What Is Credit Card Tokenization?

Tokenizing Payments

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

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

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

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

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

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

Tokenization Defined

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

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

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

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

How The Account Number Gets Tokenized

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

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

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

What Happens During A Tokenized Sale?

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

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

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

Tokenization

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

Tokenization vs. Encryption

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

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

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

Considering The Pros & Cons

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

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

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

Tokenization’s Protective Role In Payment Processing

Tokenization Vault Security

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

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

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

How Can Merchants Adopt Tokenization?

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

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

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

Companies Specializing In Tokenization

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

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

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

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

Do You Need Tokenization To Process Credit Cards?

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

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

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What Is An SMS Payment And How Does It Work?

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

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

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

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

How Do SMS Payments Work?

SMS Ordering

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

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

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

Mobile Carriers Vs. Payment Processors for Text Payments

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

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

What Do You Need to Accept SMS Payments?

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

Relay (formerly Rhombus):

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

SMS Payments Relay

Pagato:

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

SMS Payments Pagato

Sonar:

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

SMS Sonar

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

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

Which Types of Businesses Benefit Most From SMS Payments?

mobile-card-payment-app-service

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

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

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

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

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

Are SMS Payments Right For You?

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

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

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How To Start And Fund A T-Shirt Business

In the world of fashion, trends come and go, but a few select pieces stand the test of time. One piece of clothing that’s found in almost any wardrobe is the t-shirt. From comfy shirts made for the gym to shirts with trendy designs worn for a night out with friends, t-shirts are a staple for men, women, and children.

T-shirts are here to stay, so why not capitalize on this fashion staple? Whether you have a degree in fashion design or you just want to become an entrepreneur, starting your own t-shirt business could be the opportunity you’ve been looking for.

In this guide, we’ll take a look at what it takes to get your own t-shirt business off the ground. We’ll start with basics such as designing and printing your shirts. We’ll discuss the importance of registering your business. Then, we’ll look at startup costs, as well as how you can get the capital you need to start your business and keep it operating. Finally, we’ll look at ways you can advertise your business to bring in customers and revenue.

Ready to take the leap into entrepreneurship? Read on to find more.

Design Your Shirts

Before you begin selling t-shirts to the masses, you have to create designs that people want to buy. The first step is identifying your target market. Are you going to sell t-shirts to men, women, children, or a combination of the three? Are your t-shirts going to be more fashionable, or are they better suited for lounging around the house or hitting up the gym?

Once you’ve identified your target market, it’s time to think about the designs you’ll use. Let’s say that your t-shirts are aimed at the active man or woman. Your designs should incorporate fitness or motivational graphics. You can also determine other features of your shirts based on your target audience, such as the type of material used. If your shirts are designed for the fitness-minded consumer, for example, select a moisture-wicking fabric.

Your t-shirt designs don’t have to be overcomplicated as long as they appeal to your target audience. The key, though, is to make sure your designs are completely original. Not only does ripping off other designs make you look like a copycat, but you could face some serious legal issues if you use the artwork or designs of others without permission.

It’s also important to remember that sometimes a design may be a complete flop. Even the most well-known fashion designers in the world have released items that weren’t a hit with their devoted fans. If one design isn’t doing the job, try something else until you find what works best for your target audience.

Also, it doesn’t matter whether or not you have any design experience. As long as you have some ideas, you can hire a designer to bring your visions to life.

Decide How To Print Your Shirts

Once you have your designs, it’s time to think about how you’re going to bring the design from your computer or tablet screen to the front of a t-shirt. In other words, you need to decide how to print your shirts.

First, you’ll need to determine the method you’ll use to print your shirts. Screen printing is one option; it is a tried-and-true method that allows you to add long-lasting graphics to t-shirts. Screen printing is best for creating large batches of shirts since the initial setup is so time-consuming. Printing smaller batches is not cost-efficient with this method.

Another thing to note is that screen printing is best for very simple designs. Complex designs or multiple colors in one design can be problematic. If you have a more complicated design or pattern, consider direct-to-garment printing.

Direct-to-garment printing works similar to your color printer at home or at the office. The DTG printer prints directly on the t-shirt. With this method, you can use multiple colors and print complicated designs and patterns. Shirts printed with a DTG printer can be extremely detailed.

Setting up a DTG printer isn’t difficult or time-consuming. However, the actual printing process does take some time, so this method is best for smaller batches of t-shirts.

Another option to consider for printing your t-shirts is using a heat transfer machine. These machines transfer designs from heat transfer paper to the t-shirt. Full-color images can be printed using the heat transfer method, and you can easily print shirts on-demand. However, the quality is often lower and the design far less durable than using the other printing methods.

Regardless of which method you choose, there are two ways you can go about printing your shirts. You can use a third-party printing service or you can purchase the equipment and do it yourself. Let’s review the benefits and drawbacks of each.

Hiring A Third-Party Printer

Many t-shirt businesses do not do the printing themselves. Instead, these businesses hire a third-party service to handle the printing for them. There are a few benefits to hiring a third party to print your shirts. The first is that you won’t have to make an upfront investment in expensive printing equipment. You also won’t have to learn how to use the equipment or spend time running it.

However, there are some drawbacks to using a third party. You’ll have to shop around to find a printing company that provides high-quality workmanship. You don’t want your customers receiving t-shirts with graphics that fade or crack or that fall apart after the first wash. Many companies offer low-cost samples so you can check the quality before placing a larger order.

You also need to shop around and compare the pricing of different t-shirt printing companies. Some companies only fill bulk orders, which could put you at a disadvantage if you want smaller batches.

If you plan to only sell your designs online, you can work with an on-demand dropshipper. Once an order is placed on your website, the dropshipper will print and ship out the order to your customer. Before choosing a dropshipper, it’s necessary to place your own order to check out the quality of the shirts. You also need to evaluate pricing to make sure you’re getting the most bang for your buck. The major disadvantage to using a dropshipper is that if an order is wrong, slow to ship, or not printed correctly, the blame will fall on your shoulders, even if you don’t have control over any of these issues.

Purchasing Your Own Equipment

The alternative is to purchase equipment and print your own t-shirts. The advantage of this is that you have total control over both the quality and the number of shirts that are printed.

The major drawback, of course, is that t-shirt printing equipment is very expensive. Expect to spend at least a few hundred dollars for a heat transfer machine. If you want a DTG printer, expect to pay tens of thousands of dollars. You will have to pay for ink and maintenance of your machine. In some instances, you may be able to lease equipment to save on upfront costs.

You also have to take the time to learn how to properly use the equipment or train someone else to take on the job.

Decide How To Sell Your Shirts

Now that you’re closer to getting your shirts designed and printed, it’s time to decide how you plan to sell your items. You can set up an online shop, open your own brick-and-mortar store, or bring your designs to local stores in your area. You may also maximize profits by combining these selling tactics.

