme editor allows color changes and placement of widgets (but without drag-and-drop)
  • Storefront expansion bundle ($69) allows further customization without coding
  • Theme modification also possible with HTML and CSS (no proprietary coding language involved)
  • Add a free plugin (such as Elementor) for drag-and-drop design editing of WordPress.org pages without code
  • WordPress.org’s new Gutenberg editor provides additional non-coding customization for your overall WordPress site

WooCommerce Storefront Themes:

WooCommerce Theme Editor:

Below, I’ve shown the portion of the built-in theme editor where you can choose widget blocks for various spots within your pages.

So, how do WooCommerce and Shopify stack up when it comes to web design? Does Shopify win for having a drag-and-drop theme editor and font tweaking built-in, or does it lose for making you learn a proprietary coding language if you want to do further template customizations? The new Gutenberg block editor for WordPress enhances your theme editing capabilities without code, and lets you easily place WooCommerce products wherever you’d like within your larger WordPress site — so that’s another factor to consider going forward. It’s issues like these that make this category a toss-up depending on your point of view.

Integrations & Add-Ons

Winner: WooCommerce

Even though I’ve already spoiled the winner of this category, we need to highlight the fact that Shopify also has an amazing app marketplace with around 2500 integrations at your disposal. With Shopify, you have the opportunity to connect with many of the most popular third-party software platforms associated with ecommerce (think shipping, marketing, accounting, and the like). Thousands of developers have invested in creations for the Shopify extension ecosystem. In most ecommerce software battles, Shopify easily wins this category.

All that said, open-source systems like WooCommerce + WordPress.org typically offer more integration possibilities than even the most well-connected SaaS platforms. The whole point of an open-source platform is for users at large to jump head-on into the codebase to customize and build connections. In the open-source world, WordPress has a particularly enormous and active community of developers extending the platform. As a WooCommerce user, not only do you benefit from hundreds of WooCommerce-specific extensions, but also from the over 50,000 plugins available in the WordPress.org marketplace. Even Shopify can’t fully compete.

Some argue that because many WooCommerce integrations are one-time installations, it works out cheaper in the long run, or point out that more WooCommerce plugins are free. In truth, integrations can add to your monthly cost with either Shopify or WooCommerce — especially if your integrations are to third-party software platforms with their own monthly subscription fees (and not just one-off feature installs). Be cognizant of the potential for ballooning add-on costs with either system.

Payment Processing

Winner: WooCommerce

The complete freedom WooCommerce offers to choose a payment processor and associated pricing model that best suits your particular store’s needs is the reason we award the open-source plugin the win in this category.

While Shopify technically offers more pre-built payment integrations than WooCommerce in its respective marketplace, you are actually penalized with an extra 0.5% to 2.0% Shopify commission on every sale if you don’t select the in-house Shopify Payments option. This percentage — 2% for most merchants starting out — is applied on top of the fees charged by your payment gateway itself. Trust me, that extra 2% adds up fast.

Shopify Payments has its own advantages and disadvantages, but for starters, some merchants don’t even qualify to use this processor in the first place. While Shopify Payments definitely works well when it works, a lot of merchants end up stuck in no-man’s land when it comes to payment processing with Shopify. Caught between an extra fee and a hard place, as it were. (Insert your own, better metaphor here.)

While you may need to pay a one-time fee to integrate your favorite processor with WooCommerce (Stripe and PayPal come as free, built-in options), you can ultimately select an option that fits perfectly with your risk level, sales volume, and transaction size. You can also select for any customer support and feature requirements you may have for your payments system.

Customer Service & Technical Support

Winner: Shopify                                  

Both WooCommerce and WordPress have produced a plethora of self-help resources and documentation. Moreover, both boast thriving communities of developers and merchants working with the software who readily share problem-solving advice via forums. This is all very good and helpful.

