3dcart VS Volusion

3dcart-vs-Volusion

3dcart VS Volusion
✓ Pricing
Ease of Use ✓
✓ Features
Web Design ✓
✓ Integrations & Add-Ons
✓ Payment Processing
Tie Customer Service & Technical Support Tie
Tie Negative Reviews & Complaints Tie
Tie Positive Reviews & Testimonials Tie
Winner Final Verdict
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Everyone knows starting a business is a challenge, and setting up an online store can be particularly difficult. Not only do you have to find a product and make a business plan, you also have to build an entire website that can operate as your selling platform. This was an almost impossible obstacle for many sellers just a few years ago, but modern software has eliminated many of the hurdles merchants would otherwise have to overcome.

Cloud-based, all-inclusive store building software programs like 3dcart and Volusion can give you the tools you need to make your idea a reality. And because these software place a strong focus on ease of use, all sellers (even those with little technical knowledge) can get a store up and running in just a few weeks–or less!

As a fully hosted solution, 3dcart aims to be accessible and affordable for all merchants. Small and large businesses alike can use this eCommerce platform successfully, as is evidenced by the 22,000 current users. What’s more, 3dcart is continually expanding its features and services to fit even more users.

In the same way, Volusion is a comprehensive shopping cart solution for small to large businesses. Volusion hosts over 30,000 stores and is now offering two versions of their software: the more feature rich V1 and the easy to use (but still developing) V2. Volusion gives merchants the option of choosing between the two.

So, which of these shopping cart solutions should you choose? Well, it depends.

3dcart and Volusion both come with unique advantages and disadvantages, and your choice will depend on your business’s needs. To learn which solution is right for your online store, keep reading. We’ll compare the two shopping carts head-to-head in categories such as pricing, ease of use, and web design. Read on.

Don’t have time to read an entire article? Take a look at our top-rated eCommerce solutions for a few quick recommendations. Every option we present here offers excellent customer support, superb web templates, and easy-to-use software, all for a reasonable price.

Web-Hosted Or Licensed

Both platforms are web-hosted.

Hardware & Software Requirements

None. You just need a computer, secure internet access, and an up to date browser.

Pricing

Winner: 3dcart

3dcart and Volusion follow similar pricing models. Both services are billed on a monthly basis, no contract required, with advanced features included in higher level plans. If you commit to a year-long purchase, you can benefit from a discount of 10%. Keep in mind that many software solutions do not offer refunds on year-long purchases, so don’t commit to a full year until you’re sure the platform will work for you.

3dcart determines pricing levels by the number of staff users and availability of features. All plans beyond the startup plan come with unlimited products and bandwidth. Take a look at a brief breakdown:

  • Startup: $19/Month
    • 1 Staff User
    • 100 Products
    • Sell Up To $10K/Year
  • Basic: $29/Month
    • 2 Staff Users
  • Plus: $79/Month
    • 5 Staff Users
  • Pro: $229/Month
    • 15 Staff Users

3dcart also makes an enterprise platform available for any merchant with an annual revenue of over $400K/Year. There are also discounts available for charities and non-profits.

Pricing for Volusion differs between their two versions: V1 and V2. The most notable difference is that pricing for V1 does not include any transaction fees; however, bandwidth on this plan is limited and bandwidth overage fees apply. On the other hand, V2 comes with unlimited bandwidth, but merchants will have to pay transaction fees on all their sales. See both pricing models below:

V1 Pricing

  • Mini: $15/Month
    • 1GB Bandwidth
    • 100 Products
  • Plus: $35/Month
    • 3GB Bandwidth
    • 1,000 Products
  • Pro: $75/Month
    • 10GB Bandwidth
    • 10,000 Products
  • Premium: $135/Month
    • 35GB Bandwidth
    • Unlimited Products

V2 Pricing

  • Personal: $25/Month
    • Unlimited Products & Storage
    • 2% Transaction Fee
  • Professional: $75/Month
    • Unlimited Products & Storage
    • 1% Transaction Fee
  • Business: $135/Month
    • Unlimited Products & Storage
    • 0.5% Transaction Fee

When we compare 3dcart and Volusion, we can see that monthly rates for each pricing level are similar, with Volusion offering cheaper premium level plans. However, Volusion also charges fees in addition to these monthly rates (either bandwidth overage fees or transaction fees, depending on the version). For this reason, we’re awarding the category to 3dcart.

Get Started With 3dcart

Get Started With Volusion V1

Get Started With Volusion V2

Ease Of Use

Winner: Volusion

3dcart and Volusion both claim to be easy to use solutions. Let’s take a closer look at each software.

3dcart offers all potential users a risk-free, 15-day trial, so you can test out the platform for yourself without handing over any credit card information.

When you log in, you’ll get to explore 3dcart’s dashboard. 3dcart organizes all features in a toolbar on the left. Use categories and subcategories to navigate the software. Use video tutorials to learn the basic procedures.

Adding a product to your store is a two-step process.  First, you have to input and save basic product information. Once you’ve saved that page, you’ll be able to add in more detailed product information. For example, you can adjust shipping, inventory, and SEO settings.

3dcart is relatively easy to learn, though you may have difficulty locating features initially. Some features are buried in places you wouldn’t expect under titles you might not know to look for. Discounts features, for example, are available under “Promotion Manager.” Overall, we give 3dcart a four out of five stars in ease of use.

Volusion also offers trials of their software. You can sign up for free 14-day trials of both V1 and V2. Let’s start with V1.

When you log into your trial, you’ll find this dashboard:

Use tutorial videos to quickly learn your way around.

As it is with 3cart, adding a product on Volusion is a two-step process. First, add your basic product information. When you’ve saved that, you can add advanced information like SEO and shipping details along with more product descriptions.

While we don’t think Volusion V1 has the easiest dashboard in the eCommerce industry, it shouldn’t take too long to learn. You’ll find plenty of features available in the tool bar up top; you just have to figure out how to implement them the first few times.

Volusion V2 is the company’s newest attempt to make an easy to use eCommerce platform. The software is still in development, and while it is missing a few features, the UI is looking pretty good.

We’d still like to see a bit more work done to this admin. In particular, we’d like to see subcategories added to the toolbar on the left. This would make navigation require fewer clicks, which can really add up for online sellers.

V2’s “add a product page” is inviting in its simple and colorful design.

We have experienced some frustration with V2’s simple design, however. V2 tends to railroad users through basic operations, which can be a pain when you don’t need the help.

For example, when you go to set up a discount, you will encounter this screen:

You have to select the appropriate options before you’ll be presented the more typical discount creation page:

I would rather enter my information first into this second page. I don’t find the first page to be particularly helpful.

Volusion’s goal with V2 was to create a platform that’s easier to use, and they accomplish that goal. Personally, however, if I were to choose a version of Volusion, I would still pick V1. I think it’s worth learning a slightly more difficult software in order to access better features.

With so many versions of these software available, it’s difficult to directly compare 3dcart and Volusion. As far as ease of use goes, I think 3dcart and V1 are comparable, and V2 is slightly easier to use.

For this reason, we’re giving ease of use to Volusion.

Features

Winner: 3dcart

To get the best idea of these shopping carts’ features, a good plan is to visit each platform’s website and review the full list. However, if you don’t have time to do that just now, we’ll provide a brief overview of a few special features that each software offers below.

3dcart offers users lots of features, even at the lowest pricing plan. Here are a few:

  • Sell Digital: Sell digital products alongside your physical products.
  • Checkout Options: Choose either one-page or three-page checkout.
  • Automatic Calculators: Use tax and shipping calculators to generate real-time quotes.
  • Abandoned Cart Saver: Email customers to remind them to complete their orders.
  • Built-In Blog: Boost your brand and SEO with a blog.
  • SmartCategories: Create an “On Sale” category to showcase items.
  • Bulk Import / Export: Migrate platforms or make large scale edits with import and export features.
  • POS: Sell in-person with 3dcart Point Of Sale.

As you might expect, Volusion’s two versions come with different feature sets. Here are a few V1 features:

  • Abandoned Cart Reports & Emails: Encourage more conversions.
  • Allow Reviews: Let customers leave reviews on your products.
  • Returned Merchandise Authorization (RMA) Tool: Easily process returned products.
  • Sell On Facebook, Amazon, eBay: Sync channels with your store and manage your multichannel orders from Volusion.
  • Content Delivery Network (CDN): Use a CDN to deliver site content faster.

And here are features for V2:

  • Instant Search: Let customers search products on your storefront.
  • Checkout On Your Domain: Customers will not be redirected to a Volusion subdomain at checkout (available for merchants on the Professional and Business level plans).
  • Shipping Features: Create shipping options like signature-required shipments, discounted shipping, and flat rate shipping.
  • Bulk Import: Use CSV files to import new inventory in bulk.
  • Returned Merchandise Authorization (RMA) Tool: Process returns easily.
  • Dropshipping App: Use Volusion’s already-integrated dropshipping app to fulfill orders without handling merchandise.

3dcart is well known for their robust feature set. Volusion, on the other hand, is still working on expanding their feature set to better match their competitors’. 3dcart wins this one.

Get Started With 3dcart

Get Started With Volusion V1

Get Started With Volusion V2

Web Design

Winner: Volusion

As hosted software, 3dcart and Volusion work to provide elegant, easily customizable design templates for their customers.

3dcart users can find 90 free themes in 3dcart’s marketplace, all of which are mobile responsive. These themes are rather middle-of-the-road. They aren’t spectacular, but they aren’t ugly.

3dcart also has a few dozen premium themes available for purchase. These themes cost $99-$199.

Sellers can edit these themes in a variety of ways. Tech savvy users can edit the HTML and CSS, and less experienced users can use the WYSIWYG editor to make changes to your store’s language (like buttons, tabs, etc.). 3dcart also has a drag and drop available for merchants who request it, but it isn’t a very strong editing option.

Volusion features different themes for V1 and V2. V1 has a selection of 46 themes, 11 of which are free. V1 also sells premium themes at $180.

V2 has a much smaller set of themes–just 14–and all of them are free and mobile responsive. There do not appear to be any premium templates available for V2.

Theme editing between the two versions is different as well. V1 users are equipped with code editing tools. You can use HTML and CSS editors. There are also a WYSIWYG editor and visual style editor, which you can use to adjust and add blocks of content to your site.

Theme editing with V2 is much more focused on ease of use. You can use V2’s visual editor to make larger changes without touching the code. Or, if you’d prefer, you can make changes directly to the CSS.

While 3dcart provides more template options, we think Volusion has more user-friendly editing tools. Volusion wins web design.

Integrations & Add-Ons

Winner: 3dcart

3dcart’s marketplace features plenty of add-ons that offer a variety of features, including order management, shipping, security, social media, dropshipping, channel management, advertisement, and more. There’s also a RESTful API that developers can use to build more customizations and connections.

Volusion also has a strong app marketplace for merchants on the V1 version. There are over 70 integrations available for shipping, email, accounting, and more.

V2, on the other hand, does not provide so many options. There are only 22 applications currently available. It’s worth noting, however, that one of those applications is Zapier, which facilitates connections to many, many more integrations. Zapier is a paid service.

Both versions of Volusion also have APIs available for further development.

We’re basing our decision for this category on numbers. 3dcart wins!

Payment Processing

Winner: 3dcart

3dcart connects with over 100 payment gateways. You’ll have plenty of options.

Both versions of Volusion connect with significantly fewer payment gateways. V1 has 30+ payment gateways, and V1 only connects with two options: PayPal and Stripe (if you connect with Stripe, you can also enable Apple Pay).

In addition, Volusion offers its own in-house payment service for V1 merchants only: Volusion Payments. Volusion Payments lets you process transactions for around 2.15% + $0.30 per transaction with no monthly fee (note: this rate is a ballpark number. Your actual rates may be lower or higher). Volusion Payments requires users to sign a three year contract. If you terminate this contract after the 45 day grace period, you will be charged a $99 termination fee. While we’re happy that Volusion has its own payment services, we are displeased with the way they provide information about the services. Volusion is not very upfront about their fees on their website. We wish they were more transparent.