One of the easiest sales methods is to open an online shop. Customers can browse your designs and make their purchases directly online. You can ship out the orders yourself, or you can work with a dropshipper to make t-shirts on-demand when an order is placed. This option has low startup and overhead costs.

You can also open your own brick-and-mortar store. While you’ll be able to reach customers in your local area, this option has much higher startup and operating costs. Expenses may include rent for your commercial property, utilities, fees for business licenses and permits, and equipment. You’ll also have to purchase inventory to keep in stock. If you go this route, make sure to consider your local area. For example, if you live in a remote area, you may not have a large customer base. However, if you live in a thriving city or popular tourist destination, opening your own brick-and-mortar store may be a profitable venture.

The third option is to print out smaller batches of your t-shirts and network with local boutique and business owners in your area. With this method, you won’t have to pay for your own commercial space, but you will have to give the business owner a cut of your profits.

To determine what is right for your business, keep a few things in mind. Is this going to be your full-time job, or are you just trying to make a little extra money on the side? If you don’t plan on devoting yourself full time to your t-shirt business, stick to an online shop or sell your t-shirts through other businesses and boutiques.

Calculate Startup Costs

Once you have an idea of the direction you want your t-shirt business to take, you can start thinking about startup costs. The route you’ve chosen with your business will determine how much your startup costs will be.

If you plan to open a brick-and-mortar business, you’ll have expenses including a rent or lease payment, equipment and furnishings, utilities, a point-of-sale system, and inventory. Unless you plan to do all of the work yourself, you also have to hire employees. If your business will be based solely online, your costs will be much lower — think shipping costs, plus the price of a website, software, and ecommerce platform subscription fees.

Startup costs vary significantly based on the goals of your business. You can start big with a brick-and-mortar shop and may pay tens (or even hundreds) of thousands of dollars to launch your business. Start a smaller online shop, and you can get started for as little as a few hundred dollars to launch your website and register your business.

Register Your Business

You’ve started laying the groundwork for your t-shirt business, and now it’s time to make everything legal. The first step is to determine what type of business structure you will form. The business structure you select will determine how much you pay in taxes, as well as whether or not you will be personally liable for the debts and obligations of the business.

Sole Proprietorship

Sole proprietorships have one owner. These are the fastest and most inexpensive business entities to form and do not require registering with the state. The drawback is that sole proprietorships are not separate legal entities, so you will be personally responsible for the liabilities of the business. It may also be difficult to obtain a loan or raise capital as a sole proprietor.

Partnership

A partnership has two or more owners. A general partnership is the simplest form and does not require registration. General partners will be held liable for the debts, obligations, and liabilities of the business.

You may also consider starting a limited partnership, which has a general partner and limited partners. Limited partners are not responsible for the liabilities of the business.

Finally, you may choose a limited liability partnership, where all partners are limited partners and are not responsible for the liabilities of the business.

Corporation

A corporation is the most complex business structure. As a corporation, you will pay taxes at the corporate rate. Shareholders also pay taxes on dividends, resulting in double taxation. Corporations have ongoing requirements, such as electing a board of directors and holding annual meetings.

While a corporation is more expensive and complicated to form, this is the best structure if you see a large expansion in your future. As a corporation, you can sell stock to shareholders to raise large amounts of capital.

Limited Liability Company

A limited liability company, or LLC, combines benefits of different business entities. Like a corporation, business owners in an LLC are not personally liable for the debts and obligations of the business. However, LLCs do not have to pay corporate tax rates or face double taxation. LLCs also do not have ongoing requirements like corporations.

The type of business structure you select ultimately depends on the needs of your business and your future plans for growth. If you want to build a clothing brand that’s known around the world, choose a corporation or LLC structure. If you just want a smaller online shop that helps pay your bills, a sole proprietorship may be the way to go.

Once you’ve determined your business structure, you may be required to register with your state. Sole proprietorships and partnerships may file for a DBA (“doing business as”) under a fictitious name known as a trade name.

Depending on the type of t-shirt business you plan to operate, you may be required to obtain business licenses and/or permits from state and local agencies. Fees and requirements vary by state. You can contact local agencies including your City Clerk, Department of Consumer and Regulatory Affairs, and state Department of Revenue to learn more about the business licenses and permits required for your business.

Finally, you also need to register for an Employer Identification Number (EIN) from the Internal Revenue Service. This is required if you plan to hire employees now or in the future. Many business lenders may also require an EIN when you apply for funding. If you’re a sole proprietor, you may opt to use your Social Security Number in lieu of an EIN.

Seek Business Funding

“It takes money to make money,” as the old saying goes. As the owner of a t-shirt business, the amount of money you need to start and operate your business will vary according to your business model. If you have a small online shop, for example, your funding needs won’t be as great as if you’re operating a brick-and-mortar store.

Even if you have startup costs covered, there may come a time when you need additional capital for emergencies or operating expenses. If you can’t fund these costs out-of-pocket, it’s time to apply for small business funding. Whether you turn to someone you know or apply with an online lender, there are several financing options available for your business.

Friends & Family

Know a friend, family member, or colleague looking to invest in a new business? Pitch them your business idea. Prepare your presentation carefully to let them know why your idea is a winner. In general, you have two options for getting funded by someone you know. The first is to take out a loan. Your friend or family member provides you with a set sum of money that is repaid over a period of time — along with interest. This is known as debt financing.

The next option is a strategy known as equity financing. With equity financing, an investor provides you with the capital you need to cover startup costs or operational expenses. In exchange, the investor receives ownership in your business. While you may not be required to immediately pay back the investor’s capital, they will be able to take a portion of the profits over time. They may also have some level of control when it comes to important business decisions.

No matter which route you take, always make sure everything is in writing and signed by all parties. Then, uphold your end of the bargain. Nothing can make a good relationship go south faster than a business deal gone wrong.

Small Business Loans

With a small business loan, you can receive a lump sum of money that you repay over time. In addition to repaying your principal loan balance, you’ll also pay the lender interest and/or fees. You’ll make regular payments to the lender, which may be daily, weekly, monthly, or on another schedule.

Small business loans can be used for any business purpose, including funding an expansion, purchasing equipment for your business, or for use as working capital.

Recommended Option: LoanBuilder

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You can fully customize your small business loan when you work with LoanBuilder. The LoanBuilder Configurator allows you to adjust your repayment terms and borrowing amount to create the right loan for your business.

Through LoanBuilder, you may be eligible to borrow up to $500,000. All loans come with one single fixed fee of 2.9% to 18.72% of the borrowing amount. Your fee is determined by the performance of your business and your credit history. Loans are repaid weekly over terms of 13 to 52 weeks.