WooCommerce can’t compete with Shopify when it comes to personalized support, however. A “help desk” is offered with WooCommerce from which you can submit a web ticket for specific purchased items, but a personal response is not always guaranteed.

Meanwhile, along with great self-help resources and community forums of its own, Shopify offers 24/7 phone, email, and chat avenues for contacting live representatives in real time. This is part of the all-inclusive nature of the Shopify platform, and part of the reason you pay that monthly subscription fee.

Now, this is not to say you couldn’t potentially receive personalized assistance from your hosting provider if your site goes down, for example. The quality and availability of this sort of third-party tech support will vary widely by company, though. Not to mention, things can get complicated very quickly regarding exactly who holds responsibility for whatever’s gone horribly wrong with your online store in the middle of the night. Once again, our point is that neither WooCommerce nor WordPress.org has a team of service reps standing by waiting for your distress call. You’re largely on your own.

User Reviews

Winner: Tie

Shopify and WooCommerce each have devoted followings of satisfied users, and both platforms tend to score very highly on user review websites. Shopify merchants love the user-friendliness of a powerful SaaS platform where most things are taken care of for you, while WooCommerce devotees appreciate that most things are not taken care of for you — it gives these users the flexibility and control they desire.

Of course, neither ecommerce platform is perfect. Here are a few of the complaints that arise most often:

Shopify

  • Extra transaction fees when not using Shopify Payments
  • Costly add-ons
  • Poor customer support
  • Frustration with Shopify Payments

WooCommerce

  • Costly add-ons
  • Lack of personal customer support
  • Steep learning curve
  • Technical difficulties (i.e., extensions, themes, updates, etc.)

I’m still calling this one a draw. One platform does not dramatically outshine the other when it comes to real user feedback.

Security

Winner: Shopify

Shopify wins this category because all Shopify stores are automatically PCI compliant out-of-the-box and come with a built-in SSL certificate. With WooCommerce, your store’s security falls more directly upon your own shoulders. You’re ultimately responsible for choosing a secure and PCI-compliant web host and payment gateway, obtaining an SSL certificate, performing Woodpress.org and WooCommerce plugin updates, and staying on top of the latest security patches. As WooCommerce reminds you in its own documentation, “a given WooCommerce site is overall exactly as secure as the WordPress installation itself.”

There’s no doubt that a WooCommerce store can be just as secure in as a Shopify store, as long as all the right pieces are in place and carefully managed. There’s just a higher chance for site security to go (horribly) awry due to mismanagement or innocent mistakes.

Final Verdict

Winner: Shopify

 

This was a tight race, folks. Shopify and WooCommerce have both earned their popularity in the ecommerce world, even if for different reasons and for different segments of online sellers. Based on our experience, as well as our sense of the needs of our Merchant Maverick readership overall, we’re still more likely to recommend Shopify over WooCommerce.

The majority of online sellers will have an easier time with Shopify right out-of-the-box. Shopify is much more “foolproof” and all-inclusive than WooCommerce, with technical aspects like installation, hosting, updates, and security all handled on your behalf. This allows you to expand your focus beyond just building and maintaining your store, even as an absolute web-beginner. The opportunity for 24/7 personalized customer support with Shopify is also a huge factor in our verdict.

All Shopify gushing aside, we firmly maintain that this SaaS platform is not a magic bullet solution for all online merchants, and WooCommerce may be just the alternative you seek. As an open-source software plugin combined with WordPress.org’s vast ecosystem, WooCommerce offers a degree of ownership, control, and flexibility that isn’t possible with Shopify. It’s the perfect platform for the technically-inclined among us who have the time and skill to tinker with code, updates, and integrations to customize their stores at a finely-tuned pace. The freedom to select your own web host, as well as a payment processor that works best for your specific country and risk level without financial penalty (hello, Shopify’s extra transaction fees) is also a big draw for a lot of business owners using WooCommerce. The power truly is in your hands if you go this route.

