Payment Processing Companies And Services For Small Businesses

Payment Processing Services And Companies For Small Businesses

Navigating the world of payment processing services can be confusing for a small business owner, and it’s easy to make a mistake that can have a negative impact on your bottom line. With fast-talking sales agents lurking around every corner, waiting to sign you up for a lengthy, expensive contract, you need a good understanding of the basics of processing services, as well as specific things to watch out for.

While most merchant services providers offer a full range of products and services for every business, most of them are geared toward the needs of larger, established companies rather than small businesses and startups. Which services you need to run your business will depend primarily on the where and how you sell your products. For example, retailers and eCommerce businesses have very different requirements, although there are also some services (such as basic credit card processing) that are universally required.

In this article, we’ll provide you with a quick overview of the primary merchant services that you’ll need to accept credit card, debit card, and electronic check payments. We’ll also briefly review several of the best all-around merchant services providers for small businesses. All of them offer easy-to-use solutions at a fairly low cost compared to what the major credit card processors usually charge.

Payment Processing Services

It’s important to give your customers as many possible ways of paying for their purchases as you can, as this naturally leads to increased sales. At the same time, you don’t want to invest extra money into supporting payment methods that few, if any, of your customers actually use. Here’s a brief overview of the primary payment methods available and the services you’ll need to support them:

Credit Card Payment Processing

Providing credit card processing services is one of the most basic merchant services, and all providers will offer this feature. To accept credit cards, you’ll need either a full-service merchant account or an account with a payment service provider (PSP) such as Square (see our review). While every provider will allow you to accept major credit cards such as Visa and MasterCard, you’ll want to check carefully if you need support for less popular cards such as Discover, JCB, or Diner’s Club. American Express is also treated differently, as they function as both the issuing bank and the credit card association. Fortunately, Amex offers their OptBlue program, which simplifies the process of accepting their cards.

Debit Card Payment Processing

Virtually all merchant services providers support debit card transactions. In setting up your account, however, be aware that the interchange rates for debit transactions are usually much lower than it typically is for credit card transactions. The reason for this is simple: banks don’t have to issue a credit when the card is used like they do with credit cards. If the customer has sufficient funds in their bank account to cover the cost of the purchase, the transaction is usually approved, and funds are withdrawn immediately. Unfortunately, some merchant services providers set their processing rates without taking this distinction into account, which means you’ll end up paying much more for debit card transactions than you should. Tiered pricing plans and flat-rate plans are the usual culprits here, so look carefully at your proposed rate quote before signing up. You won’t have this problem with interchange-plus pricing, as the actual interchange rate is passed on to you, and the processor’s markup is the same for every transaction.

ACH Payment Processing

eCheck (ACH) payment processing operates on a different network from those used to process credit and debit cards. For this reason, most providers will require you to sign up for a separate ACH processing service as an optional feature when setting up your account. Adding eCheck processing to your account will allow you to accept bank transfers (i.e., eChecks) and paper checks with optional check scanning hardware. Processing rates for eChecks are very low because the money is coming directly out of the customer’s bank account. However, most providers will charge you a separate fee (usually around $20.00 – $30.00 per month) to add an eCheck processing service to your account. For small businesses, this might not be economical unless you have a significant number of customers who prefer to pay by check.

NFC Mobile Wallet Payment Acceptance

NFC-based payment methods such as Apple Pay and Google Pay have only been on the market for several years, and consumers have been slow to adopt them. However, they are becoming more popular over time, and it’s a good idea to offer them to your customers if you can. Most, but not all, modern credit card terminals and point-of-sale (POS) systems can accept these payment methods, but you’ll want to check the specific requirements for each particular NFC-based method you want to be able to accept. While NFC-based payment methods are ultimately tied to the user’s credit or debit card, they offer superior security and protection from fraud over traditional magstripe and even EMV card reading methods.

Mobile Payment Processing

Traditionally, mobile payment acceptance required a bulky wireless terminal. Not only were the terminals expensive by themselves, but they also needed a separate data plan (usually around $20.00 per month) to transmit the payment processing data. Then smartphones came along, and it wasn’t long before companies figured out that you could create an app that would effectively turn your phone into a credit card terminal. Coupled with an inexpensive card reader that plugged into the phone’s headphone jack, you had a simple mobile payment system that was far lighter and less expensive than the old wireless terminals.

While Square was the first company to pioneer this system, almost all other processors have followed suit, and today it’s hard to find a provider that doesn’t offer a similar mobile processing solution. Unfortunately, most of those competing systems fall far short of what Square has to offer. The apps themselves are very basic, and we’ve seen plenty of complaints about poor reliability, poor handling of tips, and a general lack of features. Magstripe-only card readers, while still offered for free or very low cost, are essentially obsolete liability traps with the switch to EMV-based chip cards. The gradual disappearance of the headphone jack from late-model smartphones further complicates matters. While this situation is bound to improve, today only Square and a small number of other merchant services providers offer both a fully-featured app and an EMV-compliant, Bluetooth-connected card reader.

eCommerce Payment Processing

To accept payments over the internet, you’ll need a software service called a payment gateway. Gateways can send transaction data to your provider for processing, and they also offer a number of other features you’ll need to run an online business. While features vary from one provider to another, most gateways offer support for recurring billing, online invoicing, and a secure customer information database to store your customer’s payment method data. Security features are also very important, with most providers offering some form of encryption or tokenization of data to keep it from falling into the wrong hands. Most merchant services providers offer either their own proprietary gateway or a third-party product such as Authorize.Net (see our review).

Online Reporting

Online dashboards are very popular these days, and almost all merchant services providers offer them. With these web-based dashboards, you can monitor the state of your business and track your transactions in real-time. They’re particularly valuable for eCommerce businesses and retailers who have more than one location.

Canadian Payment Processing

Unfortunately, most US-based providers do not offer accounts to businesses located in Canada. However, there are a few choices available north of the border that provide excellent service and fair prices. Helcim (see our review), one of our favorite providers, is based in Calgary and operates throughout both Canada and the United States.

Nonprofit Payment Processing

If you’re in the nonprofit sector, you’ll want to reduce your costs wherever possible. While you can sign up with any merchant services provider, it’s usually a better idea to go with one that offers reduced processing rates for nonprofits. Dharma Merchant Services (see our review), one of our highest-rated providers, specializes in helping nonprofits get set up with merchant services.

High-Risk Payment Processing

If your business falls into the high-risk category, your options for finding a provider will be more limited than they are for other merchants. The majority of merchant services providers, including most of those profiled below, do not accept high-risk merchants and will terminate your account if they later determine that you’re in the high-risk category. While there are many providers on the market that specialize in serving high-risk merchants, beware that many of them will charge you very inflated processing rates and account fees while providing poor customer service. For a look at the more reputable high-risk providers, check out our guide to the best high-risk merchant account providers.

Low-Volume Payment Processing

If your business only processes a few thousand dollars per month in credit/debit card transactions, or you’ve just launched, you’ll want to find a low-cost provider that won’t eat up your profits through high processing rates and hidden fees. Businesses at this end of the spectrum often don’t need a full-service merchant account and are better off going with a payment services provider (PSP). While you’ll pay somewhat higher processing rates, you’ll save money overall because most of these providers don’t charge any monthly fees. They also don’t require long-term contracts or charge early termination fees (ETFs), so you’ll be free to switch to a full-service merchant account with a different provider when your business is large enough to need one. For low-volume retailers, Square (see our review) is an excellent choice. The quickest and easiest option for eCommerce merchants is PayPal (see our review).

Payment Processing Companies

Below are short overviews of some of the best merchant services providers we’ve found for small businesses. Be sure to check out our full reviews for companies that you think might be a good fit for your business.

Square

Square Logo

Possibly the most popular provider for small businesses, Square offers simple flat-rate processing with month-to-month billing and no early termination fee. With Square, you can accept all major credit and debit cards. However, their processing rates don’t offer any discounts for debit card processing. Rates are fixed at 2.75% for swiped (or dipped) transactions, 2.9% + $0.30 per transaction for online payments, and 3.5% + $0.15 per transaction for keyed-in transactions.

Square offers a mobile-only processing solution with their Square Reader, which is now available in an EMV-compliant, Bluetooth-enabled product. While it’s not free like the old magstripe-only reader, it’s a great investment and much less expensive than competing products from other providers. The new reader also accepts NFC-based payment methods, future-proofing your system (at least for the time being).

Square also offers eCommerce payment processing, as well as a host of other features for both retail and eCommerce merchants. While it’s also available in Canada, high-risk merchants are not supported. There’s also no discount for nonprofit businesses. Square specializes in meeting the needs of low-volume merchants, and we recommend them for businesses processing less than $5,000 per month. For more details, see our complete review.

CDGcommerce

Another excellent choice for low-volume businesses, CDGcommerce offers a full-service merchant account for a low monthly fee of just $10.00 per month. That’s about as low as it gets for an actual merchant account, although you’ll want to seriously consider adding the optional cdg360 security package for an additional $15.00 per month. The company also offers true month-to-month billing with no early termination fee, which is a great feature for small businesses that don’t want to get trapped in a long-term contract.

In addition to basic credit/debit card processing, eCheck (ACH) processing is available for an additional fee. For eCommerce merchants, CDGcommerce offers a choice between their proprietary Quantum gateway and Authorize.Net (see our review). Either option is completely free, with no monthly gateway fees or additional per-transaction charges. For retailers, your account includes a “free” Verifone Vx520 EMV-compliant terminal. While there’s no charge for the terminal, you’ll have to pay a $79 per year maintenance fee, which is fully disclosed. You can also include a free mobile card reader with your account, but it’s magstripe-only at this time.

For businesses processing less than $10,000 per month, the company offers a simplified interchange-plus pricing plan. Rates are interchange + 0.25% + $0.10 per transaction for card-present transactions and interchange + 0.30% + $0.15 per transaction for online transactions. Discounted rates are also available for qualified nonprofit businesses.

CDGcommerce is not available in Canada and does not support high-risk merchants. For all others, it’s a great choice for a small business that wants a true merchant account with a minimum of expense or commitment. If the company sounds like a good fit for your business, check out our complete review.

Helcim

Helcim logo

With offices in both Canada and the United States, Helcim is another excellent provider that’s geared toward the needs of small business owners. Their Retail pricing plan costs only $15.00 per month and features interchange-plus rates starting at interchange + 0.25% + $0.08 per transaction. You’ll have to supply your own terminal, but the company offers them for sale at very competitive prices and doesn’t use overpriced terminal leases.

For eCommerce merchants, Helcim’s eCommerce pricing plan costs $35.00 per month and comes with the fully-featured Helcim Payment Gateway. Processing rates are all interchange-plus, and start at interchange + 0.45% + $0.25 per transaction. As with the Retail Plan, these are the highest rates available, with lower rates available if you meet their monthly processing volume requirements. Merchants who sell both online and from a storefront can get a combined Retail + eCommerce plan for $50.00 per month. Discounted rates are available for nonprofit businesses.

Helcim offers eCheck (ACH) processing as an optional add-on for $25.00 per month and $0.25 per check. Their mobile processing solution is free and included with all retail accounts. However, they currently only offer a magstripe-only card reader. To keep costs low, the company does not accept high-risk merchants. One caveat: Helcim freely discloses that their pricing structure will not be cost-effective for low-volume businesses processing less than $1500 per month. Read our full review for more details.

Dharma Merchant Services

Dharma Merchant Services review

You’d be hard-pressed to find a merchant services provider that’s more ethical and transparent than Dharma Merchant Services. They offer true month-to-month billing with no early termination fees, interchange-plus pricing, and low account fees – all of which are fully disclosed on their website. Account fees are only $10.00 per month for basic credit and debit card processing. eCheck (ACH) processing is available through one of several optional programs.

Dharma has special pricing plans for storefront, restaurant, and virtual (eCommerce) businesses. Processing rates range from interchange + 0.20% + $0.07 per transaction to interchange + 0.35% + $0.10 per transaction depending on your business type. Recurring and incidental fees are all disclosed on their website, including a $7.95 per month PCI compliance fee. The company also offers special discounted rates for nonprofits.

Mobile processing is supported through First Data’s Clover Go card reader and app. This service costs an additional $10.00 per month, plus $99 for the Clover Go Basic Reader (or $139 for the Clover Go Contactless reader). Dharma is only available to US-based merchants and can only support certain limited categories of high-risk businesses. The company’s fee structure is only suitable for businesses processing at least $10,000 per month, something which they also fully disclose on their website. For a more in-depth look at Dharma Merchant Services, please see our complete review.

Payline Data

Payline Data high risk merchant accounts

Another great option for small or new businesses is Payline Data. They offer a number of simplified pricing plans, all featuring interchange-plus pricing. Their Payline Start plan, designed specifically for new businesses, has no monthly fee and features a single processing rate of interchange + 0.50% + $0.10 per transaction. There’s also a $99.00 per year PCI compliance fee and a $25.00 monthly minimum, but that’s about it for recurring fees. Lower rates are available under the Payline Shop plan, which costs $9.95 per month. For eCommerce merchants, Payline Connect charges somewhat higher rates, but includes a payment gateway and virtual terminal for $10.00 per month.

While all accounts include basic credit/debit card processing, eCheck (ACH) processing is a separate service. Payline doesn’t disclose the cost of this option. They also offer Payline Mobile, their proprietary mobile processing solution. It costs $7.50 per month for merchants on the Payline Start plan, and features the Ingenico RP457c card reader, which can accept magstripe, EMV, and NFC-based payment methods and connects to your smartphone (or tablet) via either the headphone jack or Bluetooth.

Payline Data offers discounted rates to nonprofit businesses and can also support some high-risk merchants. It doesn’t advertise this capability, however, so you’ll have to ask your sales representative about it. The company’s services are only available to businesses in the United States. For a more detailed look at Payline Data, check out our complete review.