To qualify for a LoanBuilder loan, you must meet the following requirements:

  • Time in business of at least 9 months
  • At least $42,000 in annual revenue
  • Personal credit score of 550 or above

Vendor Financing

As you build your t-shirt business, you’ll establish relationships with vendors and suppliers. In an ideal world, you’d always have money in your bank account to cover the costs of your inventory and supplies. However, this isn’t always the case. An emergency expense that depleted your account, a seasonal uptick in sales, or some other challenge may leave you struggling to pay your vendors upfront.

Many vendors do not offer their own credit programs, but there are lenders that offer vendor financing. With vendor financing, your vendors will be paid the full amount for their products or services while you’re able to pay off the expense over time. This prevents you from having to pay the full cost out-of-pocket for the inventory, supplies, and services you need to keep your business running smoothly.

Recommended Option: Behalf

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Behalf provides vendor financing of up to $50,000 to qualified borrowers. You can repay your loan on a weekly or monthly schedule for up to 6 months.

Behalf charges a monthly fee for its service. Fees start at 1% and are based on the creditworthiness of the borrower. There are no additional fees to receive financing through Behalf.

There are no minimum credit scores, annual revenues, or time in business requirements, although a soft inquiry will be performed when you apply. You must have a U.S.-based business and a U.S. business bank account to qualify. Funds from Behalf can’t be used to fund existing debt, such as credit card bills or payroll.

Lines Of Credit

A line of credit is a flexible financing option that allows you to access capital on demand. Instead of receiving one lump sum, a lender sets a credit limit. You can initiate multiple draws up to and including this credit limit. Once a draw is initiated, the lender will transfer the funds to your business bank account. Then, you will repay the money over time, along with any fees and/or interest charged by the lender.

Since a line of credit is a revolving form of credit, funds will be replenished as you pay off your balance. This allows you to have continuous access to capital when it’s needed. A line of credit can be used for any business purpose, including funding emergency expenses, purchasing inventory, or using as working capital.

Recommended Option: Lendio

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Lendio is a loan aggregator that gives you access to over 75 small business lenders with just one application. One of the financing options available through Lendio is a business line of credit.

Through Lendio, you may qualify for a line of credit from $1,000 to $500,000. Rates range from 8% to 24%. You could receive funds in as little as one week after you submit your application.

To qualify for a line of credit, you must meet these requirements:

  • Time in business of at least 6 months
  • At least $50,000 in annual revenue
  • Personal credit score of 560 or above

If a line of credit isn’t what you’re looking for, Lendio offers additional financing options, including:

  • Short-Term Loans
  • Equipment Financing
  • Business Credit Cards
  • Commercial Mortgages
  • Merchant Cash Advances
  • Startup Loans

Merchant Financing

If you need working capital and you use a service like PayPal to receive your payments, you may qualify for merchant financing.

Merchant financing is a short-term loan option for ecommerce businesses. Typically, qualifying is based on the performance of your business. The lender will provide you with a loan that is repaid over time with interest and/or fees.

Funds can be used for nearly any business purpose, from covering an emergency expense to buying more inventory or using as working capital.

Recommended Option: PayPal Working Capital

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If you accept payments through PayPal, you may qualify for the PayPal Working Capital program. Through this program, you can receive up to 35% of your annual PayPal sales as a loan. Your first loan can be up to $125,000.

PayPal Working Capital charges one set fee based on your sales history, the repayment percentage of your choice, and the loan amount. On days when no sales are made, no payments will be deducted. However, you must pay at least 5% to 10% of your total loan amount every 90 days.

To qualify for PayPal Working Capital, you must meet these requirements:

  • Have a PayPal Business or Premier account for at least 3 months
  • At least $20,000 in annual PayPal sales for Premier accounts or at least $15,000 in annual PayPal sales for Business accounts
  • No more than $20 million in annual PayPal sales

Business Credit Cards

Business credit cards work exactly like personal credit cards. The lender provides you with a set credit limit. You can use your card anywhere credit cards are accepted up to and including the credit limit.

The lender charges interest and fees on your balance until it is paid off. You do not have to pay off your balance in order to continue using the card provided you haven’t met your credit limit. A business credit card is a revolving form of credit, so as you pay down your balance, funds become available to use again.

Business credit cards give you on-demand access to capital whenever you need it. You can use business credit cards to pay for an emergency, purchase inventory, or buy equipment. You can also use your credit card to pay for recurring expenses, such as utility bills or software subscription fees.

Recommended Option: American Express SimplyCash Plus

SimplyCash Plus Business Credit Card from American Express



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Annual Fee:


$0

 

Purchase APR:


14.49% – 21.49%, Variable

The American Express SimplyCash Plus card puts a new spin on credit cards. This is because this card allows you to spend over your credit limit without any fees. You can also receive cash back on all purchases – even if you’re over your limit.

The amount you can spend over your credit limit is based on your usage of the card, payment history, credit profile, and other factors. If you go over your limit, you simply need to pay the amount over the credit limit each month as part of your minimum payment. There are no fees for exceeding your credit limit.

With the SimplyCash Plus card, you can receive up to 5% cash back on your purchases. Wireless phone services and office supply store purchases yield 5% cash back on the first $50,000 spent each calendar year. You can also choose one category to receive 3% cash back on, such as advertising, shipping, hardware, or software purchases for the first $50,000 spent each calendar year. All other purchases receive 1% cash back.

There is no annual fee associated with this card. You’ll also receive a 0% introductory rate for the first 9 months. After that, variable APRs range from 14.49% to 24.19% and are based on creditworthiness.

To qualify for the American Express SimplyCash Plus card, you must have excellent credit.

Recommended Option: Spark Classic For Business

Spark Classic From Capital One


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Annual Fee:


$0

 

Purchase APR:


25.24%, Variable

Don’t have perfect credit? Consider applying for Capital One’s Spark Classic for Business credit card. This rewards card gives you unlimited 1% cash back on all of your business purchases. There is no annual fee, and the card has a variable APR of 25.24%.

Additional benefits of Spark Classic for Business include free employee cards, fraud coverage, and extended warranty protection. This card also allows you to build your business credit so you can qualify for additional financing options in the future.

Applicants must have a fair credit score to qualify for the Spark Classic for Business card.

Choose Business Software

You’re one step closer to launching your business. Now, it’s time to choose the software you need to run your business effectively and efficiently. Some of the business software programs you may need for your t-shirt business include:

Bookkeeping Software

Bookkeeping software allows you to keep an eye on the financials of your business. With this software, you can easily track your business expenses, accounts receivable, and payroll. Many bookkeeping programs also allow you to track other aspects of your business, such as inventory.

With bookkeeping software, you’ll always know where your business stands financially. You’ll be able to run and print reports as needed, which may be required when you apply for business financing. Having all transactions reported in bookkeeping software can also help you prevent headaches when tax time rolls around.

No accounting experience? No problem! Check out The Beginner’s Guide to Accounting.

