Shopventory VS Square For Retail


Let’s get right into things. Today we’re looking at Shopventory vs. Square for Retail. Why? Because if you need more inventory support than the basic Square Point of Sale app offers, they are your two best bets. Square (see our review) has been a pivotal force in the mPOS space since its beginning, but lately it has also been edging into the tablet POS market with an ever-growing number of features. Shopventory is newer, but it’s carved a niche out for itself as a supplement to not just Square, but also PayPal Here, Clover, and now even Shopify.

While Square dominates the mobile space as far as features, it lags behind tablet-based systems, particularly in terms of inventory. But now there’s Square for Retail. If you need more comprehensive inventory features, you’ll get them with an upgrade to Retail.

Shopventory is a monthly service that integrates with your Square account. While Square for Retail is a full-fledged POS, Shopventory is strictly an inventory-focused add-on for Square for Point of Sale. It replaces most of the in-app inventory management with its own web browser but it does keep the inventory lists automatically synced and generates reports.

A really quick disclaimer before we get onto the comparison: We’re not looking at the full Square for Retail app here (which I’ll also refer to as just “Retail” or “the Retail app”). We’re just focusing on how its inventory management tools stack up against Shopventory’s. It’s important to consider whether the cost of either service justifies its use. Retail offers many of the same features as Shopventory, but also includes employee management. However, it could be a more costly service given that the subscription is monthly per register. Shopventory offers monthly inventory management for three locations for less than the cost of one Square for Retail register subscription.

You don’t get everything that the standard Point of Sale app offers either, such as offline mode. In fact, the Retail app is more of a pared-down version of the POS app, but with more beefed up inventory and reporting. That’s not to say Shopventory offers all the inventory tools you could ever need, either. But it certainly seems to have the upper hand in terms of capabilities and pricing.

I think for the most part that either of this will do well. Although they might not be perfect, they’re both capable. But in the end, Shopventory has more features and more competitive pricing. I would test it out before upgrading to Square for Retail.

For more information, I encourage you to check out our full Shopventory and Square for Retail reviews. Otherwise, read on for our Shopventory vs. Square for Retail comparison and see how they stack up in the great battle for inventory management!

Features & Services

Winner: Shopventory

Both of these services offer enough that they merit full reviews in their own right. Our comprehensive reviews of Square and Shopventory explore the advantages and limitations of each. For simplicity’s sake, I am going to focus on three core aspects of inventory management and see how they stack up: inventory tracking, reporting, and purchase order/vendor management.

Inventory Tracking

With both Shopventory and Square for Retail, merchants get the ability to count inventory and have each sale deducted from total stock numbers. Both offer location management as well. You’ll be working with Square’s standard item listings, which means you can include all of the following: product name, photo, SKU/barcode, item description, and item variants with the option to set different price points.

Shopventory Inventory Tools

Screenshot of Shopventory home page

Shopventory works by syncing with Square. It pushes its inventory data (item prices, bundles, etc.) into the POS app and pulls sales data from Square into its own dashboard reports and updates the inventory counts in real time. Once you get inventory set up, you manage everything inventory-related through Shopventory, NOT Square. It might take some merchants a while to get used to that, especially if they’re used to relying on the Dashboard.

Shopventory’s pricing plan, which I’ll cover in the next section, focuses on the number of locations you use, not the number of registers or products. And setting up multiple locations is actually very easy. When you log into Shopventory, the dashboard asks you to create a location and then add an integration (that is, link to your POS). It works a little bit differently for each software, but here’s what you need to know for Square.

If you have separate Square logins for each location, that’s fine and you can connect each Square account to each location. However, if you take advantage of Square’s free location management instead, Shopventory will ask you to select a location from your list of Square locations after you connect the POS. (That means you should set up your locations in Square before you setup Shopventory.) If you’re using employee management and device codes to run multiple registers, it doesn’t matter. Shopventory tracks everything at the location level.

After you’ve created your locations and linked your POS systems, Shopventory will ask you to enable two major settings: “sync items and variants” and “sync item quantities.” This will establish the connection and effectively make Shopventory your primary inventory service.

Once you’ve set up Shopventory, you’ll continue to use Square POS as usual. Just make sure that you log into Shopventory to pull inventory and sales reports. This is especially important if you’re using the Shopventory-specific inventory features like bundles. Everything is synced in real time so you can log in and check whenever.

Here’s a quick run-down of Shopventory’s features:

  • Bundles: Square doesn’t support bundling, but this feature allows you to track raw ingredients, deduct gift basket items from main inventory stock and even keep track of goods sold at wholesale versus retail. It also allows for tracking of items by partial quantities (yards of fabric or goods sold by the pound, etc.) The bundling feature even includes bundle variants. None of this is currently supported by Square for Retail.
  • Low-Stock Alerts: You can set a custom threshold for each item, so you know when it’s time to reorder something.
  • Automatic Restocks On Refunds: You’ll have to enable this feature, as it isn’t turned on by default. It also doesn’t work on partial refunds in Square.
  • Multi-User Access: Shopventory also allows you to create multiple accounts with different permissions. Enable your managers and staff to better manage store inventory while ensuring accountability.
  • Inventory Transfers Between Locations: Is one location out of a product while another has too much of it? Use the Shopventory dashboard to keep track of internal transfers of merchandise.
  • Inventory History: Shopventory keeps a log of your inventory history, including when counts go up or down. When you manually adjust stock counts you can add a note to indicate why (theft, damaged goods, etc.). We’ll get a little bit more into some related features when we talk about reporting.
  • Inventory Reconciliation Tools: If you’re a bit old-fashioned, Shopventory does offer an easy downloadable reconciliation sheet for inventory. Just the basic details that you need, not a lot of extra information, which you can download via printable PDF or spreadsheet. However, Shopventory has also introduced a barcode scanner mobile app for inventory reconciliations. Each Shopventory user can download the app and scan and update inventory counts through the app, and Shopventory will keep a record of when and who was responsible. This is actually a pretty awesome tool.
  • Barcode And Label Printing: Shopventory lets you chose from a Dymo or Brother label printer, as well as computer printing on Avery label sheets.

Square For Retail Inventory Tools

Screenshot of Square for Retail home page

Square for Retail works pretty similarly to Square Point of Sale. Everything is controlled from the Square Dashboard or the app, though the dashboard gives you the most functionality. Even though the app (or at least parts of it) will look very different from the free version, your dashboard should look pretty much the same and the data entry process will be the same.

If you have a lot of inventory (and if you’re looking at this article, you probably are), the odds are good you don’t want to create each inventory item one by one. That’s where Square’s Bulk Upload feature comes in. You can download the spreadsheet template, populate it with your inventory, and upload your item library all at once. Likewise, you can also export your library to a spreadsheet if you need that data elsewhere.

Your item descriptions are nearly identical to the standard Square offering. Even though Square for Retail doesn’t display photos in the app, you can upload them for viewing the back end. Check out Square’s how-to video for creating items manually.

Technically, Square for Retail gives you access to the Inventory Plus features, but these are really (mostly) reporting tools or PO/Vendor management. So some of these features are actually just Square’s inventory features.

  • Low-Stock Alerts: You can set a custom threshold for each item so you know when it’s time to re-order something. (This is a standard Square feature.)
  • Employee Management: Square includes employee management at no additional charge with a Square for Retail subscription. So if you have a lot of employees this could end up being a good deal for you. You can set different user permissions, track time, and more.
  • Inventory Transfers Between Locations: Square initially required you to manually add or subtract inventory at different locations to record transfers, but that’s no longer the case with the Retail app. Now you can record merchandise transfers in the app.
  • Inventory History: Another feature that wasn’t present at Square for Retail’s launch, inventory history will show you all your sales, transfers, received shipments, etc. to show why your inventory count is what it is.
  • Barcode And Label Printing: Like Shopventory, you can choose to use one of two select label printers (A Dymo or a Zebra) or print from a computer onto standard Avery labels.
  • Vendor Library: All items associated with a particular vendor (as well as their prices) are stored in each vendor’s data file.

Note the lack of bundling features here and all that this entails: no bundles, no raw ingredient tracking, no partial ingredient tracking. This is one of the biggest limitations to Square’s inventory.

However, Square also doesn’t offer any sort of inventory reconciliation. You could download your inventory for export and modify the spreadsheet, but it’ll take a bit of work on your end to make that happen.

But that’s just for inventory management. We’ve still got to talk about reporting and purchase orders/vendor management.

Reporting Tools

First of all, Square’s reporting tools, overall, are pretty robust. (Check out the list of reports.) Shopventory’s reports exist mostly as an extension of Square’s, not a replacement for them. This makes sense given that Shopventory is an extension of Square, not a standalone app. In addition to some identical reports, Shopventory offers several reports that Square doesn’t — and a couple that Square for Retail doesn’t, either.

Square’s inventory reports are somewhat lacking. Specifically, something that merchants have been clamoring for is cost of goods sold (COGS) reporting. Square for Retail finally offers this feature, but thus far it hasn’t impressed. Editing the item costs isn’t easy to begin with, and the information isn’t available at key points in the Retail app experience. And all of that’s left merchants understandably upset. However, you can also keep a record of additional costs associated with a purchase (such as shipping or handling fees) that are added to your COGS tracking. That’s helpful.

In addition to COGS reporting, Square for Retail introduces a profitability report and an inventory by category report that lists the value of the items, projected profit, and profit margins in each category. This last report is more a combination of several other reports, but it’s nice to see.

On the other hand, Shopventory’s COGS reporting is a bit more advanced. Accessing pricing information seems a bit easier than with Square for Retail. Shopventory also tracks lot costs in addition to default costs. For advanced users, Shopventory has a cost averaging feature.  You can even back-fill lot costs using the default cost feature.

But apart from cost and profitability reporting, there’s another feature I like that Shopventory offers: a dead inventory report. You can print off a list of every item that hasn’t sold recently, and specify just how “recently” you want — whether it’s a week, a month, six months, etc. This is pretty handy because “slow” for one business isn’t slow for another.

It’s hard to ignore the fact that Shopventory outclasses Square for Retail in terms of reporting — it offers everything that Retail does, plus more. I’ve found that Shopventory and Square dashboards are both fairly intuitive and easy to use, so they’re evenly matched in that regard.

Purchase Order & Vendor Management

Since the upgrades to inventory and reporting tools are relatively small in Square for Retail, it’s nice to see that the additions in this category are actually pretty big game-changers. With the Retail app, it’s now possible to create purchase orders from within the Square dashboard and send them via email. You can also receive inventory from within the Square for Retail app.

If I’m being honest, Square for Retail and Shopventory are well matched in this category. There are a few differences — for one, with Shopventory you can only receive inventory through the web dashboard, not the app. But I think that, overall, their feature sets are pretty similar.

Square PO & Vendor Management

While you’ll need to use the Square dashboard to create purchase orders, you can receive stock from a PO directly in the Square for Retail app, which is nice. With Shopventory, everything has to be done from the dashboard, which is a major trade-off. However, it shouldn’t be a dealbreaker.

A few other features from Square that I like: You can create a new vendor listing from within a purchase order, whereas with Shopventory you must have all of your vendors already entered. You can also edit and cancel purchase orders as needed, and Square keeps an archived file.

I mentioned previously that Square does have an item library associated with a vendor, but I don’t think it’s the most effective display. When you add an item to the PO it is added to the vendor’s item library, but you can’t browse the item library while creating a PO. Instead, you need to search for the items you want in a drop-down menu. I know that some merchants have been frustrated that Square can’t auto-populate a PO using low inventory items. Others are also frustrated that they can’t see how many of an item are in stock. Instead, these merchants wind up flipping between tabs or screens to formulate a list of what is needed.

Shopventory PO & Vendor Management

Shopventory has a handle of the same shortcomings that Square for Retail does in this regard. Namely, you can’t auto-populate a PO based on low inventory, and you can’t view stock levels in the PO.  However, you can clearly browse every item associated with a vendor and select which ones you want to add to it. This kind of display seems kind of obvious, and it should be, but it’s not.

This might be the one area where I think Square has a modest upper hand. For one, Shopventory lacks the ability to edit POs or archive them to clear them out of your way while preserving the information. (The company says it’s working on this last bit.) But you can save as a draft, just like you can in Square. So if you’re not sure or you’re not ready, you don’t have to send the purchase order out into the world. With Shopventory, you also need to create your entries for vendors before you start the PO.

Pricing

Winner: Shopventory

Square for Retail’s pricing is very simple: $60/month per register. No tiered packages, no add-ons, no extra fees for priority phone support.

Square for Retail Pricing

That’s fairly competitive for an iPad-based POS system. But as we noted in our full review, Square for Retail actually removes several of the features available in the standard (and free) Point of Sale app. It’ll be up to you to decide whether the new interface and new inventory tools justify the cost.

Thinking more broadly, you’ll also need as many iPads as you have registers ($350+) and likely a Square Stand with a reader ($169) as well as any cash drawers, printers, and bar scanners you want for each device.

However, there is one caveat: Square for Retail provides employee management for an unlimited number of employees. With the standard Square plan, that cost is $5 per employee per month. So if you have 12 employees and one register, you actually break even on costs.

Shopventory’s pricing plan is focused not on the number of devices or the number of users, or even the number of transactions. Pricing is based just on the number of locations. There’s a limited free plan that provides analytics, but the paid plans start at a very reasonable $30/month.

Here’s what you can expect:

  • Starter ($29/month): 1 location, 1 year order history, 1 year reporting
  • Standard ($59/month): 3 locations, 2 years order history, 2 years reporting
  • Professional ($199/month): 10 locations, unlimited order history, unlimited reporting
  • Elite ($499/month): 25 locations, unlimited order history, unlimited reporting

If you want access to purchase orders, vendor management, and the bundling features, you’ll need to get the standard plan. The starter doesn’t support these capabilities at all. In addition, the higher-tier plans throw in a few other perks (free QuickBooks syncing, otherwise $30/month; access to beta features, phone support).

Keep in mind that you still need hardware and devices to run the Square app — and an iPad is the most full-featured option. But you could use Android tablets or smartphones too. You have a lot more options and no charge for using multiple devices at the same location. So at three locations, ignoring costs of hardware, you’re already saving $120 with Shopventory. (That’s the cost of 24 employee management subscriptions, by the way.)

You can also save a bit of money if you opt to pay for Shopventory on an annual plan instead of a monthly one, which is nice. I think designing an inventory system whose pricing focuses on locations is the smart option.