We’re giving the category to 3dcart.

Customer Service & Technical Support

Winner: Tie

All 3dcart plans come with personalized support via email, live chat, and phone. Self help support options include a knowledge base, video tutorials, a support forum, webinars, and an e-university. 3dcart’s response times are good for inquiries via phone or web ticket. However, their response times for live chat support are significantly delayed. Essentially, “live chat” is just another way to submit web tickets. It takes hours for support reps to get back to you.

Customer support is the same for both versions of Volusion. All plans (except Mini on V1 and Personal on V2) come with 24/7 support via phone, chat, and email. Self help resources include a knowledge base, webinars, video tutorials, a blog, and guides. There are mixed reviews only about the quality of Volusion’s customer support. Some have great experiences, others don’t.

Negative Reviews & Complaints

Winner: Tie

Every shopping cart comes with its fair share of negative reviews. Here’s what users dislike about each platform:

3dcart

  • Poor Customer Service: Users claim customer support is slow to respond to inquiries. Note below in the “Positive Reviews” section that this is not a universal experience.
  • Plain Templates: 3dcart’s templates aren’t bad, but they lack pizzaz.
  • Expensive Add-Ons: The cost of using multiple integrations and extensions can add up.

Volusion

  • Additional Fees: Merchants on both versions face additional fees: bandwidth overage fees on V1 and transaction fees on V2.
  • Dated Software: Users complain that Volusion’s features are not up-to-date with cutting edge software.
  • Misleading Sales Reps: I have seen a lot of reports of misleading sales tactics. It’s worth noting that Volusion has recently put a lot of work into improving their support system, and they claim higher levels of customer satisfaction.
  • No Free SSL On V1: Merchants on V1 have to purchase their own SSL certificate. These are normally included for free with hosted software.

Positive Reviews & Testimonials

Winner: Tie

Despite these negative reviews, there’s still a lot of good things to say about both of these platforms. Here’s what users love about 3dcart and Volusion:

3dcart

  • Low Price: 3dcart’s prices are competitive with other leading eCommerce software.
  • Good Customer Support: Some users have positive experiences with 3dcart’s support team.
  • Easy To Use: 3dcart’s UI is easy to learn, no matter what your technical ability level is.
  • Many Features Built In: 3dcart offers a robust feature set right out of the box. You’ll be able to access advanced features without add-ons.

Volusion

  • It Works: Users like that they can get started right away with all the necessary features. In addition, Volusion users say the software is bug-free, which is a huge plus.
  • No Transaction Fees On V1: Merchants on V1 do not have to pay transaction fees. They just need to monitor their bandwidth usage to make sure it stays within limits.
  • Ease Of Use: Volusion’s UI are very user friendly, especially on V2.

Final Verdict

Winner: 3dcart

It’s a close race, but in the end, 3dcart takes the lead. A strong feature set, low pricing, and high ease of use make 3dcart an excellent eCommerce platform for many merchants.

Despite the results of this comparison, Volusion may still be the right choice for your business. Volusion’s two versions give merchants a level of choice that 3dcart can’t offer. You may find that V1 or V2 fits your needs perfectly.

Whichever you choose, we hope you’ll consider signing up for a free trial of the software before you purchase. You can learn a lot from just a couple of hours exploring a software’s admin panel. Click the links below to get started with a trial of 3dcart or Volusion.

Get Started With 3dcart

Get Started With Volusion V1

Get Started With Volusion V2

The post 3dcart VS Volusion appeared first on Merchant Maverick.

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The Cheapest Credit Card Processing Companies

Business owners today know that it’s more important than ever to be able to accept credit cards. Customers carry less cash, and rely on credit and debit cards for the majority of their purchases. If you’re an eCommerce merchant selling online, taking “plastic” is just about your only option. Unfortunately, you can’t accept credit cards unless you have a merchant account, and merchant accounts aren’t free. In fact, they can be very expensive – especially for a small business – if you choose the wrong provider.

The credit card processing industry can be very bewildering, especially for a first-time business owner. There are dozens of companies providing processing services, and each of them offers different processing rates, fees, and contract terms. A provider that’s a good deal for a very small business might be prohibitively expensive for a larger one, and vice versa. Naturally, merchants want to cut through the confusion and get a quick answer to the question “Which one is the cheapest?” There’s nothing wrong with wanting to save money, especially for a new business that has to count every penny. However, if you look up “cheap” in the Merriam-Webster Dictionary, you’ll note that while cheap can mean “charging or obtainable at a low price,” it can also mean “of inferior quality or worth.” If you’ve ever been disappointed with a product purchase when you thought you were getting a good deal, you know that these two definitions often go together.

Here’s a quick look at some of our favorite low-cost credit card processors. Some are free to use. You just pay for the transaction you process. We don’t cover all of these in-depth in this post, but you can check out our complete reviews for all the details. 

The Overall Cheapest Credit Card Processing Companies for 2018

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Best Choice For Small-ticket, Canada, Mobile, eCommerce  All businesses, Mobile, Retail eCommerce, Mobile Canada, Restaurants Large-ticket, All-in-one, Recurring billing
POS and Other Features Included Yes Yes Yes No Yes
Rate Matching/ Negotiable No Yes No Yes Yes
Pricing Structure Flat Rate Interchange-Plus Flat Rate Interchange-Plus Subscription
Retail Rates 2.75% 0.30% + $0.10 2.70% 0.20% + $0.10 0.00% + $0.08
Basic Monthly Fee $0 $0 $9 $9.95 $99

Before we delve into specific processors, there are two important points that you need to understand:

  1. The company offering the lowest processing rates or fees isn’t necessarily the cheapest. The total percentage of your credit card sales that you’ll have to fork over to your merchant account provider isn’t an easy thing to calculate in advance with any precision. Variable processing rates and hidden (or at least unanticipated) fees can easily result in you paying much more than you thought you were going to for processing. Companies offering flat-rate pricing fare much better in this regard, as their simple pricing structure makes it relatively easy to estimate your monthly processing costs.
  2. The “cheapest” processor isn’t necessarily the best one for your business. While you naturally want to be able to accept credit cards while paying the least amount of money for the privilege, companies offering the lowest rates often cut corners in other aspects of their service to make those low rates possible. Poor customer service, for example, is a common problem among the least-expensive processors. If you want the best overall, you might also check out our top picks for small business credit card processing.

Types Of Providers

With the advent of new, low-cost providers, there are now two broad categories of companies providing credit card processing services. These include traditional (or full-service) merchant account providers, and payment services providers, who offer credit card processing, but without some of the features of a full-service merchant account. It’s very important that you understand the difference between the two.

Payment service providers (PSPs) can process your credit card transactions, but they don’t provide you with a unique merchant ID number for your business. Instead, your account is aggregated together with other merchants. This lowers the cost of things like monthly account fees and PCI compliance, but it also means that your account is much more vulnerable to being suddenly frozen or shut down for the slightest hint of fraud. Getting your account working again is complicated by the fact that most PSPs provide little in the way of one-on-one customer service. For a very small business, a PSP may very well be more affordable than a full-service merchant account, especially since you won’t have to pay so many recurring fees just to keep your account open. Be aware, however, that you’ll constantly be running the risk of suddenly losing access to your account and not being able to accept credit cards at all with a PSP. If your business processes a high number of credit card transactions on a daily basis, the loss of business you’ll incur if your account is frozen is quite high. Popular PSPs include PayPal, Square, and Stripe.

Traditional merchant accounts include a number of features you won’t find with most PSPs. The primary distinction is that you will be assigned a merchant identification number that is unique to your business. This number automatically identifies you to processors, issuing banks, and credit card associations. While it might not sound like much, having a unique merchant ID number helps to lower the risk of fraud and improves the stability of your account. While you still might have to endure a hold on funds for an unusually large transaction, the chances of your account being completely frozen for no apparent reason are much less than they are with a PSP. Merchant account providers also offer a host of ancillary services, including PCI security scans, customizable payment gateways for online payments, support for ACH (eCheck) payments, and many others. These bells and whistles don’t come cheap, of course. You’ll pay more in monthly fees than you will for an account with a PSP. However, you’ll also pay lower processing rates, especially if your merchant account provider offers interchange-plus pricing. For many medium-sized and larger businesses, a full-service merchant account will actually be less expensive than a PSP.

How We Chose

We used a number of criteria to determine which processors offered the lowest overall costs and the best service in most situations, including the following:

  • Pricing: Since we’re profiling the cheapest processors in the industry, it should come as no surprise that pricing would be our top criterion. It isn’t that simple, however. Pricing can be very complex, and there are a lot of variables to analyze in making a cost comparison between one provider and another. Fortunately, flat-rate pricing is relatively easy to analyze, as there’s usually little or no variability in the processing rates. Interchange-plus pricing, on the other hand, is very complex, as there are a bewildering number of possible rates charged under the “interchange” portion of the processing rate formula. To get a better idea of just how complicated processing rates can be, check out our Complete Guide to Credit Card Processing Rates & Fees.
  • Contracts: No one wants to be stuck in a long-term contract with an expensive early termination fee if you close your account early, but that’s what many traditional merchant account providers will offer you. All the companies profiled here – including both PSPs and full-service merchant account providers – offer month-to-month contracts. You can close your account and switch to a different provider any time you want, and with no penalty.
  • Hardware: Unless you’re running an eCommerce-only business, you’re going to need some equipment to process your customers’ credit cards. Most of the companies profiled here offer a variety of EMV-compliant credit card terminals, POS systems, and mobile card swipers. Equipment is offered for sale at competitive prices – sometimes it’s even free! You can also buy your own equipment and have it reprogrammed to work with your provider’s service. Note that Stripe is eCommerce-only and PayPal only offers a mobile payment solution through their ancillary service, PayPal Here.
  • eCommerce support: Buying online continues to overtake traditional retail shopping, and all our profiled providers offer support for eCommerce. This includes both a payment gateway to send payment data to the processor and a virtual terminal to allow you to enter transactions on your computer or mobile device. Each provider also offers options for integrating your website with online shopping carts and developer tools for customizing the interface between your site and their services.
  • Customer support: While every provider offers customer support and service, some do a much better job at it than others. We looked for vendors that provided 24/7 telephone support, as well as an online knowledgebase that allows merchants to troubleshoot common problems on their own. As we’ve noted, some PSPs don’t provide very good customer support at all. That’s one of the trade-offs you’ll have to be aware of if you want to go with the “cheapest” option for credit card processing.

Remember, there isn’t a single processor out there that can offer the lowest costs to every merchant. What might be a very inexpensive solution for you might not be such a good deal for someone else. Also, paying the least amount of money for processing won’t be of much use to you if you have to worry about your account suddenly being frozen or shut down, or if the customer service behind your account isn’t adequate to solve technical problems for you when they arise. That said, here are our six top choices for the cheapest credit card processing companies:

Square Payments

Everyone has heard of Square (see our review) by now. With its free Square Reader, app-based payment system, and simple pricing structure, it’s one of the most popular processing services on the market for small businesses. Square’s pay-as-you-go system allows businesses that ordinarily couldn’t afford a merchant account to accept credit cards.

Retail businesses love Square for its low-priced card readers, which replace traditional credit card terminals with a smartphone-based system that’s both affordable and mobile. In addition to a card reader, you’ll need the free Square app, a smartphone, and an Internet connection. Square’s original card reader is free and you’ll receive one when you open your account. However, it can only read magstripe cards and requires a headphone jack to function. Most users will want to shell out a few extra bucks for a newer, EMV-compliant reader. The Square reader is only $49.00, and supports both EMV and NFC-based payment methods. It also uses Bluetooth to connect to your smartphone or tablet – no headphone jack required.