Payment Processing Software

If you plan to accept credit cards or other methods of payment, you will need payment processing software. Your payment processor will act as the communicator between your bank and the bank of your customers, allowing you to process credit cards, debit cards, and other forms of payment.

Point-Of-Sale System

If you want a more sophisticated way to manage your sales, you’ll need a point-of-sale (POS) system. A POS system not only includes credit card processing, but it also offers additional features including barcode scanning, inventory tracking, printing receipts, and reports and analytics.

Mobile POS systems allow you to use your app or smartphone to accept payments and keep your business running efficiently. There are also more advanced systems that include hardware such as monitors, keyboards, printers, cash drawers, and scanners.

Advertise Your Business

You’re almost to the finish line and ready to open your doors … or your online business. Before you launch, though, it’s time to think about advertising. After all, if no one knows about your t-shirt business, how are you going to make any sales? Don’t wait until after you launch to spread the word about your business — start right now with these advertising tactics.

Social Media

From middle schoolers to your own grandparents, it seems like everyone is on social media these days. Use this to your advantage to let potential customers know about your t-shirt business.

The great thing about social media is that setting up your profiles is absolutely free. You can also get started in just minutes. Set up pages for your business on Facebook, Twitter, Instagram, and/or Pinterest. Include critical information about your business on each profile including your contact information, website and/or online shop link, and photos of your t-shirts. Later, you can use your profile to share news about your business and new products, advertise sales, or host giveaways.

You can also look into advertising on social media. You can purchase ads for any budget and customize your target audience to get your name out to potential customers.

Another option to consider is talking to social media influencers. Social media influencers recommend products to thousands of followers, helping companies drum up new business. If an influencer wears your shirt and links to your website, you could see an influx of customers.

Some businesses will send a free sample of their products to social media influencers. While this does mean some out-of-pocket costs for you, the exposure you could receive could be well worth the small expense.

Want to learn how to take your social media marketing to the next level? Learn more in our Guide to Social Media Marketing.

Build Your Website

In addition to your social media profiles, you also need a website to build your web presence. Website builders make it easier than ever for you to create your own professional website. You can also easily build an online shop with today’s modern ecommerce platforms.

When you build your website, make sure that it is designed to appeal to your target audience. Don’t forget to include information on your website such as contact info, details on your products, and clear photos of what your business offers. As you build up your website, you can include additional information and features such as online chat options, FAQs, news and updates, and reviews and testimonials.

Word Of Mouth

Never underestimate the power of word-of-mouth advertising. The trick to this one is simple: provide high-quality products and exceptional customer service. If someone buys one of your t-shirts and is pleased with the quality, they’ll be proud to wear it and tell others about your business. If the shirt was poorly made or customer service was lacking, they’ll also tell others.

Word of mouth advertising is an easy and free way to get the word out about your new business. And don’t be afraid to toot your own horn. If someone gave a great review, share it on social media and your website. Don’t be afraid to ask customers to give their feedback, but don’t be pushy. Also, learn to accept criticism. Not all of your reviews and feedback will be glowing. Instead of taking offense, learn from it. Where is your business lacking? How can you make sure that each customer that purchases your t-shirts is fully satisfied? Never stop trying to improve your business, and always provide the best products and customer service to keep your customers coming back for more.

Final Thoughts

Owning and operating your own t-shirt business can be fun, exciting, and lucrative, but don’t be fooled … a lot of hard work is necessary to make your business a success. Don’t rush the process. Instead, take the time to plan out your business, create unique designs, and provide high-quality products and service that will draw customers to your business.

Want to learn more about starting your own business? Download our small business guides for the information and tips you need to launch your business venture.

The post How To Start And Fund A T-Shirt Business appeared first on Merchant Maverick.

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What Is An Acquiring Bank?

Accept ACH payments online

Keeping all of the terms straight when it comes to processing payments can be a bit tricky. And there are so many entities involved in payment processing. So we’re going to start with one of the most important terms and players in credit card processing: the acquiring bank. We’ll start with a general definition of an acquiring bank, and then we are going to explore what it means for your business:

What Is An Acquiring Bank?

The acquiring bank is a financial institution that plays a crucial role for the merchant by creating and managing the bank account. Also referred to as an acquirer or a merchant bank, this financial institution is a licensed member of the card networks, including Visa and MasterCard. When you process a payment with a debit or credit card, the acquiring bank plays a role in approving the sale. The bank makes this determination based on the cardholder’s data (made available at the time of the sale from the issuing bank and the card network). Note that the issuing bank is the bank that provided customer’s credit card.

For instance, let’s say your customer pays you with a Visa card and taps their card to pay. Their card’s issuing bank makes information available about their credit card account to your merchant bank (acquiring bank). If there are enough funds on the card and everything else is copacetic, the acquiring bank approves the purchase and puts the funds in your account.

Now keep in mind that the term “acquiring bank” primarily refers to the specific role it plays in the whole credit card processing interchange. A merchant’s acquiring bank can be an actual bank, or it can be another type of financial organization. A large acquiring bank may also issue credit and debit cards to its customers, thus also acting as an “issuing bank” when a consumer pays with the card (this is the case with Bank of America). An acquiring bank is also sometimes referred to as a payment processor, and it might contract directly with merchants to provide merchants services. That said, not all payment processors are acquiring banks. 

There’s a lot to keep straight, but keep reading as we further de-mystify these terms and give you the tools to understand how money moves from your customer to you.

The Acquiring Bank’s Role In Payment Processing

The acquiring bank plays a pivotal role in processing credit card payments for merchants. When a merchant processes a payment, the acquirer’s purpose is to authorize the card transaction and connect with the issuing bank (the consumer’s bank) on behalf of the merchant.

In a nutshell, the acquiring bank acts as a go-between with the customer’s financial organization to ensure funds are transferred. In doing so, the acquiring bank assumes some financial risk (that’s where the acquiring bank fees come in.) We’ll talk more about security, disputes, and more in an upcoming section.

Want to know what happens to your funds in a transaction? Here is an overview to help you wrap your mind around the process itself:

  • 1st Step: A cardholder receives a credit card from their issuing bank and visits your shop. When they are ready to buy, they present you with their card to pay for your wares.
  • 2nd Step: The transaction information and the card information passes between the payment processor to the card network, and then to the issuing bank.
  • 3rd Step: The issuing bank charges your customer for the amount of the purchase.
  • 4th Step: The issuing bank transfers the amount to the acquiring bank.
  • 5th Step: The acquiring bank deposits the funds into your account.

Keep in mind that your payment processor may not be the acquiring bank. Read on to find out more about the difference in the roles and how you can find the right solution for your business needs.

Payment Processor VS Acquiring Bank: What’s The Difference?