While I think Shopventory’s pricing is definitely better, I can’t say definitely that it’s the better value overall. For one, Square for Retail is optimized for businesses with very large inventories. And if you’re dealing with hundreds and hundreds of items you might prefer the search-and-scan based user interface that the app offers. But if you have a small inventory, or you’re not a retail business, and still want all the management tools? If you don’t care about the UI but want some of the Square POS features like offline mode or open tickets? It’s pretty obvious that Shopventory is the better solution. What’s right for you will depend on your priorities and your budget, so check out our complete reviews of both services before you commit to anything.

Web Hosted Or Locally Installed

Winner: Tie

Both of these solutions are web-hosted, which is awesome. Yay for the cloud! Don’t forget that you’ll also get some in-app reporting capabilities if you don’t want to log into a web browser, but they aren’t inventory driven, and they’re far more limited than using the web dashboard.

Customer Service & Technical Support

Winner: Tie

Apart from a small team on the Square Seller Community (a forum for online merchants), Square for Retail doesn’t have any exclusive support channels that are separate from regular Square support. So you should expect business as usual in this regard.

Square’s been plagued by complaints of shoddy customer service pretty much since the beginning. But honestly, I think most of those complaints are rooted in Square’s tendency to freeze or terminate accounts. For most technical (not account-related) issues, Square does seem to offer more reliable support. There’s email and live phone support, as well as a very comprehensive self-service knowledgebase. And the Seller Community is honestly a great resource as well.

But I find that the amount of information and how-to’s concerning Retail specifically to be troubling. There’s not a lot. Square has tons of videos but they seem to gloss over showing how to use the Retail app. If you want to know about specific features before you sign up, you should get on the Seller forum and ask. Otherwise, the only way to find out is to test-drive Square yourself.

Not only that, but it certainly seems like the process of obtaining a code to access phone support requires more effort than some merchants are willing to put forth. I get it. I loathe automated menus that make you jump through hoops to get to a real person as much as anyone else. And I’ve heard a smattering of complaints about email support. I think Square’s support is mostly good, but occasionally something does go wrong.

If you one of the merchants who’s felt frustrated at Square’s support, you’ll probably be pleasantly surprised at the quality if Shopventory’s. Phone support is only available for higher-tiered plans, but the chat option is great and the knowledgebase is extremely helpful as well. (I know. I’ve tested both.) The chat option isn’t quite live chat because it might take a few to get someone to answer your question, but once you get one of the reps to respond, it is a live conversation. I shouldn’t have to say this about any customer support, but sadly I do: I like that you get to talk to a helpful person who isn’t going to shoehorn you into a script.

Shopventory isn’t quite large enough to have the kind of active forum that Square has for support, but the knowledgebase is easily as detailed as Square’s. I find the video tour is super useful as an orientation to Shopventory, despite how much I absolutely hate watching video tutorials longer than about one minute.

It’s worth noting that you’ll still have to deal with Square for payment- and account-related issues if you use Shopventory. But for inventory-related issues, you can deal with Shopventory instead.

Negative Reviews & Complaints

Winner: Shopventory

At this point, merchants’ biggest point of contention with Retail is that in some ways is a step back from the standard Point of Sale app. A few features are lacking in the Retail app. Plus, I’ve seen complaints that features Square promised at launch (or at least showed in screenshots) haven’t actually appeared yet.

Some of the complaints about Square for Retail we’ve seen include:

  • Problems With Cost Of Goods Recording And Reporting: This is a big one and it manifests in a lot of ways. Currently, the only way to update costs is to upload a spreadsheet. The app itself doesn’t allow you to manually edit individual item costs, and Square’s current reports don’t list item costs on everything. Merchants who were expecting to finally get COGS reporting haven’t been thrilled, though Square does say it’s on their list of improvement to make, so we may see some enhancements.
  • Lack Of Features: Specifically, with Retail, you lose access to Square’s offline mode and the open tickets capability. You can upload images as part of the item listing, but they don’t display in the app. Merchants have complained about their removal. I haven’t been super thrilled about how Retail feels like a step back from the Point of Sale application in terms of interface and features, either. And one big missing feature that I’ve seen a lot of chatter about is the ability to auto-populate purchase orders based on low inventory (or even the ability to see the inventory count in the same window as the PO).

There’s a lot less user chatter about Shopventory overall (which makes sense with a smaller customer base). I think users who integrate with PayPal or Clover will probably be more dissatisfied than Square users, honestly. I think some merchants will dislike the same sort of shortcomings you find in Square for Retail: missing features like the ability to view inventory levels while creating a purchase order, or the ability to edit purchase orders. Overall, the comments I see from merchants are positive.

Positive Reviews & Testimonials

Winner: Tie

Square gets a lot of love overall for its payment processing. Signup is quick and easy, rates are fair and affordable, and the hardware is good and fairly priced. But the Retail app seems to be less popular overall. In theory, it fills a niche that businesses with a high quantity of inventory have been needing. I know a lot of merchants were excited at the prospect when it launched, but I haven’t seen as much talk about it since then.

I don’t see a whole lot of chatter around the web about Shopventory. The website has a couple testimonials and I’ve seen the Square Seller Community talk about it, too. The discussions I’ve seen a focus on the good customer service and its fair pricing.

I’m calling it a draw here. Both options are good ones and serve their purpose, but there isn’t enough of a discussion to say which one has more positive coverage.

Final Verdict

Winner: Shopventory

I can’t say definitely that Shopventory trounces Square for Retail in every regard. One is an inventory management add-on, the other is a full-fledged POS with inventory management. So I can draw apples-to-apples comparisons about some things and say that yes, Shopventory has more and better quality inventory features. Its pricing is way more competitive if your only concern is inventory tracking. It will work great as an add-on to Square Point of Sale.

But Square for Retail has a search-optimized UI and free employee management tools that might be deciding factors for some merchants. So you could potentially get a better value with Square for Retail if you have a lot of employees and want easy time tracking along with the ability to manage large inventories.

The good news is we’re looking at two companies that are both committed to adding new features all the time. So in six months or a year, we could be looking at two majorly improved products. We’ll have to see how they stack up then.

Check out our complete reviews for Shopventory and Square for Retail to get a closer look at each. Also, both Square for Retail and Shopventory offer free 30-day trials, so you can test drive both of them (preferably not at the same time) and see which one works better. Thanks for reading and good luck with your search!

The post Shopventory VS Square For Retail appeared first on Merchant Maverick.

“”

Best Payment Processing Integrations For Accounting Software

Best Payment Processing Integrations for Accounting Software

Are you ready to start accepting credit and debit cards from your customers? Do you want your customers to be able to pay their invoices directly online? You’ve come to the right place.

Here at Merchant Maverick, we know payment processing can be a tricky concept to wrap your mind around. Finding the best option for your business isn’t always easy. The good news is we’ve done the hard work for you. The even better news? Each of these payment processors integrates directly with your accounting software to make your life that much easier.

This post will discuss five of the top payment processors that integrate directly with accounting software. We’ll cover the pros and cons of each to help you decide which is best for your small business. And we’ve even created a handy chart to help you compare all the payment processors that integrate with major accounting programs.

But before we begin, let’s cover a few basics about payment processing.

If you’re already a payment processing pro, feel free to skip this section and continue on to our top picks for best payment processing integrations. Or visit our merchant account reviews to see more payment processing options.

A Brief Intro To Payment Processing

There are two different types of payment processing companies — merchant accounts and payment service providers (or PSPs).

  • Merchant Account: A merchant account is an individual account that connects your business directly to a payment processor so you can accept credit cards and debit cards. When your customer pays with a card and the payment clears their banking institution, the transaction will be deposited directly into your bank account through your merchant account.
  • Payment Service Provider: A payment service provider also allows you to accept credit cards and debit cards. However, instead of creating an individual account, a PSP will lump all of your transactions into a shared account where multiple merchants transactions are stored.

So which one should you use? There are a lot of factors to consider, including your business type, the size of the transactions you’re processing, the number of transactions you process per month, and whether or not you are considered a “high-risk” merchant.

According to our merchant account expert, Tom DeSimone:

If you plan to process large transactions ($300 or more) or a sizeable monthly volume in card payments (about $10K or more, NOT INCLUDING cash and checks), you will want a merchant account to get the best rates.

On the other hand, he says this about PSPs:

While transactions fees might be a little higher than if you had your own merchant account, PSPs usually do not charge a monthly fee or other schedule fees. You just pay for what you use, which is ideal for businesses that only process sporadically.

It’s pretty simple, really. If you plan on processing large transactions or lots of transactions every month, a merchant account will probably be the way to go. If you’re a smaller business that doesn’t process much and needs a pay as you go option, a PSP might be a better choice.

There are other pros and cons to consider with each type of payment processing company, however.

We borrowed this handy chart from our Beginner’s Guide To Payment Processing to help you better understand the differences between merchant accounts and PSPs:

Best Payment Processing Integrations for Accounting Software

There is one more important concept to cover before we move on. In addition to merchant accounts and PSPs, you might encounter payment gateways.

If you’ve ever bought anything online, you’re already familiar with this concept (whether you know it or not):

  • Payment Gateway: A payment gateway allows you to accept credit and debit cards online. Payment gateways use either merchant accounts or PSPs to connect your business and your customer’s banking institution so you get paid.

Payment gateways account for some of the most common accounting integrations (think PayPal and Stripe).

In order to integrate your accounting software to a payment gateway, you will need to establish an account with that gateway provider. Depending on the payment gateway you choose, you may need to set up a merchant account or PSP account. Your payment gateway may require that you use a specific merchant account or PSP of theirs, or they may offer a payment gateway and merchant account or PSP bundle.

I know this is a lot to take in, believe me, but it gets easier from here. Now you can sit back, relax, and learn about our top five favorite payment processing integrations for accounting software.

Fattmerchant

Best Payment Processing Integrations for Accounting Software

Fattmerchant integrates with QuickBooks Online.

Fattmerchant (see our review) is a merchant account provider that was founded in 2014. This company sets itself apart by offering subscription-based pricing, making it competitive and potentially more affordable than other merchant accounts. Fattmerchant also offers 24/7 customer support and receives positive feedback from the majority of its customers.

Products & Services

Fattmerchant supports the following products and services:

  • Merchant account
  • Virtual terminal
  • Countertop terminals (pricing not disclosed)
  • Point of Sale (POS) integrations
  • Mobile payments
  • One mobile card reader ($75 for each additional reader)
  • Shopping cart integration
  • eCheck services ($29/mo + $0.25 per transaction)
  • Data analytics

The company does not have its own payment gateway, but Fattmerchant is compatible with Authorize.Net, Payeezy, or the TSYS Payment Gateway. It will set you up with a free gateway or integrate with your existing one.

Pricing

Fattmerchant offers two pricing plans that are paid monthly. There is no locked-in contract and no early termination fees for either plan.

  • Basic: $99/mo + $0.08 per transaction for retail ($0.15 per transaction for ecommerce)
  • Enterprise: $199/mo + $0.05 per transaction for retail ($0.10 for ecommerce)

If you’re looking for an affordable, honest merchant account, Fattmerchant is one of the best. This option is good for businesses looking for a predictable monthly subscription plan. Fattmerchant does not provide high-risk merchant accounts and may not be a good value for small businesses with low payment processing.

Read our full Fattmerchant review to learn more and see if this affordable merchant account option is right for you.

CDGcommerce

Best Payment Processing Integrations for Accounting Software

CDGcommerce integrates with QuickBooks Online.

CDGcommerce (see our review) is a merchant account provider with over 20 years of payment processing experience. This company is geared toward small to medium-sized business and also operates on a monthly subscription pricing model. A free payment gateway is included with every CDGcommerce merchant account. The company also sets itself apart with an impressive client retention rate and excellent customer support.

Products & Services

CDGcommerce supports the following products and services:

  • Virtual terminal
  • One credit card terminal (with a $79/yr insurance fee)
  • Mobile payments
  • POS systems
  • Optional security service
  • Data analytics and reports

CDGcommerce offers a free payment gateway. Users can choose between Quantum or Authorize.Net.

Pricing

CDGcommerce has two types of pricing: simplified pricing and advanced pricing. Simplified pricing rates depend on your business type and size.

  • Online: Interchange + 0.30% + $0.15 per transaction
  • Retail: Interchange + 0.25% + $0.10 per transaction
  • POS: Interchange + 0.25% + $0.10 per transaction
  • Mobile: Interchange + 0.25% + $0.10 per transaction
  • Non-Profit: Interchange + 0.20% + $0.10 per transaction

Advanced pricing offers discounts for business with a processing volume of $10,000+ each month. There are no long-term contracts or early terminations fees for either pricing structure. Check out our complete CDGcommerce review for more pricing details. To learn more about interchange and interchange-plus pricing, read Trading Ease For Transparency With Interchange Plus.

 

CDGcommerce is a scalable company with an impressive number of products and services. The free credit card terminal is also a huge plus. The only catch with this company is that it is limited to merchants in the US.

If you’d like to learn more about CDGcommerce, read our full CDGcommerce review.

Square

Best Payment Processing Integrations for Accounting Software

Square integrates with QuickBooks Online, Xero, Zoho Books, Kashoo, and Kashflow.

You’re probably familiar with the swipe-based payment processing system known as Square. Square (see our review) is one of the leaders in mobile processing. It offers great features including inventory, invoicing, and customer management features. And to top it off, Square has a ton of integrations.

Products & Services

Square supports the following products and services:

  • Virtual terminal
  • Gift cards ($2 per card)
  • Shopping cart integrations
  • e-Invoicing
  • Inventory management
  • POS app
  • Customer management
  • Customer feedback
  • Advanced reporting
  • Email marketing
  • Appointments ($30-$90/mo)
  • Payroll ($25/mo + $5/mo per employee)
  • Event rentals

Pricing

Square offers standard fees with no interchange-plus pricing. There are no monthly fees, no locked-in contracts, and no early termination fees.

  • Standard Swipe Transactions: 2.75% per transaction
  • Square Register Swipe Transactions: 2.5% + $0.10 per transaction
  • Virtual Terminal Transactions: 3.5% + $0.15 per transaction
  • eCommerce & Invoice Transactions: 2.9% + $0.30 per transaction

Square offers several add-ons and additional monthly services. Be sure to read our complete Square review for more pricing details.