Fattmerchant

For a unique take on merchant account pricing, take a look at Fattmerchant and their subscription-based pricing. Their standard account pricing plan for both retail and eCommerce merchants includes a $99.00 per month subscription fee, but offers processing rates of interchange + $0.08 per transaction (for retail sales) or interchange + $0.15 per transaction (for online sales). These low rates eliminate the standard percentage markup that most other providers charge, as those charges are included as part of your monthly subscription fee. Almost all other account fees are also included in your subscription price, although you’ll have to pay an extra $7.95 per month if you need a payment gateway.

Fattmerchant can also process eCheck (ACH) payments, although they don’t disclose pricing for this option. Mobile processing is supported via the Fattmerchant Payments Mobile app, which is currently only available for iOS. The Fattmerchant Mobile Card Reader can accept either magstripe or EMV transactions and is included with your account.

Fattmerchant doesn’t advertise any discounted rates for nonprofits, and they don’t accept high-risk businesses. They’re also only available to US-based merchants. While their subscription-based pricing can result in significant savings for businesses with a sufficiently high processing volume, they’re not ideal for very low-volume merchants or businesses that are just starting out. If you’re regularly processing over several thousand dollars per month, however, we encourage you to compare their pricing with what you’re currently paying. You might be able to save a lot of money overall despite the relatively high subscription fee. For a more in-depth look at Fattmerchant, please see our complete review.

Final Thoughts

Selecting a merchant services provider should be approached with great caution. You need to really do your homework in evaluating the numerous plans and options each provider has to offer, as well as coming up with the most accurate estimate of total costs that you can. While a basic account for credit or debit card processing can be had for relatively little money, additional services will add to your costs quickly. Credit card terminals, a payment gateway, or an eCheck processing service will usually cost you more, although they will obviously be worth the price if your business needs them.

The six merchant services providers we’ve profiled here represent the best choices for a small business or one that’s just starting out. If you’re just opening your business and don’t have an established processing history or any idea of how much your processing volume will be, Square is probably your best bet. The up-front cost to start processing is exceptionally low, and the pay-as-you-go nature of their service will help you avoid monthly fees if you don’t need to process transactions every month.

When your business is large enough that you need the stability and additional features of a true merchant account, CDGcommerce, Helcim, and Payline Data are great choices. You’ll get a full-service merchant account for a very low price and will have the flexibility to switch providers without incurring a penalty. Once your business gets a little larger and more stable, Dharma Merchant Services and Fattmerchant can really save you money on your overall processing costs. To compare our top-rated providers side-by-side, check out our Merchant Account Comparison Chart.

The post Payment Processing Companies And Services For Small Businesses appeared first on Merchant Maverick.

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The Best Credit Card Reader For Your Small Business

So you want to use your cell phone or tablet to start accepting payments for your business. Whether this is your first time around or you’re just wondering if it’s time to update that old credit card reader you’ve had for four years, there’s certainly a lot to consider. What kind of technology is out there? How much does a cell phone credit card reader cost? Should I get a credit card machine and POS instead? Which are the best credit card readers?

I’ve seen a lot of mobile card readers in my time. And the first thing to understand is that the card reader is tied to the mobile processing app (mobile point of sale, or mPOS for short). Sadly, we can’t just mix and match one card reader with another app. So before anything, you need to look at the software and make sure it’s a good fit for your needs. You should also check the processing rates and the cost of the hardware.

Apart from aesthetics, the reality is there aren’t a lot of differences between one card reader and the next. They all have the same core features, and they all use the same sort of security. Reliability is as much a product of the app design as it is the hardware design, sometimes moreso. So while you do want a good, affordably priced credit card reader, you should first narrow down the list of potentials using the software as your main criteria. Once that’s done, you can take a closer look at all the hardware.

If you are curious about what your hardware options are, read on! I’ve compiled a list of the most popular credit card readers and their specs. Make sure you read our reviews for each mobile app so that you understand the drawbacks and shortcomings of each as well as all the advantages.

But first, let’s set the record straight.

Credit Card Reader vs. Credit Card Machine: Know Your Terms

So what’s the difference between a credit card reader and a credit card machine? While it’s certainly possible that you might encounter some people who use the terms interchangeably, “credit card reader” is generally the term for small mobile devices that connect to smartphones and tablets and process transactions through a mobile app. This connection can be physical or wireless. However, the smartphone or tablet typically has to also have either cellular signal or a Wi-Fi connection.

A credit card machine (also called a credit card terminal) is larger, not mobile, and generally connects to a full-fledged POS. They may or may not have an integrated receipt printer or a PIN pad device for customers. Credit card machines require a connection to either a phone line or the Internet to function. Some machines are capable of wireless Internet connections, but they do add to the cost.

The biggest difference between a credit card reader and a credit card machine is price, though. A mobile card reader can cost anything from $10 to about $80, whereas the typical entry-level price for a machine is about $120. However, depending on what features are included, a credit card terminal can cost $600 or more.

Types of Credit Card Readers for Phone & Tablet

When categorizing credit card readers, you need to consider two criteria: how the device connects to your phone or tablet, and which payment methods the device accepts (we’re not talking about manual entry options just yet).

Phone Connection Options:

  • 3.5mm/Headphone Jack: Most of your entry-level credit card readers will connect to a phone or tablet via the 3.5mm headphone jack. However, it’s worth noting that this design is slowly fading out. Part of the driving force is Apple’s removal of the headphone jack from its iPhones, but I think it’s also a result of our overall shift toward wireless. It’s worth pointing out that both Square and PayPal have Lighting to 3.5mm headphone jack adapters that will allow you to continue to use their magstripe readers.
  • Bluetooth: Bluetooth readers are becoming increasingly common. They’re compatible with both iOS systems, they’re secure, and they allow for some sophisticated card reader designs. The one downside to Bluetooth readers is that they can run low on power quickly if they’re always connected without a “sleep” mode.

Generally speaking, credit card readers for smartphones and tablets support one of these connection methods, but not both. There’s always an exception to the rule, however. With Apple moving toward Lightning ports for everything, it’s worth getting a Bluetooth device, which will ensure that no matter what smartphone or tablet you get in the future, the card reader will be able to connect.

Supported Payment Methods

  • Magstripe: Until 2015, magstripe transactions were the only form of credit card payment commonly accepted in the US. Magstripe transactions (also referred to as swipe transactions because they are made by swiping the card through a terminal or card reader) are still supported, but becoming superfluous as other, more secure payment methods become available.
  • EMV: In October 2015, a major liability shift occurred, shifting responsibility for fraudulent swipe transactions onto merchants, if that card had an EMV chip and the merchant did not have an EMV-enabled credit card reader. As a result, you probably saw a surge of chip cards appear, and payment processors rushed to introduced new hardware capable of processing chip card transactions. Chip cards are more secure and can help reduce in-person fraudulent transactions.
  • NFC/Contactless: Apple Pay, Android Pay, Samsung Pay, and all of the other “Pay” apps you’ve seen rely on NFC (near-field communication) technology. Transactions are often called contactless or “tap” transactions.

All mobile card readers on the market accept some combination of these three payment methods. As a merchant, it’s important that you are able to process EMV transactions to protect yourself against liability for fraudulent transactions.

Card Readers for iOS vs. Card Readers for Android: Is There a Difference?

Generally speaking, mPOS apps tend to offer more features to tablet users, especially iPads. But apart from enhanced features for tablets, there usually isn’t much difference between apps for iOS vs. apps for Android.

The same goes for mobile card readers. Unless the app itself is built to function only on one operating system, a card reader for iPhone or iPad works with an Android phone or tablet. So if your business has a mix of Android and iOS devices, you can use your hardware on both. You’ll just have to worry about pairing and re-pairing any Bluetooth devices as needed.

Now that we’ve identified the defining traits of credit card readers, let’s look at the mobile card readers from the most popular mPOS systems: Square and PayPal.

Square Credit Card Readers

Square (read our review) is definitely a leader in the mPOS industry, both for its software and hardware. It was one of the first mobile systems to embrace chip cards and it seems to put a high priority on keeping its hardware affordable.

The one piece of Square hardware that we haven’t included here is the Square Register, which is more of a full-fledged POS than a mobile system. Check out our full review of Square Register for a closer look at the system.

Square Magstripe Reader

If I wanted to be extremely hyperbolic, I would say that Square’s magstripe reader is synonymous with mobile processing. Instead, I’ll just say that the white and boxy device certainly is iconic. The overall design hasn’t changed in years. Available for free if you order directly from Square or $9.99 at retail stores such as Staples (Square will reimburse you later), this entry-level device connects via the headphone jack, and as the name says, handles magstripe transactions only.

  • Cost: Free ($9.99 reimbursed if bought at a retail location)
  • Connection: 3.5mm
  • Payment Types Supported: Magstripe

Square Chip Card Reader

If you just glance at the Square Chip Card Reader (read our unboxing review), you might not notice any immediate differences between the magstripe reader and the chip card reader. That’s because Square didn’t exactly reinvent the wheel. The Chip Card Reader is slightly thicker than the original, with an extra slot for inserting the chip end of a credit or debit card. Unlike the magstripe reader, you need to periodically charge this model. Square sells the Chip Card reader for $29, which is, all considered, a pretty good price for a device that can handle magstripe and EMV transactions.

  • Cost: $29
  • Connection: 3.5mm
  • Payment Types Supported: Magstripe, EMV

Square Contactless & Chip Card Reader

The Contactless and Chip Card Reader from Square doesn’t exactly break the mold as far as design: White, boxy, with Square’s logo set into it. What’s that expression? If it isn’t broke, don’t fix it?

Unlike the previous two card readers, the contactless and chip card reader relies on a Bluetooth connection to process transactions. And it doesn’t support magstripe cards at all. To get around this, Square includes a magstripe reader in the package as well.

The contactless and chip reader sells for a very reasonable $49, but if the upfront investment makes you cringe a bit, Square also offers an installment plan that will allow you to pay off a portion of the cost each week. Expect to pay a little bit more in the long term as a trade-off for the convenience of the installment plan, but it’s nowhere near as bad a hardware lease program from a traditional merchant account.

The contactless and chip reader is a slim, slick little device and you can certainly use it in a handheld mobile situation. But Square also sells a clever little dock to charge the device and still allow you to use it. The dock goes for $29 on its own, but it is optional.

  • Cost: $49 (dock available for additional $29)
  • Connection: Bluetooth
  • Payment Types Supported: EMV, NFC/Contactless (separate magstripe reader included)

Square Stand

The Square Stand isn’t really a card reader — it’s an iPad stand with an integrated magstripe reader. But it was one of the devices that helped make Square so popular with merchants. These days Square sells the stand with a contactless and chip card reader plus the dock. But it merits a mention here because it shows that mobile card readers can also be used in countertop/retail setups. Square even sells bundles and kits with everything you need to get set up.

The Square Stand plus the card readers will run you $169, which is less than you’d pay for all the individual components — the stand ($99 originally). The contactless and chip card reader ($49), and the dock ($29). Bundles that include a cash drawer and receipt printer start upwards of $500, not including the iPad.

  • Cost: $169
  • Connection: Bluetooth
  • Payment Types Supported: EMV, NFC, Magstripe (integrated into tablet stand)

PayPal Credit Card Readers

The other major name in the mPOS space (and commerce in general) is PayPal. The company’s mobile processing app, PayPal Here (read our review), isn’t quite as full-featured as Square, but you’ll find a lot of similarities between the two, especially as far as business model.

PayPal Mobile Card Reader

PayPal’s mobile card reader is a standard magstripe reader with a headphone jack connector. While the color has changed from PayPal blues to black, the overall shape hasn’t: it’s still a simple and quite stable triangle that connects via a headphone jack. There’s no frills or fuss here.

PayPal used to offer the mobile card reader for free through its website, but that’s no longer the case. It’ll cost you $14.99 to get started, though it’s worth the extra money to upgrade to at least an EMV reader.

  • Cost: $14.99
  • Connection: 3.5mm
  • Payment Types Supported: Magstripe

PayPal Chip & Swipe Reader

PayPal’s Chip and Swipe reader is a step up from its Mobile Card Reader, with a sleek rectangular design. It’s about the size of a credit card and slim at just half an inch thick. Plus, $24.99 for a Bluetooth device that accepts both EMV and magstripe, makes it one of the more affordable options for card readers, especially if all you need is mobile support.

  • Cost: $24.99
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV

PayPal Chip & Tap Reader

If you want more than just magstripe and EMV support, PayPal also sells a Chip and Tap reader that allows you to accept Apple Pay, Android Pay, and other contactless methods. The Chip and Tap reader looks quite a bit different from the Chip and Swipe reader. Though it’s still black, it’s boxy and measures 0.75 inches in depth.

I actually hate to say this, but the PayPal reader reminds me a bit of Clover Go’s all-in-one reader, just more refined. And unlike the Chip and Swipe reader, this design is meant for both mobile and countertop use — and PayPal offers a charging dock for those who are interested in a countertop setup.

Alone, the reader sells for $59.99, but a bundled kit with the reader and dock sells for $80 (PayPal indicates that’s a markdown from $89.99 on its website). I don’t see the dock listed for sale separately, but I would assume it would sell for $30 on its own.

  • Cost: $59.99 (bundle available for $79.99)
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

PayPal Chip Card Reader

PayPal’s Chip Card Reader was actually the first EMV-enabled reader the company offered, and it wasn’t PayPal’s own design. The reader is actually a branded Miura M010, which has also previously been offered by Square, and is still available from Shopify as well.

The Chip Card Reader is a handy little mobile reader, but you can get a dock for it and mount it in a countertop setup (at least, until PayPal possibly phases this device out of its lineup). Despite its rather bland name, this reader accepts magstripe, EMV, and NFC/contactless payments. However, it comes at a steep price $79, which is still less than the original $150 it sold for. It’s worth noting that despite the PIN pad, it doesn’t support PIN entry because PayPal Here doesn’t support debit transactions.

  • Cost: $79
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

Alternatives to Square & PayPal Readers

While Square and PayPal are certainly two of the biggest names, they’re not the only options if you need a mobile credit card reader. Let’s take a look at some of the other processors and what hardware they offer.