When someone discusses payment transactions, the words payment processor and acquiring bank are sometimes used interchangeably. Some acquirers are themselves also payment processors and you can sign up for a merchant account with them directly. However, not all processors are acquiring banks. In this case, they contract with an acquiring bank to provide services. While they may or may not be two separate entities, the acquirer and payment processor roles are unique.

The payment processor plays more of a direct role with the merchant, as they are obtaining and processing the credit or debit card information during the transaction. Your payment processor handles the lion’s share of the data security as the card information moves from your customer to you. Processors are also the source of the hardware or software you may use. They provide connection to the payment gateway and thus are also integral to the authorization as well.

The acquiring bank is more of a go-between among the card networks, including the issuing bank and the merchant. For example, the acquiring bank essentially mediates any disputed transaction from the issuing bank. When an issuing bank reviews a dispute brought up by a customer, the card network passes the dispute to the acquiring bank, which then conveys the issue to the merchant. The merchant’s response gets passed back to the acquiring bank and so forth. This example is simplified but illustrates where the acquiring bank sits as it relates to you and your customer.

As mentioned earlier, though the role of an acquirer and a payment processor may be unique, sometimes the same organization fulfills both duties. In other cases, payment processors and acquiring banks have contract agreements with one another to perform their separate roles.

Why Does An Acquiring Bank Charge Fees?

As we’ve shown, the acquiring bank is the financial institution that’s involved in each sale and also assumes some financial risk when it comes to funds transfer during credit card processing. The other thing to keep in mind is that just like your payment processor, your acquiring bank is dealing with sensitive customer data and has to follow strict payment security standards. For these reasons, the acquiring bank also charges a fee to cover its own risks and financial investment in the whole process.

For more information on the different types of costs you may incur with processing credit cards, check out What Are Interchange Fees For Credit Card Processing?

How Do Acquiring Banks Affect Merchant Services?

Acquiring banks are essential players in the whole credit card processing landscape. As a merchant, it’s important to at least generally understand who the players are and how they may affect your business. It’s not always obvious who your acquiring bank is, as some processors and acquiring banks are separate entities, while sometimes you’re dealing with the same organization.

On a similar note, smaller processors that contract with acquiring banks often bring better customer service because of their specialization. They also may have different pricing and contract terms, such as month-to-month agreements. Keep the whole picture in mind when you are shopping around for a merchant account so that you can make the best decision for your business.

Wondering what companies are out there and which one is right for your business? You are in the right place here at Merchant Maverick. If you haven’t yet, visit our Merchant Account Comparison page and peruse our small business resources that cover the gamut when it comes to payment processing and you.

The post What Is An Acquiring Bank? appeared first on Merchant Maverick.

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How to Use Square for Recurring Payments And Invoices

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

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

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

How To Set Up Recurring Payments With Square eCommerce

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

Square Payment Form and Transaction API:

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

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

Pre-Built Workflow:

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

Choose An Integration:

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

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

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

Square Integration Plug Ins

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

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

How To Set Up Square Recurring Invoices

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

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

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

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

Square Recurring Invoice

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

Getting Paid with Square Invoices

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

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

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

How To Use Square Installments For Invoices

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

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

How Much Do Recurring Payments Cost With Square?

What is cheaper than Square?

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

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

Should You Use Square’s Recurring Payments Tools?

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

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

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

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

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6 Free Square Tools To Make Running Your Small Business Easier

If you own a business, you don’t need anyone to tell you about the value of time-saving tools. Personally, whenever I uncover something that unexpectedly makes business run more efficiently, it can almost feel like winning the lottery — time is that important to me. If you juggle a lot of responsibilities during your day, you probably feel the same way. That’s why I was pretty stoked to pull back the curtain and see what’s really behind the scenes when it comes to Square — one of the most popular payment processing apps available. 

In this post, we’ll discuss some of the tools you may not have heard about that are available with any standard Square account. While I also get pretty excited about some of the premium options on offer (like Square’s email marketing and CRM tools), we are going to stick with the freebies in this post. Keep reading to learn about tools you can start using today that may help you do business a little smarter.

Note: Keep in mind, we’re not touching on all of the free software and tools you get with Square — just some of the most valuable ones. Check out our in-depth Square review for a closer look at everything Square has to offer.

Inventory Management

When we talk about what is waiting when you open up a free Square account, one of the most important tools is your inventory management. Good inventory management is so important to keep your customers happy and ultimately help support your bottom line. Understanding what is most popular and identifying your best sellers can help you not only maintain the right amount of stock but support your promotional efforts as well.

So let’s start with the basics. After you enter in an item in your Square dashboard or the POS app, you can add the current stock amount, enable tracking, and set up a low stock alert right from the same screen. Whether you ring up the item from your POS, virtual terminal, or send an invoice, Square adjusts your stock automatically.

You can add item variants as well. Add different price points for sizes, add-ons, or customize however you like. Just name the variant, set the price, and add a unique SKU if needed. And if you sell in bulk, you can use Square’s variable price point feature to leave the price open based on the weight/quantity sold. 

Need a customizable option like a topping change, a special dietary adjustment, or another type of swap-out? You can create modifiers for that, too! Unlike item variations, modifiers don’t decrease inventory accounts. You can opt to assign a price to your modifier, however.

When it comes to managing your physical stock, it is worth mentioning that the free POS account isn’t set up to print barcodes for your SKUs. Some business owners use a Dymo label printer as a workaround. If you have a lot of inventory and need a more robust solution for advanced inventory management (including barcode scanning and printing) in one solution, Square for Retail may be worth your while. Check out our full Square for Retail review for pricing and a better look at all the extra inventory-related features included with the POS. 

Customer Directory

small business loyalty program

When you use Square’s customer directory, the amount of data you have access to automatically builds with each sale. With just a swipe of the card, your list collects data such as your customers’ names, when they visited which location, and their visit frequency. During the sale, your customer may also have entered in their email address with you to get a digital receipt. Of course, if you are feeling bold, you can also ask your customers one-by-one for their email addresses so you can start building a healthy list.

Square’s customer database is accessible through Square Point of Sale or through the Square Dashboard. Under each customer in your directory, you can add a note, upload a file, view any feedback they have left you on their receipts, or create an invoice to send directly (more on that below).

When all of these customer insights build over time, you can start to get a clearer picture of who your loyal customers are, who has visited more than once, and who hasn’t visited you in a while. You can also see what their favorite products are — all of which is useful data for your business in general, and especially for marketing purposes. 

Again, the Square Customer Directory is entirely free to use, and it syncs with all of Square’s other tools — that includes paid software options such as loyalty and email marketing. The Square email marketing tool lets you segment customers, then customize email campaigns based on their habits. Square has pay-as-you-go pricing at 10 cents an email, or you can opt for a monthly subscription to send unlimited emails. Square offers a 30-day free trial for an email marketing subscription, and pricing starts at $15/month for up to 500 customers.