If you’re looking for a mobile payment processor, this is one of the most well-known and developed options. Square is good for small businesses with low processing volumes and can be an affordable choice. However, Square is not meant for high-risk merchants or companies with a large processing volume as the company is known to hold funds and suddenly terminate accounts.

To learn if Square is the right payment processing option for your business, check out our full Square review or read our post: Is Square Right For Your Business?.

Authorize.Net

Best Payment Processing Integrations for Accounting Software

Authorize.Net integrates with QuickBooks Online, Xero, Zoho Books, FreshBooks (classic), and Microsoft Dynamics.

Authorize.Net (see our review) is a payment gateway that was founded in 1996; it has since supported over 400,000 merchants. Not only does Authorize.Net allow you to accept online payments from customers, it also has a checkout feature, recurring billing, contact management, and fraud protection. In addition, the company offers good customer support and key accounting integrations.

Products & Services

Authorize.Net supports the following products and services:

  • Virtual terminal
  • Mobile payments app
  • Supports mobile card reader ($42-$98 per reader)
  • Simple checkout
  • Apple pay support
  • Fraud detection
  • Recurring billing
  • Customer information management
  • eChecks (additional cost)

If you have a merchant account, Authorize.net is designed to be compatible with your existing merchant account.

If you don’t have a merchant account, you can have Authorize.Net set you up with one. Or, you can choose a merchant account provider that partners directly with Authorize.Net. If you want to go this route, we recommend Dharma Merchant Services, one of our all-time favorite payment processing providers.

Pricing

Authorize.Net offers two pricing plans: a gateway-only plan and a gateway + merchant account plan. There are no-long terms contracts or cancellations fees (but this may vary depending on your merchant account provider).

  • Payment-Only: $25/mo + $0.10 per transaction
  • Payment Gateway + Merchant Account: $25/mo + 2.9% + $0.30 per transaction

Note: If you are using a merchant account provider that partners with Authorize.Net, your merchant account may lower or even waive certain fees. Read our complete Authorize.Net review for more pricing details so you can make sure you get the best deal.

If you’re looking for a payment gateway, Authorize.Net is a great option. It boasts excellent customer service and tons of features to cover most business needs. One important thing to remember is that Authorize.Net is not good for data exporting. Pricing can also be expensive if you sign up with Authorize.Net directly, so make sure you explore all of your options before deciding.

Read our full Auhorize.Net review for more information.

Braintree

Best Payment Processing Integrations for Accounting Software

Braintree integrates with QuickBooks Online, Xero, Sage One, FreshBooks (classic), and Saasu.

Braintree (see our review) offers both merchant accounts and payment gateways. This processing company was established in 2007 and offers impressive features, multiple currency options, and excellent customer support. Flat-rate pricing and ample integrations are also a huge plus.

Products & Services

Braintree supports the following products and services:

  • eCommerce integration
  • Mobile payments
  • Recurring billing
  • Fraud detection
  • Tax support
  • Developer tools
  • PayPal integration

Braintree comes paired with its own payment processing, but merchants can choose to use a different merchant account with the Braintree gateway for an added fee.

Pricing

Braintree has a simple pricing plan. There are no monthly fees, setup fees, gateway fees, or early termination fees. Instead, you’ll pay a competitive, standard rate:

  • 2.9% + $0.30 per transaction

If you only want to use the Braintree gateway and not its payment processing, then you’ll have to pay a flat fee of $49 per month plus $0.10 per transaction instead.

We like Braintree so much that it even outranks PayPal and Stripe in our books. However, Braintree is not suited for high-risk merchants and certain types of businesses are prohibited from using Braintree.

Read our complete Braintree review for more details and to see if this merchant account and payment gateway provider is a good fit for your business.

Which Is Right For Me?

If you’ve learned anything from this post, it’s that when it comes to payment processing there are lots of options to choose from. The right payment processing provider for your business will depend on whether you’re looking for a merchant account or a payment gateway (or a combo of both), plus the number of transactions you process and the extra features your company requires.

One of the main things you should consider is which providers integrate with your accounting software. This will narrow down your decision quite a bit.

While we named some of our favorite companies above, there are several other common payment processing accounting integrations, including PayPal, Stripe, forte, and GoCardless. To make your search for the perfect payment processor easier, we’ve created a chart of the most common accounting programs and the payment processing providers they integrate with.

Software Payment Processing Integrations
QuickBooks Pro BluePay, Durango Merchant Services, QuickBooks Desktop Payments
QuickBooks Online Authorize.Net, BluePay, CDGcommerce, Fattmerchant, Forte, Partial.ly, Payline, PayPal, WorldPay, QuickBooks Payments,    Square, Stripe, WePay, WorldPay
Xero Authorize.Net, Bill&Pay, Braintree, Forte, GoCardless, PayPal, Square, Stripe, WorldPay
Zoho Books Authorize.Net, Braintree, Forte, PayPal, RazorPay, Square, Stripe, WePay
Wave PayPal, Stripe, Wave Payments
FreshBooks (new)  Partial.ly, Payments by FreshBooks, PayPal, Stripe
FreshBooks (classic) Authorize.Net, Braintree, Forte, PayPal, Stripe
Sage One Braintree, PayPal, Sage Payment Solutions,
Stripe, WayPay, WorldPay
Sage 50c GoCardless, Sage Payment Solutions
FreeAgent GoCardless, PayPal, Payal Here, Square, Stripe
Saasu Braintree, eWay, PayPal, PayWay, PinPayments, Stripe
Kashflow GoCardless, Global Payments, PayPal, Square,
Stripe, WorldPay,
Kashoo BluePay, PayPal, Stripe
ClearBooks GoCardless, PayPal,  PayPoint
AND CO PayPal, Stripe

Note: The above integrations are always changing and may vary by country. Check with your accounting software directly for the most up-to-date information.

Remember that when you are choosing the perfect payment processor to integrate with your accounting solution, you can never do enough research. Be sure to check out our merchant account reviews to learn how each software stacks up in terms of features, value for your money, and reliability. If you’re interested in learning more about payment processing, you can also download our free Beginner’s Guide To Payment Processing to learn to evaluate your options, negotiate a good merchant account contract, and more.

Best of luck, and stay tuned for more payment processing tips and tricks from the Merchant Maverick team. If you’d like to do more reading on the subject, the following articles will point you in the right direction:

The Complete Guide to Online Credit Card Processing With a Payment Gateway

Are You A High-Risk Merchant?

The 5 Best Small Business Credit Card Processing Companies

The post Best Payment Processing Integrations For Accounting Software appeared first on Merchant Maverick.

“”

The Best Credit Card Processing Apps For Mobile And Service Businesses

mobile-card-payment-app-service

Being able to take payments on the go without having to jump through five million hoops is crucial for mobile businesses, whether you’re a service business that visits customers at home or just a small business without a permanent storefront. That’s where credit card processing apps come in: Combining integrated payments and feature-rich POS systems that run on smartphones and tablets, they’re designed to operate anywhere you can get a cellular or Wi-Fi signal.

We took a look at the most promising credit card processing apps for mobile and service businesses, comparing their features as well as their processing rates. Then, we compiled the best options into a list!

Choosing the Best App Features for Mobile & Service Businesses

If your business is primarily service-based or you tend to do more pop-up sales and events than deal with retail storefronts, you probably don’t need (or want) a whole lot of hardware. What you do need is an EMV-friendly reader and a smartphone or tablet to run the system from.

We used two primary criteria in deciding this list: first, the product has to have integrated payment processing, and the app must be available on a tablet (preferably a smartphone as well).

While hardware may not be a priority, knowing which systems can work as a countertop system as well as mobile is helpful. Invoicing, virtual terminals, solid sales tax management, and decent item libraries were also factors. Take a look at our comprehensive comparison chart to figure out which system might work best for your particular needs.

Square for retail review logo imageSquare PayPal Here Shopify Payline Mobile SumUp
BASICS
Integrated Processing Yes Yes Yes (Other options available) Yes Yes
Processing Rates (for most swiped/dipped transactions) 2.75% 2.70% 2.70% Interchange + 0.5% or 0.3% 2.75%
Monthly Fee $0 $0 Plans start at $9/month $0 / $9.95 $0
Number of Devices Unlimited Unlimited Unlimited Unlimited 1
Tablet Support Apple, Android Apple, Android, Windows Apple, Android Apple, Android Apple, Android
Smartphone Support Apple, Android Apple, Android, Windows Apple, Android Apple, Android Apple, Android
Email/SMS Receipts Email/SMS Email/SMS Email Only Yes Email/SMS
Receipt Printer Connectivity Bluetooth, Ethernet, USB Bluetooth, LAN, Wireless Bluetooth, USB, LAN No Bluetooth, LAN
Cash Drawer Connectivity Yes (Tablet Only, With Printer Connectivity) Yes (With Star Printer Connectivity) Yes (iPad Only, with Printer Connectivity) No Yes (with Printer Connectivity)
FEATURES
Split Tender Yes Yes Yes Yes No
Offline Processing Mode Yes No Very Limited No No
Full and Partial Returns Yes Yes Yes (including store credit) Yes Full Only
Sub-User/Employee Accounts Yes (monthly fee) Yes (free) Yes (PINS/accounts) Yes Yes (Limited)
Discounts by $ or % Yes Yes Yes Yes No
Tipping by $ or % Yes Yes No Yes Yes
Multiple Tax Rates Yes Yes Yes Yes Yes
Adjust Tax Rates In-App Yes Yes Yes Yes Yes
Customizable Receipts Yes Yes Yes Yes No
Generate Invoices Yes Yes Yes No No
Virtual Terminal Yes Yes (monthly fee) No Yes Yes
INVENTORY
Bulk Item Upload Yes No Yes No No
Item Counts Yes No Yes No No
Item Variants Yes Yes Yes No Yes
Item Add-ons Yes Yes No No No
Item Categories Yes Yes Yes No Yes
Item Photo Yes Yes Yes Yes Yes
Create Item from App or Dashboard Yes Yes Yes Yes No (App Only)

You can check out our reviews of each service for more information about features, user experience, and more.

Square

Square business model and mobile credit card processingSquare made its name with a mobile processing service that anyone could use, and while the company is definitely catering to larger entities these days, small and mobile businesses still make up a good portion of Square’s merchants. Square’s totally free processing app makes it easy to create an item library of physical products as well as services.

Square’s tax rate settings are easily adjustable from within the mobile app and you can pre-program different rates if you find yourself flipping between different locations often.

In addition, Square offers invoicing, recurring invoicing/storing cards on file, and a free virtual terminal. You can even integrate Square’s appointment booking software seamlessly.

Square will charge you 2.75% per swiped transaction, but invoicing will run you 2.9% + $0.30, and virtual terminal transactions will cost you 3.5% + $0.15.

PayPal Here

PayPal Here review: One of the top Square alternativesPayPal Here is another staple of mobile businesses with a free mobile app. PayPal has the advantage of massive eCommerce support as well as a solid mPOS so you can seamlessly blend different aspects of your business. Plus, your funds are available almost instantly in your PayPal account, and with the PayPal debit card, you can spend them anywhere. The free mobile app isn’t quite as feature-rich as Square’s, but it’s highly capable.

You’ll also find PayPal Here’s tax settings are adjustable within the app and you can easily accommodate different sales tax rates. Like Square, you get free in-app invoicing. However, if you are looking for a virtual terminal or recurring billing, they’re going to run you an additional $30 and $10 per month, respectively, which is a fairly high price tag.

You’ll pay 2.7% per transaction in the app, whereas invoices will run you 2.9% + $0.30. Virtual terminal transactions (not counting the monthly fee) cost 3.1% + $0.15.

Shopify

Shopify started out as just an eCommerce offering but it’s expanded into a multi-channel solution for business. You can get Shopify’s Point of Sale app for as little as $9/month with the Lite plan, or you can upgrade to a countertop-friendly version with the Retail package, and even add on integrations for appointment booking. However, if you don’t /need/ a receipt printer or cash drawer and don’t sell through your own site online, the Lite plan will absolutely get you through.

Shopify isn’t the most advanced credit card processing app out there — for example, it doesn’t support tipping — but overall it has most of the features mobile and service-based businesses need, and its integration with the eCommerce tools is definitely an asset. It even allows invoicing.

Shopify allows you to set a tax rate for a shop location and create overrides and exemptions. One thing I do like that I don’t often see in these sorts of apps is tax rates based on GPS location, which eases the burden on you considerably.

For Shopify Payments (the default processing method), you’re going to pay 2.7% per transaction to start out, though if you opt for the higher-tiered plans you’ll see some savings.

Payline Mobile

Payline is one of our favorite merchant account providers, and we like their mobile solution because it’s available independently of the other offerings and suitable for low-volume businesses, which isn’t common with traditional merchant accounts.

The app is overall solid, with inventory features, tipping, and discounts. While there’s no invoicing feature, the mobile plans do offer access to a virtual terminal. The app is also designed for mobile use only: it doesn’t support retail/countertop processing features like cash drawers or receipt printers. However, Payline supports multiple tax rates for different items as well as a master tax rate for checkout, depending on your needs.

Payline’s mobile products offer interchange-plus pricing, too: the Start plan (formerly Spark Plan) will charge you 0.5% over interchange plus $0.20 per transaction with no monthly fee; the Surge plan charges a 0.3% markup plus $0.20, with a $9.95 monthly fee. The $0.20 per-transaction fee is a little high, but doesn’t put Payline Mobile in the realm of unreasonable pricing. However, it does mean businesses with larger ticket sizes will feel the effects of that per-transaction fee less.

Spark Pay

Capital One’s mobile processing solution Spark Pay is part of the larger “Spark” line of businesses solutions, which includes a fairly advanced online store. However, despite that, Spark Pay the mobile app stands alone, with no integrations.

It has all the major features a merchant would need — tipping, custom discounts, an item library, and support for a countertop setup. Unfortunately, there’s no invoicing, and Spark Pay’s virtual terminal is only in beta mode. You can only set one tax rate in the app as well. However, the major shortcoming is simply that while Spark Pay does offer EMV terminals, there’s not currently an EMV-compliant mobile reader, something that all the other options here do offer.

That said, Spark Pay does offer great customer service, and its pricing is competitive. On the Go plan, there’s no monthly fee and transactions cost 2.65% + $0.05. The Pro plan has a $19 monthly fee, but your rates drop to 1.99% + $0.05.