 

Cheapest Mobile Credit Card Processing Company

The Essentials:
✓ $0 monthly fee
✓ 2.75% for all card-present transactions
✓ Exceptional POS app included free
✓ Free credit card reader available
Proprietary software suite includes:
• Point of sale software
• Inventory management
• Mobile app
• Virtual terminal
• Invoicing/billing
• API for custom solutions
Visit the Square website
Read our Square review

Square’s pricing structure is about as simple as it gets. There are no monthly fees whatsoever for a basic account, and none of the types of “hidden” fees that traditional merchant account providers like to tack on. While some advanced features require a monthly subscription, these are entirely optional, and most businesses probably won’t need them. Square’s processing rates are also very simple:

  • 2.75% for all card-present transactions (including magstripe, EMV, and NFC)
  • 2.90% + $0.30 for all invoices and eCommerce transactions
  • 3.50% + $0.15 for all virtual terminal and keyed-in transactions

That’s it! You don’t have to worry about non-qualified transactions, batch fees, or anything else. Funds are deposited into the user’s account within 1-2 business days in most cases. Billing is month-to-month, so you don’t have to worry about long-term contracts and early termination fees. You can quit anytime you want without penalty.

This all sounds great – and it is – if you’re a small business that has to watch every penny and can’t afford to shell out a significant amount of money every month just to have a merchant account. For a larger business, however, Square’s pricing actually isn’t the best deal available. Flat-rate pricing is deliberately on the high side because it has to pay for all the other services that most providers bill you separately for. At a certain point (roughly $10,000 per month in processing volume), you’re actually better off going with a full-service merchant account provider that offers interchange-plus pricing. Yes, you’ll have to pay those pesky account fees, but your processing rates will be so much lower that you’ll save money overall.

Besides high processing rates, Square has a few other drawbacks as well. We’ve already mentioned that your account is much more likely to be frozen or terminated unexpectedly, but what makes this situation worse is that Square’s customer service isn’t so great. The company didn’t even have telephone support for several years after it launched, but it does now. Unfortunately, it’s only available during business hours, and the large number of complaints about it suggests that the quality of support you’ll receive if you call in with a problem is inconsistent at best.

But is it really the cheapest way to go? Well, it depends. For a very small business that doesn’t have a high processing volume, Square’s lack of account fees and predictable pricing can make it very affordable. On the other hand, a larger business with a high processing volume will end up paying much more under those flat-rate prices than it would with an interchange-plus pricing plan.

Square keeps costs low by aggregating accounts together rather than issuing each user a unique Merchant ID number. Because of this, you won’t get a true full-service merchant account. The trade-off is that there’s a much higher chance that your account will be frozen or terminated without notice if fraud is suspected. This might be a minor inconvenience to a retail business that mostly deals in cash and only occasionally takes credit cards, but it’s catastrophic to an eCommerce business where cash isn’t an option.

PROS:

  • No monthly account fees
  • Low-cost EMV-compliant card readers available
  • No long-term contracts or early termination fees

CONS:

  • Not a full-service merchant account; no unique Merchant ID number
  • Frequent account holds and terminations
  • Flat-rate pricing is more expensive than interchange-plus for larger businesses

For a more detailed look at Square, be sure to check out our full review.

Payline Data

Payline Data (see our review) covers all the bases for small business transactions, from mobile and online payments to in-store sales. They offer easy-to-understand pricing plans that are very affordable, especially for low-volume sellers. However, the company’s website fully explains all of the extra features and their associated costs, so you know up front what you’ll have to pay. Payline also stands out from the crowd for their corporate philosophy of charitable giving and support for non-profits through discounted pricing and their “Commercial Co-Venture” program.

 

Cheapest Merchant Account Provider

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pass-through pricing
✓ Outstanding $0 monthly fee option
✓ Exceptional ecommerce shopping cart compatibility
Proprietary software suite includes:
• Excellent mobile processing app
• Easy integration API for customization
• Virtual terminal
• Billing management
Visit the Payline website
Read our Payline review

For brand-new or mobile businesses, Payline Start is the most affordable plan. There’s no monthly fee, and pass-through markup rates are set at 0.30% + $0.10 per transaction. In addition to the free virtual terminal, you’ll also receive a free Ingenico GX5 card reader and the Payline Mobile app to go with it. If you’re looking for value, but want better equipment and lower rates, the Payline Shop plan might be right for you. This plan includes the same features as the Payline Start plan, but lowers your processing rate. The plan costs $10 per month, and markup rates are set at 0.20% + $0.10 per transaction. Mobile businesses and small to medium retailers will benefit the most from this plan.

For more information, see our complete Payline Data review.

CDGcommerce

No account setup fees. No PCI compliance fees. No gateway fees. No monthly minimums, either. There’s a lot of things that CDGcommerce (see our review) doesn’t charge you for, making them a very affordable option for small businesses and those just getting off the ground. They also offer month-to-month contracts with no early termination fee, so in the unlikely event that you aren’t happy with their service, you can close your account without penalty.

So, what do you pay for? Besides processing charges, you’ll only have to pay a $10.00 monthly account fee. This gets you both a full-service merchant account and a payment gateway. You can select either CDG’s own proprietary Quantum gateway or Authorize.Net. Either way, there’s no fee for using the gateway, and no additional per-transaction processing fee. While this is a great deal, you also have the option of adding the cdg360 security package for an extra $15.00 per month. It comes with customized security alerts, PCI-DSS vulnerability scans, and $100,000 in data breach/theft protection. It’s well worth paying a little extra for, especially for eCommerce merchants.

Good Option for Online Payment Processing

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pass-through pricing
✓ Free payment gateway option with activation within an hour
✓ Exceptional ecommerce shopping cart compatibility
✓ Over 20 years with excellent reputation
Proprietary fraud prevention suite includes:
• Automatic high-risk order detection
• Dialverify phone order verification
• Cardholder authentication (VbV/MSC)
• Chargeback defender
• Easy integration and API for customization
Visit the CDGcommerce website
Read our CDGcommerce review

We don’t recommend leasing a credit card terminal, but CDG has a program that’s very different from traditional leases, and is actually a good deal. For only $79 per year (for terminal insurance), CDG will provide you with a terminal and keep it updated. This works out to $6.58 per month, a fraction of what most terminal leasing companies will charge you. If you need a wireless terminal, you’ll also have to pay $20.00 per month for wireless data and an additional $0.05 per transaction in processing fees.

You won’t need to negotiate with CDG to figure out your processing rates. All their rate plans are interchange-plus and are fully disclosed on their website. The company offers a choice between Simplified and Advanced pricing plans, with Simplified pricing being designed for merchants processing less than $10,000 per month, and Advanced pricing being for those processing $10,000 or more per month. Here are their current rates:

Simplified Pricing:

  • Online: interchange + 0.30% + $0.15 per transaction
  • Retail (swipe or 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

With very low account fees and competitive interchange-plus processing rates, CDGcommerce offers a great combination of price and value. If you’ve been using Square or PayPal and want to upgrade to a full-service merchant account, they’re an excellent option.

PROS:

  • Interchange-plus pricing
  • Month-to-month billing with no long-term contracts or early termination fees
  • Free payment gateway with virtual terminal
  • Excellent customer service

CONS:

  • Only available to US-based merchants

For more information, see our complete review here.

Dharma Merchant Services

Headquartered in downtown San Francisco, California, it should come as no surprise that Dharma Merchant Services (see our review) is far more socially responsible than just about any other merchant account provider in the industry. For you, that enlightened corporate philosophy translates into fair and transparent pricing, reasonable contract terms, and excellent customer support.

Because they don’t try to squeeze extra money out of struggling small business owners, you won’t have to pay an account setup fee or an annual fee. There’s no monthly minimum, either. You will pay a $10.00 monthly fee and a $7.95 per month fee for PCI compliance. Other fees (most of which are per-occurrence, such as chargeback fees) are fully disclosed on their website. Like many of our other favorite processors, Dharma doesn’t have long-term contracts, either. Billing is month-to-month, and there’s no early termination fee if you close your account.

Dharma Merchant Services review

Good Option for Nonprofits and B2B Payments

The Essentials:
✓ Provides discounted rates for nonprofits
✓ Exceptional customer service
✓ Transparent interchange-plus pass-through pricing
✓ Proven track record with nonprofits
Free MX Merchant Software includes:
• Level 2 and level 3 data for lower interchange rates on B2B processing
• Virtual terminal
• Invoicing/billing
Visit the Dharma Merchant Services website
Read our Dharma Merchant Services review

The company uses interchange-plus pricing exclusively and lists their rates right on their website. Here’s their current processing rate information:

  • Storefront: interchange + 0.25% + $0.10 per transaction
  • Virtual: interchange + 0.35% + $0.15 per transaction
  • Restaurant: interchange + 0.20% + $0.07 per transaction

If you need a terminal, Dharma will sell you either the First Data FD-130 or Verifone Vx520. They’ll also reprogram your existing terminal, if you have one. Need a POS system? Dharma offers the Clover Mini, and will sell it to you outright rather than leasing it. If you need a mobile payments system instead, Dharma offers the Clover Go for $99.00, plus a $10.00 monthly fee. For $139, you can upgrade to the Clover Go Contactless, which connects via Bluetooth instead of your phone’s headphone jack.

Dharma doesn’t have a minimum monthly volume requirement, but they do acknowledge that their fees and rates aren’t the lowest on the market for businesses that process less than $10,000 per month. You’re still free to sign up if you need a full-service merchant account, but they recommend either PayPal or Square if you don’t.

PROS:

  • Transparent interchange-plus pricing
  • Minimal account fees
  • Full range of services and equipment for both retail and online businesses
  • Great customer support

CONS:

  • Not a good fit for low-volume (less than $10,000 per month) accounts

For more information on Dharma, see our complete review here.

Helcim

Headquartered up in the Great White North, Helcim (see our review) provides outstanding service and affordable prices to both Canadian and US-based merchants. They offer interchange-plus pricing exclusively, and their website features one of the most detailed and transparent explanations of their rates and fees that you’ll find anywhere.

Transparency and honesty are major themes with Helcim, which is something you won’t often find with many other providers. Reading their website will give you a quick education on all the sneaky, misleading tricks that other companies use to squeeze more money out of their merchants. Fortunately, you won’t have to worry about this kind of behavior with Helcim. Not only do they fully disclose their processing rates, account fees, and contract terms, but they also provide all their services at fair, competitive prices.

 

Good Option for Canadian Businesses

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pricing
✓ Exceptional reputation in Canada
✓ High-quality all-in-one payment platform
✓ Great educational material
Proprietary Helcim Commerce solution includes:
• Point of sale software
• Inventory management
• Billing and invoicing
• Virtual terminal
Visit the Helcim website
Read our Helcim review

Unlike many of their competitors, Helcim encourages merchants to buy their credit card terminals outright rather than leasing them. The company offers a number of popular models, most of which are EMV-compliant. For a little extra cash up front, you can also get an NFC-capable terminal that supports Apple Pay and other similar mobile payment methods. If you already have a terminal, they’ll reprogram it to work with their system for free. Unfortunately, Canadian EMV-compliant terminals are not designed to be transferred or resold, so Canadian customers will have to use the rental option or buy a new machine. Renting on a month-to-month basis (which is not the same as leasing) is usually the best choice for Canadian merchants.

Helcim offers three basic pricing plans: a Retail Plan, an eCommerce Plan, and a combined Retail + eCommerce Plan. The Retail Plan costs a flat $15.00 per month. This fee covers PCI compliance, and there are no account setup or statement fees. There’s also no monthly minimum. All swiped transactions are processed at a rate of interchange + 0.25% + $0.08 per transaction.

Helcim’s eCommerce Plan works the same way, but it costs $35.00 per month. This gives you access to the company’s proprietary Helcim Payment Gateway, which includes support for recurring billing, a customer information storage system, shopping cart integration, and a customizable payment gateway API. The plan also includes a virtual terminal that allows mail order or telephone order businesses to key in transactions on any computer. All online (i.e., card-not-present) transactions are processed at a rate of interchange + 0.45% + $0.25 per transaction.

The Retail + eCommerce Plan includes all features of the other two plans, and costs $50.00 per month. Processing rates are the same as for the other two plans.