Shopify

Shopify is mostly associated with eCommerce, but it’s moved toward an all-in-one approach that includes a POS (read our review). The full-fledged POS package is designed for a countertop setup and syncs with your Shopify store. However, for a very reasonable $9/month, you can get the Shopify Lite plan, which supports sales through social media and a buy button on your own website, as well as access to the mobile POS. Keep in mind that this is designed almost exclusively for retail environments. For mobile users, though, Shopify offers two readers.

Shopify Tap, Chip & Swipe Reader 

I mentioned before that PayPal’s Chip Card Reader is actually made by another company and is called the Miura M010. Shopify licenses the same device and calls it the Tap, Chip and Swipe reader.

Again, you have a Bluetooth connection with support for magstripe, EMV, and contactless transactions. Shopify sells the reader for $89, which is on the higher end of things. The dock sells for $39. However, the reader is well designed and very functional, and if you want to accept Apple Pay and other “Pay” apps with Shopify, it’s the only option.

  • Cost: $89 (dock available for $39)
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

Shopify Chip and Swipe Reader 

Shopify’s Chip and Swipe Reader is a sleek white device. As the name implies, the reader can handle both magstripe and EMV transactions, but not contactless/NFC. I like that it comes with a dock charging dock by default, instead of as a pricey add-on.

The retail price for the reader is listed as $29, but as I am writing this, Shopify is offering it for free. The Chip and Swipe Reader is easily one of the more beautiful card readers I’ve seen, as well as innovative and well priced.

  • Cost: $29
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV

Payline Mobile

Payline Data is a traditional merchant account processor, but its Payline Mobile app (read our review) is actually a viable standalone processing option even for low-volume and seasonal merchants. The company offers a standard magstripe reader (the Ingenico G5X) that isn’t particularly interesting. Its other mobile reader, though, is the Ingenico RP457c, and it is definitely one of the more innovative card reader designs I’ve ever seen.

For starters, the RP457c can connect to cell phones and tablets through the headphone jack or Bluetooth, which is very uncommon. It also supports magstripe, EMV, and NFC transactions all in one. The device is designed to clamp onto phones or rest in a dock for use as a wireless reader.

Payline doesn’t disclose its current pricing for the RP457c, in part because some merchants may be eligible for a free device. However, I was able to confirm that the reader retails for $150, which is quite expensive.

  • Cost: $150
  • Connection: 3.5mm, Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

SumUp

SumUp (read our review) is a European company that opened up processing for US merchants in 2017. While it’s not as comprehensive as other mPOS options, it does everything most merchants will need to do. It’s also worth pointing out that the SumUp mobile card reader, called the SumUp Air, actually won an award for its innovative design.

The SumUp Air shows its European sophistication with its sleek white minimalist design. It relies on a Bluetooth connection to process magstripe, EMV, and contactless transactions. If you want more information, check out our unboxing review of the SumUp card reader.

  • Cost: $69
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

Clover Go

Clover Go (read our review) is the mobile extension to the Clover family of POS products developed by First Data. It functions best as an extension of Clover, but it can be a standalone POS option. However, pricing for the hardware as well as payment processing can vary significantly depending on which reseller you go through, and you should be wary of sales gimmicks and possible contracts with early termination fees.  However, don’t forget that anyone selling Clover products is just reselling First Data’s processing services.

Clover Go Reader 

Clover’s basic “entry level” reader is a headphone jack reader that supports magstripe and EMV transactions. The design is overall larger than most comparable devices, but Clover does include a clamp to help stabilize the card reader while attached to a phone or tablet.

Pricing for the Clover Go reader will depend on resellers. Some may even offer it for free. Unlike its all-in-one sibling, you can’t get this reader through the Apple Store and if you sign up with First Data directly you’ll probably be offered the All-In-One Reader first and foremost.

  • Cost: Varies according to reseller
  • Connection: 3.5mm
  • Payment Types Supported: Magstripe, EMV

Clover All-In-One Reader

I said earlier that the PayPal Chip and Tap Reader reminded me of Clover Go. That’s because Clover Go is also a square, boxy device with very similar dimensions. However, whereas PayPal’s is black, Clover Go’s is white.

You’ll also find the All-In-One Reader comes with a dock. It’s not the most elegant design, but it will allow you to charge the device or keep it on a countertop while still processing card transactions.

Unfortunately, pricing for this card reader varies depending on which company a merchant chooses to sign up with. You can get it direct from First Data (or the Apple Store) for $39.95, not counting the dock, which sells for $34.  

  • Cost: $39.95 (through First Data or Apple Store; other prices vary according to reseller)
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

Intuit/QuickBooks GoPayment

Intuit’s mobile payment solution, QuickBooks GoPayment (read our review) appeals mostly to a small but viable niche — QuickBooks Online customers who need an easy way to take payments in person. While the app isn’t loaded with advanced features, it will work pretty well for merchants with simple needs. Intuit offers two readers to address merchant needs.

Chip and Magstripe Reader

Intuit’s Chip and Magstripe reader is a small, gray, unassuming device. It doesn’t have quite the sophistication of some other readers (I might even call it bland), but the design is overall good. The curves have a sort of friendliness about them rather and prevent it from looking boxy like other devices. As the name implies, this card reader supports magstripe and EMV transactions. It connects to a phone or tablet via Bluetooth.

The Chip and Magstripe Reader goes for $19 normally, but Intuit is offering the reader free for new merchants. That puts it at the lower price end, especially for a Bluetooth enabled device with EMV. You can also connect the device to computers running QuickBooks Desktop Pro 2018 and future versions of the software.

  • Cost: $19 (free with signup for new merchants)
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV

All-In-One Card Reader

Intuit’s newer card reader is an all-in-one device that connects via Bluetooth. But unlike its sibling, this device supports magstripe, chip card, and contactless transactions. By default, it’s meant to nest in a charging dock.

Intuit sells the all-in-one reader for $49, which is not a bad price at all considering that the dock/cradle is included at no extra charge. It has the same sort of nondescript gray finish, but Intuit has embraced a curvy aesthetic that is easy on the eyes.

  • Cost: $49 (including dock)
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

PayAnywhere

Last on the list is PayAnywhere (read our review). While the name isn’t as recognizable as some of the alternatives, PayAnywhere’s mPOS does have some good features and interesting hardware. Its biggest shortcoming is simply the quality of customer service and some practices involving its Storefront plan.

PayAnywhere offers merchants a choice of two readers for merchants, though they still leave me a bit perplexed in terms of design.

PayAnywhere 2-In-1 Reader

PayAnywhere’s entry-level reader is a 2-in-1 device with magstripe and EMV support and Bluetooth connectivity. It looks pretty simple, and it actually reminds me of PayPal’s Chip and Tap reader with its shape and coloring.

There’s not much more to say about this little device except that PayAnywhere offers it free for new merchants. Additional 2-in-1 readers run for $30.

  • Cost: $29.95 (free for new merchants)
  • Connection: Bluetooth
  • Payment Types Supported: Magstripe, EMV

PayAnywhere 3-In-1 Reader

I think the most interesting thing about PayAnywhere’s 3-In-1 Reader is that it’s the only mobile card reader I’ve seen that supports NFC and connects via a headphone jack. (The Ingenico RP457c can connect via headphone jack OR Bluetooth, so I don’t count it in the same category.) It looks shiny and futuristic with its black finish and lights, which is ironic for a device that uses a dying connection method.

PayAnywhere offers its 3-in-1 device for $40, but on the website you’ll also see an offer for free processing on your first $5,000 in Apple Pay transactions (valued at $135). However, an offer like that should not be the deciding factor in choosing a processor.

  • Cost: $39.95
  • Connection: 3.5mm
  • Payment Types Supported: Magstripe, EMV, NFC/Contactless

Is a Mobile Credit Card Reader Absolutely Necessary?

You don’t actually have to have a mobile credit card reader to process payments with a mobile POS system.

Flint Mobile, a mobile processor that works through Stripe, has no credit card readers at all. Instead, the app relies on a device’s camera to scan cards. The camera doesn’t actually snap a photo of the card, which would be a huge security issue. But the app is able to open the camera and scan a card the same way QR code readers are able to access the camera to open QR code links. Flint has a couple of filters it applies to the camera for added security.

That said, Flint isn’t the only mobile option with this ability. PayPal Here and Intuit GoPayment also include the camera scanning feature.

Not only that, but most mPOS apps also include a feature that allows you to manually key in transactions. These process at a higher rate that swiped/dipped/tapped transactions because they’re processed as card-not-present, like ecommerce transactions. But it’s a useful alternative when the card reader is being glitchy or the card is very worn. The notable exception to all this is SumUp, a company that started in Europe and doesn’t support manual entry for cards except through its virtual terminal.

Of course, if you don’t want to pay extra for manually entering transactions, it might be best to spend a little extra money and buy a backup card reader or two in case one starts to misbehave.

Are Free Credit Card Readers Worth It?

Several mobile POS options (including Square) provide an incentive for potential customers in the form of a free credit card reader. This can certainly make it more tempting to try out a payment processing service, but it shouldn’t be the deciding factor.

For one, free card readers tend to be pretty basic. Some have EMV support, but none of the free card readers on this list support contactless payments. Contactless support may not be mandatory for everyone, but EMV support should be a mandatory feature for every merchant. A reader with a Bluetooth connection will also ensure it’s future-proof no matter what phone or tablet you upgrade to later on.

Two, a free mobile card reader will absolutely not offset a processor’s shortcomings, such as poor customer service or missing features. It’s smarter for merchants to make a decision based on the quality of the mobile app, its features, and the processor’s customer support.

So while the ability to try some mPOS options without any upfront investment is nice, please don’t let a free credit card reader be the reason you pick one processor over another. Make sure you explore all of your options.

Don’t let a free reader be the determining factor in choosing an mPOS.

Final Thoughts

I’m not going to try and convince you that mobile credit card readers are the world’s most fascinating subject (even if I could probably talk your ear off for a couple of hours about all the different designs and features and how they embody the philosophies of the companies that sell them).

But if nothing else, you should take away a few key ideas that will prepare you to choose a mobile point of sale app and a credit card reader:

  • Software is more important than the hardware. Make sure the app has what features you need before you set your heart on a device.
  • Make sure the card reader you choose has EMV support. In 2018, there’s no reason why you shouldn’t be taking such a basic step to protect yourself and your business.
  • Prices for credit card readers range from totally free to upwards of $75. How much you want to spend is entirely up to you, but you will generally pay more for Bluetooth connectivity and for NFC support. Don’t be suckered in by the offer of a free reader, because there are lots of other criteria you should consider first.
  • You don’t technically need a mobile reader to take payments on a phone or tablet. However, you will pay more to process manually entered transactions in your mPOS app, so it’s a good idea to get one anyway.

Thanks for reading! If you’re ready to choose an mPOS app, a great place to start is our mobile processing comparison chart! Otherwise, if you have questions, feel free to leave us a comment!

The post The Best Credit Card Reader For Your Small Business appeared first on Merchant Maverick.

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What Is Payment Processing?

What Is Payment Processing?

Running your own business always works much better when your customers actually pay you for the products and services you provide for them. Paying for purchases has become a lot more complicated in the modern world than it used to be. It wasn’t all that long ago that cash and paper checks were the preferred payment methods, but now consumers increasingly prefer credit or debit cards. Online payments, while commonplace today, have only been available for a little over twenty years. The recent introduction of NFC-based payments, which allow a consumer to make a payment with their smartphone (or smartwatch), adds yet another way for your customers to complete a purchase.

Each of these payment methods requires specific hardware (and, in some cases, software) that you’ll need if you want to support them. The days of just having a cash drawer in your shop are long gone. In this article, we’ll review the various payment methods you’ll want to be able to accept, as well as explain how those payment methods are processed so you can receive your money.

Payment Methods

Customers have a lot more options for paying for purchases today than they did just a few years ago. While cash is still the simplest payment method, it’s fallen out of favor as the use of credit and debit cards has risen. Merchants, of course, prefer to be paid in cash because they don’t need a merchant account to process these transactions, and they receive 100% of the sale price immediately. Paper checks are almost as good, although they require a trip to the bank and there is a significant risk of fraud or having the check “bounce” due to insufficient funds. While some customers prefer to pay in cash or by paper check, they’re a dwindling minority. Most customers today will want to use a credit or debit card, which requires a merchant account and a processor to ensure you receive your payment.

Credit Card Processing

While credit cards have been around for over 100 years, their use has skyrocketed within the past few decades. Although this has also led to a nationwide crisis in consumer credit card debt, it’s also created headaches for merchants who have to set up a merchant account and pay for processing costs. Nonetheless, credit card use has become so prevalent that for most merchants, the additional sales more than make up for the cost of maintaining a merchant account.

While most credit cards are issued by banks, they’re also sponsored by a small number of credit card associations, such as Visa, MasterCard, Discover, and American Express. These entities charge a variety of fees whenever a purchase is made with one of their cards. These fees are collectively known as interchange. When a transaction is processed, the processor will charge you both the interchange and a markup in exchange for its processing service. Unfortunately, interchange rates vary widely based on the type of card used and other factors, and this has made it easier for processors to rake in higher profits by offering merchants “simplified” processing rate plans such as flat-rate or tiered pricing. For this reason, we recommend interchange-plus pricing for most established businesses. This pricing method adds a fixed markup to each transaction, regardless of types. Example: interchange + 0.30% + $0.15 per transaction. While the interchange variable will vary widely with each transaction, the markup that you pay to your processor will always be the same.

In addition to paying processing rates for each transaction, maintaining a merchant account also usually requires the payment of a variety of account fees. These fees are different for every processor, and sometimes even among merchants using the same processor. For a more in-depth discussion of merchant account fees, please see our Complete Guide to Credit Card Processing Rates and Fees.