SumUp

SumUp has been operating in Europe for several years now, but it’s only reached the US in the past year, which definitely makes it the newcomer. The app is overall solid, though more limited than the others on this list.

You do get a free mobile app and free virtual terminal, as well as a fairly unique tool: SMS payments where customers can complete a transaction by opening a link sent through text message.

However, you can only process on one device at a time, so while you can create sub-user accounts, there’s not much of a benefit. SumUp does support multiple tax rates, but tax rates can’t be deleted when they are associated with an item. You’ll have to delete the item first.

The lack of discounts and the ability to make some changes through the dashboard are a bit disappointing — but the fact that you can manage everything from within the app is a major improvement over a platform like Clover Go, which requires you to make many adjustments in the web dashboard.

There are no recurring billing or card-on-file options, though, and no invoicing, either. That said, SumUp charges a simple 2.75% per transaction, and 2.9% + $0.15 for virtual terminal and SMS payments, with no monthly fee.

Final Thoughts

I’m usually pretty hesitant to recommend one product above all others without consideration of the differences from one business to the next. And that’s true here. If you really only have simple needs, any of the options on this list will serve you well. As your needs get more advanced, it’s definitely worth looking at more advanced setups such as Square or PayPal Here. And as always, the price is a major consideration. Make sure you run the numbers and are confident the rates you will pay are competitive.

The good news is that all of these services have a no-monthly-fee option so you can try them out with no risk. I encourage you to check out our complete reviews of any credit card processing app you’re interested in pursuing. And if you have questions, I encourage you to reach out. We’re always here to help, so feel free to leave us a comment!

The post The Best Credit Card Processing Apps For Mobile And Service Businesses appeared first on Merchant Maverick.

“”

How To Identify The Pricing Model On Your Processing Statement

Credit Card Processing Statement image

“It’s 11 o’clock. Do you know where your children are?”

This was a popular PSA broadcasted to parents in the ’70s and ’80s, back when “stranger danger” was just about the scariest thing out there. Now, I have an equally important PSA for small business owners: “You have your processing statement. Do you know your pricing model?”

The ability to recognize merchant account pricing models (and, most importantly, which one you have) is a crucial step toward understanding your statement, as well as increasing your overall merchant-savvy. We’ve found that many merchants recognize the rates and fees they were quoted for processing, but without any broader context of which pricing model they have. This makes deciphering an already-confusing card processing statement all the more difficult, and makes discerning whether you’re paying too much nearly impossible.

Starting with a statement and working backward to an accurate understanding of how your quoted rates actually kick in is maybe not the ideal introduction to pricing models. Yet, this is most often the way things go, and I’m not surprised. No one goes to “merchant account school” for this stuff, and account providers vary widely in both their skill and willingness to thoroughly explain pricing.

The good news is that small business owners are no strangers to learning on the fly. So, grab a statement or two, and let’s get cracking!

A Quick Primer On Pricing

In broad strokes, the main pricing models are differentiated by the way your merchant account provider handles the wholesale cost of processing (what it must pay to other entities in the processing chain) versus its own markup. There are two separate types of wholesale costs — interchange fees and card association fees — but the differences between pricing models mostly center around how interchange fees are handled.

You’re probably already aware of the vast variety of credit and debit cards in circulation. Each type of card has its own pre-set interchange cost (a percentage of the sale and sometimes a per-transaction fee) that all merchant account providers must pay to the card-issuing bank when that particular card type is used. Over the years, the main merchant account pricing models have developed based on two possible ways of dealing with these wholesale interchange costs:

  1. Pass the interchange costs directly to the merchant and also charge a separate “low” markup.
  2. Blend the interchange costs into one or more “high” overall rates for the merchant that already include a markup.

I’m putting “low” and “high” in quotation marks because we recognize they’re super-relative terms. Not to mention, the exact amount of your rate is only one piece of the puzzle. As a helpful simplification going forward, you can think of “low” as well under 1%, and high as over 1% (often at least 2%, or even much more). The important thing to remember is that a low rate may not include interchange already (look for those costs listed separately), while a high rate likely does.

The “Big Four” Models

The most common pricing models are interchange-plus, membership, flat-rate, and tiered. For more background on the models, check out these helpful articles:

  • Trading Ease For Transparency With Interchange-Plus
  • Tiered Pricing: The Epic Fail Of A Pricing Model
  • Get A 0% Interchange-Plus Markup With Membership Fee Pricing
  • Analyzing The Cost-Effectiveness of Square’s Mobile Processing Solution (flat-rate pricing)

If you’re still a bit foggy on the differences, that’s okay. For now, you can start with your statement and work toward a better understanding of merchant account pricing as a whole. We’ll get there!

Good Indicators, But Not Guarantees

While each pricing model leaves tell-tale signs on a statement, it’s important to note that no “standard” indicator is necessarily a guarantee. Think of the indicators we’ll discuss as good clues, or important signs. In truth, processors may include red herrings in their statements, or invent their own strange hybrid systems. Fortunately, most stick fairly closely to the main pricing models.

Now, we’re finally ready to look at the four main pricing models and their most common statement indicators. The more indicators for a certain model on your statement, the better the odds that’s the model you have. I’ll be using a few snippets of statements as examples, but note that any interchange rates listed are not necessarily the current values. Some of the statements are older. In any case, your statement will never match these completely. No two processors display this stuff in the same way.

Interchange-Plus / Cost-Plus Pricing

All things being equal, interchange-plus statements are the most difficult to read. The big payoff is that you clearly see the difference between wholesale costs and your account provider’s markup on your statements. In this model, the rate you were quoted was just the markup piece — the “plus” in “interchange-plus.” In other words, interchange fees and your account provider’s markup are charged separately. Typically, interchange-plus plans charge both a percentage markup and a flat, per-transaction markup. Here’s what you’ll likely see on your statement:

  • Itemized Interchange Rates: 

    Example A: One small section of a long list of interchange rates. Note that each type of card is charged its own pre-set rate, and passed through to the merchant.

  • Consistent “Low” Percentage Markup: Charged separately from interchange fees.

Example B: Consistent markup of 0.40% listed after each card type’s itemized list of interchange fees. All transactions/card types have the same 0.40% markup.

Example C: In the “Rate” column, a consistent 0.31% markup is shown directly above the itemized interchange rate for each type of card/transaction.

  • Consistent Transaction Fee Markup: This per-transaction markup may be found in the same line items as the percentage markups, or down in a separate “authorization” section.

    Example D: Along with a consistent 0.10% markup across the board (Disc %), there’s a consistent $0.10 transaction fee markup (Disc P/I) for all card/transaction types.

Subscription / Membership Pricing

Membership pricing is sort of a riff on interchange-plus. The wholesale interchange rates are still charged separately from the account provider’s markup. The difference is that the markup comes in the form of one flat monthly subscription fee, and also a small, per-transaction markup. No percentage markup is charged. Here are the main statement indicators of subscription pricing:

  • Itemized Interchange Rates: Similar to Example A above.
  • Consistent Transaction Fee Markup: See Example E below.
  • No Percentage Markup: See Example E below. Note that percentages will still be part of itemized interchange rates (not shown below), but no separate percentage markup is present.

Example E: Consistent $0.11 “Item Rate” charged on all card/transaction types. No “Disc Rate” % markup. This account had a membership fee of $120/month (not pictured).  Interchange rates were itemized separately (not pictured).

Flat-Rate / Blended Pricing

This is the model most commonly offered by third-party payment facilitators (a.k.a. PSPs, merchant aggregators) like PayPal, Stripe, and Square. Occasionally, traditional merchant account providers use it as well. In this all-inclusive model, wholesale charges and the processor’s markup are all blended together into your one, flat processing rate. If a per-transaction fee is part of your rate, this also goes toward covering your provider’s wholesale costs plus any profit margin. Your flat rate covers all types of transactions, from inexpensive signature debit transactions, all the way to expensive business rewards cards. You’ll typically observe:

  • No Itemized Interchange Rates: Your statement is quite simple, but you can’t see the actual wholesale cost behind any of your transactions.
  • Consistent “High” Rate: If any rate is displayed at all, it’s usually just one main rate in the high 2% to mid-3% range, and sometimes you’ll see a per-transaction fee as well. Note that some PSPs charge a couple different high rates based on the type of transactions you run (i.e., keyed or ecommmerce vs. swiped/dipped.)

Tiered / Bundled Pricing

This is another case where you can’t see the itemized interchange rates separate from your processor’s markup on your statement. Instead, your transactions are first grouped into tiers according to the processor’s pre-set criteria. Each group (tier) is then charged a flat rate that already includes the interchange costs for those transactions. If you’ve got a tiered plan but have only been quoted one rate, it’s typically the rate for transactions that fall under the lowest, “qualified” tier. In reality, some transactions may be downgraded to higher priced tiers (mid-qualified and non-qualified). You have no real way of predicting these downgrades ahead of time. Here’s what you’d see:

  • No Itemized Interchange Rates: You generally won’t see a list of interchange charges–because why list them if they’re already blended into your tiered rates?
  • Qualified, Mid-Qualified, Non-Qualified Labels: Any line items with any of these labels (or similar-looking abbreviations) is your biggest clue.

Example F: Transactions are charged 1.75%, 2.75% or 3.25% depending on the tier

  • Multiple Rates, Usually “High”: By definition, a tiered program must have at least two rate levels or tiers shown on the statement. The standard model is three levels: qualified (lowest), mid-qualified (middle), and non-qualified (highest). Note that some providers may create a separate set of three tiers for debit transactions, because these wholesale debit costs are cheaper. The bottom levels of a signature debit tier can actually be “low” (well under 1%) and still account for the interchange cost or act as a loss leader. You’ll need to be sure that there are no other higher rates charged on your statement (and examine other indicators) before you can assume your “low” rate means you’re on interchange-plus! On the other hand, all credit card tiers will likely be well over 1% and in the “high” category, so look for those as a better indicator. When you’re looking for multiple rates on your statement, the mid and non-qualified transactions may be listed right next to the qualified ones, or may be shown as separate surcharges later in the statement (like in Example H below).

Example G: Two “high” rates are charged, 1.75% + $0.10 for credit, and 1.21% + $ 0.20 for debit. These are the two qualified tiers of this plan.

Example H: In the same statement as above, we find a surcharge section. Twenty-two transactions were downgraded to non-qualified (amounting to an extra 2%) and 30 to mid-qualified (an extra 1.47%). Multiple rates for multiple tiers at play!

Final Thoughts

Did you recognize your own pricing model among these main four types? If you made it this far with your statement, I hope you’ve at least developed a strong hunch. While each model has its merits for different situations, you can probably tell we prefer the inherent transparency and comparability of models that separate out the interchange costs from the account provider’s markup. By the same token, we have a hard time getting behind the unpredictable downgrading and surcharging of tiered pricing. I’d encourage you to check out our top merchant account providers if you’re looking for a fresh start. All of them offer transparent interchange-plus or subscription pricing plans.

Parents of the 70s and 80s feared “stranger danger” above all else, but my biggest fear for merchants is that they pay too much or even get scammed because they don’t have a solid understanding of their processing statements. Knowing and recognizing your pricing model is one of your best protections as a merchant. If you’re still unsure about yours, drop us a line and we’ll see if we can help!

The post How To Identify The Pricing Model On Your Processing Statement appeared first on Merchant Maverick.

“”

The Complete Guide to Credit Card Transaction Fees

Are there days when you wonder if it’s even worth it to accept credit cards at your business? Do those days happen to correspond with the days you receive your monthly card processing statements? Hmm…interesting coincidence.

We know that accepting plastic is usually worth the cost in the end, whether or not you occasionally fantasize about the good ol’ days of all cash. Still, there’s no denying that card processing fees add up fast. It can be hard to determine where they are all coming from and why they are being charged. Some fees are automatically charged monthly, while others are charged consistently on a per-transaction basis. Still others are charged on a per-transaction basis but only under certain circumstances. Is your head already spinning?

Fortunately, Merchant Maverick has great resources on all things related to card processing costs. I’ll direct you to these as we go along. As you may have caught from the title, this post will focus specifically on credit card transaction fees. (Okay, we’ll throw debit cards in there too). Let’s begin by defining what we mean by “transaction fees.”

A broad definition of “transaction fee”

When most people think of “credit card transaction fees,” I’m pretty sure they’re thinking of the following definition: anything you are charged on a per-transaction basis. If you want an introduction to all of these various fees, this article might not be for you. Please see our Complete Guide to Rates and Fees for more generalized rate and fee information first. If, however, you are looking at your processing statement and want to figure out what some of the specific “nickel and dime” transaction fees mean, read on!

A more precise definition

In the payment processing industry, the term “transaction fee” can actually mean something a bit more specific. We often limit the use of the term to fees charged as a flat dollar amount per transaction. These are the fees we will examine in this post. We will not be looking at percentage-based fees here. Percentage-based fees are often referred to as processing “rates” rather than fees.

Why am I charged flat per-transaction fees?

Per-transaction fees are usually less than one dollar. Sometimes, they are even fractions of one cent. So why do they even exist, especially if you’re already getting charged a percentage of each sale? Is this just another excuse for “The Man” to squeeze you dry, $0.0001 at a time?

I find it helpful to think of these fees as what you pay for the privilege of using pieces of the processing system each time you run a card. Whatever costs are involved in transmitting, encrypting, storing, looking up, verifying, authorizing or otherwise handling the transaction and card data ought to be covered by flat per-transaction amounts. After all, data is data, no matter if the transaction was $5 or $5,000. We’re just moving electrons around in either case. In contrast, costs based on the percentage of the volume of the transaction cover the relative risk involved in handling different amounts of money.

Why should I keep a close eye on transaction fees?

Here are a few reasons transaction fees deserve your attention:

  • They are often “small” — sometimes even fractions of a cent — but can add up quickly
  • There are lots of different types
  • They tend to have odd or vague names and abbreviations
  • The names and abbreviations are not necessarily standardized across the industry
  • It’s hard to decipher exactly what function each one serves
  • It’s easy for merchant account providers to sneak in extra, unnecessary ones
  • It’s easy for providers markup existing, legitimate ones

How are transaction fees labeled on a statement?