There are few downsides to Helcim’s services. One way they’re able to keep costs so low is to exclude high-risk merchants from signing up. This policy lowers the company’s overall risk profile, but it also means you’ll be out of luck if you meet their high-risk criteria. Because they charge a monthly fee (albeit a very reasonable one), they’re also not quite as affordable as Square, PayPal, etc. if you’re processing below $2,500 per month. We’re also still waiting for the company to introduce an EMV-compliant mobile card reader. They currently offer a basic, magstripe-only reader that requires a headphone jack to communicate with your smartphone or tablet.

PROS:

  • Extremely transparent fee structure
  • Very competitive rates for businesses processing over $1,500 per month
  • Excellent customer service and support

CONS:

  • Not suited for very small businesses processing less than $1,500 per month
  • Not available for high-risk merchants
  • Mobile card reader isn’t EMV-compatible

For more information, see our complete review here.

Popular (But Less Reliable) Inexpensive Options

PayPal

Everyone has heard of PayPal (see our review). And just about everyone uses it. With an active user base of almost 200 million customers in 200 markets around the world, it’s a good bet that most of your customers use it, too. But can the company fill all your processing needs? The short answer is yes. PayPal has all the features you would need to run a business – either retail or eCommerce – using just their payment processing services and equipment. But would this be cost-effective? Here’s where it gets complicated. While the company offers flat-rate pricing and no monthly fees for its basic accounts, those flat-rate prices are kind of on the high side. Also, if you need features such as a virtual terminal, your account isn’t free. Instead, it’s $30.00 per month, plus your processing charges.

PayPal doesn’t offer true, full-service merchant accounts. Instead, they function as a payment service provider (PSP), which keeps costs relatively low, but also means that they’re quick on the trigger to freeze your account if they suspect that fraud has occurred. Like most PSPs, they don’t have long-term contracts and don’t charge early termination fees. Billing is month-to-month, and an account that doesn’t have a monthly fee is good for a business that only processes credit card transactions occasionally.

PayPal’s basic rate for online transactions is 2.9% + $0.30 per transaction. International payments and transactions processed through their virtual terminal cost more, while registered charities and mobile payments get a discount. PayPal fully discloses their rates on their website, so you’ll always know in advance what you’ll be paying.

While PayPal is designed primarily for eCommerce businesses, the company also supports retailers through integration with numerous third-party mobile POS systems and their own mobile payments system, PayPal Here. The latter now includes a Bluetooth-enabled EMV card reader. While many companies offer a free virtual terminal, but charge a monthly fee for the payment gateway needed to use it, PayPal does just the opposite. Their PayFlow Payment Gateway comes with no monthly fee, but if you also need a virtual terminal, you’ll pay $30.00 per month for it. There’s also a small additional per-transaction processing charge.

While these are all great features, there are also some not-so-great things about PayPal that you should be aware of before you sign up. Customer support through their telephone support line is very inconsistent. Some customer service representatives are quite knowledgeable and helpful, while others are not. Fortunately, the company provides an online knowledgebase that should help you solve common problems on your own. As we’ve mentioned, sudden account holds or terminations are also a possibility. If you simply can’t afford to lose access to your account temporarily, consider a different option.

For some businesses, PayPal is really all you need. If you don’t need a virtual terminal or any of the other features of the $30 PayPal Payments Pro plan, you can avoid monthly fees altogether and operate on a pay-as-you-go basis. For larger businesses and those with more specialized needs, PayPal makes an excellent secondary payment option on top of your regular merchant account.

PROS:

  • No monthly fees (for standard account)
  • Transparent flat-rate pricing
  • Most customers have a PayPal account

CONS:

  • High flat-rate processing charges
  • Frequent account freezes, holds, and terminations
  • Inconsistent customer support

For more detailed information about PayPal, see our complete review here.

Stripe Payments

Stripe logo

Just like Square is popular with small retail businesses, Stripe (see our review) is the darling of the eCommerce world. The company functions as a payment service provider (PSP), aggregating accounts and keeping costs low for their clients. There are no monthly fees, and their flat-rate processing plan is extremely simple.

Stripe is so focused on eCommerce that they don’t offer much of anything to retailers. There are no credit card terminals, POS systems, or even mobile payments systems for your smartphone or tablet. So, if you’re a retailer, you can skip right on ahead to the next company profiled below. Stripe is not for you.

eCommerce-only merchants, on the other hand, will find a very robust variety of services to help them sell online. Integration is the name of the game at Stripe, and their payments processing service works with just about every online shopping cart on the market. They also have a vast library of APIs that allow businesses to customize the interface between Stripe and their websites. If you’d like to sell your products through your own app as well as on your website, they offer an impressive in-app purchasing capability.

So, how much does all this techy goodness cost? The short answer is not much – at least under certain circumstances. Since all your transactions will be processed online without a physical card being swiped or dipped, Stripe charges a flat 2.9% + $0.30 for all credit and debit card transactions. eCheck (ACH) and Bitcoin payments are charged a mere 0.8% per transaction. This is the same rate that Square and PayPal also charge for online transactions. There are no additional account fees, although you will be charged $15.00 for each chargeback. Chargeback fees are unavoidable with any processor, but unlike most companies, Stripe will refund your money if the chargeback investigation comes out in your favor.

You also won’t have to worry about long-term contracts or early termination fees, as Stripe bills on a month-to-month basis. This is a useful feature for a growing eCommerce business, as Stripe’s flat-rate pricing suffers the same flaw that plagues Square and PayPal: for a high-volume business, their flat-rate pricing is actually more expensive than what a full-service merchant account can provide through interchange-plus pricing.

While Stripe has some very impressive features, it also has a few serious drawbacks. Like other payment service providers (PSPs), account holds and terminations occur frequently and without notice. Stripe uses a machine learning-enabled algorithm to scan accounts for possible fraud, and it’s definitely programmed to err on the side of caution. This wouldn’t be so bad if you could call up a human customer service representative on the phone and resolve the situation. Unfortunately, you can’t – Stripe doesn’t offer telephone support at all. Instead, you’ll have to contact the company through email and wait for a response. Judging from the many complaints about Stripe’s customer service, the quality of those responses leaves a lot to be desired.

Despite its shortcomings, Stripe is a good choice for a new eCommerce venture. You’ll enjoy pay-as-you-go service with no monthly fees, and you won’t have to worry about long-term contracts. The company’s extensive library of developer tools can offer you options that you might not be able to find with other providers. Just be aware that when your business grows beyond a certain point, you’ll need the security and reliability of a full-service merchant account. You’ll also save money on processing charges by switching to interchange-plus pricing.

PROS:

  • Simple flat-rate pricing structure
  • No additional fees or long-term contracts
  • Huge API library for developers

CONS:

  • Flat-rate pricing is more expensive than interchange-plus for high-volume merchants
  • Frequent account holds and terminations
  • No telephone customer support

For more information, see our complete review here.

Final Thoughts

As you’ve probably noticed by now, pricing for credit card processing is a ridiculously complicated subject. With dozens of interchange rates and a wild assortment of fees, trying to figure out how much accepting credit cards is going to cost your business inevitably comes down to guesswork. While you can make a reasonable estimation based on your processing history and your business type, it’s not realistic to expect that you’ll be able to come up with a precise figure. Fortunately, the companies we’ve profiled here fully disclose their processing rates and fees, making your job of estimating your costs much easier.

We’ve only listed six of the most popular and most affordable processors here, so be aware that the cheapest processor for your particular business might not be one of them. There are plenty of other providers out there who are also competing for your business, so check them out, too!

Here are a few very general rules of thumb regarding merchant account pricing:

  • If your business has a low processing volume, you’ll want to find a provider with low monthly and annual fees. One of the most appealing aspects of Square or PayPal is that they don’t charge any monthly fees. This is a great feature if your business is seasonal or you only occasionally have a need to accept credit cards. Processing rates won’t be as important for low-volume merchants.
  • If your business has a high processing volume, fees aren’t as important, and you’ll want to get the lowest processing rates you can find. Paying one or more monthly fees for a merchant account is an insignificant expense for a larger business, but higher processing rates can make a serious dent in your profits.
  • Carefully analyze both the percentage rate and the per-transaction processing fee when evaluating rates. While you’d ideally like them both to be low, which one is more important will depend on your average transaction size. If you process a lot of smaller transactions, a $0.30 per transaction fee can add up quickly. On the other hand, if your transactions are usually larger, you won’t need to be as concerned with the per-transaction fee, and should try to get the lowest percentage rate you can find.

While all the companies we’ve profiled here provide excellent service at an affordable cost, some are better suited to particular types of businesses than others. Square, for example, works best for very small retail businesses. PayPal and Stripe, on the other hand, are a better fit for small eCommerce merchants. Full-service merchant account providers like Helcim, CDGcommerce, and Dharma are more well-rounded, but CDG is a better fit for smaller businesses, while Helcim and Dharma work better with larger ones. For a side-by-side comparison of some of the companies listed here (and a few other excellent providers), please see our Merchant Account Comparison Chart.

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Best Choice For Small-ticket, Canada, Mobile, eCommerce  All businesses, Mobile, Retail eCommerce, Mobile Canada, Restaurants Large-ticket, All-in-one, Recurring billing

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The Complete Guide to B2B Payment Processing

B2B Payment Processing

Business-to-business (B2B) transactions have been around forever, but with the dramatic increase in credit card usage by corporations, they’ve also become a lot more complicated to deal with for merchants who process them. Traditionally, businesses made their purchases by placing an order in person, through the mail, or over the telephone. The merchant would then ship the products and send the business a paper invoice for payment. They would then wait – sometimes for weeks – for payment to arrive in the form of a paper check. Cashing the check and receiving funds added several more days to the process.

With the advent of the internet, B2B transactions can now be received and processed in very little time. Specialized credit cards designed for small businesses and larger corporations allow nearly instantaneous payments, but also cost more to process than the old paper invoice method. For most merchants, the ability to bring the delay in receiving funds down to just 1-2 business days more than makes up for the extra expense. Accepting credit cards for B2B transactions also leads to a significant increase in overall sales, as more and more companies use credit cards exclusively for their business purchases.

While B2B credit card processing has a reputation for being expensive, you can actually save a very significant amount of money on your processing costs – if you know how to take advantage of the lower interchange rates available to B2B merchants. In this article, we’ll walk you through the basics of B2B processing and show you how you can save hundreds – or possibly even thousands – of dollars in processing costs by properly establishing yourself as a B2B merchant and taking advantage of the discounted rates offered by the major credit card associations.

What Are B2B Transactions?

A B2B transaction is simply a transaction where the customer is another business rather than an individual consumer. The transaction may involve goods, services, or a combination of both. You’ll also hear the term B2G (business-to-government) transaction, which describes transactions between a business and a local, state, or Federal government agency.

The most obvious example of a B2B transaction is when a company purchases supplies for its operations. However, many other types of transactions can also be classified as B2B transactions. For example, when a company hosts a luncheon for employees at a restaurant and uses a business credit card to pay for it, this would be a B2B transaction. The business making a B2B purchase can be anything from a large corporation to a solo freelancer using a business credit card to keep business and personal expenses separate.

In establishing a strategy for dealing with B2B transactions, the most important thing to consider is the percentage of B2B purchases your business expects to experience. Some businesses sell almost exclusively to individual consumers, and see very few, if any, B2B transactions. At the opposite end of the spectrum are businesses that sell almost exclusively to other businesses and make few direct sales to consumers. Most businesses, however, will fall somewhere in the middle, with B2B transactions making up a small, but significant percentage of their overall transactions. As we’ll see below, B2B transactions can entitle you to lower interchange costs and lower overall processing costs. However, you’ll have to jump through several hoops to establish yourself as a B2B merchant, and the specialized software you’ll need to take advantage of those lower rates isn’t free. You’ll want to evaluate very carefully whether it’s cost-effective to add specialized B2B processing services to your merchant account.