Card On File

deferred interestYou can make it easier for your repeat customers to order by phone or for a future invoice by saving your customer’s credit card information using Square’s Card on File feature. Be aware that your customers have to “sign off” so you can appropriately save their card on file, however. If you are completing a sale on your computer through Square’s Virtual Terminal, you will be prompted to print out the approval release and have your customer sign it. Keep this document in a safe place, because it proves you received their permission to store their card and can protect you from chargeback issues.

If you are at your free Square POS app, your customer can approve saving the card on file by entering in their zip code at the permission screen. After that, you can process their payments quickly and easily with no need to present the card. While it costs nothing to store a card on file or use the feature regularly, keep in mind that you will pay a little more with each transaction (3.5% + $0.15 per transaction instead of 2.75% per swipe/dip/tap) because they process as card-not-present, rather than card-present.  

Is Card On File Secure?

What’s the Difference Between Chip-and-PIN and Chip-and-Signature Cards

Square lets you store your customer’s credit card information with their approval, and yes, it’s fully compliant with the payment security standards set up by the PCI-DSS. That’s because when you enter credit card data, it is only going through the secure Square app. Also take note that when you enter in credit card data — whether during a sale or saving a card on file, the full number isn’t viewable to your or your staff once it’s entered in the system.

Securely saving customer card data is vital to your financial protection as a business and prevents very costly fraudulent risks. For more about Square’s security, check out our related post, Is Square A Secure Way To Accept Credit Card Payments?

Gift Cards

Gift cards may not be the first thing you think of when it comes to business tools, but here are some pretty neat statistics for you: In a 2018 press release, First Data shares a study that found that consumers, on average, spend $59 over the original value of the gift card they receive. Not only that, but shoppers plan to spend 55% of their annual gifting budget on gift cards. That is no small potato when it comes to amping up your revenue.

If I’ve piqued your interest, I have some more good news. Square’s digital gift cards are completely free for you to sell. If you want to offer physical gift cards, you could start with a stock of 20 for $40 or opt for higher quantities with a significantly lower cost with each tier. When your customer pays for the gift card using a credit or debit card, standard processing fees will apply. (There’s no charge for payments made with cash.) When it comes time for the gift recipient to spend with you, you won’t face any additional costs. Square treats this transaction like cash, and they only deduct the amount of the sale from the card. And it’s great that you don’t need to pay any monthly fees to accept gift cards — you just pay the cost of the physical cards (if you want them) and any associated payment processing when purchased. 

Invoicing & Installments

Square Invoice Tutorial

When it comes to invoicing clients, Square makes it pretty easy. First, you can send an unlimited amount of professional-looking invoices for free. And instead of your customer having to call you with their number or waiting for a paper check, they follow the prompts and pay securely online. You can also send files, images, contracts, or attach information along with the invoice.

If you sell larger ticket items and want to finance your customers, you may also be interested in Square Installments. With this service, you can let your customer pay over time, while getting all of the funds upfront from Square. That’s because Square takes the risk by checking their credit and approving or denying the purchase. To find out more about letting your customers pay by installments, check out How Does Customer Financing With Square Installments Work?

If you want to assume more of the risk or set up a layaway program, however, you can also send out a regular invoice to request a down payment or partial payment as well. There is simply a lot of flexibility afforded with invoicing and installments. Read our Square Invoices Review to find out more about this tool and how to use it for your business.

Virtual Terminal

 

Don’t have a card reader handy? Does a customer want to pay over the phone? You can accept payments securely at your own computer when you log into Square dashboard and go to your Virtual Terminal. There are many scenarios when taking payments at your virtual terminal can empower your business model — and it makes for a great backup if other devices are misbehaving. 

In any case, you can still take payments quickly via Square’s Virtual Terminal. You can manually enter in the credit card information, or you can pull up a customer in your directory and charge a card you have saved on file. If you have a Mac or Chromebook, you can still connect a basic magstripe reader and swipe the card at your computer, too! 

Square charges no software fees to use the virtual terminal and it’s included with all free Square accounts, but you will still have to pay transaction costs. With keyed entry, you’ll pay 3.5% + $0.15 per transaction, or 2.75% for swipe transactions.

Square Card

At first glance, the Square Card may seem like just another line of credit, but it isn’t. The Square Card is a debit card that gives you instant access to any of the funds that are in your Square account in real time. So why are so many business owners stoked about the Square Card? For one, it can help manage and organize cash flow. One way to separate business expenses from everything else is to keep all of your business expenses on your Square Card. It makes sense because you’ll also always have an itemized list of exactly what you spent at the Square app under “Card Spend.”

Keep in mind that once you get the ball rolling with your Square Card, your funds are automatically going to sit in your Square balance unless you manually transfer funds into a different account. You can do so at any time and Square will deposit funds in the next 1-2 business days. If you want your funds deposited into your main bank account faster, you can also opt for a same-day instant deposit for the fee of 1% of the total amount.

When it comes time to spend your balance, the Square Card is a debit card accepted at any merchant that takes MasterCard. As far as cost, the Square Card is completely free with no annual or usage fees whatsoever. The other cool bonus is that you get a 2.75% discount at all other Square merchant locations. If you have a Square account, you can request your free Square Card under Deposits at the Square Dashboard. Note that Square doesn’t automatically send you a card when you open your account.

Is Square Right For You?

There is no doubt that Square offers an abundance of tools and add-on software apps that can help you run your business more efficiently. Utilizing inventory management tools can help you stay on top of the ebb and flow of demand, and payment processing options offer flexibility when you need it.

We’ve only scratched the surface when it comes to Square’s tools because there are many layers to Square’s solutions. Check out our Square Review to get even more details about features and pricing so you can make the decision that’s right for you. You can also set up a free Square account and play around in the dashboard and check out the tools yourself.

The post 6 Free Square Tools To Make Running Your Small Business Easier appeared first on Merchant Maverick.

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How To Use Square To Accept Credit Cards In Person

Square has carved out quite a spot for itself in the world of payment processing. When it comes to accessibility, there are few rivals. With no credit checks, sign-up fees, monthly fees, or cancellation fees, and a very transparent pricing model, it’s no wonder why Square remains the go-to option for business owners who want a no-hassle choice.

In fact, it’s so easy to get started, that you can usually start taking payments immediately after setting up your Square account! That being said, it helps to get a bit familiar with the process before ringing up your first customer — and there is more than one way to do it. If you are interested in weighing your options, this post is for you.

We are mainly going to focus on taking payments with physical cards in this post, so if you have an eCommerce shop, you may want to check out our Square Online Store and eCommerce Review. If, however, you want to know how to ring up your sale and get some important details to help you choose the best options, keep reading.