The advent of interconnected banking and credit card processing networks has drastically sped up the process of purchasing with a credit card. While the transaction approval process is rather complicated, it can be completed within just a few seconds in most cases. Here’s a very simplified explanation: The consumer’s credit card data is submitted to the processing network, which contacts the issuing bank to ensure that sufficient credit is available on the consumer’s account to cover the cost of the purchase. Several anti-fraud checks are also completed, and if no red flags are raised, the transaction is approved. The processor then processes the transaction, paying the interchange to the issuing bank and credit card associations, and keeping the remainder of the processing charge. Only then are funds released to the business owner’s merchant account. Unfortunately, this part of the process takes much longer, as most merchants submit their transactions in a batch at the end of the day. It can take up to several days before funds are deposited into your account.

Debit Card Processing

Paying with a debit card is also increasingly popular with consumers, particularly for small, day-to-day purchases such as groceries and automobile fuel. These transactions are also much easier to process, as the issuing bank doesn’t have to decide as to whether to issue a credit to the consumer to cover the cost of the purchase. As long as there are sufficient funds in the consumer’s bank account, the transaction will usually be approved.

Because there is no need to issue a credit, the overall risk associated with debit card use is significantly lower than it is with credit cards. For this reason, the interchange rates for debit card use are substantially lower as well. One of the reasons we encourage you to avoid tiered pricing plans is that many of the processors that offer these plans charge the same rates for debit card use as they do for credit cards. This can result in you paying significantly more for debit card processing than you should. This issue is also a shortcoming with flat-rate pricing plans offered by providers like Square (see our review). However, the lack of account fees usually associated with these types of processors often outweighs this consideration, especially for small or seasonal businesses.

eCheck (ACH) Payment Processing

Although it’s becoming less common, some consumers still prefer to pay by check whenever possible. Merchants can accept paper checks without the need for an eCheck processing service, and you’ll receive 100% of the sale price. However, you’ll have to make a trip to the bank to cash the check, and it might be rejected due to insufficient funds. There’s also the possibility of losing a paper check.

eCheck processing services eliminate all these problems, but they’re not free. Because not all merchants need them, most providers offer eCheck processing as an optional service, and charge a monthly fee for it (usually $20.00 – $30.00). You’ll also have to pay a small transaction fee for each processed check, but it’s much less than most credit or debit card transactions.

Most eCheck processing services require the use of a check scanner, which scans an electronic copy of the check and submits it to the customer’s bank to confirm the availability of funds. As long as the check won’t bounce, the transaction is approved immediately. Because of the monthly fees associated with most eCheck processing services, we recommend them only to businesses that accept a high volume of paper checks from their customers.

Digital Wallet Acceptance

We’re using the term “digital wallet” here to include payment methods that rely on near-field communication (NFC) technology. NFC-based payment methods utilize small, very short-range radios in both the consumer’s payment device (typically a smartphone or smartwatch) and the merchant’s credit card terminal. Apple Pay and Google Pay are currently the most popular forms of NFC-based payments. This technology has only been on the market for a few years and acceptance has been slow. The use of this payment method is growing, however, and merchants should consider adding it to meet the increasing demand. NFC payment methods are, of course, ultimately tied to the user’s credit or debit card, and these transactions are processed as a regular card transaction without any additional fees or markup. While they’re generally not available to independent merchants, other forms of digital wallet payment, such as Walmart’s proprietary Walmart Pay, use the smartphone’s camera and a QR code scanner to accept payments.

Payment Processing Methods

Credit and debit card transactions will be processed either through a traditional, full-service merchant account or a third-party payment processor like Square (see our review). While eCheck payments also go through your merchant account, they are processed under an Automated Clearing House (ACH) system that’s separate from the one used to process credit/debit cards.

Merchant Account and Payment Gateway

Merchant accounts can be used to accept both card-present and card-not-present transactions. Processing rates for card-not-present transactions are usually higher due to the higher level of risk associated with not having the cardholder’s magstripe or EMV data available. While card-present transactions require a magstripe or EMV terminal, card-not-present transactions can be keyed in manually or processed online using a payment gateway. While eCommerce-only merchants require a gateway to accept payments, retailers don’t need them. However, they’re becoming increasingly popular with retail merchants who want to add an online sales channel or take advantage of their integration with cloud-based reporting or inventory management applications.

Third-Party Payment Processor

Third-party payment processors (also known as payment service providers (PSPs)) offer credit/debit card processing services without a full-service merchant account. These types of payment processors are also known as aggregators, as they combine their merchant’s accounts rather than issue each business a unique merchant identification number. This arrangement eliminates most of the account fees associated with traditional merchant accounts, but also results in an increased risk of account freezes or terminations. Third-party processors generally charge using a simplified flat-rate pricing plan with rates that are higher than those available under interchange-plus pricing. The most well-known PSPs include Square (see our review) and PayPal (see our review).

ACH Payment Processor

As we’ve noted above, eCheck payments go through a separate processing method than credit/debit cards. While it’s possible to have an eCheck-only service without the need for a merchant account, this arrangement won’t be practical for most businesses. eCheck processing is usually offered as an optional service (at additional cost) due to the decreasing use of paper checks by consumers.

Final Thoughts

With so many payment methods to choose from, you’ll have to decide which ones are important to your business. While there are still a handful of cash-only businesses out there, today most retail merchants accept credit and debit cards due to the increased sales generated by offering this payment option. Whether you need a full-service merchant account or a third-party payment processor will depend on the size and nature of your business. Merchants operating seasonally or processing only a few thousand dollars per month can usually save money by signing up with a third-party payment processor. Most other businesses will require a full-service merchant account due to the lower processing costs and increased account security. For a brief overview of our highest-rated merchant account providers, check out our Merchant Account Comparison Chart.

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What Is A Merchant Services Provider?

What is a merchant services provider?

If you’ve just started your own business or you’re looking to add credit and debit cards as payment methods, you’re going to be bombarded by a bewildering variety of new terms and concepts that you’ve never encountered before. One very basic term you’ll want to familiarize yourself with is the type of business entity known as a merchant services provider.

To understand what a merchant services provider is and what it can do for your business, you’ll first need to understand the concept of merchant services. This term describes the range of services and hardware and software products that allow merchants to accept and process credit or debit card transactions. Before the internet came along, things were pretty simple. Merchant services consisted of countertop terminals to input card payments, processing services to approve the transaction, and merchant accounts to deposit the money in after the sale. Today, it’s a much more complicated landscape, with eCommerce opening up far more opportunities for selling products remotely than just mail and telephone ordering. Software products such as payment gateways allow customers to pay for purchases directly over the internet, while inventory management and online reporting services give you the power to track virtually every aspect of your business on your computer.

Merchant services providers are sometimes also referred to as acquirers, processors, or merchant account providers. Here at Merchant Maverick, we use the term merchant services providers as a catch-all to cover entities such as merchant account providers, payment services providers (PSPs), payment gateway providers, and any other type of business that allows you to accept payment methods other than cash or paper checks.

Types of Merchant Services Providers

Not all merchant services providers offer the same features, but most fall into one of several categories that help to differentiate them a little from their competitors. The most common types of merchant services providers include the following:

Merchant Account Providers

These entities are the most commonly encountered merchant services providers. A merchant account provider can, at a minimum, provide you with a merchant account and processing services to ensure that you receive your money when a customer pays by credit or debit card. While all merchant account providers can set you up with a merchant account, only a few of the largest companies can also offer processing services to process your transactions. These companies are called direct processors, and include industry leaders such as First Data (see our review), Elavon (see our review), and TSYS Merchant Solutions (see our review). Most other merchant account providers rely on one of these direct processors to process their merchants’ transactions.

Payment Services Providers (PSPs)

While having a merchant account is a good idea for all but the smallest of businesses, you don’t absolutely need one to accept credit or debit card payments. A payment services provider (PSP), such as Square (see our review) or PayPal (see our review) can give your business the ability to accept these kinds of payment methods without a dedicated merchant account. Instead, your account will be aggregated with those of other merchants, and you won’t have a unique merchant ID number. This arrangement has the advantage of virtually eliminating the account fees and lengthy contract terms that often come with a traditional merchant account. However, these accounts are more prone to being frozen or terminated without notice, and customer service options aren’t as robust as they are with a full-service merchant account. PSPs are an excellent choice for businesses that only process a few thousand dollars a month in credit/debit card transactions or only operate on a seasonal basis.

Payment Gateway Providers

With the advent of eCommerce, a new kind of provider has come on the scene: the payment gateway provider. These companies can offer you a payment gateway, which you’ll need to accept online payments. However, they may or may not also offer you a merchant account to go with it. Authorize.Net (see our review), one of the largest and oldest gateway providers, gives you a choice between one of their merchant accounts or using their gateway with your existing merchant account. Other providers, such as PayTrace (see our review), offer a gateway-only service. You’ll have to get your own merchant account from a third-party provider.

Types of Merchant Services

Most merchant services providers offer a wide variety of products and services to allow merchants to accept credit and debit card payments, as well as manage their inventory and track other aspects of their business. Your needs as a merchant will depend on the nature and type of your business. While all businesses will need either a merchant account or a payment service account (if you’re signed up with a PSP), other features will only be useful for certain types of businesses. For example, if your business doesn’t sell anything online, you won’t need a payment gateway. Here’s a brief overview of the most common types of merchant services:

Merchant Accounts

Every business that wants to accept credit or debit cards as a form of payment will need a merchant account. While most merchant account providers offer full-service merchant accounts, those from PSPs like Square (see our review) lack a unique merchant ID number. Merchant ID numbers make your business easier to properly identify to payment processing systems, giving you some protection from fraud and adding stability to your account. A merchant account is simply an account where funds from processed transactions are deposited. Those funds are then transferred by your provider into a business account that you specify, such as a business checking account.

Credit Card Terminals

Retail merchants will also need a hardware product that can read your customers’ credit and debit cards and then transmit that information to your provider’s processing network. Traditional countertop terminals such as the Verifone Vx520 can connect to processing networks via either an Ethernet connection or a landline. Wireless models are also available, but they tend to be bulkier and more expensive than wired models, and require a wireless data plan (usually around $20.00 per month) to operate.

Terminals may be purchased outright or leased from your merchant services provider. Because most providers support the same terminals, we recommend either buying your terminal directly from your provider or purchasing it from a third-party supplier. Terminals require a software load which must be installed before they can accept transactions. If you buy your terminal from a third-party source, you’ll need to have it re-programmed to install this software. We strongly discourage terminal leasing due to the noncancelable nature of the leases and the fact that you’ll pay several times more than the value of the terminal over the lifetime of the lease.

In shopping for a terminal, you should select an EMV-compliant model as a minimum. Support for NFC-based payment methods (such as Apple Pay and Google Pay) is also a good choice as these methods are becoming more popular among customers.

Point of Sale (POS) Systems

POS systems combine the functions of a credit card terminal with a large computer display, enabling you to manage inventory and monitor your sales through a single piece of equipment. These systems include fully-featured, dedicated terminals and tablet-based software options that can run on an iPad or Android tablet. Many providers offer optional accessories such as tablet mounts, cash drawers, and check scanners, allowing you to accept any form of payment through a single device.

Mobile Payment (mPOS) Systems

These systems allow you to use your smartphone or tablet as a credit card terminal. mPOS systems consist of a mobile card reader that connects to your mobile device and an app to communicate with your provider’s processing network. While Square (see our review) was the first provider to offer a simple mPOS system, most providers now offer similar products. Although they’re difficult to find and cost more than simple magstripe-only readers, we recommend selecting a card reader with EMV compatibility and a Bluetooth connection (rather than the traditional headphone jack plug) to future-proof your system.

Payment Gateway

A payment gateway is simply software that communicates between your website and your provider’s processing networks, allowing you to accept payments over the internet. Because not all merchants need a gateway, providers usually charge a monthly gateway fee (around $25.00) to access this feature. Most gateways include support for recurring billing, a customer information management database, and security features such as encryption or tokenization to protect your customers’ data.

Virtual Terminal

A virtual terminal is another software product that turns your computer into a credit card terminal. Transactions can be entered manually or swiped using an optional USB-connected card reader. Virtual terminals are most commonly used by mail order/telephone order businesses that don’t have an eCommerce website.

Online Shopping Carts

Shopping cart software is designed for eCommerce merchants who need a more specialized shopping experience or want to customize the features of their website. Shopify (see our review) is one of the most popular online shopping carts. Check compatibility with your merchant services provider before selecting an online cart.

eCheck (ACH) Processing

eCheck processing is an optional feature offered by most merchant service providers. It allows you to scan paper checks and instantly confirm that funds are available to cover the purchase. This service protects you from fraud and saves you a trip to the bank.

Merchant Cash Advances and Small Business Loans

Merchant cash advances and small business loans provide another way for your business to receive funds when you need them, and most merchant services providers offer them. Check out our Merchant’s Guide to Short-Term Loans for more information.

Final Thoughts

Which specific merchant services you need will depend on the nature of your business. Retail-only businesses won’t need a payment gateway, but they will need reliable credit card terminals. eCommerce businesses can’t function without a payment gateway, but do not require terminals. Of course, if your business operates in both the retail and eCommerce sector (which is becoming more common), you’ll need just about every service your provider has to offer.

Every merchant service provider has their own unique combination of products and services, so you’ll want to ensure that a provider offers the features that you need before you sign up. Many of these services are proprietary, meaning they’ll only work with the provider that offers them. While this helps to ensure compatibility between different products, it also means you won’t be able to take your favorite product with you if you switch providers. This is more of a factor in the eCommerce sector, where payment gateways are often proprietary products. For an overview of our highest-rated merchant services providers, check out our Merchant Account Comparison Chart.

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The Best First Data Credit Card Processing Alternatives

First Data logo on the websiteIf you’re a business owner searching for a merchant account provider, you’re going to hear about First Data sooner or later. They’re rather hard to ignore, as they’re the largest provider in the United States. The company currently processes 45% of all credit and debit card transactions in the US, either directly or through a network of sub-ISOs and third-party partners. There are several really large providers in the processing industry, but First Data is simply huge.