As the old adage goes, however: with great power comes great responsibility. If you choose an open-source platform like WooCommerce, you should definitely heed this nugget of graphic novel-based wisdom.

Have you worked with Shopify or WooCommerce? Let us know if the comments — particularly if you have experience with both!

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MasterCard SecureCode: What It Is And How To Use It

You may have seen mentions of “SecureCode” around, on TV and elsewhere. After all, when Hugh Jackman (aka Wolverine) stands on a scenic rooftop and asks if we know that SecureCode is a more secure way to pay, it’s hard to ignore.

Mastercard SecureCode

But what the heck is SecureCode?

Simple! MasterCard’s SecureCode is a private code known only to the account holder that provides an additional layer of security for online purchases. The program is free for consumers as well as merchants. 

The Claim:

MasterCard SecureCode ostensibly comes with these benefits:

  • Reducing fraud
  • Guaranteeing e-commerce payments
  • Reduced chargeback risk to merchant
  • Improved cardholder confidence 

With online payment security an ever-present concerns for both online shoppers and merchants alike, these Mastercard SecureCode claims deserve a closer look. Keep in mind that both the merchant and the cardholder need to opt into the program for either party to benefit from it. 

Whether you are a cardholder who is thinking about setting up a SecureCode yourself, or you are a curious business owner who wants to know how you can improve security for online purchases, read on for an explanation of how SecureCard works and whether it’s right for you!

How SecureCode Works For Online Shoppers

no annual fee credit card

The basic concept of MasterCard SecureCode is very similar to using a PIN to process a debit payment at the checkout. Just like during a debit transaction, where the PIN is kept private, the SecureCode should always remain private to the account holder.

When your customer fills their cart with your wares and begins the checkout process, they will also enter their MasterCard SecureCode to verify their identity as the cardholder. But there is one major caveat. Instead of sharing their SecureCode directly with you, the merchant, an issuer-provided inline window appears with a personal greeting that is only known by the cardholder. If the customer recognizes their personal greeting, they enter their SecureCode. In just a few seconds, the issuer verifies that the true cardholder is making the transaction and the checkout process continues. 

How Can Cardholder Enroll?

MasterCard customers who have cards issued from participating financial institutions can enroll in SecureCard and register any of their debit or credit cards. To find out if you can enroll, can contact your institution or view the list of participating financial institutions updated by MasterCard. 

MasterCard SecureCode For Businesses

If you are a merchant wondering why you should bother offering SecureCode, it makes sense to take the time to understand more about it. From a merchant standpoint, MasterCard SecureCode can give your current and future customers greater confidence and security while shopping online with you. This extra layer of authentication and security also protects you from fraudulent use and some types of chargebacks (more on that below).

It is important to note that if you decide to go with SecureCode, it’s not mandatory for all of your customers to enter in a code to finish the sale with you. Authentication with a personal code is only required for customers who have already signed up for SecureCode. Whenever a customer connects a card with SecureCode and the merchant is also signed up, the SecureCode is required, however. But if you decide to offer SecureCode and your customer isn’t signed up, they’ll enter their credit card information just like they would with any other sale, and it is processed as usual. 

For SecureCode transactions, merchants can gain protection from unauthorized cardholder chargebacks, and customers who have activated SecureCode get more protection, too.

How To Offer MasterCard SecureCode

If you are a business owner who is ready to get this new layer of security live on your site, here is what you need to know: Your transaction processor may already support the MasterCard SecureCode program, so give them a call first and see if they can get you started.

The setup process is fairly simple if you’re used to maintaining your website yourself, and involves installing a plug-in to your site. After everything is up and running successfully, MasterCard also provides you with a logo you can put on your site to identify your program involvement.