Honestly, the nomenclature for transaction fees is all over the map. We’ll dive into some of the specific names and abbreviations for individual fees as we go. Fortunately, most statements will at least divide any percentage of volume charges and any per-transaction fees into two separate columns. Here are some common headings for flat per-transaction charges:

  • Item rate
  • Item fee
  • Sale item fee
  • Per item
  • Per item rate
  • Per item fee
  • P/I
  • Disc P/I
  • Tran fee
  • Trans fee

When you match up the main column heading to the individual name or abbreviation of each charge along the left-hand side of a statement, you should have a good idea of what the fee is and how much you’re charged each time. Pay attention to the number of transactions that incurred the fee too. This will often help clarify the fee’s identity and purpose.

Where will I encounter transaction fees?

1. Interchange Rates

The interchange rates (a.k.a., interchange reimbursement fee, wholesale rate, or discount rate) are decided upon by the card networks. Interchange rates differ depending on card and transaction type, but most are composed of a percentage of volume rate and a flat per-transaction fee. Interchange costs are considered non-negotiable for merchants.

2. Your Processor’s Markup

Depending on your pricing model (e.g., tiered, blended, interchange-plus, subscription), your processor’s markup will be handled differently. The markup over interchange may already be lumped in with your overall rate, or interchange may be charged separately from the markup. In other words, whatever is quoted as your “processing rate” may or may not have interchange already included. If you’re not sure which pricing model you have, check out our complete rate and fee guide. What you need to know going forward is that your rate — whether it’s just your provider’s markup or a blend of their markup and interchange — may include a percentage fee and a flat per-transaction fee component. And, depending on the pricing model, it may include just one or the other type of charge.

3. Card Brand Fees

These fees are collected by card networks — Visa, MasterCard, etc. — and most of them are charged on a transactional basis. Like the interchange costs, they’re considered non-negotiable, pass-through costs by your merchant account provider, so watch out to make sure they don’t get marked up! Card association fees may involve a percentage of volume or a flat, per-transaction charge, depending on what the fee is supposed to cover (catching a theme here?).

Dharma, one of our preferred merchant account providers, maintains a handy list of card brand fees. I’ll list just a few examples below. Each card brand tends to have fees that cover the same kind of things, but with frustratingly different names, just to annoy us all. As you might expect, Visa and MasterCard’s fees line up more closely than the other card brands.

  • Assessments: This is the main card brand fee. In fact, sometimes people just use “assessments” as a blanket term for all card brand fees. Visa charges 0.13% + $0.0195 per transaction for all your Visa credit card sales, for example. We might call the second piece — the $0.0195 — a “transaction fee” by our working definition. Sometimes, that flat per-transaction bit is separated out and called the Acquirer Processing Fee (APF). For MasterCard, the flat per transaction part of the assessment is called the Network Access and Brand Usage Fee (NABU). Note that some blended pricing plans may already incorporate these assessment costs into your rate quote.
  • Fees for Transaction Problems: Some card brand transaction fees only kick in if something out of the ordinary happens, such as when there’s been a mistake, mismatch, or omission in the way the transaction was processed. This includes fees with exciting names such as the Zero Floor Limit Fee, Misuse of Authorization Fee, and Transaction Integrity Fee.

4. Authorization & Authorization-Related Fees

All transactions require some kind of authorization. If the card is accepted, the authorization turns into a full-blown transaction. If the card is declined, then an authorization procedure has taken place without a transaction ultimately occurring. This means that you can potentially have more authorizations (and authorization fees) than transactions that actually go through.

So how do processors cover authorization costs? Well, some providers bake any authorization costs into the flat per-transaction fee that comes with your rate quote. In my mind, that’s exactly what any flat per-transaction fee charged by your processor should cover. Nevertheless, the technical difference between a transaction and an authorization is part of the reason why you’ll often see them broken down into separate categories and fees.

If you’re on a pricing plan that has no per-item flat fees, you can bet that authorization costs have been covered by a higher percentage of volume charge, or by some other piece of your plan’s overall fee structure. Meanwhile, there are definitely a few authorization and authorization-related costs that are commonly charged separately:

  • AVS Fee: The Address Verification Service is accessed as part of every keyed-in transaction to provide an additional layer of fraud protection. The card’s billing address is requested and verified before authorization is given. eCommerce and telephone-order businesses must use this service every single time they authorize a transaction. Consequently, many quoted rates for eCommerce and card-not-present transactions already have an AVS charge included as part of the flat per-transaction fee. But some don’t! If you run mostly card-not-present transactions, you’ll definitely want this matter clarified up front. Meanwhile, brick-and-mortar merchants will only see an AVS charge on the odd occasion that they must manually key-in the customers’ card info.
  • Gateway Fees: Payment gateways are used to authorize transactions that occur via the internet only. Since not every business needs one, gateways are often separate add-ons to merchant accounts, with separate fees. Gateway fee structures usually involve a monthly fee, and sometimes a flat per-transaction fee as well. You can see how costs could add up quickly for an eCommerce business if there was gateway fee, plus an AVS fee, plus a main transaction fee, plus a separate authorization fee! Thankfully, many eCommerce payment providers will charge a gateway fee in lieu of the AVS fee, or just charge one main “transaction fee” that covers everything. The important thing is to know the exact set-up for your account.
  • Voice Authorization Fee: This is a telephone dial-up service for transaction authorization. When a transaction is outside the normal range of a particular customer’s purchasing behavior, a voice authorization may be triggered. The customer will need to provide additional information over the phone to verify he or she is, in fact, the cardholder. Occasionally, merchants use this service as a backup if their terminal, internet connection, or software isn’t working to authorize transactions. Most businesses will rarely need this service, but it’s typically a per-transaction, flat fee if you do.
  • Other Authorization Fees: You’re gonna hate me for saying this, but there are lots of other authorizations that could be charged in addition to the regular “transaction fee” that’s part of a normal rate quote. Many of these charges come from the large processor behind the scenes of a merchant account, such as First Data, Elavon, or TSYS. This means your smaller merchant account provider might consider them as “pass-through” from their perspective, providing a convenient little excuse not to bring them up. The authorizations are usually named for the way the authorization is communicated, such as over a toll-free number, a “wide area telephone service” (a.k.a. WAT or WATS), a local phone number (LOC), digital data over voice, a dial-up point of sale device, carrier pigeon, stagecoach…you get the idea. So, if that’s the way your transactions are normally processed, you could get charged the corresponding fee every single time.

Final Thoughts: How can I keep my transaction fees under control?

You can’t avoid the fact that when it comes to card processing, multiple entities will whittle away at your profit, one tiny piece at a time. (You were tired of having money anyway, right?) The good news is that with a little time spent educating yourself on transaction fees, you can begin to spot any that are suspiciously high, and perhaps some that shouldn’t be there at all.

Here are a few actions steps, as well as questions to ask your merchant account provider about your transaction fees:

  • Know your pricing model. You should know what type of pricing model you have and which non-negotiable fees (i.e., interchange fees, card brand fees) are already blended into your rates.
  • Before you sign up for a merchant account, ask for a sample processing statement. If they agree to give you one (most good providers will), it may not have every possible transaction fee represented. However, you can still begin to familiarize yourself with their terminology, abbreviations, and categories for fees. It helps to have something concrete in front of you that you can ask questions about. Plus, you’ll have a baseline for spotting unexpected fees later.
  • Ask specifically about transactions fees and authorizations. Don’t be afraid to press your merchant account provider about transaction fees. “Will the transaction fee that’s part of the processing rate I’ve been quoted be the only transaction fee I’ll be charged? Are there any other separate authorization fees I should expect to see on the bulk of my transactions?” POS-WAT or POS-WATS is one that comes up a lot as an extra authorization charge for brick-and-mortar merchants, so you could even ask about that one as an example. If your sales rep can’t adequately answer these questions, ask to be put through to someone who can.
  • Card-not-present merchants: be especially aware of AVS and Gateway fees. All eCommerce and other card-not-present transactions will need to access the Address Verification Service to complete the authorization. This means eCommerce merchants should specifically ask if this fee is already included in your normal transaction fee, or if it will be a separate charge. eCommerce merchants should also inquire as to whether an additional gateway per-transaction fee is part of the pricing plan or if it’s already covered by the main transaction fee in your rate quote. Knowing whether these fees are already included in your rate will also help you better compare costs between providers.
  • Carefully review your statements. Even though this is the Complete Guide to Credit Card Transaction Fees, we couldn’t possibly cover every authorization, strange abbreviation, or totally made-up term your provider may use to identify each of the fees on your statement. Sneaky merchant account providers may mark up card brand fees, or invent tiny transaction fees that add up over time. Then, they’ll name their fees in confusing ways to cover their tracks. If you’re not sure about a certain interchange or card brand fee on your statement, you can usually look it up to see if 1) it’s a valid fee in the first place, and 2) the established price is what you’re being charged. If these wholesale costs were supposed to be blended into your rates, you should still keep an eye out for extra transaction fees charged separately. Compare what you were told when you signed up with what you see on your statement.
  • Watch out for multiple authorizations. Really, you shouldn’t be charged multiple times to authorize one transaction. At most, there may be an extra security step and fee involved (like in the case of AVS for eCommerce transactions). But even in that case, good providers will either charge you one flat per-transaction fee to cover authorization costs, or fully disclose additional fees like AVS, Voice Authorization or a backend processor’s pass-through authorization if it’s charged separately. The most exasperating fees are extra authorizations you were never told about, but that occur on pretty much every transaction. The only way to catch these is to scan your statement carefully for those flat per-transaction charges.

The post The Complete Guide to Credit Card Transaction Fees appeared first on Merchant Maverick.

“”

Crowdfunding For Startups: 8 Tips For Launching

Our unbiased reviews and content are supported in part by affiliate partnerships. Learn more.

startup crowdfunding

For a people who revere startup culture and the idea that one can bootstrap one’s way to business success, we seem to prefer the TV version to the real thing — especially as of late. It turns out that new business creation recently approached its 40-year low. Banks are retaining their Great Recession-era tight-fistedness and the costs of education, housing and healthcare continue daily to expand beyond the ability of most Americans to keep pace. Frankly, our veneration of the entrepreneurial spirit does not appear to extend to supporting policies that would actually increase people’s ability to take the financial risks required to start their own business.

Due to these factors — along with the legalization of equity crowdfunding accomplished via the passage of the JOBS Act in 2012 — crowdfunding has arisen as a means of raising startup funds. You may only be familiar with crowdfunding in the context of all the medical- and disaster-based campaigns that have been making the news lately, but crowdfunding is a viable way to raise money for businesses as well.

The fact is, for the right kind of new enterprise, a crowdfunding campaign can be a great way to raise a much-needed initial infusion of capital. The biggest crowdfunding site for startups, Kickstarter (see our review), has seen over $3.4 billion USD raised by product-oriented business projects. To be fair, this money didn’t just fall into the laps of the startups in question. Crowdfunding takes some work to get right. However, it’s hard to imagine that the campaigners who raised that $3.4 billion could have raised that same sum via conventional means.

Just know that you’ll have a lot of competition for those crowdfunding dollars. You need to go into it with more than just a good story (not to discount the value of a good story!) — you’ll need to tailor your campaign to suit your particular enterprise, and you’ll need to give your potential backers a personal stake in supporting you with the promise of rewards, profit, or both.

Here’s what you should do to prepare before you begin.

Table of Contents

1) Learn Which Type Of Crowdfunding Suits You Best

If you know anything about non-charitable crowdfunding, you’ve likely heard of Kickstarter and its rewards-based crowdfunding model. What you might not be aware of is that Kickstarter is but one method of crowdfunding available to startups.

Rewards Crowdfunding

Rewards crowdfunding is what most people think of when they hear the term “crowdfunding.” Along with Kickstarter, Indiegogo (see our review), Patreon (see our review), and GoFundMe (see our review) are examples of popular platforms offering rewards crowdfunding. I’ll get into the differences between these platforms later on, but suffice it to say, these platforms generally involve raising money from The Crowd in exchange for rewards that are directly related to your startup’s mission. The platform will then take a cut of what you raise (except in the case of GoFundMe).

Equity Crowdfunding

Equity crowdfunding is a different beast entirely. The field of equity crowdfunding is a new one. It was legalized by the JOBS Act, which was signed into law in 2012 and whose provisions have gradually taken effect over the last few years. The JOBS Act was seen as a way to facilitate greater access to capital in the wake of the 2008 financial crisis.

Equity crowdfunding differs from traditional rewards crowdfunding in that instead of backing a project in exchange for exclusive illustrations or a gadget or tickets to a performance, backers become investors who receive an ownership stake in the company. Investing is much more heavily regulated than rewards crowdfunding, so it’s a more legally complex way of raising funds than using Kickstarter. What’s more, the JOBS Act provides for two similar yet distinct forms of equity crowdfunding: the type in which you raise money from accredited investors only (which basically means rich people) and the type in which you can raise money from non-accredited investors (everyone else). Most equity crowdfunding platforms, including Crowdfunder (see our review) and Fundable (see our review), offer equity crowdfunding for accredited investors only, while a few upstart companies like Wefunder (see our review) offer equity crowdfunding for all (sometimes referred to as Regulation Crowdfunding).

Debt Crowdfunding

Debt crowdfunding, like equity crowdfunding, involves investing in a security of the company in question. However, with debt crowdfunding, the investor is a lender who gets paid back on a fixed schedule with interest. From the perspective of a startup, getting into debt crowdfunding means you’re borrowing money — not from a bank, but from a crowd of investors. Kiva U.S. (see our review), Lending Club (see our review) and Prosper (see our review) are all prominent debt crowdfunding outfits.

If you’re wondering which of these three types of crowdfunding best fits your startup, here’s a quick rundown for you:

  • Rewards crowdfunding is best suited to startups in the business of producing content for people to consume. Artists, gadget makers, podcasters, filmmakers, and board game producers have all made good use of rewards crowdfunding.
  • Equity crowdfunding makes sense for startups with exponential growth potential that do not produce a singular product or experience to share with a crowd of backers.
  • Debt crowdfunding is for startups that need cash for a defined purpose and that have the ability to pay back the loan.

For more information on the subject, I recently wrote an article comparing and contrasting these three types of crowdfunding. Check it out!

2) Research Different Platforms To Understand Their Differences

Simply knowing the difference between the three varieties of crowdfunding doesn’t provide enough information for you to settle on a platform. For one thing, crowdfunders like Indiegogo and Fundable offer both rewards and equity crowdfunding. For another, the terms, fees, content policies, and even the structure of the crowdfunding campaigns themselves differ from platform to platform.