The company dominates the processing industry in the same way that Amazon and Walmart dominate the retail sector. Unfortunately, First Data’s outsized chunk of the market share is the only thing they have in common with these two retail giants. While Amazon and Walmart have succeeded by offering lower prices than their competitors, First Data is more like the Apple of the processing industry. They provide a high-quality product, but you’ll pay top dollar for it, and they make no effort to lower their prices to accommodate customers of more modest means.

We’ve reviewed First Data and found that their products and services are generally quite good. However, their prices and contract terms are geared toward the top end of the market. If you’re a large business processing over $100,000 per month, they can offer you very competitive rates. They’ll also charge you high account fees, but you’ll still save money overall. Small businesses, on the other hand, will be far more impacted by the higher fees, and won’t qualify for the lowest possible rates. First Data also continues to push outrageously expensive terminal leases through their subsidiary, First Data Global Leasing.

If you’re a small business owner, you’ll want to consider several alternatives to signing up with First Data. Below, we’ve presented four alternative processors that work better for smaller businesses. One (Dharma Merchant Services) is a merchant account provider that uses First Data as their backend processor. This relationship gives you access to many of First Data’s powerful features, but at a much lower cost and with far more personal customer support. The others (Helcim, Fattmerchant, and Chase Merchant Services) offer services similar to First Data but are much more affordable for small businesses. Of these four alternatives, only Chase Merchant Services is a direct processor, able to manage your merchant account and process your transactions.

Overview of First Data

If you’re still thinking about signing up with First Data, you’ll want to read our in-depth review of the company before making a decision. While we’ve given them a decent score overall, the fact remains that their services are geared (and priced) more toward big businesses. They’re not a good deal for smaller companies, and merchants who only occasionally need to process credit or debit card transactions should steer clear altogether due to their high account fees.

First Data’s standard contract imposes a four-year term, with an automatic renewal clause that extends the contract for one-year periods after that. The contract is enforced through an early termination fee (ETF). Rather than charge a fixed amount for breaking your contract, First Data adds your monthly minimum, monthly customer service fee, and monthly account fee together, then multiplies this amount by the number of months remaining in your contract to calculate your ETF. This amount can easily exceed $1000 in the first year or two of your contract – far more than most providers charge for an early termination fee. While the company is sometimes willing to waive this fee altogether, you might prefer to avoid liability for this fee entirely by choosing one of our alternative providers, none of whom charge early termination fees at all.

First Data doesn’t disclose any information about processing rates on their website, but they offer a combination of both tiered and interchange-plus pricing plans. Of these two, tiered pricing is almost always more expensive. Because it brings in more revenue for First Data, you’re likely to be offered this type of pricing if you don’t ask for interchange-plus. Sales representatives have some leeway to negotiate the kind of pricing plan you’ll receive and the rates you’ll pay, but very small businesses or those without an established processing history might have no choice but to accept a tiered plan. You can avoid the uncertainty and the possibility of overpaying for processing by looking into one of our alternative providers. Dharma and Helcim offer fully-disclosed interchange-plus rates exclusively, while Fattmerchant uses a unique subscription-based pricing system that offers very low interchange-plus rates in exchange for a higher monthly account fee. Chase Merchant Services offers a combination of both tiered and interchange-plus rates, but seems more amenable to offering interchange-plus rates to smaller businesses than First Data.

First Data also charges a number of monthly, annual, and incidental account fees to maintain your merchant account. While none of these fees are directly disclosed on their website, you can find information about most of them in the sample contract. While some of these fees may be waived or reduced through negotiation, they’re generally higher than industry averages. If you don’t want to pay extra just to maintain your merchant account, you’ll be happy to know that our preferred alternatives charge lower fees than the industry average. Better yet, Dharma, Helcim, and Fattmerchant fully disclose their fee schedule right on their website. You won’t have to talk to a sales representative or sift through pages of fine print to figure out what your fees will be for your merchant account. Chase doesn’t disclose their fees in such a transparent manner, but merchant feedback indicates that they’re reasonable and in line with industry averages.

While pricing is understandably the most important concern for most merchants when choosing a provider, customer support and service after the sale should also be an important consideration. All our suggested alternative providers offer excellent customer support. First Data has a surprisingly good reputation in this area despite their huge size, but we’ve found that smaller providers generally offer better, more personalized service than the larger companies. With these considerations in mind, let’s take a closer look at our recommended alternatives to First Data:

Dharma Merchant Services

Dharma Merchant Services review

If you want to harness the power of First Data’s specialized services and products, but at a lower cost, take a look at Dharma Merchant Services (see our review). While the company uses First Data as one of its backend processors, they have a completely different pricing structure and a unique corporate philosophy. Dharma Merchant Services takes its name from the term dharma, which is found in several Eastern religions and roughly translates to a “right way of living.” The folks at Dharma take this concept seriously, offering a full spectrum of credit card processing services for a fair and reasonable price. Their fee structure is completely transparent, with all fees and charges disclosed on their website. All merchants receive interchange-plus pricing, and there are no annual fees. They also don’t charge account setup fees, early termination fees, or have a monthly minimum. Fees that they do charge (including PCI compliance fees) are fully disclosed. Dharma is unique in the world of credit card processing companies in that they donate a significant percentage of their profits to charity, living up to their motto “Commerce with Compassion.”

In addition to merchant accounts, Dharma offers a variety of wired and wireless countertop terminals for in-store use, including the First Data FD130. Their terminals are EMV-compliant and support Apple Pay. If you need a full-featured POS system, they offer the popular Clover Mini. Dharma also offers their proprietary MX Merchant system, which integrates a payment gateway, virtual terminal, and mobile processing solution into a single product.

Dharma easily offers the fairest and most transparent fee structure in the industry. In addition to a flat $10.00 per month fee for storefront and eCommerce accounts, transactions are billed according to an interchange-plus pricing model. In-person transactions are charged interchange + 0.25% + $0.10 per transaction, while eCommerce transactions are charged interchange + 0.35% + $0.15 per transaction. For restaurants, Dharma offers a special discounted rate of interchange + 0.20% + $0.07 per transaction. Other additional fees (such as PCI compliance fees) are clearly spelled out on Dharma’s website.

While there is no minimum monthly volume requirement, Dharma openly acknowledges that their full-service merchant accounts don’t make financial sense for low-volume businesses processing less than several thousand dollars per month in transactions. If your business falls into that category, they recommend either PayPal or Square.

Helcim

Helcim logo

“Trust, transparency, and fair pricing” is Helcim’s motto, and they live up to it by providing the most up-front, clearly-explained pricing structure of any of the credit card processing companies we’ve reviewed. A Canadian company, they also have an office in Seattle and provide full support to US-based merchants.

Helcim (see our review) offers a full gamut of services and equipment for both storefront and online businesses. Their website features a variety of EMV-compliant and NFC-capable credit card terminals, starting at $199. Unlike many of their competitors, they encourage US customers to buy their terminals outright, rather than renting or leasing. Helcim will reprogram your current equipment for free if it’s up-to-date. If your current terminal isn’t compatible, they’ll exchange it for a refurbished model for $75.00. Unfortunately, Canadian EMV-compliant terminals are not designed to be transferred or resold, so Canadian customers will have to use the rental option or buy a new machine. Renting on a month-to-month basis (which is not the same as leasing) is usually the best option for Canadian merchants.

Helcim has recently introduced their Helcim Commerce system, a web-based solution that processes both online and manual payments on your computer or with a traditional terminal, generating receipts that can be emailed or printed. This system includes a virtual terminal, payment gateway with API, support for recurring billing, billing information vault storage, e-invoicing, shopping cart integration, and hosted payment pages. Best of all, you get all these features for a flat $15.00 per month for retail users or $35.00 per month for eCommerce merchants.

Mobile payments are supported through the free Helcim Commerce Mobile app for iOS and Android. To use the app, you’ll need the Helcim Mobile Reader, which supports magstripe swiping and plugs into your smartphone’s audio jack. Readers cost $30 each.

Helcim uses an interchange-plus pricing model for all merchants. Rates for retail merchants range from as high as interchange + 0.25% + $0.08 per transaction to as low as interchange + 0.10% + $0.05 per transaction, depending on your monthly processing volume. Online rates range from as high as interchange + 0.45% + $0.25 per transaction to as low as interchange + 0.10% + $0.10 per transaction, again depending on monthly processing volume. Helcim doesn’t charge fees for account setup or termination, and PCI compliance is included in the monthly subscription fee. All contracts are month-to-month, with no early termination fees. For small businesses processing at least $1500 per month, Helcim will save you a significant amount of money over First Data through lower interchange-plus rates and lower account fees.

Fattmerchant

Fattmerchant (see our review) is a newcomer to the merchant account industry, starting up in 2014. Focusing on transparency and lower costs for merchants, the company offers several subscription-based pricing plans. Under these plans, you’ll pay a higher monthly fee, but you won’t pay any markup percentage on your processing costs. With a high enough processing volume, this can lead to significant savings in overall costs over traditional interchange-plus pricing plans. Your monthly subscription fee also covers things like PCI compliance, eliminating most of the additional fees that traditional processors like to add to your bill.

With Fattmerchant, you’re encouraged to buy your own terminals, and they’ll re-program them to work with their services for free. They also offer EMV-compliant terminals and POS systems with some of their pricing plans. For mobile payments, the company offers their free Fattmerchant Payments Mobile app, which is currently available for iOS only. An Android version is under development.

Fattmerchant offers a choice between two subscription-based pricing plans. The $99 per month plan is available for businesses that process up to $1 million annually. Larger businesses processing over that amount pay $199 per month for their subscription. With the $99 per month plan, retail merchants pay interchange + 0% + $0.08 per transaction. Enterprise users on the $199 per month plan pay interchange + 0% + $0.06 per transaction. Online and mobile transactions cost interchange + 0% + $0.15 per transaction under the $99 per month plan, and interchange + 0% + $0.12 per transaction under the $199 per month plan. As you might have guessed, the bulk of your monthly subscription fee goes to covering the markup that traditional interchange-plus pricing plans charge. If your processing volume is high enough, you could save quite a bit in processing charges with one of these plans. On the other hand, it’s probably not cost-effective for low volume or seasonal businesses. Fattmerchant doesn’t charge PCI compliance fees, batch fees, or statement fees, as these are all covered by your monthly subscription fee.

While Fattmerchant claims that there are no contracts, what they really mean is that there are no long-term contracts. Their merchant accounts are billed month-to-month, and there is no early termination fee if you close your account.

Fattmerchant offers an intriguing alternative to traditional merchant accounts. Their processing rates are extremely low, although this is offset by the high monthly subscription costs. You’ll want to run the numbers carefully and compare your current processing costs to what you’d pay with them to see if their plans make sense for your business. While mid-sized companies could save as much as 40% over the cost of a First Data merchant account, smaller businesses might find the subscription cost to be too high to save money overall on processing costs.

Chase Merchant Services

Chase merchant services review logo

While all the alternatives to First Data we’ve discussed so far have been smaller providers, Chase Merchant Services (see our review) is one of the larger merchant services providers in the industry. They’re large enough to be a direct processor, much like First Data itself. As such, they can offer you many of the same powerful features that First Data can. However, their pricing and terms are more competitive, and they have a much better reputation for customer service.

Like First Data, Chase doesn’t disclose any pricing information on their website. However, they offer a similar combination of both tiered and interchange-plus pricing rates. Merchant feedback suggests that they’re more likely to provide you with interchange-plus pricing, and that their account fees are reasonable. They also sell their equipment rather than leasing terminals, which is a big plus.

While the company doesn’t appear to offer true month-to-month billing, they no longer include an early termination fee in their contracts. So, while you might still be bound by a three-year contract with an automatic renewal clause, it will be much easier to close your account early, and you won’t be charged a penalty for doing so. As always, we strongly advise you to read your entire contract thoroughly before signing up, and don’t rely on any verbal assurances from sales representatives.

Chase Merchant Services is a good choice for both retail and eCommerce merchants. They offer several EMV-compliant credit card terminals, which you can purchase outright rather than leasing. Their Orbital Payment Gateway is one of the best in the industry. They also have a solid mobile payments system, which uses their Chase Mobile Checkout app (available for both iOS and Android) and an EMV-compliant mobile card reader. Note that, as of this writing, they’re one of the few providers in the industry to offer an EMV-capable mobile card reader.

Chase Merchant Services is also a good choice for companies that do business overseas or process a lot of B2B transactions, offering payments in over 120 currencies and providing the ability to process Level II and Level III card data.

While you won’t find the same high level of transparency that our other alternative providers offer, Chase Merchant Services is a good choice for mid-sized and larger businesses looking for a provider that can match First Data’s services, but at a more competitive price. The company also has a remarkably low complaint volume relative to its size. As a point of comparison, Chase Merchant Services has 37 complaints within the last three years, while First Data has over 1000.

Final Thoughts

With nearly half the market share in the United States, it’s impossible to ignore First Data in your search for an ideal merchant services provider. However, bigger isn’t always better, and First Data is really only a good choice if you’re already very successful in your business and experienced in negotiating with providers. Smaller businesses and merchants who are just starting out should steer clear of First Data and consider one of our preferred alternatives instead.

One of the significant advantages offered by Dharma, Helcim, and Fattmerchant is that they fully disclose their pricing upfront. Not only does this eliminate the need to negotiate with a sales representative, but it also allows you to make a far more accurate estimate of your anticipated processing costs before you ever contact their sales department. While you won’t be able to do this with Chase Merchant Services, a price quote from them will allow you to make an accurate estimate of how their costs stack up against our other, more transparent, providers.

In selecting between these four alternatives, Dharma and Helcim are best for nonprofit businesses, as they offer discounted pricing for qualified nonprofits. Dharma is also an excellent choice for restaurants, being one of the few providers in the industry to provide lower pricing just for restaurant owners. Helcim is a great all-around choice for small or newly-established businesses. Fattmerchant can offer the most significant savings over more traditional providers to businesses that are large enough to afford their subscription rates. Finally, if your business needs the power of a direct processor and you can negotiate a good deal, Chase Merchant Services is a great alternative to First Data. If your business is too small to afford any of these alternatives, we recommend that you look into a payment service provider (PSP), such as Square or PayPal.