Merchant Category Codes (MCC Codes)

Merchant Category Codes (or MCC codes) are assigned by the credit card associations to classify businesses according to the products and services they provide. Before you can take advantage of the lower interchange rates available for B2B transactions, you’ll need to be assigned an MCC code that identifies you as a B2B merchant.

Unfortunately, all the major credit card associations have their own set of MCC codes, and they all treat them differently when it comes to B2B transactions. Visa, for example, will offer you a discounted interchange rate on B2B transactions if you’re assigned a qualifying MCC code and meet certain other criteria. MasterCard also uses MCC codes, but doesn’t offer a discount for B2B transactions.

Because each card association uses its own set of MCC codes, your business will end up with a separate code for each type of credit card you accept. Establishing the proper MCC code for your business is ultimately up to the credit card associations, although your merchant services provider can assist with this task to make sure you’re assigned an appropriate code.

Here’s a list of MCC Codes recognized by Visa as qualifying for B2B merchant status:

  • Accounting, Auditing, and Bookkeeping Services (MCC 8931)
  • Advertising Services (MCC 7311)
  • Books, Periodicals, and Newspapers (MCC 5192)
  • Business Services (MCC 7399)
  • Chemicals and Allied Products (MCC 5169)
  • Cleaning, Maintenance, and Janitorial Services (MCC 7349)
  • Commercial Equipment (MCC 5046)
  • Commercial Footwear (MCC 5139)
  • Commercial Photography, Art, and Graphics (MCC 7333)
  • Computer Maintenance, Repair, and Services (MCC 7379)
  • Computer Programming, Data Processing, and Integrated Systems Design Services (MCC 7372)
  • Construction Materials (MCC 5039)
  • Durable Goods (MCC 5099)
  • Electrical Parts and Equipment (MCC 5065)
  • Employment Agencies and Temporary Help Services (MCC 7361)
  • Florist Supplies, Nursery Stock and Flowers (MCC 5193)
  • Industrial Supplies (MCC 5085)
  • Information Retrieval Services (MCC 7375)
  • Insurance Sales, Underwriting, and Premiums (MCC 6300)
  • Landscaping and Horticultural Services (MCC 0780)
  • Management, Consulting, and Public Relations Services (MCC 7392)
  • Medical, Dental, Ophthalmic and Hospital Equipment and Supplies (MCC 5047)
  • Men’s, Women’s, and Children’s Uniforms and Commercial Clothing (MCC 5137)
  • Metal Service Centers and Offices (MCC 5051)
  • Miscellaneous Publishing and Printing (MCC 2741)
  • Motion Picture and Video Tape Production and Distribution(MCC 7829)
  • Motor Freight Carriers and Trucking (MCC 4214)
  • Nondurable Goods (MCC 5199)
  • Office and Commercial Furniture (MCC 5021)
  • Paints, Varnishes, and Supplies (MCC 5198)
  • Photographic, Photocopy, Microfilm Equipment and Software (MCC 5044)
  • Piece Goods, Notions, and Other Dry Goods (MCC 5131)
  • Plumbing and Heating Equipment and Supplies (MCC 5074)
  • Professional Services (MCC 8999)
  • Special Trade Contractors (MCC 1799)
  • Specialty Cleaning, Polishing and Sanitation Preparations (MCC 2842)
  • Testing Laboratories (Non-Medical Testing) (MCC 8734)
  • Typesetting, Plate Making and Related Services (MCC 2791)

Note that these codes only apply to Visa. MasterCard, American Express, and Discovery use their own separate sets of codes. Also, having an appropriate MCC code to qualify as a B2B merchant doesn’t automatically qualify you for discounted interchange rates on B2B transactions. You’ll also have to submit Level II (and possibly Level III) credit card data, as explained below.

Data Levels

In addition to being a properly-coded B2B merchant, you’ll need to submit additional payment data with each B2B transaction to be eligible for discounted processing rates. Credit card associations recognize three levels of payment data: Level I, Level II, and Level III data. Once again, the major credit card associations have their own separate ways of classifying and treating this data. Visa, for example, refers to these three data categories as “data levels,” while MasterCard calls them “data rates.”

For standard transactions between your business and individual consumers, only Level I data is required to process a transaction. Level II and III data is not submitted, and won’t get you a discount on interchange rates anyway. Because most businesses primarily sell to individuals rather than other businesses, your merchant account will only be set up to handle Level I data unless you add a service to record and transmit Level II and Level III data. Since most businesses won’t need this service, it’s often only available as an optional upgrade, and you’ll usually be charged an additional monthly fee for it. If your business only processes a small number of B2B transactions, you’ll want to weigh carefully whether the discounted interchange rates are worth this added expense. Remember, you’ll be paying the additional fee for Level II/III processing every month regardless of whether you use it regularly or not.

Processing of Level II and III data is further complicated by the fact that once again, the credit card associations have separate policies for handling this additional data. Discover, for example, only handles Level I data and won’t give you any discount on interchange rates for submitting Level II or III data. American Express, on the other hand, accepts both Level I and II data, but not Level III data. Acceptance of Level II data also requires prior approval for your business directly from American Express. Visa and MasterCard have the most liberal policies, accepting all three levels of credit card data without the need for prior approval. Note that you will still need to be properly coded with a Merchant Category Code identifying you as a B2B merchant.

So, just what “data” is included in these various data levels, anyway? Think of transaction processing data as a very large database, with each transaction being a record, and each record consisting of several fields that have to be filled in. All transactions will have to include all required fields for Level I data before they can be approved and processed. Level II and III data require additional fields that have to be filled in for the transaction to be processed as a Level II or III transaction and qualify for a lower interchange rate. Again, there are some slight variations in the data requirements among the various credit card associations. Here’s an overview of the common data requirements for each data level:

Level I data is required for all transactions, B2B or otherwise, and generally includes the following fields:

  • Merchant DBA name
  • Transaction amount
  • Billing zip code

Level II data includes all Level I data, and the following additional fields:

  • Sales tax amount
  • Customer code
  • Merchant postal code
  • Merchant tax identification number
  • Invoice number
  • Order number

Level III data includes all Level I and Level II data, plus the following additional fields:

  • Product commodity code
  • Item ID or SKU
  • Item description
  • Unit price
  • Quantity
  • Unit of measure (each)
  • Extended price
  • Line discount

As you can see, entering Level III data requires a lot of additional data for each transaction. Unfortunately, manually entering this data on a standard countertop credit card terminal is not an easy process. If you’re using a virtual terminal or a payment gateway, it’s a little easier since you’ll have access to a full alphanumeric keyboard. Some merchant services providers can also set you up with a specialized software load for your terminal that automatically captures the required data, but you’ll have to pay extra for it. The bottom line is that manually entering Level II and III data is only a practical option for merchants who only handle the occasional B2B transaction and for whom specialized B2B processing software would not be cost-effective.

B2B Processing Rate Discounts

As we’ve noted above, including Level II and III data when processing a B2B transaction can save you money on processing costs by lowering the interchange rate that you have to pay to the credit card associations for each transaction. How significant are these savings? Perhaps more importantly, are they significant enough to offset the cost of paying for an additional B2B processing service for your merchant account?

To answer these questions, you’ll have to understand interchange fees and how they impact your overall costs for credit card processing. Interchange fees are the fees you’ll have to pay to the credit card association for each transaction. You’ll also have to pay an additional markup to your processor, but in most cases, the interchange fee will constitute a majority of your overall transaction processing cost. For a more in-depth explanation of interchange fees, check out our article Interchange Reimbursement: What You Need to Know About Your Most Costly Merchant Account Fee.

Each credit card association has its own set of interchange fees that apply to a variety of transactions. For our example, we’ll be using the 2018 Visa USA Interchange Reimbursement Fees schedule. You can find similar fee schedules online for the other major credit card associations. Be aware that these fee schedules are frequently updated – usually because the credit card associations have raised their rates. Here’s an extract from Visa’s current interchange fee schedule that applies to B2B transactions:

Visa Level II & III Interchange Rates - 2018

As you can see, a standard Commercial Card-Present transaction made on a business credit card will incur an interchange fee of 2.50% + $0.10 per transaction. However, if you include Level III data when submitting the transaction, the interchange fee drops to 1.90% + $0.10 per transaction. That’s a savings of 0.60%, and even larger savings are possible for other types of B2B transactions. While this may not sound like a significant amount of money, it can really add up quickly, particularly if your business processes a lot of B2B transactions.

Here’s an example of how these savings work. Let’s say you have a single B2B transaction for $1,000. If you only include the Level I data, you’ll pay $25.10 in interchange fees alone. Your actual processing costs will be even higher once you pay whatever markup your processor charges you. For the same transaction, including Level III processing data reduces your interchange fees to $19.10. While that $6.00 savings might not seem like much, it can really add up in a hurry if a significant number of your transactions are B2B.

Large-ticket transactions are common in the B2B world, and the inclusion of Level III data will result in a very significant savings on interchange fees if your transaction amount is large enough to qualify. In the extract above, you’ll see that a Commercial Product Large Ticket transaction incurs an interchange fee of 1.45% + $35.00 per transaction. This special large-ticket rate only applies to single transactions over $6,500.

Given the hefty $35.00 per transaction charge, you might understandably be skeptical that this “special” rate will save you any money. So, let’s do the math. A transaction for $6,500.01 – barely large enough to qualify – would incur an interchange fee of $162.60 if processed at the standard Commercial Card-Present rate of 2.50% + $0.10. However, under the Commercial Product Large Ticket rate of 1.45% + $35.00 your interchange fee would only be $129.75. That’s a savings of $32.85. At the same time, the same transaction would only cost $123.60 under the Commercial Level III rate of 1.90% + $0.10. The break-even point between the Commercial Product Large Ticket rate and the Commercial Level III rate occurs at $7,758.50. Thus, for any transaction over this amount, the Commercial Product Large Ticket rate will actually save you money in interchange costs. Remember in comparing these rates that the markup you pay to your processor under an interchange-plus pricing plan will add to your overall processing costs, but it will be the same regardless of whether the transaction is B2B or not, and regardless of the ticket size.

How Processing Rate Plans Affect B2B Processing

If your head is spinning a little by now, we understand. There are a lot of variables involved in comparing B2B processing rates against standard business-to-consumer rates. There is, however, one simple and very important point that you need to understand: B2B processing rates will only save you money if you have an interchange-plus or subscription-based pricing plan. With an interchange-plus pricing plan, you pay the applicable interchange rate plus a fixed markup (usually a percentage of the transaction plus a small per-transaction fee) that goes to your merchant services provider. Subscription-based (or membership) pricing plans modify this arrangement by offering much lower per-transaction costs in exchange for a higher monthly subscription fee. One of our favorite providers, Fattmerchant (see our review) only charges a low per-transaction fee with a 0% markup (although their $99 per month subscription fee might not be cost-effective for low-volume businesses). Interchange-plus and subscription-based pricing plans pass the interchange costs directly onto you with a fixed markup. If the interchange costs go down due to using Level III data for B2B transactions, this lower rate is also passed on, meaning you save money.

Unfortunately, the same cannot be said for flat-rate or tiered pricing plans. Providers such as Square (see our review) will charge you a flat rate for each transaction regardless of the underlying interchange fee. As a result, you won’t see any savings on B2B transactions with Level III data. In fact, if such a transaction does result in a lower interchange fee, your provider gets to keep the savings. Tiered pricing works the same way, with transactions being processed according to fixed rates based on whether a transaction falls under a qualified, mid-qualified, or non-qualified tier. Since these tiers are designed to ensure that the processor makes a profit from each transaction regardless of the underlying interchange rate, you won’t see any decrease in processing costs by using Level III data for B2B transactions. In fact, your processor will get to keep whatever savings result from using Level III data. While we strongly recommend against tiered plans for all merchants, it’s doubly important to avoid them if your business processes a lot of B2B transactions.

B2B Software Applications

As we’ve discussed above, you can save a significant amount of money on processing B2B transactions by including Level III data and ensuring that you have the proper MCC code identifying you as a B2B merchant. However, a standard merchant account designed for business-to-consumer transactions won’t include these features. You’ll have to pay extra for them, and every merchant services provider approaches the problem of serving B2B merchants differently.