It’s also worth mentioning that many processing companies, including Stripe, offer an extra layer of authentication through 3D Secure  (sometimes abbreviated as 3DS). 3D Secure is a security protocol that bundles MasterCard SecureCode with the Visa equivalent, Verified by Visa. It gets its name from the fact that a third party, the card network, is involved in verifying the credit card purchase. In some regions, 3D Secure authentication also includes American Express SafeKey. Your merchant account provider may offer 3DS authentication as part of its service, though you might also need to configure this option in your payment options if it isn’t enabled by default.

How SecureCode Reduces Fraud & Guarantee eCommerce Payments

image of man in a hoodie in front of a laptop, overlaid with lines of code

MasterCard claims that SecureCode helps reduce fraud and guarantees ecommerce payments. Let’s say a hacker manages to lift someone’s card number from a skimming device or a compromised website and they post it on the Dark Web. Another scammer buys it and then tries to make a purchase with the card details. A CVV check (another common ecommerce security feature) might stop some transactions, but CVV checks aren’t universally used in ecommerce. Plus, we often give away our CVVs when we place an order over the phone (Chinese takeout, anyone?) — if that business has a shady employee who lifts customers’ numbers, they now also have your CVV. And of course, if a fraudster does get a physical card, they have everything they need to start making purchases.

SecureCode prevents unauthorized use in these types of situations because unlike a credit card number, SecureCode isn’t entered on a business’ site or shared over the phone. The SecureCode acts like a PIN between the issuing credit card company and the customer. If the person using the card doesn’t provide the correct code, or doesn’t enter any code, the transaction can’t go through. 

Keep in mind that SecureCode doesn’t take the place of authorization approval; it is simply an additional authentication step. Every card-not-present transaction, no matter how small, will be authorized by the issuing bank.

How SecureCode Reduces Chargebacks

The Complete Guide to Preventing and Winning Chargebacks

We’ve already talked about how SecureCode protects against unauthorized card use. It also provides protection against friendly fraud via chargebacks. 

For a business owner, a chargeback is a loss of revenue (both in terms of the money refunded to the customer and the fees charged by the processor for the chargeback), and too many chargebacks can negatively affect your standing with your credit card processing company. In essence, a chargeback happens whenever a customer files a dispute with their bank, saying that a charge was not authorized by the customer. 

Despite the somewhat innocent-sounding name, friendly fraud can cause a lot of grief. Friendly fraud refers to a type of chargeback that happens when a customer falsely claims they didn’t make a purchase in order to get their money back. They may have changed their mind or filed a chargeback claim directly with their credit card company instead of returning the product to you. Whether the customer’s intent was purposely malicious or not, these types of chargeback claims can be a big problem for any online retailer. They actually account for the majority of chargebacks.

If you’re a merchant, the great thing about SecureCode’s extra authentication step is that it’s much harder for a customer to claim they never ordered from you if they authenticated their purchase with their private code. You can make a stronger case when it comes to proving your customer actually made the purchase, so much of the liability in these types of “friendly fraud” or chargeback cases shifts away from you and to the user and their bank — which means you don’t lose out on the money from that purchase. 

If you want to read up a little bit more on chargebacks and what you can do as an online merchant, visit our post, The Complete Guide to Preventing and Winning Chargebacks.

How SecureCode Improves Cardholder Confidence

blogging

In the past, MasterCard cardholders and merchants alike had some issues with the user experience because SecureCode used a pop-up window. Business owners were rightfully concerned because customers are naturally suspicious of pop-ups. The last thing any business owner wants when they try to improve security is also to increase cart abandonment. MasterCard took these concerns to heart and improved the experience by switching to an inline window rather than a pop-up for the SecureCode authentication. 

Now, the streamlined experience ensures that the entire checkout and verification process is embedded directly in the merchant site. When you offer SecureCode on your site, it gives your shoppers an added layer of security, too. Especially for smaller businesses, having this added layer of security helps to legitimize your site and improve overall confidence. 