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Team Bio Series — Frank Kehl (The Mountain Climber)

This week on “Meet The Merchant Maverick Team” — the world’s least conflict-driven reality show — we’ll get to know Frank Kehl, one of our merchant accounts writers. Frank gets the award for “most amazing careers outside of Merchant Maverick,” but what else is interesting about him? (Hint: a lot.)

Name: Frank Kehl

Title: Merchant accounts writer

Hometown: Berwick, Pennsylvania

Current city: Paso Robles, California

Education and background: I have a Bachelor of Science in Psychology from Penn State and a Juris Doctorate degree from The Ventura College of Law. Prior to joining Merchant Maverick, I served as an officer in the United States Air Force and California Air National Guard for 28 years. I flew as a navigator on both the B-52 and C-130 aircraft, and ended up logging a little over 7500 hours of flying time around the world.

Merchant Maverick department/specialty: I write about merchant accounts, payment gateways, and, occasionally, mobile payment systems.

Proudest professional moment: Passing the Bar Exam here in California after graduating from law school. It was a three-day exam and only has about a 40% pass rate, so I felt really good about getting through it on the first try.

Favorite Merchant Maverick post/moment/opportunity: The 5 Best Small Business Credit Card Processing Companies. It was the first post I wrote when I first started at Merchant Maverick, but it’s generated a lot of interest and I still get comments on it almost every day.

What do you do when you’re not working?: When I was young and single, I had quite a passion for mountain climbing. I’ve climbed a lot of the classic peaks, including Mount Whitney and Mount Shasta here in California, as well as Mount Rainier, Pico de Orizaba in Mexico, and Kilimanjaro. These days, it’s mostly family hikes and the occasional camping trip here on the Central Coast or up in the Sierras.

What literary character do you identify most with and why?: My son has recently shown a strong interest in The Lord of the Rings movies, so I’m going to say Gandalf. I just need a staff…

Favorite song: I’m not sure that I have a single favorite, so I’ll give a shout-out to ‘Lawyers, Guns, and Money’ by Warren Zevon. It’s funny as hell, and the lyrics are rather timely. Check it out!

Favorite classic movie: I suppose I should pick something serious and inspirational. Nah. Monty Python and the Holy Grail still cracks me up.

What is your ideal dinner out?: Getting a sitter and having dinner with just my wife. It’s usually a ‘romantic dinner for three’ these days, unfortunately.

What skill have you always wanted to learn?: In retrospect, computer science might have been a good major to choose in college. I took a few programming classes in school, but I’ve never found the time to go back and brush up on my coding skills since then.

If you could travel back in time to any stage in your life and observe, where/when would you go?: Just observe? No do-over? Then probably the first few years of my life, since I don’t remember very much about them.

Mac or Windows?: I’ve been a Windows guy since back when they were called “IBM PC-compatible.” However, all my mobile devices are from Apple. It’s the best of both worlds, I think.

You’re given an unlimited budget at any retail establishment. Where do you go and what do you buy?: I’ve already lived out this fantasy, but without the unlimited budget. Let’s just say I’ve built up some pretty impressive dividends at REI over the years. You can never have too much gear.

I think it’s safe to say that Frank is the coolest member of the Merchant Maverick team. An ex-Air Force navigator who has climbed Kilimanjaro? Please. Come on Frank, you’re making the rest of us look lame.

Interested in reading about other members of the Merchant Maverick staff? Check out our team interview series.

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Top 5 POS Tablet Systems For Restaurants

The restaurant industry is a hectic environment with a ton of moving parts. From taking orders to printing tickets to splitting checks, every function needs to work seamlessly if you’re to maximize your potential — and stay alive. Studies show that nearly 60% of restaurants close after three years, so choosing the right point of sale system can be a crucial component to the ultimate survival of your business.

Happily, if you’re opening up a restaurant right now, you’re in luck. POS systems have never been more helpful or powerful. Chances are, if you’ve done you’re research, you’re looking into at least a few systems that are iPad or tablet-based. A point of sale tablet can be a server or manager’s best friend. The mobility of these devices boosts the efficiency of your waitstaff and can improve interactions with customers; managers, in turn, can keep tabs on reports and sales on the go, from any device with a wireless connection.

Read on for an in-depth look at some of our favorite tablet POS systems.

ShopKeep

Best For…

Small to mid-sized retail businesses and smaller restaurant establishments.

Pricing

$69 per month per first three registers.

Feature Overview

There is little fault to find with ShopKeep’s (read our review) sleek and modern POS for tablet. This company has been on the cutting edge of POS technology for a few years now and continues to improve and expand its services. Though it was previously best suited for retail establishments and smaller food service establishments, ShopKeep now offers open check features and server-less syncing.

It also recently added the ability to create your own modifiers and is working on an update for table layouts.

ShopKeep has always prided itself on being user-friendly, and its restaurant software is exceptionally simple to master, particularly with features like the ability to keep multiple tabs open and split bills in a quick and intuitive manner. Tickets can also be sent immediately from the table to the kitchen, saving precious time in a fast-paced environment.

If ShopKeep is lacking at all on the front end, it more than makes up for it with in-depth reporting, analyzing your restaurant’s busiest times to help you coordinated staffing. Employees can be assigned specific permissions and all reports and sales data can be viewed in real time on any device with the app installed.

Takeaway

Like most of the best POS systems, ShopKeep continues to improve. In particular, ShopKeep is becoming a better and better option for restaurants. Already boasting an excellent interface and strong reporting and employee management, the modifier and check functions of this POS make it worth a look for any new business owner.

Read our complete review or check out ShopKeep’s website for yourself.

Lightspeed Restaurant

Best For…

Almost any size foodservice establishment. There is an enterprise package for larger industries, but Lightspeed is probably better suited for mid-sized restaurants.

Pricing

Lightspeed offers three plans at $69 a month, $129 a month and $198 a month.

Feature Overview

Lightspeed Restaurant (read our review) offers some unique features that are difficult to find anywhere else. Coupled with a superior design, Lightspeed has very few weaknesses to speak of and may be worth the slightly higher price compared to other similar systems.

Lightspeed thrives in both employee and inventory management. There is a feature which allows managers to change the visibility of employees on the app — quite useful for a business with multiple part-time employees. Permissions are assigned and broken down easily. The Timed Events features, which lets you set up unique promotions and contests for employees, is something I haven’t seen in many other products. You can also select your language of choice to print tickets.

One nice visual element is the ability to upload appetizing pictures of your menu items that can be displayed to customers. Most features, such as table layout and modifiers, are also highly customizable.

On the back end, Lightspeed Restaurant has a wealth of reports to help you analyze your business quickly and intuitively. The raw ingredient tracking mechanism also updates in real time, allowing servers to see when a product is running low. Things like discounts and tax codes can all be added or updated in a matter of seconds and, as an added bonus, Lightspeed’s customer service comes without additional cost and has many positive reviews. Lightspeed Restaurant is still lacking slightly in integrations but, at this point, we’re really picking nits.

Takeaway

Lightspeed Restaurant is designed specifically for the foodservice industry, and it shows. The company does nearly everything right and is particularly strong in both customer and inventory management, all at a reasonably competitive pricing structure that can fit whatever sized business you’re running.

Read our full review here or check out Lightspeed Restaurant’s website.

Toast

Best For…

Anything from small food-service establishments (like cafes) to mid-sized, full-service restaurants.

Pricing

Toast starts at $79 a month and is $50 a month for each additional register.

Feature Overview

Here at Merchant Maverick we’re suckers for products that give you as few headaches as possible. Under that umbrella, Toast (read our review) continues to be one of our favorite point of sale systems. Toast has a simple and affordable pricing structure, a feature-rich and simple-to-use platform, and fantastic customer service that is included in the original price. Even one of the few issues we have with Toast — its inability to work with other credit card processing companies — at least leaves you with one less decision to make when you’re starting your business or shopping for a new POS.

Toast is simple to use. You can be walked through its initial set-up so you’re an expert in a short amount of time. Normal restaurant functions like check splitting, voiding, and the ability to transfer tickets to different tables are intuitive and can be done with just a few taps. Toast has a solid menu creation feature and it’s simple to make quick pricing changes either manually or automatically for things like Happy Hour.

Toast’s reporting functioToast hardwarens are robust and, as you would expect, can be accessed from anywhere with a wireless connection on a tablet or mobile device. You can see things like ticket times and tip reports all in an easily digestible format. Many current systems are delving deep into customer management and Toast is no different. The POS can take and store customer information and track an individual’s order history while tabulating their loyalty rewards, helping you set up ways to entice them to come back. The inventory and employee management functions are also strong, helping a business owner cut down on inefficiency. For an additional cost, you can add on Toast’s loyalty program and its online ordering service, two impressive features.

Takeaway

Everything about Toast is easy, from its pricing to its layout to its quick set-up. If you’re looking for a POS tablet system that won’t give you headaches, it’s tough to see you going wrong here. A strong menu-creation function and simple table management, coupled with some of the best customer service in the industry, make Toast a top contender.

Check out our complete review of Toast or visit their website.

Revel

Best For…

Mid-sized to larger foodservice businesses, though it can be adapted to smaller restaurants as well.

Pricing

Revel has a flexible pricing structure depending on what features you need. The cost of the software is built in to the monthly subscription.

Feature Overview

Revel (read our review) is another impressive system that packs a lot of features into intuitive yet unassuming software. Revel has the ability to handle larger scale restaurants better than some of the other systems mentioned in this post. It can take on multiple locations with ease and has an extremely robust offering of reports that can be managed remotely, along with a varied list of integrations and customizable software.

Revel has a simple interface, without a lot of distractions. It is created with the server in mind, making things like voids, order editing, and check splitting simple. For smaller establishments, Revel has a very nice kiosk function with a customer-facing display. The ability to take reservations and inform customers via a text message or email is also a nice feature.

Going along with current POS trends, Revel allows you to take orders tableside and, with its Kitchen Display System, servers can view the status of an order as it’s being made.

Revel, a Lightspeed POS alternativeThe backend takes a little more time to get the hang of. However, that’s mainly because there’s a lot to offer. Revel has a huge slate of reports that can be viewed and digested quickly. Its employee management feature is also superb, assigning individuals their own PIN number for log-in. Managers can then track performance by sales, productivity, or number of voids, and permissions can be assigned easily. There is a built-in loyalty system within Revel that stores basic customer information. One of the biggest draws for Revel is the sheer number of companies that it integrates with. If the POS doesn’t have a specific function you’re looking for, chances are you can download a program that can help. Revel’s open API also makes it possible to create your own customizable functions.

Takeaway

Revel is a powerhouse of a POS that can handle large-scale restaurant establishments. The system is loaded with reports and an extensive employee management system. Though it comes with a slightly higher learning curve than some systems, Revel’s wealth of integrations gives it a big edge in a very competitive market.

You can find our full review here or check out Revel’s website.

Clover

Best For…

Quick-service food establishments and small to mid-sized restaurants.

Pricing

Clover’s pricing can range from $350 to $800 depending on the retailer and on whether you’re purchasing it alongside other Clover products.

Feature Overview

Clover (read our review) has emerged as a giant in the POS game and for good reason. Although certainly not without its flaws (mostly on the payment processing end of things), Clover is exceptionally easy to use, comes with access to the Clover app market, and can be up and running within minutes out of the box, making it a popular product for small and mid-sized restaurants.

Clover arrives virtually ready to go from the second you turn it on with a preloaded menu. It’s also extremely customizable and will intuitively download a few starter apps for you based on your preferences. Clover has been a popular choice for business owners new to the restaurant game both because of its simplicity and how easy it is to tailor the POS to your specific needs. The product is EMV compliant and accepts virtually any payment type.

On the backend, Clover isn’t quite as robust as some other systems, but small to mid-sized restaurant owners are likely to find just about anything they might need.

The customer management feature stores information, making it easy to peruse an individual’s purchase history. One of Clover’s huge pluses is how easy it is to manage your business, even across multiple locations, from just one device. The POS stores all of its reports and you can see profits and employee activity in real time. Clover’s biggest draw, however, is its impressive app store. If you do find that you’re missing some functionality on the back end, it’s likely that you can find a program in the always-expanding App Market to help you out.

Takeaway

Clover is a tough system to beat in when it comes to sheer convenience. With a very simple and intuitive interface that you can have up and running in minutes, it’s a strong option for new business owners. Simple and extensive customer management and access to Clover’s App Market are also extremely convenient features. Unfortunately, though the software itself is exceptional, you will have to put up with First Data’s less than stellar support on the payment processing end of things, and depending on what kind of reseller you use to buy your Clover device, customer service is hard to navigate. Approach Clover with caution.

You can read more about Clover in our full review or visit their site.

Final Thoughts

These are just a handful of the available point of sale systems for tablets, and each one has its unique strengths. While you certainly aren’t limited to a tablet-based POS, it’s easy to see why they have become so popular. Locally-installed systems have advantages when it comes to security, but it’s tough to compete with the convenience, ease of use and set-up, and sheer affordability a tablet provides. And that’s not even mentioning the powerful reporting and various back-end management tools that can all be accessed in a device smaller than most books on your shelf.

As always, do your research and make sure you don’t settle for a system that doesn’t completely suit your needs. For more information in general, check out our selection of full restaurant point of sale reviews, read about iPad POS vendors, or view our comparison chart of restaurant POS software.

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6 Platforms That Do Crowdfunding For Nonprofits

nonprofit crowdfunding

The crowdfunding industry continues to grow and expand as a means of soliciting donations, product sales, and investment, so it’s only natural that nonprofit organizations are looking to get into the crowdfunding game. In taking advantage of a crowdfunding platform’s fundraising and social media tools, nonprofits can bring their message to a much wider (not to mention younger) swath of the population than would otherwise be possible.