While including Level III data can be as simple as installing a special software load on your credit card terminal, merchant services providers are increasingly turning to computer- and web-based software to help B2B merchants get the lower rates to which they’re entitled. A notable trend we’re seeing in the merchant services industry is the switch to integrated processing software that allows merchants to process both retail and online transactions using the same platform. With an integrated payments platform, it’s easy to include B2B processing capability as an option for merchants who need it.

One of the better-integrated services we’ve seen is the MX Merchant platform offered by Dharma Merchant Services (see our review), one of our favorite providers. By adding the optional MX B2B app, B2B merchants can have Level III data automatically populated whenever they submit a B2B transaction. While the app costs an additional $20.00 per month, it can more than pay for itself if you process even a single large-ticket B2B transaction at the lower interchange rates.

Most other merchant services providers will also charge you an additional monthly fee for submitting Level II or III data. While these fees vary, $20.00 per month seems to be the industry average. If you only rarely process B2B transactions and they aren’t for large amounts, this extra service might not be cost-effective. On the other hand, any merchant who processes a significant amount of B2B transactions – particularly large-ticket ones – should realize a net savings by including this feature in their merchant account.

Final Thoughts

If you’ve ever tried to input Level III data on a countertop terminal manually, you’ve probably gotten frustrated and given up on inputting all the required data needed to qualify for a lower interchange rate. You’ve probably also overpaid for processing that transaction. Yes, the world of B2B processing can seem very confusing at first. However, it’s really not all that complicated. Your merchant services provider can help ensure you’re properly coded as a B2B merchant and that your payment processing systems (i.e., terminals, POS systems, virtual terminals, and payment gateways) are set up to include Level III processing data. Whether you want to invest the money into additional B2B services will depend on your overall B2B transaction volume.

For merchants who only see a B2B transaction on rare occasions, it might not be worth the extra monthly fee for a service you’re rarely going to use. In such cases, using a payment gateway or virtual terminal will make it much easier to enter the required Level III data manually. Merchants who process a significant amount of B2B transactions, on the other hand, will save far more money in lower interchange rates than the cost of the additional B2B software. If you can save more than the usual $20 monthly fee for B2B services, we highly recommend that you include this feature when setting up your merchant account. Your merchant services provider should be able to help you get this option set up and running smoothly.

The post The Complete Guide to B2B Payment Processing appeared first on Merchant Maverick.

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Shopify VS 3dcart

If you’re looking into building an online store, you’ve probably seen mention online of both Shopify and 3dcart. Both of these are fully hosted SaaS (Software as a Service) solutions, and both boast usability and plentiful eCommerce features. These shopping carts call themselves all-in-one solutions, meaning that they will provide you with site hosting, web security, and customer support, all for one monthly fee.

Let’s start with a quick overview of each eCommerce platform:

Shopify VS 3dcart
Tie Pricing Tie
✓ Ease of Use
Features ✓
✓ Web Design
Tie Integrations & Add-Ons Tie
Payment Processing ✓
Tie Customer Service & Technical Support Tie
Tie Negative Reviews & Complaints Tie
Tie Positive Reviews & Testimonials Tie
Tie Final Verdict Tie
Read Review Read Review
Visit Site Visit Site

Shopify and 3dcart clearly offer their users a lot, but how do they stack up against each other? In this article, we’ll go over the price, features, and design editors of each solution. By the end of this article, you’ll have a clear idea of which software better fits your business.

Shopify is a Canadian eCommerce solution, which has grown since 2006 to host more than 600,000 stores worldwide. Shopify’s claim to fame is usability and affordability. Merchants at all stages will be able to access the software and use it to build a site to their liking.

Shopify’s downfall, however, is related to this usability. Because Shopify aims to provide easy-to-use features, they often fail to add more advanced functionality. Users have to add-on these advanced features with integrations and applications.

3dcart3dcart, on the other hand, is a feature-rich eCommerce solution that is built to serve merchants large and small. They offer a range of pricing options so that users can select a plan that fits their budget. 3dcart is a less popular solution than Shopify, currently hosting over 22,000 customers, but it is still a main player in the eCommerce industry.

However, 3dcart is not a perfect solution. While the platform is still relatively easy to learn, it is not quite as intuitive as Shopify. In addition, users often report that 3dcart’s customer support is not reliable.

Keep reading for more in-depth information on each of these platforms. Learn which software is best for you.

Don’t have time to read an entire review? Take a look at our top-rated eCommerce solutions for a few quick recommendations. Every option we present here offers excellent customer support, superb web templates, and easy-to-use software, all for a reasonable price.

Web-Hosted Or Licensed

Both services are web-hosted.

Hardware & Software Requirements

None. You’ll only need a computer, internet access, and an up-to-date web browser.

Pricing

Winner: Tie

Pricing plan for 3dcart and Shopify follow a similar model. Both are available as a monthly subscription in which price is based on features. Neither service requires you to sign a contract, although you can get a discount on your monthly rate if you commit for a year or more. What’s more, Shopify and 3dcart both offer enterprise-level platforms for users who need a higher level of support and capabilities.

Shopify’s plans are billed on a month-by-month basis. If you choose to sign on for one year, you can benefit from a 10% discount on your plan, and if you pay for two years, you’ll get a 20% discount.

One way in which Shopify’s pricing is different from many eCommerce platforms is that Shopify charges transaction fees. You will be charged these fees (0.5%-2.0% based on your plan) in addition to the processing fees that you’ll pay to your payment processor of choice. Shopify will waive these transaction fees if you use their in-house payments solution, Shopify Payments. You will still have to pay processing fees to Shopify Payments, but you won’t be charged the additional transaction fee.

Here’s a quick overview of plans:

  • Shopify Lite Plan (No Online Store Included): $9/month
    • Transaction Fee: 2.0%
  • Basic Shopify Plan: $29/Month
    • Transaction Fee: 2.0%
    • Two Staff Accounts (In Addition To The Owner’s Account)
  • Shopify Plan: $79/Month
    • Transaction Fee: 1.0%
    • Five Staff Accounts (In Addition To The Owner’s Account)
  • Advanced Shopify Plan: $299/Month
    • Transaction Fee: 0.5%
    • Fifteen Staff Accounts (In Addition To The Owner’s Account)

With 3dcart, you’ll be billed monthly. However, if you pay in advance for a full year on the platform, you’ll receive a 10% discount. Keep in mind that 3dcart does not allow refunds, so be sure 3dcart is the right software for you before you commit for a year.

All of 3dcart’s regular plans (excluding the Startup Plan) come with unlimited products and bandwidth, free domain registration, API connectivity, and 24/7 phone support.

  • Startup Plan: $19/Month
    • 1 Staff User
    • 100 Products
    • Sell Up To $10K/Year
  • Basic: $29/Month
    • 2 Staff Users
    • Unlimited Products & Bandwidth
  • Plus: $79/Month
    • 5 Staff Users
  • Pro: $229/Month
    • 15 Staff Users

Pricing for 3dcart and Shopify is very similar. Your choice will depend on how many staff users your business needs and how Shopify’s transaction fees would affect you. For our comparison, we’ll call this a tie.

Ease Of Use

Winner: Shopify

For many merchants looking for eCommerce software, ease of use is the number one priority. Fortunately, both Shopify and 3dcart provide that ease of use to all their users.

Shopify is one of the most intuitive eCommerce platforms on the market. Try out the admin for yourself with a free 14-day trial, no credit card required. Here’s what you’ll find when you first create your account:

Adding products is easy. All of the information you’ll need to enter is available on one page. Just fill in the fields provided.

Discounts are similarly easy to set up, and you can make them specific to certain products or categories. You can limit your discounts to customer groups, number of uses, or minimum order total. There are also BOGO discounts available.

Shopify also makes site customization accessible to all merchants. Read more in our web design section.

3dcart works to make their software accessible to all merchants, regardless of technical experience. Try out the platform with a 15-day free trial, no credit card required.

When you sign into your account, you will immediately be presented with a setup wizard. This wizard and the available tutorial videos will help you locate and learn to use some of the more basic features.

3dcart’s dashboard is user friendly. You can find everything organized in the toolbar on the left. Most of this organization makes sense, but there are a few features that are buried where you wouldn’t expect them. ‘Discounts,’ for example, is under a tab called “Promotion Manager.”

Adding a product with 3dcart is unique because it involves a two step process. You’ll start by entering basic product information like images, product name, and a product description. Once you’ve saved that page, you’ll be able to add more advanced information. On this page, you’ll be able to adjust your shipping and inventory information, write SEO descriptions, and more.

Discounts follow the same two-step model. The more detailed (second) page lets you apply your promotions to specific categories, to an order that includes a specific product, and more.

While we love that 3dcart’s dashboard, we have to award this category to Shopify. 3dcart is just not quite as intuitive as Shopify. There is a slight learning curve to overcome, and a few features are difficult to find in the admin.

Features

Winner: 3dcart

As we’ve stated, Shopify comes with all of the basic features merchants need. However, advanced functionality often requires add-on applications. Let’s take a look at a few of the features that come built-in with Shopify:

Front End Features

  • Language Capabilities: List your site in over 50 different languages.
  • Automatic Shipping Rates: Users on the Advanced Plan can integrate with UPS, USPS, and FedEx to calculate shipping rates. All users have access to Shopify Shipping, which lets you calculate shipping rates, and purchase and print shipping labels.
  • Abandoned Cart Recovery: Automatically send an email to remind customers about items they left in their cart.
  • Integrate With Shopify POS: Sell in person with Shopify’s Point Of Sale (see our review) system.

Back-End Features

  • Customer Segmentation: Group your customers by location, shopping tendencies, and demographics. Use those customer groups to market more effectively.
  • Dropshipping Apps: Shopify integrates with dropshipping apps like Ordoro, Inventory Source, and eCommHub (now HubLogix). Learn how to start a profitable dropshipping business with Shopify.
  • SEO Best Practices: Shopify includes many SEO tools, including a customizable H1, and automatically generated sitemap.xml, and the ability to write titles, meta tags, and product tags.
  • Discounts: You can create discount codes and coupons, including BOGO (Buy One, Get One) discounts. Gift cards are available at higher plans.
  • Digital Products: Sell physical and digital products on your site.
  • Bulk Import/Export: Make bulk edits to your products, or use the bulk import feature to easily migrate from another software.

3dcart, on the other hand, includes many of the bells and whistles that Shopify is lacking. For example, 3dcart includes the option to enable one-page checkout on your site. Here are some of the features you get with 3dcart:

Front End Features

  • Sell Digital: Let customers download products immediately after purchase.
  • Checkout Options: Choose to enable either one-page or three-page checkout.
  • Product Images: Include multiple product images, image zoom, and videos on product pages.
  • Promotions: Create gift certificates, discounts, and coupons.
  • Automatic Calculators: Provide real-time quotes for taxes and shipping at checkout.
  • Abandoned Cart Saver: Remind customers to complete transactions.
  • Blog: Include a blog on your site to boost your SEO and add value to your site.

Back-End Features

  • Inventory Management: Monitor low stock and make sure inventory is accurate.
  • SEO: Use a variety of tools to optimize your organic traffic.
  • Bulk Import / Export: Migrate platforms and make bulk edits.
  • POS: Sell in-person with 3dcart POS.

This one is close, but 3dcart has a few more features that are not available with Shopify. So, we’re giving the win to 3dcart.

Web Design

Winner: Shopify

Shopify is well-known for its beautiful and responsive web design options. In the Shopify Themes marketplace, you can find 64 theme options, 10 of which are free. Take a look at one premium theme below:

There are a few ways you can go about customizing your theme. Users with little technical experience can use a WYSIWYG editor to make changes to site content. For example, you can update headings, categories, and button text. Shopify’s drag and drop editor, Sections, lets you make larger changes to your storefront. Use Sections to add and move widgets on your storefront. Shopify also offers code editors for the more technologically inclined. Shopify uses a language called Liquid, which some developers like and some don’t.