More International Buying & Selling Opportunities

As if adding security in an insecure world wasn’t enough, the MasterCard SecureCode program may help you expand your business internationally! When you add SecureCode to your website checkout, you can start processing payments from customers overseas who use  Maestro cards (owned by MasterCard). This factor can potentially help you expand to Europe and other countries abroad where shoppers use debit cards much more frequently than credit. In countries like Germany, Maestro has replaced the Eurocheque system. All of this gives you extra reach when it comes to processing payments.  

Should I Use SecureCode On My Site?

Now more than ever, payment security is the subject of much focus and debate. While customers expect things to be streamlined and convenient, the truth is that they also expect their data to be secure. In a world where the cost of fraud continues to increase, adding solutions to protect everyone involved makes sense— especially when they involve no extra costs for you or your customers. While it may take a few extra moments for a customer to enter in their personal code, authenticating their identity can prevent fraud and save everyone a lot of heartaches (and headaches).

The truth is that merchants are the ones that shoulder the cost of chargebacks and fraud, so finding better solutions to protect yourself, your time, and your sanity is a very smart business move. However, not all eCommerce processors are the same. Some have robust solutions that keep up with the current threats, and some lag behind. I encourage you to take the time to find out what your merchant account is doing for you in regards to security, and if you don’t love it, find something that is better. We have a plethora of resources for you here at Merchant Maverick.

If you want to find a better payment processor that specializes in online businesses, we recommend checking out our post, How To Choose An eCommerce Merchant Account.

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What Is AVS For Credit Card Processing?

Address Verification Service

Like it or not (and you won’t like it), credit card processing comes with a bewildering variety of small, nickel-and-dime fees that add to your costs in ways you might not even be aware of. One fee that you might have seen on your credit card processing statement is the AVS Fee. If you’re an ecommerce merchant, you probably already know what this is, but if you’re in retail, you most likely don’t see it very often and may not understand how it works. Well, we’re here to help. In this article, we’ll explain what AVS is, how to use it, and how much it might cost you in additional processing charges.

AVS is an acronym for the Address Verification Service, a feature that’s used to compare the address given to you by your customer and the billing address on file with the cardholder’s issuing bank. AVS serves two primary functions: (1) to deter fraud by confirming that the customer is the legitimate cardholder, and (2) to help prevent chargebacks by giving you additional information to verify your customer’s identity. AVS is provided by MasterCard, but is used by all major credit card brands in the United States, Canada, and the United Kingdom.

As you’re probably already aware, card-not-present fraud is a growing problem in today’s ecommerce-driven world, and it can come in many forms. Using AVS won’t eliminate CNP fraud, but it will lower the chances of it happening to you. Likewise, chargebacks are also becoming more common. If the address the customer provided and the address on file with the issuing bank matched when you processed the transaction, this provides additional evidence to improve your chances of successfully defending against the chargeback. Better yet, effective use of AVS can lower the chances of a chargeback occurring in the first place.

How Address Verification Works

Use of the Address Verification System isn’t necessary for all credit/debit card transactions. In fact, the only time you’ll need to use AVS is for card-not-present transactions and situations where you need to key in a customer’s card information manually. This can happen if for some reason your credit card terminal is unable to read the customer’s magstripe or EMV chip. Note that while it’s fairly common for the magstripe on an old card to wear down over time and eventually become unreliable, the chance of this happening with an EMV card is very small.

If your business is retail-only, you’ll only rarely need to use AVS, and the impact on your processing costs will be minimal. On the other hand, ecommerce-only, mail order, and telephone order businesses will need to use AVS for every transaction. If you’re in one of these types of businesses, the cost of using AVS can be very substantial, depending on how (and whether) your credit card processor charges you for using it. If you process a lot of B2B transactions, you should also be aware that some processors require the use of AVS to process Level II and III credit card data.