To start us off, here is a short list of the ways you could accept payment with Square:

  • Your device + Square Point-of-sale (POS) app +  Square card reader
  • Keying in credit card information in the Square POS app
  • Square POS hardware (e.g., Square Register)
  • Accessing the Square Virtual Terminal from your laptop

Below, we are going to start by explaining how to accept payments with the Square Reader. After going through some different scenarios, we’ll also explore Square’s POS hardware for those of you with a physical storefront. By the end of this post, you should feel confident navigating your options and finding the best solution (or solutions) for your business processing needs.

But first, a note on Square’s payment security.

Square & Payment Security

Right out of the gate, we need to take a quick minute to cover payment security. It’s that important. Regardless of how you accept a payment — whether that is keying in a card,  swiping with a magstripe reader, a dip or tap, etc. — Square provides secure and PCI compliant payment transactions. That is to say, Square is fully compliant with the latest Payment Card Industry Data Security Standard (PCI-DSS). And that also means you won’t have to pay additional PCI fees or hire a team to manage ongoing compliance, either.

This out-of-the-box payment security is just one reason Square is such a powerhouse for the millions of small business owner who trust it.

Let’s take a look at the Square reader options next.

How To Use A Square Reader For Mobile Payments

We’ll start with the obvious: the Square reader. Assuming you have already downloaded the Square app, it’s effortless to accept payment with your reader.

  • Step One: Open the app on your device. You will already be at the screen you need to make a charge. No fumbling required!

Taking a Payment with Square

  • Step Two: If you have entered inventory into your Items list, find the item and click what you need. The total will automatically update.
  • Step Three: Tap the Charge button when you’re ready.
  • Step Four: Swipe or insert the card, or tap your connected reader. You can also manually enter the card number (keyed entry) if necessary.
  • Step Five: Your customer will sign their name and the sale is complete!

Don’t have a connection? Suffering from a spotty connection? Square’s offline mode helps you avoid losing the sale. Your customer’s data is securely saved in the app and the transaction will process when you connect your device to the internet again (WiFi or cellular connection). You must reconnect within 72 hours, though, or the transaction will cancel.

It’s really that easy. To see how Square stacks up next to other mobile credit card processors, check out our Mobile Credit Card Processing Comparison table.

Square Transaction Fees & Mobile Reader Costs

As stated at the start of the post, Square offers very transparent pricing. If you use Square Point of Sale on a smartphone or tablet with a mobile card reader, you’ll pay the standard processing fee of 2.75% per swipe, dip, or tap. And keep in mind that no matter what type of card your customer hands you, Square charges the same fee per transaction. If for some reason you need to key-in the credit number, you will pay 3.5% + 15 cents for manually-entered transactions. We will revisit the types of card-not-present transactions later in the post.

Let’s talk a little more about the Square Reader, because you do have some choices that go beyond the free magstripe device. The good news is that Square readers work with nearly all Android or iOS devices running the latest updates. If you’re in doubt, Square offers a compatibility tool so you can look up your device and see for yourself.

After signing up for a new Square account, you can choose which free Square reader you would like — and they’ll ship it directly to you for free. Depending on your device needs, you can choose between the lightning adapter for iOS or the standard 3.5mm headphone jack reader. The other option you have is to shell out $49 for the Contactless + Chip reader.

The free magstripe card reader is great for getting started, but I recommend considering the upgraded Contactless + Chip Reader for improved payment security in processing. (It also offers your customers more ways to pay you.)

Square Reader

Square also sells a small charging dock so you can keep your contactless reader fully charged through the day. If you opt for the contactless reader, you can also purchase a specially designed Otterbox case from Square. You can slide the contactless reader on the back of the case if you’re on the go. Unfortunately for Android users, the case only fits an iPhone 7 or 7 plus, but I have a hunch there will be more options for this one when the demand grows.

Can You Use A Square Reader With Multiple Devices?

You may be wondering about the possibility of sharing a reader between different devices — or maybe even switching readers. Good news! You can do either of those things! If you have more than one device, decide to upgrade a device (or reader for that matter), need to swap a device, or hand your Square reader to a different team member for them to plug into their phone, you can do so without an issue.

That’s because your account is anchored to your Square POS app, not to a specific reader. When you or your team member signs into the Square POS app, transactions go into the system automatically. You can use the same reader across different accounts, too. So if you have two businesses, or you have more than one Square POS app (like Square Retail or Square Restaurants), the reader works interchangeably with those as well.

Keep in mind that when you choose your reader, you may limit your usage. For example, you can only use the lightning reader with iOS, but the standard 3.5mm headphone jack reader is compatible with multiple devices. Of course, you can always purchase more readers to suit your needs and keep up with a growing team. As long as they are signed into your Square account, all sales will be synced to your account.

How To Use Square’s Countertop POS Systems

Square Register

If you are considering how you can use Square’s countertop POS systems to make business flow, here are your options:

Square Stand for Contactless and Chip:

When you use the Square Stand with the free Square Point of Sale (POS), you will need to bring along your own compatible iPad (most recent model) or purchase an iPad to go into your stand. The magstripe reader is built-in if you must swipe, but we recommend utilizing the Square Reader for contactless and chip payment for the latest payment security protections. The Square Stand also comes with a dock to keep the contactless reader charged and stable.

When it comes time to ring up an order, you’ll complete the sale just as you would through your mobile device, as the free Square POS app is still the engine that’s running the whole thing. The Square Stand for Contactless and Chip makes a great choice if you are looking for a more prominent, bonafide countertop POS option. It has a simplistic design with minimal cords and offers more screen real estate to find inventory and add to your sale.  

Square Stand for Contactless and Chip

With the Square Stand, you can run your Square POS app or the premium options created just for retail and restaurants. Find out why these might be a better option for you (and see the fee differences) by visiting our Square for Retail or Square for Restaurants reviews.

Square Terminal: 

The Square Terminal is a great all-in-one choice if you want a little more portability than the Square Stand offers. You can swipe, dip, or tap credit and debit cards, and it even has a receipt printer built right in. Terminal runs the free Square POS app, so it’s easy when it comes to ringing up a sale. You can also access features such as your customer directory, reports, and inventory tools.

If you are running Square for Restaurants, you won’t have access to all of the bells and whistles, but Square Terminal does have limited compatibility with the Restaurants POS. For example, you can pull up an open ticket and settle payments right at the table — complete with a receipt! When all is said and done, The Square Terminal can hold its own as an excellent countertop solution, but it’s also lightweight enough to use as a mobile solution. And because Square POS has an offline mode built right in, you don’t have to worry about losing connection. Transaction data is all saved safely with Square and ready to process when your device is back online.

Square Register:

They built the Square Register with both your and your customer’s ease of use in mind. There’s one 13.25-inch screen for you, and one for 7-inch display customers, complete with magstripe, chip card, and contactless payment processing built in! Square Register runs Square POS and supports Square Loyalty and other software add-ons. The Square Register also supports the back-end features of the premium Square for Retail software, such as the advanced reporting and inventory features, but can’t run the POS app itself. 