3dcart, on the other hand, offers 90 free themes, which is many more than Shopify. All of these themes are mobile responsive. In addition, there are a few dozen premium themes available from $99 to $199.

Users sometimes complain that 3dcart’s themes are dated, and I tend to agree. That isn’t to say that the themes are ugly; they just don’t have that sleek look I’m used to finding on modern eCommerce platforms.

You’ll have to edit these templates primarily using the HTML and CSS editors. 3dcart also includes a limited WYSIWYG editor for buttons, tabs, etc., and a drag-and-drop editor for older HTML5 themes (you must request to have this editor enabled). It isn’t a perfect editor (which is why it isn’t automatically available), but it could be a help as you learn your way around the code editors.

Integrations & Add-Ons

Winner: Tie

Both 3dcart and Shopify offer plenty of integrations and add-ons to further functionality.

There are over 1500 apps available in Shopify App Store, which essentially guarantees that there’s an app to fill whatever feature gap you may have. Unfortunately, for many merchants, multiple applications are necessary, and the costs of those add-ons can quickly add up. Shopify also has an API that you can use to develop your own own applications.

In the same way, 3dcart offers integrations for a variety of features (including order management, shipping, security, social media, dropshipping, channel management, advertising, and more.) Users of 3dcart also complain that the cost of these add-ons can quickly become expensive. 3dcart also has a RESTful API available.

Payment Processing

Winner: 3dcart

Shopify integrates with over 100 gateways.

In addition, Shopify has its own in-house payment solution called Shopify Payments. As we stated in the Pricing section of this article, if you use Shopify Payments, Shopify will waive their additional transaction fees. Shopify Payments is currently available to merchants in the US, Puerto Rico, Canada, the UK, Australia, New Zealand, Singapore, Japan, Hong Kong, and Ireland.

Credit card processing rates for Shopify Payments are based on a user’s Shopify plan. Take a look at the fees for each plan in the screenshot below:

Keep in mind that Shopify Payments is not a perfect solution, and there are many complaints online about withheld payments and cancelled accounts. Read our full review of Shopify Payments for more information.

3dcart connects with over 100 payment gateways. They do not offer an in-house payment solution, but they also don’t ding you with transaction fees if you use a third party processor, which in my opinion is a much bigger deal.

The winner here is 3dcart.

Customer Service & Technical Support

Winner: Tie

Merchants using Shopify have access to 24/7 support via email, live chat, and phone. Self help resources include a knowledge base, a community forum, videos, podcasts, and guides. You can also hire a Shopify expert to help you through a particularly rough patch.

I’ve seen mixed reviews of Shopify’s support team. Some users say they’re helpful, while others blame them for reading from a script and being informed about the product.

3dcart also offers 24/7 personalized support via email, live chat, phone. Resolve issues on your own with a knowledge base, video tutorials, a support forum, webinars, and e-university courses.

Not too surprisingly, I have also seen mixed reviews of 3dcart’s quality of support. Users frequently complain about delays in response time via live chat (in my experience “live chat” is more like another way to submit a web ticket), but response times for web tickets and phone calls are decent.

Another tie here, folks.

Negative Reviews & Complaints

Winner: Tie

Surprisingly, complaints about Shopify and 3dcart are very similar.

Shopify is often blamed for including only the basics in their platform. You’ll have to find a few extensions in the Shopify App Marketplace in order to access more advanced features. And unfortunately, costs for these add-ons can quickly add up. Users also frequently complain about Shopify’s customer service. Some users have less than positive experiences. Finally, that transaction fee continues to be a frustration for many merchants, as does Shopify Payments’s tendencies to cancel accounts and withhold payments.

Users of 3dcart also complain about customer support, saying they are very slow to respond to inquiries. In addition, 3dcart merchants dislike that add-ons can be expensive, especially when you need to use multiple extensions. Finally, some merchants state that 3dcart’s available design templates are dated, and that they’d like to see more current designs.

Because these negatives are so similar, we’re calling it a tie.

Positive Reviews & Testimonials

Winner: Tie

Users of Shopify and 3dcart have similar things to say about the advantages of each platform. A few commonalities include the low monthly price of running your store, strong ease of use, and good customer support.

This final advantage may be confusing as we’ve also included it in the complaints section above. It is very common to see a 50/50 split between positive and negative comments on customer service. Both Shopify and 3dcart have these mixed reviews.

One notable difference is that Shopify is celebrated for its themes while 3dcart is praised for its features. If you scroll up to the negatives section you’ll see that users often complain about Shopify’s features and 3dcart’s themes. It’s interesting to see that what is a strength of one platform is a weakness of the other.

The two platforms tie in this category as well.

Final Verdict

Winner: Tie

It’s always disappointing to end on a tie, but with such a close race, we don’t think it’s fair to call a definitive winner. Your decision will depend on your business’s needs.

Are you looking for an easy to use platform with beautiful design templates? Try Shopify.

Are you willing to overcome a slight learning curve to uncover a few more advanced features? 3dcart is your best bet.

We will say that overall we think Shopify better fits the needs of most merchants, which is why we’ve given Shopify a perfect score of 5 stars in our full review while 3dcart has 4.5 (see our review). However, it’s evident here that both shopping carts are strong options. We recommend you sign up for a trial of each eCommerce platform and decide for yourself which option you prefer.

Get Started With Shopify

Get Started With 3dcart

The post Shopify VS 3dcart appeared first on Merchant Maverick.

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5 Shopping Carts For Starting An eCommerce Business In Canada

best canada ecommerce platform

Are you a Canadian seller looking to set up an online store? Or are you an American merchant hoping to sell products in Canada? If so, you’ve come to the right place.

In this article, we’ll be covering the top 5 eCommerce solutions for Canadian sellers. Each shopping cart included here provides the logistical features that Canadian merchants need for their online stores. What’s more, all of the shopping carts in this article are of top quality, each one earning a perfect five-star review.

Here are a few of the Canada-specific features we’ve looked for in each of the eCommerce solutions presented below:

  • Calculate tax rates for Canada
  • Display prices and accept payment in CAD
  • Integrate with Canada Post for real-time shipping rates
  • Support multiple languages, such as French

We’ll kick off the list with a couple of our favorite Canada-based shopping cart solutions, and then we’ll move onto some American software solutions that also work for Canadian merchants. Let’s get started!

Need a payment processing service? Check out the best and worst Canadian merchant accounts providers. Don’t have time to read an entire review? Take a look at our top-rated eCommerce solutions for a few quick recommendations. Every option we present here offers excellent customer support, superb web templates, and easy-to-use software, all for a reasonable price.

Review
Visit Site
Review
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Review
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Review Review
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Best Choice For Small to enterprise businesses with little technical skill Small to large businesses with some technical skill Small to large businesses with some technical skill Small to large businesses with advanced technical skill Large B2B businesses with some technical skill
Based In Canada Yes Yes No No No
SaaS Yes Yes Yes No Yes
Beginning Pricing Structure $29/month + 2.0% transaction fee $19/month for 75 orders $44.95/month Free $299/month
Free Trial Yes Yes Yes No Yes
Ease Of Use Easy to use Moderate learning curve Moderate learning curve Steep learning curve Moderate Learning Curve

Read on for more details about each eCommerce solution.

Shopify

Based out of Ontario, Canada, Shopify is our first recommendation for Canadian merchants seeking an easy to use shopping cart solution. Shopify is the perfect example of an SaaS (software as a service) solution, which means that Shopify handles the technical aspects of running an online store. For a monthly fee (plus transaction fees) Shopify provides hosting, web security, and technical support.

Shopify is designed for merchants with little to no development experience, so it’s perfect for smaller merchants who want to get their products to market quickly. However, that does not mean that Shopify is limited to exclusively these merchants. The software is scalable, so large or enterprise level businesses can also use Shopify to their advantage.

Pricing for Shopify is relatively low, and all plans include unlimited storage, bandwidth, and products. You can subscribe to their Basic Shopify Plan for just $29/month (+ 2.0% transaction fee). For more advanced features, you’ll have to subscribe to a higher level plan. One step up is the Shopify Plan at $79/month and the next step is the Advanced Shopify Plan at $299/month.

Pros

As one of our favorite, most versatile solutions, Shopify has a lot to offer merchants. Here are a few of the biggest perks of using Shopify:

  • Ease Of Use: Shopify is known for their simple UI. Uploading products is a breeze, and you can make changes to your storefront design with a drag-and-drop tool.
  • Elegant Design: The Shopify marketplace comes stocked with beautiful, responsive, ready-to-use themes. Ten of these themes are available free of charge, and the rest cost between $140-$180.
  • Good Customer Service: 24/7 customers support is available on all pricing plans via email, phone, and live chat. Some users report excellent interactions with support reps, although other users have a different experience (see Cons below).

Cons

Despite all of its positives, Shopify is not a perfect solution. There are still many ways Shopify can continue to improve. Here are a few of the things users complain about on online forums:

  • Limited Features: This is the biggest complaint users have about Shopify. While Shopify includes all of the basic features sellers need to initially set up their store, there are not many advanced features available. In order to access more advanced features (like B2B selling options, single page checkout, etc.), you’ll have to purchase the appropriate add-ons. This leads us to our second complaint.
  • Add-Ons Add Up: Although Shopify’s plans are affordably priced, costs of using Shopify for your online store can quickly add up once you start using extensions. Extensions and add-ons from the Shopify marketplace are billed monthly.
  • Poor Customer Support: This contradicts the “pro” I mentioned above. Reviews are mixed when it comes to customer support. Some users have great experiences. Others end up frustrated.

Canada-Specific Features

Because Shopify was created by Canadians, you can expect the software to offer enough features to support Canadian sellers’ specific needs. Here’s how they handle Canada-specific selling:

  • Multi-Lingual Features: Have your storefront, checkout, and emails display in multiple languages. Shopify has also recently introduced a beta for a multi-lingual admin. Languages currently supported include French.
  • Multiple Currencies: Display pricing in multiple currencies using a drop-down currency picker. Accept multiple currencies.
  • Shopify Shipping: Use Shopify Shipping to calculate and display shipping rates for multiple carriers, including Canada Post, UPS, USPS, and DHL.
  • Tax: Set tax rates for countries and provinces.

Get started with Shopify by signing up for a free 14-day trial, no credit card required.

Read our full Shopify review

Visit the Shopify website

LemonStand

Founded in 2010, LemonStand is an SaaS eCommerce solution with headquarters in Vancouver, BC. Like Shopify, LemonStand provides merchants with hosting, customer service, and site security.

One notable trait about LemonStand is that their design templates are completely customizable. The design is all open source, so if you have the proper know-how, you can change nearly every aspect of the look and feel of your store.

Pricing for LemonStand is based on the number of orders you process each month. We like this pricing model because all features are included with all plans. However, merchants who process many orders each month with very narrow profit margins might be turned off by this pricing model. You can begin with the Starter plan ($19/month for 75 orders) or move up to the Growth plan ($69/month for 300 orders) or Professional plan ($199/month for 1000 orders). There’s also a Premium plan available for even larger sellers.

Pros

We deem LemonStand a 5-star solution, and it seems many users would agree. Here’s what current users praise most frequently on comment boards and review sites:

  • Customizability: If you have the technical experience, you can do a lot with LemonStand. In particular, you will be able to change many aspects of the look and feel or your storefront.
  • Progress: LemonStand is constantly working to add new features to their software and improve existing features. This progress is encouraging.
  • Good Customer Service: LemonStand’s representatives are helpful, courteous, and timely.

Cons

LemonStand isn’t a perfect solution, however. Here are a few of the complaints I’ve found:

  • Missing Features: LemonStand is constantly adding new features, in part because the software is still missing some advanced functionality. Users are hopeful that these gaps in features will be filled soon.
  • Technical Skill Required: Web design with LemonStand requires at least some knowledge of HTML and CSS. If you don’t have that knowledge, you should be able to hire someone who can take care of design issues for you.
  • Lacking Documentation: LemonStand provides documentation as a form of self-help technical support. Unfortunately, some of that documentation is not very detailed. Documentation can occasionally be difficult to follow.