However, it’s not a simple matter of picking from a list of interchangeable platforms and getting started. Not all crowdfunding websites are created equal. Some crowdfunders are purely for creative/business projects and cannot be used for nonprofit fundraising, while other platforms specifically cater to the nonprofit market. Some platforms don’t let you collect the money you raise unless you hit your funding goal amount, while others let you keep whatever you raise regardless. Some platforms charge a percentage of what you raise as a fee (and some charge more if you fall short of your funding goal), while others charge a flat monthly fee to use their services. Some platforms facilitate the giving of rewards to your donors, while others do not.

Point being, your choice of a crowdfunding platform matters. We here at Merchant Maverick want to help you cut through the dizzying array of crowdfunding sites available by highlighting the crowdfunders best suited for nonprofit fundraising.

A Warning Before You Begin

It’s vitally important that you familiarize yourself with the laws regulating nonprofit fundraising in the state or states in which you will be operating. You may well have to register your charitable nonprofit with the state before you begin soliciting donations. If you’re looking to crowdfund for your nonprofit and you’re confronting these questions for the first time, I recommend starting by checking out the information provided by the National Council of Nonprofits and going from there.

It’s easy to find yourself unwittingly running afoul of fundraising laws if you’re unaware of them, so take caution!

1. GoFundMe

GoFundMe (see our review) is best known for hosting campaigns related to personal medical expenses and other tragedies. That’s what has propelled GoFundMe to become the world’s top crowdfunding platform in terms of dollars raised (more than 5 billion and counting). What’s less well known is that GoFundMe hosts nonprofit crowdfunding campaigns as well. On the subject of nonprofit campaigns (referred to as Certified Charity campaigns), GoFundMe states the following:

Certified Charity campaigns can be created by anyone, whether you’re a good samaritan wanting to support your favorite charity or an employee of a non-profit. A ‘Certified Charity‘ badge will appear on the campaign to give your cause an extra layer of verification.

Donations made to Charity campaigns are processed through PayPal Giving Fund, a 501(c)3 public charity (Federal Tax ID: 45-0931286). The Campaign Organizer doesn’t have to touch the money at all, and donors will automatically receive a tax-deductible receipt.

In order to launch a Certified Charity campaign, the outfit you’re fundraising for must be a 501(c)(3) US-based nonprofit organization. It must also be registered in PayPal Giving Fund’s database. If your 501(c)(3) nonprofit isn’t in this database, GoFundMe outlines how you can rectify that here. And if your nonprofit is based outside the US, GoFundMe asks you to contact them to discuss your options.

GoFundMe’s Certified Charity campaigns carry with them a 5% platform fee on the money raised. While GoFundMe eliminated their 5% platform fee for their US-based personal campaigns in late 2017 (and has subsequently expanded that policy to Canada and the UK), the platform fee still applies to nonprofit campaigns. Now, given the current trend in crowdfunding (and with GoFundMe in particular), I wouldn’t be surprised if GoFundMe eliminated the platform fee for its Certified Charity campaigns sometime in the future. For now, however, the 5% platform fee remains.

In addition to the platform fee, a 2.9% + $0.30 processing fee will apply to each donation made. Therefore, a total fee of 7.9% + $0.30 will be taken from each donation.

GoFundMe provides the following primer for those interested in starting a crowdfunding campaign for a nonprofit organization. Check out our full GoFundMe review for more information.

2. YouCaring

YouCaring is another crowdfunding site specializing in personal and charitable fundraising campaigns. Having facilitated over $900 million in donations since its founding in 2011 — and having recently acquired Indiegogo’s charitable crowdfunding spinoff Generosity — YouCaring’s profile is rising as a cause-oriented crowdfunding platform. Thankfully for you, they host nonprofit crowdfunding campaigns as well as campaigns for individuals.

YouCaring has one big advantage going for it vis-à-vis GoFundMe. Unlike their larger competitor, YouCaring charges no platform fees to the crowdfunding campaigns it hosts, including nonprofit campaigns. That’s 5% more funds going to your charity — not too shabby. Just keep in mind that you’ll still be paying 2.9% + $0.30 per transaction to the payment processor. You can use PayPal (see our review) or WePay (see our review) for payment processing, though YouCaring recommends WePay.

One drawback of using YouCaring compared to GoFundMe, however, is the fact that with YouCaring, your donors won’t automatically get tax-deductible receipts. The nonprofit in question will have to do this themselves by collecting their donors’ contact information through YouCaring.

While YouCaring doesn’t have as much nonprofit-specific information on their site as does GoFundMe, they do include this guide for setting up a WePay account under your nonprofit organization.

3. Razoo

Since its founding in 2006, Razoo (see our review) has been something of an all-of-the-above crowdfunder, hosting crowdfunding campaigns for nearly any cause under the sun: business crowdfunding, personal crowdfunding, team crowdfunding, and, yes, nonprofit crowdfunding. Recently, however, they seem to be paying special attention to capturing more of the nonprofit crowdfunding market.

In order for your nonprofit to directly raise funds on Razoo, it needs to be registered as a 501(c)(3) public charity in the US. However, if your organization doesn’t yet have 501(c)(3) status or is based outside the US, you may still be able to use Razoo for fundraising. To do this, you’ll need to find an organization willing to act as your fiscal sponsor. Razoo provides information as to how to do this here.

Razoo charges a standard nonprofit crowdfunding campaign 4% off the top as a fee, with an additional 2.9% + $0.30 per donation going to the payment processor. A standard Razoo nonprofit campaign will be paying slightly less in fees than a GoFundMe campaign. However, Razoo has recently unveiled a new feature exclusively for nonprofits: premium subscription plans that eliminate the 4% Razoo transaction fee and give your nonprofit unique fundraising software through which your organization can run a totally branded crowdfunding campaign.

Here are Razoo’s three nonprofit premium plans and their respective details:

Plus

  • $99/month, billed annually
  • No platform fees
  • Unlimited P2P & Team pages
  • Priority support
  • Donor analytics
  • Advanced CRM tools
  • Donor data collection
  • Data Connect integration
  • Branded donation page, donation receipts, and donation widget
  • Volunteer management

Pro

  • $249/month, billed annually
  • All of the above, PLUS:
  • Pro CRM tools
  • Advanced donor data collection
  • Email messaging
  • Branded P2P fundraising
  • Advanced white label controls
  • Custom subdomain

Enterprise

  • Contact Razoo for pricing
  • All of the above, PLUS:
  • Domain masking
  • Custom events
  • Dedicated project manager
  • Fundraising coaching

These aren’t cheap packages, so if you’re considering going this route, it’s best if you have some experience with nonprofit fundraising and have a reasonable expectation of funding success. If you do, these premium nonprofit packages offer a pretty compelling deal. Your organization will be able to host its own crowdfunding campaign — one operating under its own brand, not that of Razoo. Plus, you’ll have access to the advanced campaign features listed above.

Donors who contribute to nonprofit campaigns will immediately be emailed a receipt which can be used to claim a deduction on their taxes.

Read our full Razoo review to learn more.

4. FundRazr

fundrazr

Declaring themselves “Canada’s leading crowdfunding platform”, FundRazr (see our review) has facilitated the raising of over $116 million USD in their near-decade of existence. FundRazr hosts crowdfunding campaigns for personal causes, business causes, and, yes, nonprofit organizations. The company also has a great reputation among both campaigners and donors. In fact, FundRazr is one of the few crowdfunding outfits that proudly links to its Trustpilot page. That should tell you something.

FundRazr goes into exactly who can raise money on their site for a nonprofit organization here. Essentially, if you’re not an Authorized Officer of the organization in question, you’ll need to submit a Letter Of Subordination that expressly authorizes you to fundraise on behalf of the organization.

A nonprofit fundraising campaign on FundRazr will have to contend with fees equal to those of GoFundMe. There’s a 5% platform fee and a 2.9% + $0.30 payment processing fee. Sorry!

FundRazr doesn’t give a great deal of guidance for nonprofits looking to use their platform, so if you represent a nonprofit, you’ll want to get in touch with the company to iron out the details. One thing I can tell you, however, is that PayPal and WePay (available in the US, UK, and Canada only) are your options for payment processing.

Read our FundRazr review to get the full story.

5. CrowdRise

For most of its existence, following its founding in 2010, CrowdRise was a crowdfunding platform for both personal causes and charity/nonprofit fundraising. However, in early 2017, CrowdRise was acquired by GoFundMe. CrowdRise now directs all would-be personal campaigners to GoFundMe while focusing solely on crowdfunding for nonprofit organizations.

CrowdRise details the following requirements for using their services:

In order to become a CrowdRise nonprofit, [an organization] must first be a registered 501c3 in good standing with the IRS or a Canadian charity in good standing with the CRA, and have a valid listing on GuideStar (US) or Canada.Ca (Canada).

CrowdRise is somewhat similar to Razoo in that you can set up a crowdfunding campaign for free and pay a transaction fee on what you raise or you can spring for a paid subscription that reduces (or eliminates) the transaction fee and gives you access to special fundraising features. Here are the details on CrowdRise’s offerings:

Starter (the free-to-start no-subscription package)

  • 6% platform fee, 2.9% + $0.30 payment processing fee
  • Essential fundraising tools
  • Two active campaigns
  • Registration integrations
  • Recurring donations
  • Basic campaign theming
  • Email support
  • On-demand training resources

Premium

  • Contact CrowdRise for subscription pricing
  • 3% platform fee, 2.9% + $0.30 payment processing fee
  • All of the above, PLUS:
  • Unlimited active campaign pages
  • Custom branded URLs
  • Registration and ticketing
  • Custom transactional emails
  • Configurable donate forms
  • Text-to-donate
  • API access
  • Google Analytics integration
  • Salesforce integration
  • Fundraising minimums
  • Phone support with 24-hour response time
  • Success strategist and annual review
  • Live, web-based setup and training

Enterprise

  • Contact CrowdRise for subscription pricing and fees
  • All of the above, PLUS:
  • Complex campaign structure
  • Parent/child level campaigns
  • Adjustable donor fees
  • Phone support with 4-hour response time
  • Premier account management
  • Live setup, training and success planning
  • Success resources w/ live assistance
  • Quarterly success review

It’s unfortunate that CrowdRise doesn’t just list the pricing for premium plans on the website. Still, you get the idea. Pay a monthly fee, and you’ll get the platform fee reduced and gain access to special features you can employ in the course of your crowdfunding campaign.

At first glance, CrowdRise’s standard nonprofit crowdfunding campaigns don’t look too appealing, what with that 6% platform fee and the payment processing fees. However, when a donor pledges to a campaign on CrowdRise, they’re given the chance to cover these fees themselves — and, according to CrowdRise, most donors do just that. CrowdRise states that on average, 98% of funds donated to causes go to the campaigner due to this policy. If true, this is a very competitive rate indeed!

6. FirstGiving

FirstGiving is a fundraising platform wholly devoted to nonprofit crowdfunding. It’s somewhat similar in structure to CrowdRise in that you can fundraise for a nonprofit freely without a subscription or get a subscription which gives you access to more advanced features.

According to FirstGiving:

All donations made through FirstGiving are processed through our charity partner Global Impact, a 501c3 nonprofit, and are fully tax-deductible to the full extent of the law.

No word on whether donors get sent a tax-deductible receipt or not.

Without a subscription, one can launch a crowdfunding campaign for “any of the 1.5 million nonprofits in the US” A “performance fee” of 5% and a credit card processing fee of 2.5% apply to what you receive; however, as with CrowdRise, donors are given the option of covering these fees when they donate, and FirstGiving estimates that 45% of donors do so.

As for the paid subscription packages, here’s what FirstGiving has to offer. Unfortunately, you’ll have to contact FirstGiving to get pricing estimates.

FirstGiving Pro

  • For small- to medium-sized nonprofits
  • Branded fundraising pages
  • P2P and event registration
  • Event management
  • Corporate gift matching
  • Comprehensive reporting
  • GiftWorks Cloud integration

Artez Enterprise

  • For large nonprofits
  • Fully customized fundraising and event pages
  • Built-in coaching tips
  • Predictive suggested donation amounts
  • Mobile optimized donation forms
  • Monthly giving programs

A Note Regarding Indiegogo

If you’ve cruised the internet looking for crowdfunding platforms that cater to nonprofits, you’ve probably seen Indiegogo (see our review) listed as one such platform. However, this was before Indiegogo sold its charitable crowdfunding division, Generosity, to YouCaring. As of March 2018, you can no longer launch a nonprofit crowdfunding campaign with Indiegogo.

Final Thoughts

Crowdfunding for nonprofits isn’t as straightforward as crowdfunding for a business or for a personal cause. Thankfully, modern crowdfunding platforms make it easier than ever to navigate the legal complexities to help nonprofits raise money, whether you’re an officer of the nonprofit or not. Just be careful and make sure you’re doing everything by the book!

The post 6 Platforms That Do Crowdfunding For Nonprofits appeared first on Merchant Maverick.

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5 Great LoanBuilder Alternatives For Small Businesses

PayPal’s LoanBuilder offers an unusually high level of transparency to prospective borrowers, allowing them to see — and even tinker with — the terms of their loans well in advance of signing on the dotted line.

This is a welcome trait in an industry where speed and low barriers to entry take precedence over openness and affordability.

As we often warn in our reviews, however, it’s a good idea to compare as many different products as you can to get the best deal you can.

So what are some alternatives to LoanBuilder for small business?

Square Capital

Best for: Square customers looking for small loans with low rates

Square, a company known more for point of sale hardware and software, also offers an alternative lending service to its clients. That last bit will probably be a major deciding factor for most of the people reading this: to get a loan from Square Capital you have to already be an existing Square customer.

Requirements:

Time in business: N/A
Credit score: N/A
Revenue: $10K/yr

If you’re a Square customer, you may periodically get funding offers from the company by email. This passive approach to lending won’t suit everyone, but Square does offer some of the lowest short-term loan rates in the business (between 1.1 and 1.16). If you accept the offer, you’ll have up to 18 months to repay the loan. Micropayments are deducted from your daily credit card sales until you’re paid up. You can borrow between $500 and $100,000.