For instance, you might be trying to raise funds to build your own board game company and have your sights set on Kickstarter. However, Kickstarter is a more exclusive platform than most rewards crowdfunders — it might not accept your campaign proposal. What’s more, you might find Kickstarter’s all-or-nothing funding policy intimidating. With all-or-nothing funding, if you raise less than your stated goal amount during the length of your campaign, you get nothing at all. You might find a platform like Indiegogo more to your liking, as Indiegogo accepts any campaign that doesn’t violate its rules while allowing you to collect whatever you raise with your campaign regardless of whether you’ve hit your goal.

Let’s say you’re an artist collective seeking to put on monthly art exhibitions. The Kickstarter/Indiegogo fundraising-for-a-one-time-event model of crowdfunding may not be for you. You might find Patreon to be a better fit. With Patreon, backers (or “patrons”) sign up to support you on an ongoing basis, either per month or per creation. You won’t have to gin up a new crowdfunding campaign every time you want to start a big project.

Likewise, equity crowdfunders vary greatly in their policies — SeedInvest (see our review), for example, boasts of only accepting 1% of those who apply to crowdfund on its site, whereas EquityNet (see our review) accepts any startup applying to use its services.

3) Check Out Other Crowdfunding Campaigns To See What Works (And What Doesn’t)

When you’re raising money via crowdfunding, you have one big advantage over those trying to raise money via other means. If you’re applying for a bank loan, you don’t get to browse through every loan application ever submitted to the bank or view the result of every application. But with crowdfunding, in most cases, the data is there for everyone to see!

Kickstarter is typical for a crowdfunding site in that every campaign ever posted to its website is left up permanently, regardless of whether the campaign succeeded or not. For the creator whose ridiculous campaign never really got off the ground, this permanent record of failure may not seem like such a boon. However, if you’re a startup looking to identify patterns in past crowdfunding campaigns that correlate with success — as well as patterns that correlate with not-success — this data is quite valuable indeed. I would strongly advise you to make use of it! Don’t be too proud to emulate what has been shown to work.

4) Be An Intensive Self-Promoter

If you’re the modest, retiring sort who spurns self-promotion, get ready to change your approach  — that is, if you want your campaign to succeed. Spend some time promoting your startup’s cause before taking the crowdfunding plunge (Indiegogo recommends at least two months of prep time before launch).

Do the legwork necessary to build up your social media following before starting your crowdfunding campaign, so that when you launch your campaign, you’ll have a built-in audience that is already receptive to your message. Contact journalists who cover your field. Build an email list. Consider buying ads on Facebook or Twitter to promote your campaign. Unfortunately, with crowdfunding as with so much else in our fallen world, you have to spend money to make money.

Remember to tailor your self-promotional efforts to fit your audience. If you’re looking to conduct business with accredited investors, a hard-nosed, data-focused approach may bear more fruit than a flashier look-how-cool-we-are campaign.

5) Create A Professional Video

I suppose I could have included this point in the previous section, but I think it deserves to be emphasized on its own. According to Kickstarter, posting a video to go along with your campaign increases your likelihood of ultimately succeeding from 30% to 50%.

Here’s another example of “spend money to make money” — a professional video with decent production values will make your potential backers more confident in the potential of your enterprise than something produced on the cheap. I’d love to live in a world where one could devote all one’s energies towards their true passions and not have to set aside time and resources for salesmanship, but we don’t live in that world. So, make a video. Keep it to just 2-3 minutes. You can get personal, but make sure to hit all your main points about your startup and its potential. Don’t forget to mention the benefits backers stand to earn!

6) Get Commitments From Backers Before Launching Your Campaign

It might not be fair, but it’s not easy to attract backers when your campaign first launches. An adverse first impression can easily dissuade someone from contributing to your campaign, and seeing “$0 pledged” next to your project can be enough to cause a prospective backer’s wallet to close. That’s why it’s important to line up commitments from backers before your campaign launches.

Time to make your family and friends prove their love to you by securing their backing before your campaign goes live! Gather commitments from your followers as well. Remember how I mentioned that you should build an email list of potential backers? Here’s where you can put that list to good use. Email your followers immediately when your campaign goes live. Get some pledges early and it will be all the easier to get subsequent commitments from backers. Data provided by Kickstarter backs this up — while their overall project success rate is just a hair under 36%, projects that raise over 20% of their goal have a 78% success rate.

7) Don’t Be Afraid To Use Analytics

The use of analytics is the only way you’ll be able to tell just what kind of traffic to your campaign page is converting to pledges. Use whatever analytical tools are available to see where your pledges are coming from and how you can boost them.

For instance, Kickstarter’s Project Dashboard gives you access to a trove of data regarding exactly where your backers are coming from. This data is invaluable when determining where you should focus your marketing.

kickstarter

8) Stay In Touch With Your Backers

Show your backers that you respect them by staying in touch with them. Keep them updated on your progress. After all, these are people who made a financial commitment to you knowing that there’s no guarantee that your plans will come to fruition.

Monitor social media chatter related to your campaign to see if particular concerns pop up repeatedly. If so, do what needs to be done to address these concerns. After all, you’ll want to stay in their good graces if you want to launch another crowdfunding campaign in the future!

Final Thoughts

Crowdfunding doesn’t work out for every startup that tries it. If you do your due diligence, however, you greatly increase the likelihood that your campaign will reach its funding goals. Follow these tips, and you’ll have a fighting chance to get the funding you need so that you can ultimately focus on growing your startup, not on fundraising!

Jason Vissers

Jason Vissers is a writer, cereal chef and Netflix aficionado from San Diego. A native Californian who enjoys the beach, Jason nonetheless prefers to do his surfing on the World Wide Web, the raddest wave of them all. Jason can’t eat raisins.

Jason Vissers

“”

Thank You Page Best Practices, Ideas & Examples

A visitor has taken some sort of action on your site… hurray!

Before you celebrate too much, let’s talk about your Thank You page.

The Thank You page is one of the most underrated pages on a website. We often focus so much on getting someone to take an action (like purchasing a product, signing up for a webinar, downloading a whitepaper) that we forget how valuable a Thank You page can be, or the effort we should put into it.

A Thank You page, when used correctly, can be a crucial part of nurturing your audience.

But before we dive into some best practices, let’s cover the basics.

What is a Thank You Page?

A Thank You page is where a visitor is taken after completing a desired action on your website. It’s also sometimes referred to as a “confirmation” page because it confirms an action was taken.

A Thank You page can follow up any desired action on your site, from filling out a contact form to subscribing to an email newsletter or purchasing a product on your site.

Do I Need a Thank You Page?

If you have some sort of action you want visitors to take (also known as a “conversion” in marketing speak), then you absolutely need a Thank You page on your website.

This page not only serves as a way to confirm the action was taken successfully, but it also allows you to continue to engage your visitors, especially while they’re still “warm” (sales jargon for they’re more likely to want to interact/do business with you).

A visitor who has just taken an action on your site is incredibly valuable because they’re indicating they’re interested in you and what you have to offer. An effective Thank You page is a way to further that relationship and keep that interest growing.

Plus, saying thank you after your audience does something on your site is just plain polite.

Thank You Page vs. Thank You Message

A lot of forms and landing pages include built-in functionality to display a confirmation message once an action is completed. This functionality generally keeps users on the same page and simply replaces the form/download button/purchase area with a thank you message.

While showing this message is enough to confirm the action, in most cases, it doesn’t do much for continuing to engage with your audience. This is where a dedicated Thank You page can do wonders for your post-conversion opportunities.

By leveraging an individual page instead of a message on the existing page, you have more flexibility and opportunities to increase engagement, share relevant content, and provide additional opportunities to convert.

For more about thank you pages vs. thank you messages, check out this article by Hubspot.

Thank You Page Best Practices

Now that we’ve covered the basics, let’s dive into the details. Here are seven Thank You page best practices you can implement on your own site.

Give Confirmation

The first thing your Thank You page should do is confirm whatever action your visitor just took was completed successfully. For example, if they’ve just subscribed to your weekly newsletter, your page might say something like, “Thank you for subscribing to our weekly newsletter.”

Your Thank You page should also confirm any relevant details relating to the conversion, such as how long it will take you to respond after they’ve filled out a contact form, or when they can expect to receive the whitepaper they’ve opted-in for.

ShivarWeb Thank You Page

Ex: ShivarWeb

Remember, this is someone who has indicated interest in your business. You want them to feel valued right off the bat and to know that the action they took actually worked. The best way to do that is to confirm all of the details as soon as they finish the conversion.

Include Navigation

One of the worst things you can do on your Thank You page is keep your audience stranded there. These are people who have just indicated they’re into what you have to offer, which means this is the perfect time to keep them hanging around your site!

At the very least, your Thank You page should include your website’s navigation to allow your audience to stick around and explore your site some more.

The Skimm thank you page

Ex: The Skimm

Provide Related Content/Actions

Aside from using your navigation to give your audience an opportunity to stick around, your Thank You page is also a great place to provide related content or additional actions your lead may find interesting.

For example, if they’ve just opted-in to a whitepaper, you could provide related content on the same or a similar subject. This is a great way to continue to “warm up” your visitors (AKA make their interest in you grow) without being overly sales-y.

You could also use this opportunity to lead your users further “down the funnel” (the next step closer to purchasing) by offering another relevant action. For example, Hubspot offers a free session to learn more about their software after you opt-in to download one of their guides.

Hubspot Thank You Page

Ex: HubSpot

If your Thank You page shows when a visitor has already taken a purchasing action, you can still use related content to keep them engaged. The easiest way to do so is to display related items they may also be interested in — Amazon is renowned for doing just that!

Amazon Related Items

Ex: Amazon

Add an Offer/Promotion

Did a customer just enter to win a free product? Why not offer a coupon code to encourage them to purchase something sooner?

Adding an offer or promotion can be an excellent way to encourage warm visitors to convert, or to increase the value of a converting customer by enticing them to purchase additional items.

Keep in mind that your offer should be something relevant to their action and worthy of their attention. You don’t want to come across as spammy over overly sales-y. You want to provide something that feels uniquely valuable to your audience and relates to whatever action they just took.

Get Social

Encouraging people to connect with you on social media is a great way to further connect with a warm audience.

Instead of just leaving links to your social profiles, take it a step further and tell visitors why they should follow you. What can they expect to see if on they follow you? News about your business? Tips and tricks related to the action they just took? Spell out the value and make it clear it’s worth it.

katelyn dramis thank you page

Ex: Katelyn Dramis

You can also use your Thank You page as an opportunity to spread the word about your business. This works particularly well for actions like webinar registrations and offer redemptions.

If your Thank You page is confirming an offer redemption or webinar sign-up, include social share buttons to encourage your converters to spread the word on social media with their friends. They obviously think what you have to offer is worth signing up for! There’s a good chance they’ll spread the word for you, too.

Show Off Testimonials

Even if your visitor has just completed a purchase, your Thank You page can still be a place of reassurance that you’re as great as you say you are.

Use your page as an opportunity to show off social proof, whether it be customer testimonials, the number of social media fans you have, or a quick stat or case study.

Your Thank You page should continue to warm your visitors and encourage them either to purchase down the road or to purchase again. Using social proof to help reassure them that you’re the real deal can help this process significantly.

Encourage Opt-Ins & Account Sign-Ups

A Thank You page is the perfect time to ask your audience to become a regular part of your community and an ongoing converter.

For e-commerce businesses, asking your purchases to create an account after converting can yield far more results than asking prior to purchase (and can reduce cart abandonment).

If your business doesn’t include the opportunity for customers to create accounts, you can still invite converters to be regulars by asking them to opt-in to your email newsletter on your Thank You page. Make sure you specify why your audience would want to subscribe to your newsletter — what is it you’ll be offering that makes it worthwhile?

Conclusion & Next Steps

Your Thank You page can be an amazing tool in your sales arsenal if used correctly. Don’t let all of your focus go toward the conversion — spend adequate time on your confirmation page and yield the benefits time and time again.

Start by taking a look at your own Thank You page. Does it confirm the action your visitor took? Does it offer opportunities to stay engaged with your business? If it doesn’t, start by introducing one way for users to continue to interact with you.

Remember, like all pages on your website, your Thank You page isn’t set in stone. Test one approach to adding some meat to your page (like adding related content or a call-to-action to follow you on social media) and see how it works. Then, adapt!

“”

How To Create A Journal Entry In QuickBooks Pro

Our unbiased reviews and content are supported in part by affiliate partnerships. Learn more.

How To Create A Journal Entry In QuickBooks Pro

Journal entries, as an accounting concept, can take a while to grasp. The good news? QuickBooks creates almost all of your journal entries for you automatically. The other good news? If you do have to create a journal entry, it only takes five steps.

In this post, we’ll explain when you need to create a journal entry in QuickBooks and walk you through the journal entry process.

Table of Contents

When To Create A Journal Entry In QuickBooks Pro

In double-entry accounting, a journal entry is used to log which debit and credit accounts are affected by a given transaction. QuickBooks takes care of all the double-entry accounting behind the scenes.

Whenever you enter a transaction (like an invoice or bill) in QuickBooks, the software automatically creates a journal entry for you. Take this bill for example:

How To Create A Journal Entry In QuickBooks Pro

If we use the command shortcut Ctrl + Y, we can see the journal entry that QuickBooks automatically created for this transaction…

How To Create A Journal Entry In QuickBooks Pro

The entry tells us that Accounts Payable was credited $49.95 and the Other Business Expenses Account was debited $49.95. The debits and credits balance.

Again, QuickBooks creates an automatic journal entry for every transaction entered in QuickBooks. Additionally, the software will adjust the journal entries if you edit or change the transaction. So, most often, you won’t need to worry about it.

However, there are a few cases where you may need to manually create a journal entry. For example, you’ll need to create an entry for depreciation. QuickBooks provides a list of all the instances where you may need a journal entry. In such instances, follow these five steps:

Create A Journal Entry

To begin, go to Company>Make General Journal Entries…

You may see a notification letting you know that QuickBooks automatically numbers journal entries. You can eventually turn off auto-sequencing or change the beginning number, but for now, just click “OK” to get started.

How To Create A Journal Entry In QuickBooks Pro

Step 1: Enter Date

Use the drop-down calendar to enter a date for your journal entry. For our company, we’re going to create a depreciation journal entry for the end of 2017.

How To Create A Journal Entry In QuickBooks Pro

Step 2: Adjust Entry Number (Optional)

At this point, you can adjust the beginning sequencing number of your journal entry. QuickBooks will automatically number your journal entries from here on out.