Not sure what you need? Check out A Guide To Square Credit Card Readers And POS Bundles to compare and explore your options. Below, we’ll break down the cost of the hardware we just talked about, and discuss the transaction fees associated with each.

Square POS Hardware Costs & Transaction Fees

As always, Square pricing is very straightforward. Below we’ve listed prices for the hardware and what it will cost you to process payments.

  • Square Stand for Contactless and Chip:  The cost for this one is $199.00. If you want to add an iPad, you can do so for $329.00. Note that the stand is only compatible with an iPad (2017, 2018), iPad Pro 9.7”, or iPad Air (1, 2). You’ll pay a flat 2.75% per swipe, dip or tap transaction at the Square Stand so long as you are running the free Square POS. Square For Restaurants and Square for Retail process at different rates — 2.6% + $0.10 for Restaurants and 2.5% + $0.10 for Retail.
  • Square Terminal: To get your business a Square Terminal, you’ll pay $399.00, shipping included. You can also opt to add on 20 rolls of terminal print paper for another $20.00. Your payment processing fee is 2.6% + 10¢ per swiped magstripe cards, swiped or inserted chip cards, and contactless payments.
  • Square Register: Square Register costs $999.00 to purchase it outright. Shipping is free, and it arrives in seven business days or less. It’s ready to start processing payments right out of the box, so there’s no fuss when it comes to launch time. Contactless payments, swiped or inserted chip cards, and swiped magstripe cards processed through cost 2.5% + 10¢ fee.

If you add on specialized software, such as Square for Restaurants or Square for Retail, you will have an additional monthly charge (both starting at $60/mo). Both of these premium POS systems are geared towards specialized businesses and include features such as advanced reporting (for retail), and table mapping (for restaurants).  

How To Accept Card-Not-Present Payments with Square POS  

Small Business Owner Using Square Customer Service

There may be some situations when you need to take a payment from your customer, and you can’t swipe, dip, or tap the card. Maybe you don’t have your reader with you, or you want to take an order over the phone. Whether the card is physically present or not, if you manually enter in the card information, it’s considered a card-not-present transaction.

In the next section, we will lay out the payment processing costs for such transactions. But first, let’s discover the ways you can process a card with Square if you don’t have your reader (or the card) in hand.

Virtual Terminal

If you log into the Square Dashboard from your computer, you can key in manual payments from your Virtual Terminal (not to be confused with the Square Terminal hardware). You won’t need additional hardware to complete the transaction. You simply go into the terminal and enter the amount, credit card information, and even add a note to describe the sale. Then you hit “Charge,” completing the transaction. You can also take “Card on File” payments from the Virtual Terminal (more on that below). If you have a Chromebook or Apple laptop, you can connect a basic magstripe reader to swipe transactions. In that case, you’ll pay the standard swipe rate instead of the keyed entry rate.

Card-on-File Transactions

Whenever you ring up a sale, you can also opt to save your customer’s card number on file for future use. After that, you always have the option of selecting “card on file” to complete the sale. However, keep in mind that whenever you ring a card-on-file transaction later and don’t swipe, dip, or tap, you have entered into “card-not-present” territory and slightly higher processing rates apply. 

Security Concerns with Card On File 

The Square app only reveals the last four digits of your customer’s credit card on file and does not save CVV card data to remain PCI compliant. Any time you make a transaction with Card on File, Square automatically sends a receipt to the customer so they have a record of the transaction, to help minimize the risk of unauthorized charges.

You should never save your customer’s card data unless it is stored with PCI-compliant software (such as Square). Businesses that store customers’ payment data improperly put everyone in danger of a breach, and the company can be liable for the breach, should it occur. Small businesses are targeted by fraudsters looking for unsecured data, and it is a lot more common than you may think. If you save the card on file through Square POS or Virtual Terminal, keep in mind that Square also requires you to obtain written consent to store the card on files — the site provides a form you print off and store somewhere secure. Also, your customer can revoke their consent to keep their card on file with you at any time.

Manually Keying-In Credit Card Information

In addition to the Virtual Terminal included with Square, you can always opt to enter credit card information manually with the Square POS app. Because there is a higher chance of fraud when you don’t capture the electronic data, it’s going to cost you a bit more to process. However, sometimes it is necessary to take these types of payments. Use your discretion with these types of transactions, and swipe, dip, or tap the card if at all possible to reduce your fees (and your chargeback risk). However, if a card is particularly worn down, the card reader is just misbehaving, or you don’t have your Square reader handy, it’s good to know you have a backup option to accept payments. 

Invoices

If you are looking for yet another workaround when it comes to processing payments, don’t have your reader handy, and you don’t want to key in the amount, you always have an option to send an invoice. Your customer will get the invoice via an email right away. From there, they can open their email and follow the prompts to enter in their credit card information from their own device. This is especially good for higher-value transactions where keying in the card number might send up a red flag. 

Check out our Square Invoices review for a more in-depth look at Square’s free software, but for now, what you need to know is that you can link your inventory to invoices, allow customers to send tips, take down payments, and even enable installment payments.

Square Keyed-Entry Transaction Fees

As we covered above, there are several scenarios in which you may want or need to key in your customer’s credit card information and more than one way to do it. Here’s how much it’s going to cost you to process these types of payments:

  • Keyed Entry Payments (Square POS Or Virtual Terminal): 3.5% + 15¢
  • Card-On-File: 3.5% + 15¢
  • Invoicing: 2.9% + 30¢

Is Square’s Credit Card Processing Right For You?

Square offers several solutions for businesses at every stage. That means that if you’re a one-person shop now, you don’t really have to worry about finding a new solution when you grow because Square offers so many scaleable hardware options. When it comes to taking payment at your storefront or on the go, there are many ways to go about it. And with a transparent pricing model, there are no surprises on the back end. Because Square offers an all-in-one solution with payment processing and PCI compliant security built right in, you don’t need to worry about jumping through hoops to keep up with the latest global payment security regulations.

So is Square right for you? Sometimes the best way to find out is to see for yourself! Consdier setting up a Square account and playing around with the possibilities. It’s free to set up a Square account, and there are zero commitments or contracts required.

If you are still weighing all of your options when it comes to processing, check out this Mobile Credit Card Processing Comparison table for a quick side-by-side view of some top-rated companies.

Reader eCommerce Retail Food Service
Free App & Reader Square eCommerce Square for Retail Square for Restaurants
Get Started Get Started Get Started Get Started
Free, general-purpose POS software and reader for iOS and Android Easy integration with popular platforms plus API for customization Specialized software for more complex retail stores Specialized software for full-service restaurants
$0/month $0/month $60/month $60/month
Always Free Always Free Free Trial Free Trial

The post How To Use Square To Accept Credit Cards In Person appeared first on Merchant Maverick.

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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

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)

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

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Review

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Review

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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)

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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