Using AVS is actually very simple. In addition to their credit card information, your customer also provides a billing address. This information is submitted to your credit card processor, which queries the AVS system to determine whether the customer-provided address matches the billing address on file with the credit card’s issuing bank. AVS can be set up to run automatically through a payment gateway or virtual terminal, or you can manually query the system through your credit card terminal. The Address Verification System will compare the submitted billing address with the one on file with the issuing bank, and return a code that tells you how closely the two addresses match. Here’s an overview of the most common codes returned by the AVS, and what they mean:

Common AVS Codes (for Visa, MasterCard, and Discover)

AVS Code Meaning
B No address information submitted, AVS check could not be performed
E AVS data provided is invalid (or AVS is not allowed for the card type submitted)
R AVS unavailable at the time transaction was submitted. Retry transaction
G Credit card issuing bank is of non-U.S. origin and does not support AVS
U Address information is not available for the customer’s credit card
S U.S. card issuing bank does not support AVS
N Neither street address nor 5-digit ZIP code matches address and ZIP code on file for card
A Street address matches, but 5-digit ZIP code does not
Z First 5 digits of ZIP code matches, but street address does not
W 9-digit ZIP code matches, but street address does not
Y Street address and first 5 digits of the ZIP code match perfectly

Note that there are additional codes that you might see. However, they’re far less common than the codes listed in the table above.

Okay, so you’ve got a code from the AVS system. Do you approve the transaction or not? In some cases, your credit card processor will automatically decline a transaction if certain AVS mismatch codes are returned. If this happens, your only recourse is to ask the customer for an alternative billing address and try again. There are legitimate reasons why a customer might inadvertently supply an incorrect billing address. For example, your customer might have recently moved, but hasn’t updated their new billing address with their credit card company. Or perhaps the customer simply doesn’t remember their address correctly. However, if the customer doesn’t provide the correct address on the second try, there’s a very good chance that it’s because the card is stolen, and the customer has no idea where the actual cardholder lives. In this case, you should decline the transaction.

In a retail setting, a merchant will have to decide whether to accept a transaction if the Address Verification System returns a code indicating something other than a perfect match. Different AVS codes present varying levels of risk in accepting the transaction, as summarized here:

AVS Risk of Transaction Approval

Transaction Approved If: AVS Codes: Risk Level:
ZIP code or street address do or do not match None High
Street address matches B, N and Z Medium
5-digit ZIP code matches B, N and A Medium
Either 5-digit ZIP code or street address match B and N Medium
Both 5-digit ZIP code and street address match B, N, A and Z Low
Both 9-digit ZIP code and street address match B, N, A, Z, W and Y Extremely Low

Again, retail merchants will have to make a decision based on the level of risk if a partial mismatch occurs. We recommend that you set specific policies regarding which AVS codes will be approved and which will be declined, and that you ensure your employees are trained to recognize AVS codes that will require them to reject a customer’s card. Mail order and telephone order businesses will also have to set similar policies to ensure consistency in accepting or declining transactions.

For ecommerce businesses, things are a little easier. In most cases, you can set up your payment gateway to automatically accept or reject transactions based on the returned AVS code. Popular gateways such as Authorize.Net (see our review) allow you to configure your gateway to automatically accept only transactions where specified AVS codes are returned. You’ll want to exercise extreme caution in selecting which codes to approve based on the overall level of risk. Accepting too many partial mismatch codes can leave you vulnerable to fraud and chargebacks. At the same time, you might lose a lot of sales if your AVS code acceptance policies are too restrictive. Although you’ll obviously want your gateway to be able to process transactions automatically 24/7 without input from you, we suggest that you set up a system to automatically email a customer notifying them that their transaction was declined due to an AVS mismatch. This gives the customer a chance to either correct the billing address information or submit an alternate payment method, and keeps you from losing a sale.

Address Verification Fees

Credit card surcharge fees illustration

Regardless of how frequently you use the Address Verification Service, you’re almost always going to have to pay for it one way or another. For starters, MasterCard charges an automatic AVS assessment fee whenever AVS is used, regardless of the circumstances. This fee is currently $0.01 for card-not-present transactions and $0.005 for card-present transactions. Your processor has to pay this fee to MasterCard when they process your transaction, and they’ll usually pass it on to you in one form or another.