How To Create A Journal Entry In QuickBooks Pro

Step 3: Add Debited Account

In journal entries, you list the debited accounts first and then the credited accounts. If you need a refresher on debits and credits, read our Quick Guide To Accounting Terms and Concepts.

Select the account being debited. Then enter the amount under “debit.” If desired, you can also add a memo, name, and mark the amount as billable.

How To Create A Journal Entry In QuickBooks Pro

Step 4: Add Credited Account

Select the credited account from the drop-down menu. QuickBooks automatically enters the credited amount under “credit” because the debits and credits must always match. If desired, you can you can also add a memo, a name, and mark the amount as billable.

How To Create A Journal Entry In QuickBooks Pro

Step 5: Save

Check that all of the information looks correct and that the debits and credits match. Then click “Save & Close” or “Save & New” if you’re planning on creating another journal entry.

How To Create A Journal Entry In QuickBooks Pro

For troubleshooting issues, check out the QuickBooks Community or call QuickBooks directly. If you have any further questions, leave a comment below and we’ll do our best to help you.

Chelsea Krause

Chelsea Krause is a writer, avid reader, and researcher. In addition to loving writing, she became interested in accounting software because of her constant desire to learn something new and understand how things work. When she’s not working or daydreaming about her newest story, she can be found drinking obscene amounts of coffee, reading anything written by C.S. Lewis or Ray Bradbury, kayaking and hiking, or watching The X-Files with her husband.

Chelsea Krause

“”

7 Ways To Make Your Business Website Better

Our unbiased reviews and content are supported in part by affiliate partnerships. Learn more.

As a reviewer of small business software and services — and a human who lives in the modern era — I’ve seen my share of business websites. Many of them are so basic that they serve only to confirm that the business in question, be it a bowling alley or an accountancy firm, is not merely a front for backroom bookie Big Sal and his associates (Fingers, Lefty, and Slippery Joe). What is dodgier than a business without a URL, after all?

(Read this article if you’re wondering whether your small business even needs a website. Spoiler alert: it does.)

Few websites are anything other than forgettable, and the ones that stand out usually owe their memorability to monumentally funny errors rather than to craftsman-level design.

Your website can be — and should be — more than just an online throwback to the yellow pages, a mere repository for basic information about hours and addresses and contact emails. Your website was destined for greatness. And I’m going to help you take it there. Here are several steps you can take to make sure your website stands out for all the right reasons:

Table of Contents

Join The 21st Century (Be Mobile Responsive)

When I say, “join the 21st century,” I am not being snarky in the manner of a 90s sitcom character. (If I were, I would have said: Welcome to the Oughts, holmes!)

I am trying to stress the importance of having a modern, mobile-responsive site. There’s a word for businesses with websites that don’t work well on smartphones. And that word is defunct.

Consumers are addicted to their mobile devices. And according to this article by Marketing Land, mobile devices now drive an estimated 56% of web traffic. That’s right — chances are that more than half of your customers will find your website on their mobile browser. If your site isn’t mobile responsive, I guarantee they will exit your page as quickly as they enter.

When viewed on a smartphone, non-responsive sites appear either too large or too small, requiring the reader to manually adjust the screen. Responsive sites, on the other hand, automatically adjust to accommodate each device, be it an iPhone, a Kindle, or a Galaxy Note8. Mobile sites are often simpler and/or allow the visitor to scroll down for more information, rather than navigating from one page to another.

Effective mobile sites are sleek, minimalistic repositories of information. They should be reminiscent of your full site and good ambassadors for your brand. They should not make people throw their phones in anger.

Happily, most do-it-yourself website builders allow for mobile responsive design; if yours doesn’t, it’s time to look for a new platform. And it goes without saying that if you’re paying a developer to design your site, you should insist that they make it responsive. If you want more information about this topic or tips about how to make it work for you, read our articles What Is Responsive Design? and Creating Websites For The Smartphone Generation.

Update, Update, Update

To stay competitive, your site has to look current. People are only becoming more attuned to (and judgemental about) the aesthetics of their technology. Older designs simply won’t cut it. You must update, and update frequently, to stay alive.

To be clear, we’re not just talking about upgrading from something like this…

If your site looks like that, you either went out of business in 1996, or you are using the design ironically. If it’s the former, and you’re now trying to get back into the game, good for you. Burn the site and start over. Burn it. If it’s the latter, you are invariably a hipster and I don’t want to talk to you or your handlebar mustache.

This is the horrible truth: your pages don’t have to be neon and underlined to look hopelessly dated.  Sites built as recently as 2012 now appear sad and outre. First impressions matter, and the average consumer will ditch your site without blinking an eye if it looks sketchy or old.

To stay in the game, you must update the design of your site every few years. Yes, it’s a pain. Yes, it will cost you time, money, or both. But what you gain in street cred will be worth every dime.

Updating actually isn’t so bad if you’re using a modern website building platform, like Wix (read our review) or Squarespace (read our review). New, intuitive site editors make it easy to switch layouts, change templates and forms, and alter color schemes — without paying an hourly rate to a spendy developer.

Provide Accurate & Complete Information

I know I spent a good part of the introduction talking about how business websites need to be more than just storehouses of basic information. That is 100% true, and I stand by every word. But…and this is a big but…it is vitally important to put basic information about your business on your website, front and center, or everything else in this article is pointless. Highlight your operating hours, address, phone number, and digital contact information, and put that information in more than one place. If your business occupies a physical space, your address and phone number should be above the fold. In other words, website visitors should not have to scroll down or navigate to another page to see this information.

You also need to give potential customers and new visitors at least a hint of what your company is all about on your home page. Don’t write a novel at this point. As you’ll see in the screenshot of Merchant Maverick’s home page below, a simple summary phrase — Unbiased Reviews That Save You Time And Money — is enough to convey the purpose of our site.

An “About Us” page is a great place to go more in-depth about exactly what your business does, and why you do it. It can also be a good vehicle to introduce yourself or your staff. Include mini-bios and pictures if you can. People are social animals. We’re evolutionarily wired for relationships, and that’s not going to change anytime soon. The exchange of goods and services is occurring less and less in the meatspace, but we still like to know who we’re dealing with.

Avoid Grammar Mistakes

You don’t have dig deep to realize that American public schools are sadly failing when it comes to even basic writing competency. Just log in to Twitter for 10 seconds and yOull sea that Im rite. (There’s a little editor humor for you.)

You can get away with shocking grammar in Tweets, texts, and even over email (alas). But your website is not the place to be slipshod and careless. Save that devil-may-care attitude for Facebook or Christmas cards, where only some of your acquaintance will be judging you. If your website is riddled with typos and syntax goofs, you will lose customers, period. Error-laden copy connotes one of two things to your client base: you are illiterate or you are lazy. Ponder this riddle: What’s more off-putting to a consumer — an uneducated merchant or an indifferent one? The answer, of course, is moot. Neither one is going to survive.

This may all seem terrifying if grammar isn’t exactly your thing. But don’t worry! There’s no need to hastily enroll in a community college course. Simply running your site through spellcheck should catch most spelling errors, though you’d be surprised how many merchants neglect to do so. For higher level syntax and grammar issues, try using a service like Grammarly. It’s not perfect for higher level writing, but it catches almost 100% of basic errors (there/they’re/their, etc.), and it’s free. You can also enlist help from friends and family. The more eyes on your website copy before you publish, the better.

Write Engaging Copy About Your Products/Services

It’s not enough for your content to be grammatically perfect. It must also be useful and interesting. And there’s the rub.

How does one write captivating copy? Especially if one is trying to sell items as unsexy as, say, lawnmower parts or plumbing services? The key is to know your audience. Your stuff doesn’t have to be Dostoevsky-good. It doesn’t even have to be Reader’s Digest-good. Excellent website copy is defined by only three characteristics:

  • Detail
  • Utility
  • Appeal

Let’s take them one by one.

Detail

Presumably, you understand your business and your products or services well. Take the time to describe them, providing as much or more of the minutia as is reasonably warranted. Color; size; shape; weight; feel; smell; taste. Go further into the aesthetic sensibility of your items if you want. The more your customer knows about the product or service, the more likely they are to be satisfied with their purchase.

Utility

The overall helpfulness of your copy will depend in part on how wisely you’ve used detail in your descriptions. But you must go even a step further. It’s not enough to state that a scarf is hand-knit, blue, and made of angora wool. It’s not even enough to say that it is 60-inches-long and machine-washable. For optimal impact, you’ve got to paint a word picture for your potential customers. Give suggestions about various ways to wear the scarf. Talk about occasions or events the scarf is appropriate for. If a customer can imagine your product as a useful part of their daily life, you’re far more likely to make the sale.

Appeal

This one’s not so straightforward. The line between interesting copy and content that is mind-meltingly dull is thinner than you’d expect. When in doubt, go back to the advice above: know your audience. If you’re hawking lawnmower parts, it’s best not to be cutesy or make attempts at humor. You’re likely to simply irritate people. For utilitarian products and services, appealing equals factual and descriptive. But if bespoke spa treatments or patchwork quilts are your daily bread, be as whimsical as you want. Go nuts. Employ first-person language. Break out the charm. And if you don’t feel up to the task, hire someone who is. There are plenty of freelancers out there who write website copy for a living. Sites like Upwork are teeming with writers who would fist-fight each other for the privilege of generating your web content. (I know because I used to be one of them.)

Use Original Images

On the internet, as in life, it often pays to be unique. And not in an after-school-special, every-snowflake-is-beautiful kind of way. Search engines like original content. They give preference to it, in fact.

That said, unless your name is Dorothea Lange or Ansel Adams, you’re much better off using BigStock or Getty Images for your graphic content than simply uploading pictures from your digital camera or smartphone. Unique isn’t always equivalent to good. My iPhone pictures, for example, are invariably blurry and too dark, invoking what I’m sure are merely pity-likes on Instagram. Yours may be better (and likely are), but I can say with near certainty that they aren’t good enough to be featured on your website.

Website-quality photographs and images should be:

  • High-resolution
  • Well-lit
  • Sharply focused
  • Artistically blocked, posed or designed
  • Minimally cluttered

Images like this don’t grow on trees. They come from professional photographers and graphic designers who use professional equipment. In other words, you’ll have to pay for them. Craigslist is a good place to find relatively cheap freelancers in your area, or you can solicit help from sites like Upwork and Guru.

Maintain A Blog

Blogs aren’t just for bloggers. Used wisely, a blog can be an excellent marketing tool for your retail, restaurant, or service business.

For starters (to reiterate my point in the section above), search engines give preference to original content. They gobble it up, in the manner of hungry hippos. To be clear, Google is an equal opportunity tool in that, if you have a URL, you’ll show up in an appropriate keyword search…eventually. But if you want to rank a little higher than the two-millionth results page, you’ll need to put it a bit more effort. Creating unique, high-quality content for your site increases your visibility to potential customers online. The key phrase here is high-quality, by the way. Search engines employ highly trained digital bloodhounds that can sniff out BS filler-content a mile away. You can try to cover redundant or pointless copy with metaphorical coffee grounds, but Google algorithms just keep getting smarter.

If you equate blogs solely with hot-button social issues like politics, the Mommy Wars, religion, and the like, it may be difficult to see how having one could benefit — or even apply to — your business. There are only so many edgy articles you can write about lawnmower parts.

Blogs don’t have to be hilarious rants or incisive social commentaries. In fact, if you want them to work well for your site, you should avoid controversy and/or high-art altogether. Instead, think about what kinds of things your customers are interested in, and provide content that caters to those interests. Do you sell custom clothing? Write a few how-to posts about accessorizing or blog about fashion trends. Run a pet shop? Talk about what pet owners can do to keep their dogs healthy. Rank cat toys from worst to most purrr-fect. Cat owners in your area who search for toy ideas may just stumble on your article and become loyal customers. Blogs exist to provide helpful information for your current clients, but they serve to draw in new customers as well.

Here are some articles types that work well for business blogs:

  • Top 10 Lists
  • How-To Articles
  • Dos & Don’ts
  • Product Comparisons
  • Guides
  • Best Of/Worst Of Lists
  • Industry News
  • Trends & Fads
  • Interviews

If you don’t feel up to creating the content yourself, hire someone who is.

Final Thoughts

In our increasingly digital society, your website is the most visible face of your business. It behooves you to make that face as clean and attractive as possible. The good news is that it doesn’t take much to create a professional, effective site.

Consider the tips above and take action where you can. With just a little TLC (and a little cash), your website can go from bland and forgettable to sleek and profitable.

Further Reading

We’ve talked about seven ways that you can create a better website for your business. Here are some other resources to help you get started.

Starting From Scratch?

Check out our large selection of do-it-yourself website builder reviews or compare top website building software vendors. If your website needs to incorporate an online store, you’ll want to peruse our eCommerce software reviews and compare some of the top shopping carts.

Read these articles if you need help deciding on a platform:

Looking To Improve Your Current Site?

If you already have a site, but need some tips on how to take it to the next level, these articles should help:

Want Tips On eCommerce?

We’ve written a comprehensive ebook on starting an online store. It’s free and well worth a read. If you’re operating an online store already or are thinking about adding one to your website, check out these articles:

Need Help With Social Media For Your Business Website?

Social media is a huge part of good business marketing, and it’s helpful to integrate your social media channels with your website. Check out these articles for more information:

Julie Titterington

Julie Titterington is a writer, editor, and native Oregonian who lives in the beautiful Willamette Valley with her husband and two small children. When she’s not writing or testing software, she spends her time reading early 20th century mystery novels, staring blankly at her iPhone, and attempting to keep her kids fed, clothed, and relatively uninjured.

Julie Titterington

Julie Titterington

“”

The Complete Guide To Card Brand Fees For Merchant Accounts

Our unbiased reviews and content are supported in part by affiliate partnerships. Learn more.

credit card processing fees image

In this guide, we’re tackling a surprisingly tricky and supremely detail-oriented topic in the world of card payment processing: card brand fees. Navigating these fees on your merchant account statement can feel like you’re on a scavenger hunt you didn’t sign up for — and not the fun kind. There’s no avoiding the fact that the devil’s in the details when it comes to card brand fees, but too many merchants overlook or misunderstand them at their own peril. Fortunately, Merchant Maverick is here to help you:

  • Understand card brand fees and how they apply to your specific merchant account.
  • Identify these fees on your statement with our reference list of commonly-charged card brand fees.
  • Discern if your card processor is ripping you off by messing with these fees.