This arrangement may not be for everyone, of course. A lot of the advantages come from being heavily integrated into the Square environment — their credit card processing service makes it easy for them to collect on their debt. You may not be comfortable owing debt to the company that also handles your point of sale.

Credibly

Best for: Businesses looking for a transparent alternative lender, businesses looking for medium-term loans

If you’re attracted to LoanBuilder’s transparency but want an alternative, you may want to give Credibly a look. Credibly offers a bit more diversity in their loans than most alternative lenders, providing not just short-term, but more traditional medium-term loans. You can find most of the information you need to make an informed comparison on their website.

Requirements:

Time in business: 6 months
Credit score: 500
Revenue: $15K/yr + avg. daily balance over $1K for expansion loans

Compared to LoanBuilder, you’re probably looking at higher rates (between 1.09 and 1.36), especially if you don’t have great credit, but you’ll have a little more leeway with term lengths. Consider whether the tradeoff is worth it before you commit to anything.

OnDeck

Best for: Businesses looking for low rates

This addition to the list probably won’t be a big surprise to anyone familiar with the alternative lending industry. If you’ve been looking for loans online, there’s a good chance you’ve come across OnDeck.

Requirements:

Time in business: 12 months
Credit score: 500
Revenue: $100K/yr

As one of the early arrivals to the alternative lending scene, OnDeck’s had a lot of time to hone their products and offer competitive rates. These extremely low rates (1.003 – 1.04) come at the cost of some additional charges, namely a fairly high origination fee, but you’re still likely to land a better deal here than with many other alternative lenders. Additionally, OnDeck offers lines of credit for companies that want the flexibility.

You won’t find quite the same level of transparency here as you will with LoanBuilder, though the company’s website should give you a decent sense of what types of fees to expect.

SnapCap

Best for: Businesses looking for equipment financing and transparency

SnapCap flies under the radar compared to some of the other funders on this list, but they still deserve an honorable mention. Like Credibly, their rates are a little higher, particularly for borrowers with bad credit.

Requirements:

 

Time in business: 1 year
Credit score: 500
Revenue: $100K/yr

On the other hand, you’ll be able to find a lot of the information you’re looking for upfront, with only a little digging around SnapCap’s website. While they wouldn’t be my first choice for unsecured loans, SnapCap also offers secured financing in the form of equipment loans. This is where they’re most likely to stand out to prospective borrowers.

Kabbage

Best for: Companies that want to avoid hidden fees

As we often caution, the alternative lending industry isn’t known for its transparency. Kabbage is an interesting case study. The fee structure is a bit more complex than that of many of its competitors, which can make it challenging to compare to other products.

Requirements:

Time in business: 1 year
Credit score: N/A
Revenue: $50K/yr

Kabbage, however, takes pains to give you the tools necessary to figure out exactly what you’ll owe. Their website comes equipped with handy tools and explanations of their formulas. The big selling point here is that you won’t have to worry about Kabbage springing any surprise administrative fees; everything’s factored into the rates you see.

Final Thoughts

Alternative lending is a highly competitive market, so you should never feel like you’re locked into one particular funder. Find a lender you’re comfortable working with that offers you fair terms.

Not sure where to start looking? Check out our small business loan comparison.

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Best Accounting Software For Macs

Best Accounting Software For Macs

Are you a loyal Mac-lover looking for accounting software? You’ve come to the right place!

When there are so many accounting options out there, finding the best small business accounting software for Macs isn’t easy — especially now that QuickBooks has discontinued QuickBooks Mac. Luckily for you, we’ve created this list of the top five best accounting software programs for Mac users.

Each of these programs offers tons of features and has a 4/5 star rating (or higher) on our site. We’ve picked a variety of accounting software programs that target different business sizes, needs, and price ranges so that you can find the best Mac accounting solution for your small business.

Read on to learn which option is right for you.

AccountEdge

AccountEdge

When most people think about accounting software, they’re really thinking about QuickBooks (the notoriously difficult to learn, locally-installed software for Windows). AccountEdge (see our review) offers the same sort of functionality as QuickBooks Pro, but for Mac users.

AccountEdge is an on-premise, traditional accounting program. Because AccountEdge is locally-installed, the software is far more developed and offers much more functionality than the other programs on this list. For example, it’s the only software of the five to offer lead management. But these features come at the cost of a steep learning curve.

The software is also more limited than its cloud-based counterparts in that there is no mobility and the cost of extra users adds up fast. However, for those with accounting experience who are planning on sticking with one software for a few years, AccountEdge can be an economical choice and may even prove to be less expensive than some cloud-based alternatives.

Best Accounting Software For Macs

Features

AccountEdge is a fully-developed accounting solution with tons of great features for running a business:

  • Invoicing
  • Quotes
  • Contact management
  • Lead management
  • Expense tracking
  • Bank reconciliation
  • Accounts payable
  • Chart of accounts
  • Inventory
  • Project management
  • Time tracking
  • Payroll
  • Commission
  • 100+ reports
  • Customizable cards
  • Budgeting
  • Sales tax
  • Multi-currency support

Note: Some features are only available with AccountEdge Pro.

Pricing

AccountEdge Basic costs a one-time fee of $149 for a new user license, while AccountEdge Pro (which includes all of the features listed above) runs $399 for a new user. Each license comes with a single-user; additional users cost extra. Any future AccountEdge upgrades are offered at a discounted rate.

If you’re looking for a locally-installed Mac accounting software, you really can’t beat AccountEdge. Read our full AccountEdge review to learn more about this software or give it a whirl with the free 30-day trial.

Xero

Best Xero Alternatives

Xero (see our review) has been a force to be reckoned with in the accounting world since 2006. This software (and all of the other Mac accounting options) in this post differ from AccountEdge in one significant way: they are cloud-based. Instead of installing the software on your computer, the software is accessed via the internet. That means that Mac and Windows users alike can benefit from Xero.

Xero offers strong accounting, incredible customer service, and an impressive number of positive customer reviews. Xero also allows for unlimited users, something almost unheard of in the accounting world.

The software is ideal for medium-large businesses in need of strong accounting and multiple users. Xero allows you to set detailed user permissions and manage multiple companies. While there is a small plan marketed toward smaller businesses, this plan is incredibly limited when compared to similar offerings by other cloud accounting programs (like Wave and Zoho Books for example). Payroll is only available in 37 states.

Best Accounting Software For Macs

Features

Xero offers a great selection of features:

  • Invoicing
  • Estimates
  • Contact management
  • Expense tracking
  • Accounts payable
  • Bank reconciliation
  • Chart of accounts
  • Fixed asset management
  • Inventory
  • Project management
  • Timesheets
  • Payroll
  • 65 reports
  • Journal entries
  • Print checks
  • Tax support
  • Sales tax
  • Multi-currency support

Note: Feature access may vary by plan. Visit our comprehensive Xero review for a complete feature list.

Pricing

Xero offers five scalable price plans ranging from $9/mo – $180/mo. Payments are made monthly. Each plan comes with unlimited users. Check Xero’s pricing page for more details.

If Xero sounds like it might be a good fit for you, check out our comprehensive Xero review and/or take the software for a spin with a free 30-day trial. If you do end up going with this accounting software, take a look at How To Set Up Your Xero Account, a free guide that walks you through how to set up and use your Xero software.

QuickBooks Online

QuickBooks Capital Review

QuickBooks Online (see our review) was launched in 2004. Since then, this robust software has grown to support over 2.2 million users. QuickBooks Online is cloud-based software with over 500 integrations and beautiful invoicing automations and customizations.

In the past, QuickBooks Online was fairly intuitive and required little previous accounting experience, but a recent downgrade in usability has made the software fairly difficult to navigate. However, the software is updated monthly so (hopefully) this could change soon.

The software is ideal for all types of small businesses, particularly those in need of strong accounting and ample integrations. It is not a good fit for companies with more than 25 users.

Best Accounting Software for Macs

Features

QuickBooks Online offers an impressive number of features. These features are often a lot easier to use than those of locally-installed alternatives:

  • Invoicing
  • Invoice automations (like autoscheduling)
  • Estimates
  • Basic client portal
  • Contact management
  • Expense tracking
  • Bank reconciliation
  • Accounts payable
  • Chart of accounts
  • Inventory
  • Project management (beta)
  • TIme tracking
  • Reporting
  • Budgeting
  • Class tracking
  • packing slips
  • Tax support
  • Sales tax
  • Multi-currency support

Note: Feature access may vary by plan. Visit our comprehensive QuickBooks Online review for a complete feature list.

Pricing

QuickBooks Online offers three pricing plans ranging from $15/mo – $50/mo. Plans are paid monthly and payroll costs an additional $39/mo – $99/mo. Check QuickBooks Online’s pricing page for more details.

If you’re interested in QuickBooks Online, read our complete QuickBooks Online review for more details and take advantage of the free 30-day trial.

Zoho Books

Best Accounting Mobile Apps

Zoho Books (see our review) is a complete accounting package with some of the most beautiful invoicing tools I have ever seen. The software was launched in 2009 and is an easy accounting software for Mac users to learn and use.

Overall, Zoho Books is incredibly affordable, offers good customer support, has amazing mobile apps, and provides some of the best international business options on the market.

Zoho Books is ideal for small to medium businesses (with up to 10 users) that are looking for strong accounting capabilities. Zoho Books has almost all of the features you’d find in QuickBooks or Xero; the only thing the software doesn’t offer is payroll or budgeting, so users in need of built-in payroll may want to look elsewhere.

Best Accounting Software For Macs

Features

Zoho Books offers an impressive number of features:

  • Invoicing
  • Estimates
  • Client portal
  • Contact management
  • Expense tracking
  • Mileage deductions
  • Accounts payable
  • Chart of accounts
  • Fixed asset management
  • Inventory
  • Time tracking
  • Project management
  • 50+ Reports
  • Journal entries
  • Class tracking
  • Print checks
  • Tax support
  • Sales tax
  • Multi-currency support
  • Invoice in multiple languages

Note: Feature access may vary by plan. Visit our comprehensive Zoho Books review for a complete feature list.

Pricing

Zoho Books offers three pricing plans ranging from $9 – $29/mo. Plans are paid monthly. Features vary by plan. Check out Zoho Book’s pricing page to learn more.

If Zoho Books sounds like it might be the best Mac accounting software option for your business, or if you’re interested in learning more, be sure to read our complete Zoho Books review and take advantage of the free 14-day trial.

Wave

Best QuickBooks Online Alternatives

Wave (see our review) is the best free accounting software for Mac users. And just because it’s free doesn’t mean it’s skimping on features. The software is incredibly robust and very easy to use. Wave offers strong accounting, decent invoicing, and built-in lending. The customer support is great and user reviews are positive almost across the board.

The ability to separate personal and business expenses makes Wave ideal for freelancers and microbusinesses, while complex accounting features (like a detailed chart of accounts) will meet the needs of most any small business. The software is ideal for businesses looking to save a bit of money. There is an Etsy-integration as well, which makes Wave a perfect choice for Etsy sellers. The software is not ideal for users in need of cash-basis accounting.

Best Accounting Software For Macs

Features

Wave offers an impressive number of features, especially for a free accounting software. These features are easy to navigate and don’t require a background in accounting to use:

  • Invoicing
  • Estimates
  • Contact management
  • Expense tracking
  • Separate personal and business expenses
  • Accounts payable
  • Bank reconciliation
  • Chart of accounts
  • Item list
  • Time tracking
  • Lending
  • 12 reports
  • Multi-currency support
  • Sales tax

Pricing

As I mentioned earlier, Wave is a free accounting solution. However, there are a few extra costs to be aware of. Namely, payroll and credit card processing come at an additional price. Be sure to check Wave’s pricing page for the full scoop on these costs.

If this free software sounds tempting, you’ll want to read more about it in our full Wave review. You can also sign up for a free Wave account to give it a try (and cancel at any time).

Which Software Should I Choose?

When it comes to choosing the best small business accounting software for Mac users, we couldn’t pick a single favorite. There are several great Mac accounting options, and choosing which one is right for your business will ultimately depend on your business’s size, needs, and price range.

To summarize:

  • AccountEdge: AccountEdge is the best locally-installed accounting software for Mac users. The software offers more features than any of the other Mac accounting software alternatives, but there is a learning curve and the software is not ideal for businesses with multiple users.
  • Xero: Xero is an incredibly robust accounting option that is ideal for medium to large businesses. The software also has a bit of a learning curve, but it offers unlimited users and great customer support.
  • QuickBooks Online: QuickBooks Online is one of the best small business accounting options. It has hundreds of integrations and plenty of features for most businesses. The software isn’t the easiest to use, and customer support can be a hit or miss.
  • Zoho Books: Apart from Wave, Zoho Books is the easiest accounting software for Mac users to learn. It offers true accounting, beautiful invoicing, and competitive pricing. The software is ideal for small to medium-sized business who don’t need payroll or a lot of integrations.
  • Wave: Wave is the best free accounting software for Macs. The software offers true accounting, but is easy to use and suits the needs of freelancers, micro businesses, and most small businesses. It’s not as comprehensive as AccountEdge or Xero, but the price tag is enticing.

When choosing between these five options, one of the first questions you should ask is: Do I want locally-installed or cloud-based software? 

If you’re set on a locally-installed program, then the decision’s already made for you — AccountEdge is the way you should go. If you prefer the mobility of cloud-based software, then Xero, QuickBooks Online, Zoho Books, or Wave would be better options.

For additional help choosing which software is best for your small business, read 10 Questions To Ask Before Choosing Accounting Software. I also highly recommend reading our reviews and taking advantage of free trials before committing to any solution. Read the Complete Guide to Choosing Online Accounting Software and Accounting Software: Cloud-based or Locally Installed? for extra help.

Good luck on your journey to finding the perfect accounting software for your Mac, and feel free to reach out if you have any questions along the way.

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