If you use Square (see our review) or a similar payment service provider and are on a flat-rate pricing plan, you won’t pay a separate AVS fee. Instead, Square incorporates this fee into their processing rates, so you’ll never see it. Note that Square, along with almost all other providers, charges a higher rate for ecommerce and keyed-in transactions. While a lot of this increased rate reflects the higher risk associated with card-not-present transactions in general, use of the AVS service is also included.

If your processor uses a tiered pricing plan, you may or may not be charged a separate AVS fee for each transaction where the Address Verification Service was used, depending on your processor. However, using AVS for a card-not-present transaction is usually a requirement for placing that transaction in the qualified tier. Conversely, failure to use AVS will often result in the transaction being downgraded to nonqualified, and you’ll pay a much higher fee for processing it. Because the nonqualified rate will cost you up to two or even three times the qualified rate, you’ll save money using AVS – even if you have to pay a fee for it.

Merchants on an interchange-plus pricing plan may or may not be charged a separate AVS fee, but use of AVS will give you a lower interchange rate, thus reducing the cost of processing your transaction. Again, in most cases, the savings from the lower interchange rate will more than offset the cost of the AVS fee.

Subscription-based pricing works the same way as interchange-plus, with the exception that you usually don’t pay a percentage markup on your transactions. Once again, you’ll save money overall by using AVS for your card-not-present transactions. Note that most providers offering subscription pricing usually don’t tack on extra fees like the AVS fee, as you’re already paying a monthly subscription fee that’s intended to combine these and other costs associated with maintaining your merchant account.

To find out how your provider handles the AVS fee, you’ll have to wade through the fine print in your contract. Although some of the more transparent providers disclose this information on their website, most do not. Most providers that impose a discrete AVS fee will charge anywhere from $0.01 to $0.25 per transaction where AVS is used. These fees can add up quickly, especially if you process a high number of small-ticket transactions. Other providers might simply include this extra cost in their rates for card-not-present transactions, as you will be using AVS for 100% of these types of transactions.

Because of the potential for AVS fees to add significantly to your processing costs, some providers will permanently waive the fee if your business is ecommerce-only. Businesses with both a retail and an online presence probably won’t be so lucky.

Final Thoughts

The Address Verification Service provides valuable protection for your business from both fraud and the possibility of a chargeback. While it isn’t foolproof, it’s far better to use it rather than simply accepting all transactions without it. In this sense, AVS is worth paying a little extra for and is in no way a “junk” fee.

At the same time, you’ll want to make sure that your provider isn’t ripping you off by charging an AVS fee that’s much higher than what they have to pay to MasterCard for the use of the service. Your best defense is to discuss the AVS fee with your sales representative when negotiating the terms of your merchant account. And, by all means, read your contract documents thoroughly before signing to ensure that what your sales representative told you is reflected in your legally-binding contract.

eCommerce merchants are particularly vulnerable to overpaying for the Address Verification Service, and you’ll want to choose a provider that will either waive the AVS fee entirely or merely charge you the pass-through cost. Paying significantly more than this will add up quickly if you’re assessed an AVS fee on every single transaction that your business processes.

We also recommend that ecommerce merchants set the automatic rejection policies on their payment gateways to balance the risk of fraud against the possibility of lost sales from legitimate customers. Your provider can help you select automatic rejection policies that will meet this goal.

Each provider treats AVS fees differently, so you’ll want to research this issue before considering a particular provider for your business. For example, one of our highest-rated providers, Dharma Merchant Services (see our review) charges a flat $0.05 per transaction to use AVS. However, they disclose this fee on their website, and they also point out that the lower interchange costs from using AVS will still, in most cases, result in a lower overall cost to process the transaction.

The post What Is AVS For Credit Card Processing? 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.

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