Let’s dive right in, shall we?

Table of Contents

Card Brand Fees VS Interchange Fees

Wait, aren’t these the same thing? If you thought so, you’re not the only one. Many merchants are surprised to learn that interchange fees and card brand fees are two completely separate types of fees. If this includes you, then you are about to join the elite class of merchants who understand the difference!

The common conflation of these two fee types stems from the fact that both are considered part of the “wholesale” cost of card processing, as opposed to the “markup.” In processing lingo, “wholesale” simply means that your processor must pay these fees to a separate entity in the processing chain instead of keeping the money for its own use.

The key distinction between these two sub-categories of wholesale fees, therefore, is which link in the chain is owed each fee. Here’s the difference: An interchange fee goes to to the customer’s card-issuing bank, while card brand fees are ultimately paid to the actual card brands themselves (e.g., Visa, MasterCard, Discover, American Express).

For both of these wholesale costs, card processors and the merchant services providers (MSPs) who manage your accounts are faced with a choice. Do they itemize and “pass-through” these wholesale fees directly to the merchant? Or, do they absorb the wholesale cost into the pricing structure in other ways, perhaps by charging a higher processing rate or monthly fee? Or, do they use some solution in between?

As a merchant, you’re tasked with knowing how your own MSP handles wholesale fees — both interchange and card brand. We’re only addressing card brand fees in this article. For more on interchange fees and how the different pricing models (such as interchange-plus) incorporate them, see our complete guide to rates and fees.

Card brand fees are typically either a percentage of volume charge or a flat amount per instance. Some apply to all your transactions, while others only apply in very specific situations, such as when an authorization is abnormal in some way. We’ll cover these individual fees and their circumstances in the itemized list at the end of this article.

The good news is that card brand fees have set, established amounts across the industry. Like interchange fees, they’re considered non-negotiable, and the processor has no control over the amounts. The bad news is that finding the true wholesale amounts for card brand fees is generally more difficult than looking up interchange rates.

Before we delve into why these fees are so pesky, note that they’re also called card network fees, card association fees, or assessments (although, as you’ll see, an “assessment” is technically a specific sub-category of card brand fee).

Card Brand Fees Are Especially Tricky

Due to several regrettable quirks of the processing industry, card brand fees are particularly complicated and opaque. Here are the primary reasons:

  • They’re not displayed on the card brand websites. By contrast, interchange tables are readily available at the Visa and MasterCard websites.
  • You can’t call the card brands and ask about the fees. You’ll be redirected right back to your own MSP to answer any questions. It’s incredibly frustrating that we can’t rely on the card brands to disclose these base costs, and instead must rely on processors and MSPs to be honest when they pass the fees through.
  • Multiple fees may apply to the same authorization or transaction. For example, transactions paid with a foreign-issued card incur separate international surcharges on top of the regular assessment that’s applied to all your transactions.
  • The fees change (usually increase) over time. And not all at once. While they’re rarely decreased, sometimes particular fees are eliminated and/or replaced with others. Occasionally, a completely new fee is instituted, to which the only fitting response is…

[embedded content]

  • Many of the fees are known by multiple names and abbreviations, and it’s often difficult to match the names on your own statement with any established names.
  • Two or more fees may be combined into one on your statement, making them hard to identify and verify.
  • The fees can be spread throughout multiple sections of your statement — not grouped all together or even labeled properly — just in case you weren’t already driven bonkers by this stuff. Often, I’ve seen them buried inside “interchange” or “authorization” sections.
  • Brazen processors or MSPs may add their own markups to card brand fees without telling you. Or, they may invent fees and give them card-brand-sounding names. Yuck, right?
  • Most of the fees are small, so can be overlooked as inconsequential. They can still add up quite quickly, but the real issue at stake is the overall honesty and transparency of your provider. Regardless of whether an extra fee or markup here and there isn’t costing you that much, wouldn’t you still rather know about it?

How To Stay On Top Of Card Brand Fees

It’s a shame that merchants can’t rely on Gandalf’s wizardry for this quest. Instead, we suggest you follow our tips for navigating these fees:

  • Be aware that you may be charged only some, or even none, of these fees. This depends on several factors, including 1) your pricing model, 2) what your MSP decides to pass through versus absorb, and 3) what happens with your transactions and authorizations in a given month. With many blended, tiered or flat-rate plans, all or most of the card brand fees are absorbed into the overall cost of your account instead of itemized and passed through to you. There are no guarantees with any pricing model, however, so check your statements anyway!
  • Obtain a list of card brand fees from your merchant account provider. If they’re passing these fees through to you, they should provide a detailed list with the specific names and abbreviations they’re using.
  • Use a secondary, neutral source to confirm fee amounts. Our list below is a great place to start.
  • Keep a running list of the card brand fees you’ve seen on your own statements, along with the amounts. Reference lists are handy, but a personalized list is easier to use and track over time than a litany of every possible fee for every possible circumstance.
  • Processors shouldn’t mark up these fees without clearly informing you. And really, they should leave these fees alone completely. If the fee is charged at all, it should be passed through at cost.
  • Trust the amount more than the name. Identifying a fee on your statement is often more about looking at the rate or amount charged, as well as the specific number/volume/type of transactions to which it was applied. The process of elimination can be very effective here.
  • Definitely be suspicious if you spot extra fees that aren’t on the reference list, any that seem like duplicates or that can’t be matched with established values, or those that look too high. Don’t worry too much if a fee seems too low; it’s possible your processor is just absorbing or redistributing some of the cost.
  • Be on the lookout for fee change notifications. October and April are common transition points, but the fees can change at any time. Good processors will notify you (sometimes on the statement itself) when a card brand fee is set to increase or change. If your processor doesn’t fall in this camp, it’s all the more important that you bookmark this article.
  • Ask before you sign. If you’re just signing up for an MSP or changing providers, ask how it handles card brand fees in addition to interchange costs. Be very clear that you know the difference and want the specifics. Remember, not all customer service reps are created equal in their knowledge of this topic. Ask to be transferred up the chain if you’re not satisfied.

Final Thoughts (Let’s Crowdsource This!)

As merchants, you are on the front lines for tracking card brand fees. We believe your input will be key in keeping our reference list up to date. Some of you have processors who actually do a good job organizing and displaying card brand fees on statements, as well as notifying you of any upcoming changes. Is a fee on our list is no longer accurate? Are we missing a new, legitimate fee? Together, we can also help other merchants whose processors are abysmal at communicating fees, or even cheating business owners. Let’s all team up on this — leave a comment below!
International Service Assessment (ISA)

  • Surcharge owed on transactions that are processed in the US on a card issued outside the US.
  • 1.20% – International Service Assessment (ISA) – Non-US currency
    • Same fee as above, but incurs this higher rate when the transaction is settled in the cardholder’s local currency.
    • 0.45% – International Acquirer Fee (IAF)
      • Applies in same circumstance as the International Assessment above.

    Per-Item:

    • $0.0195 – Acquirer Processing Fee (APF): Credit
      • Owed on all credit transactions for US-based businesses, irrespective of where cardholder/issuer is located.
    • $0.0155 – Acquirer Processing Fee (APF): Debit
      • Owed on all debit transactions for US-acquired businesses, irrespective of where the cardholder/issuer is located.
    • $0.0195 – Credit Voucher Fee (Credit)
      • Owed on all refunds issued in the US via credit card.
    • $0.0155 – Credit Voucher Fee (Debit)
      • Owed on all refunds issued in the US via debit card.
    • $0.0018 – System File Transmission Fee / Base II Fee
      • Owed on all authorized transactions submitted for settlement (in addition to the above transaction fees). Base II refers to Visa’s settlement network.
      • Outdated Visa settlement fees:
        • $0.0025 – Settlement Network Access Fee. Base II fee may still be called by this name but should be $0.0018.
        • $0.0047 – Kilobyte (KB) Access Fee. Should not be charged in addition to the above.
    • $0.10 – Transaction Integrity Fee (TIF)
      • Owed on a debit or prepaid Visa transaction that fails to meet CPS requirements (e.g., not settled in 24 hours, no AVS submitted on a keyed transaction).
    • $0.09 – Misuse of Authorization Fee
      • Owed when a transaction is authorized, but not followed by a matching cleared transaction, or when a canceled or timed-out authorization is improperly reversed.
    • $0.20 – Zero Floor Limit Fee
      • Owed when the merchant submits a settlement transaction without an authorization.
    • $0.025 – Zero Dollar Verification Fee
      • Owed when the merchant verifies a cardholder’s information (e.g., AVS, CVC2) without authorizing a transaction.

    Other:

    • Varies – Fixed Acquirer Network Fee (FANF)
      • A flat fee based on your volume per month, type of business (Merchant Category Code or MCC), number of locations, etc. Typically charged quarterly or monthly. Learn more about the FANF here.

    MasterCard Network Fees

    Volume-Based:

    • 0.12% – Assessment / Acquirer Brand Volume Fee – Transactions <$1,000 and all Signature Debit
      • Owed on gross commercial and consumer credit transactions less than $1,000, as well as all signature debit.
    • 0.14% – Assessment / Acquirer Brand Volume Fee – Transactions >$1,000)
      • Owed on gross commercial and consumer credit transactions exceeding $1,000; excludes signature debit. Note: May be listed as 0.02% surcharge over the above assessment.
    • 0.0075% – Acquirer License Fee (ALF) / License Volume Fee 
      • Owed on gross transaction volume. Increased from 0.0045% Oct. 2017. Note: sometimes combined with the above assessments, bringing the totals to 0.1275% and 0.1475%, respectively.
    • 0.60% – International / Cross-Border Assessment Fee (Domestic)
      • Surcharge owed by US-based merchants on transactions on a card issued outside the U.S. settled in USD. (Similar to Visa’s ISA.)
    • 1.00% – International / Cross-Border Assessment Fee (Foreign)
      • Same fee as above, but incurs this higher rate when the transaction is settled in the cardholder’s local currency. (Similar to Visa’s ISA.)
    • 0.85% – International Acquirer Program Support Fee
      • Applies in same circumstance as the Cross-Border Assessment above. (Similar to Visa’s IAF.)
    • 0.01% – Digital Enablement Fee
      • Owed on all card-not-present transactions for signature debit, consumer credit, and commercial credit cards.
    • 1.57%Global Wholesale Travel Transaction B2B
      • Owed instead of regular assessments, international surcharges, and NABU fees when the MasterCard B2B (MSB) card product has been used. Applies to a specific set of Merchant Category Codes (MCCs) in the travel and entertainment sector.

    Per-Item:

    • $0.0195 – Network Access and Brand Usage Fee (NABU Fee)
      • Owed on all US-based authorizations, regardless if settled. (Similar to Visa’s APF, Discover’s Data Usage Fee.)
    • $0.0044 – Kilobyte (KB) Access Fee
      • Owed on each authorized transaction submitted for settlement. Note: we’re in the process of checking to see if it’s still charged.
    • $0.01 – AVS Fee (Card-Not-Present)
      • Owed on card-not-present transactions processed using Address Verification Service (AVS). Often shows up on a statement under “Authorizations.”
    • $0.005 – AVS Fee (Card-Present)
      • Owed on Card-Present transactions processed using AVS. Often shows up under “Authorizations.”
    • $0.0025 – Card Validation Code Fee
      • Owed on all transactions involving CVC2 authorization.
    • $0.025 – Account Status Inquiry Fee
      • Owed when a merchant verifies AVS or CVC2 without authorizing a transaction.
    • $0.03 – SecureCode Transaction Fee
      • Owed on all MC SecureCode verification attempts (SecureCode service requires merchant signup).
    • $0.055 – Processing Integrity Fee
      • Owed for transactions that do not comply with best practices for transactions (i.e., not properly cleared/settled/reversed within MasterCard’s time frames for the type of transaction). Below are similar fees for other types of authorization integrity issues:
        • $0.045 – Processing Integrity Fee, Pre-Authorization
        • $0.045 – Processing Integrity Fee, Undefined Authorization
        • $0.040 minimum, or 0.25% – Processing Integrity Fee: Final Authorization
    • $0.012 – Processing Integrity Fee Detail Reporting
      • Owed on any authorization that generates a processing integrity fee for pre-authorization, undefined authorization, or final authorization.

    Other:

    • $1.25/mo. ($15 per year) – Merchant Location Fee
      • $15 annually for each location with traditional MSPs/processors ($3 annually for payment facilitators like Square). Not applicable to merchants processing under $200/month, nor to charitable or religious organizations.
    • $500 – Yearly Registration Fee
      • For online e-cigarettes/vaping businesses.

     Discover Network Fees

    Volume-Based:

    • 0.13% – Assessment
      • Owed on gross transaction volume.
    • 0.55% – International Processing Fee
      • Owed on US-based transactions processed with a card issued outside the U.S.
    • 0.80% – International Service Fee
      • Applies in same circumstance as the International Processing Fee above.

    Per-Item:

    • $0.0195 – Data Usage Fee
      • Owed on all authorized transactions. (Similar to Visa’s APF and MasterCard’s NABU Fees.)
    • $0.0025 – Network Authorization Fee
      • Owed on all authorized transactions. Replaced the Data Transmission Fee in 2013, which only applied to settled transactions.

    American Express OptBlue Network Fees

    American Express OptBlue

    Volume-Based:

    • 0.15% – Assessment
      • Owed on gross transaction volume.
    • 0.40% – International Assessment / Inbound Fee
      • Surcharge owed on transactions involving a card issued outside the US.
    • 0.30% – Card-Not-Present Surcharge
      • Surcharge owed on any transactions considered CNP, including keyed and ecommerce transactions.
    • 0.75%Technical Specification Non-Compliance
      • Owed on transactions that do not meet Amex standards, such as an authorization not obtained at the same time as a sale. Much rarer than Visa and MasterCard fees for transaction integrity problems.

    Per-Item:

    Rose Holman

    Rose’s eclectic professional background includes teaching, research, retail, non-profits and music. Upon returning to her Pacific Northwest roots following a four year stint in the tiny country of Luxembourg, she immediately applied her innate curiosity and lifelong love of explaining stuff to the world of merchant accounts. Her hobbies include devouring podcasts, practicing minimalism, and singing four-part harmony with her husband and two kids.

    Rose Holman

    “”