Canada-Specific Features

Here’s how LemonStand supports Canadian merchants:

  • Canada Post: LemonStand integrates with Canada Post so you can provide real-time shipping rates.
  • Taxes: Use tax classes to define tax rates by location. Alternatively, you can integrate with Avalara for more detailed tax calculation.

Surprisingly, I was not able to find any information about displaying your storefront in multiple languages and currencies. However, this doesn’t necessarily mean they are unavailable (especially since LemonStand is a Canadian based company). Comment below if you have any information on the matter.

Test out the software for yourself with a free, commitment-free 14 day trial. Or, read our full review for more information!

Read our full LemonStand review

Visit the LemonStand website

PinnacleCart

PinnacleCart was developed with the intention of helping merchants promote and sell their products, regardless of technical ability. As SaaS software, PinnacleCart gives you the ability to add and edit products, process orders, create marketing materials, and customize your site design. And although PinnacleCart is not a Canadian company, they do provide many of the logistical features that Canadian merchants need.

Pricing for PinnacleCart is based on traffic and storage. All features come included with every plan. These features include unlimited products, daily backups, phone and email support, and an SSL certificate. Pricing is available in three tiers: $44.95/month, $94.95/month, and $199.95/month.

Pros

Pinnacle Cart is another five-star solution. Find out what makes it great:

  • Ease Of Use: Once you conquer the initial learning curve, using your PinnacleCart admin should be second nature.
  • Customer Support: Users are happy with the support they receive from PinnacleCart.
  • Good Marketing Features: Use widgets to market your products on any website, and integrate with social media to further your reach. PinnacleCart’s SEO features are also generally well praised.

Cons

Some PinnacleCart users, however, may have a different experience. Here are a few cons we’ve noticed:

  • Learning Curve: Users who are new to PinnacleCart (and new to eCommerce in general) will have to overcome a slight learning curve when they first begin using the software.
  • Difficult Customization: Some users have trouble customizing their design.
  • Not International Friendly: PinnacleCart does not offer many languages or currency options. In addition, users have some difficulty accepting payments outside of the US and Canada.

Canada-Specific Features

Although PinnacleCart is not the best solution for cross-continental selling, they offer plenty of features for selling within Canada:

  • Canada Post: Add real-time shipping for Canada Post.
  • Automatic Tax Calculation: Use flat-rate tax options to set up tax rates by state and province. Integrate with Avalara Ava Tax or Exactor Tax for more detailed tax estimates.
  • Accept Multiple Currencies: List your prices in multiple currencies and accept payments in multiple currencies.
  • Add French Language Options: Choose to display your site in multiple languages.

Try out the platform for free for two weeks, no need to hand over any credit card information. For more details on pricing and features, view our full review.

Read our full PinnacleCart review

Get Started With PinnacleCart 

Magento

Until now, we’ve discussed exclusively SaaS platforms that favor ease of use over customizability. Magento is the opposite. As one of the eCommerce industry’s most popular open-source software, Magento is highly customizable and scalable, and it’s perfect for merchants with greater developing skills.

Another advantage to Magento is that it’s totally free to download. However, that doesn’t mean Magento costs $0 to implement. Because Magento is open-source, you will be responsible for finding hosting, maintaining security, and hiring developers (or being your own developer) to design your site and add necessary features. There is no Magento support available. Your only options are to resolve issues on your own or pay a developer to fix things for you.

As you might imagine, Magento is more difficult to implement than the SaaS solutions we’ve discussed above. However, Magento’s strong feature set and customizability make it a good option for fearless merchants.

Pros

Take a look at the advantages that come with Magento:

  • Features: Magento provides a robust feature set right out of the box. Add even more advanced features through integrations or develop your own extensions with the available API.
  • Strong User Community: Magento is used by 240,000 merchants around the world. Join a wide community of sellers and developers. Find solutions in Magento’s community forum or hire a Magento developer for select jobs.
  • Scalable & Customizable: Use Magento to build the online store system that your business needs.

Cons

As you might expect, Magento comes with its challenges. Many of these challenges relate to ease of use. Take a look:

  • Steep Learning Curve: Many sellers find Magento difficult to learn. You will need to have some experience with coding or be able to hire a developer.
  • Expensive: Although the software is free to download, there are always expenses related to operating an online store. Be sure to consider web developer costs as well as the expense of hosting, adding integrations, and maintaining security.
  • No Customer Support: You can use self-help support routes or hire a developer. Magento does not provide customer support for their open source software.

Canada-Specific Features

Magento is built for merchants worldwide. The software includes many international selling features, which benefit Canadian sellers.

  • Languages: Choose from many, many available languages. Set up multi-language store views so that you can feature multiple languages without creating multiple sites.
  • Accept CAD: Accept CAD. Implement “dual currencies” to accept both USD and CAD easily.
  • Taxes: Manually add tax rates and rules, or integrate with AvaTax for more detailed (and easier) tax calculations.
  • Canada Post: Use integrations from the Magento Marketplace to add Canada Post shipping calculations to your store.

Magento does not offer a free trial because the software itself is totally free to download. Test out the software by downloading it for free, or read our review for more information.

Read our full Magento review

Zoey

If Magento sounds great, but you’re turned off by that “steep learning curve,” you might look into Zoey. Zoey offers the functionality of Magento paired with an ease of use that rivals Shopify. Sound perfect, doesn’t it? The only downfall: the price. Zoey is designed to be a B2B eCommerce platform with B2C capabilities. It is therefore intended for merchants beyond the startup phase, and the price reflects that.

Nevertheless, we think Zoey is a fantastic option. In particular, we love Zoey’s robust drag-and-drop storefront design tool, which lets all merchants make changes to their sites with zero coding. In addition, we love Zoey’s extensive feature set that includes strong capabilities for wholesale selling.

Pricing for Zoey is divided into two tiers: Entry ($299/month) and Power ($499/month). A step up in pricing includes more staff account permissions, the ability to list more SKUs, priority customer support, and more.

Something important to note: Multi-language and multi-currency features are only available on the Power plan.

Pros

There’s a lot to love about Zoey. Here are just a few of those positives:

  • Easy Setup: It’s easy to get your store up and running. Zoey also offers migration services to make the transition from another eCommerce platform easier.
  • Feature Rich: Zoey comes with lots and lots of features already built-in, so you won’t have to use so many add-ons.
  • Drag & Drop Editor: Zoey’s drag and drop editor gives you control over your site’s look and feel. You can use it to change many, many aspects of your storefront.

Cons

However, there a few drawbacks to using Zoey. We’ve compiled a few potential issues:

  • Pricey For Smaller Sellers: Zoey’s monthly subscription rates are significantly higher than any of the other solutions in this list. These rates are likely too high for merchants who are just starting out.
  • Limited Customizability: Although Zoey is similar to Magento in its features, it is not similar in customizability. Since Zoey is not open source, you will not be able to customize every aspect of your store. So, if you want any additional features, you’ll have to add them via integrations or wait until Zoey releases those features in an update.
  • “Heavy” Platform: If you add on lots of extensions, your platform can get a bit bogged down and not run as smoothly as you’d like.

Canada-Specific Features

Zoey provides sellers with multiple international sales tools, which Canadian merchants can use to their advantage.

  • Multi-Lingual: Sell in 80+ languages.
  • Multiple Currencies: Display prices in 168+ currencies and accept payments with 50+ international payment gateways.
  • Taxes: Zoey includes tax support for many countries, including Canada.
  • Shipping Integrations: Zoey does not offer a direct link to Canada Post, which is unfortunate. Access Canada Post with a shipping software extension like Ordoro or ShipStation.

As you’d expect, Zoey offers a 14-day free trial, no credit card required. Test the platform out for yourself or learn more with our full review.

Read our full Zoey review

Get Started With  Zoey

Final Thoughts

We hope you’ve found one or two shopping carts that might fit your business’s needs. Take a look into our full review of each potential eCommerce solution to learn the details about pricing, features, and customer service.

And when you have a better idea of what each shopping cart provides, we always recommend you take advantage of a free trial to test out the software yourself. Test out your daily operations, and try to “stump” the software with complex products and promotions.

Best of luck in your search for a Canadian-friendly eCommerce platform! There are lots of great options out there, you just have to find the one that works for you!

Need a payment processing service? Check out the best and worst Canadian merchant accounts providers.

The post 5 Shopping Carts For Starting An eCommerce Business In Canada appeared first on Merchant Maverick.

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Complete Guide To Credit Card Machines And Terminals

We don’t typically think about what happens in the moments after we swipe our debit and/or credit cards. More often than not, we simply run or insert our card into the credit card machine and hope that the cashier doesn’t use the next few moments to initiate small talk. The number in our checking account decreases or the number on our credit card bill increases, and that’s all we care about.

But, to the business owner, credit card processing is exceptionally important and it can play a huge role in your bottom line. There’s a lot of information to take in if you’re a novice when it comes to credit card processing, and you’ll need to decide what elements are most important to your business. Do you need mobility when accepting payments? Will you be accepting transactions online or over the phone? What security measures should you be taking to protect both your business and your customers? What companies are highly rated or come heavily recommended?

We’ll try and answer the bulk of your questions about credit card machines and terminals below.

Credit Card Machines

Credit card technology has evolved rapidly over the years. It doesn’t seem like that long ago when the process involved a terminal with just the option for credit. Then came debit cards. As the internet became the world’s go to for conducting business, the processing game had to change as well. Now, merchants can take payments with readers connected to their phones or tablets — they can even accept payments remotely without the physical card present. This has created a need for increased security which has led to encryption technology and the relatively recent advent of the EMV chip card.

Before we get into that, however, let’s start with some basics about credit card transactions. You have, no doubt, used hundreds of different types of card readers throughout your illustrious tenure as a consumer. But what happens once your card’s magnetic strip has been read? In simple terms, there are three phases involved in actual processing:

  • Authorization: Once your card is scanned, its information is sent over with a request to be processed. The processing request is then sent to the company of the cardholder (VISA, Mastercard etc…). The company sends the request on to the issuing bank. If there are enough funds in the account, and if the card is registered as valid, the purchase is approved. All of this takes place in a matter of seconds, generally speaking.
  • Settling: After a transaction has been approved, it is forwarded on to be cleared via an interchange. When the request is received, a credit is given to the merchant for the amount of the sale. The bank will then issue a statement to the customer in that amount which the customer must then pay off.
  • Funding: So far in the transaction, no actual money has changed hands. After the card has been authorized and the credit is issued, the payment company then makes a deposit into the merchant’s checking account. These funds can generally be accessed in just a few days.

In order to accept these forms of payment, you will need some type of card reader. Your options here have also evolved rapidly in the past couple of decades. The most common type of credit card machine is still the stationary card terminal. This is a machine that needs a physical connection either to a phone line or to the internet in order to process physical cards.

The next type of machine, and one that is rapidly gaining in popularity, is the wireless processor. These often look very similar to a stationary device, using a magnetic strip or chip reader to take a customer’s card information. However, these devices only require a wireless connection, making them far more versatile and mobile for merchants (albeit with slightly higher security concerns).

Finally, you can also accept payments via a virtual terminal, something we’ll get into more thoroughly a little bit later. In short, virtual terminals allow you to take a customer’s card information without that card being physically present.

Of course, within these different machines, you’ll have some other hardware choices to make. One item you may want to look into is a PIN pad. With this device, customers can manually type in their debit card password to process a payment. Debit cards with either a VISA or Mastercard logo can be processed almost identically to credit cards. However, with a PIN pad, a transaction that is specifically run as debit usually costs the merchant a smaller fee. This ends up saving you a lot of money in the long run, particularly on large transactions.

Some point of sale systems have this technology built-in, allowing customers to enter their PIN numbers on a touchscreen. PIN pads encrypt a customer’s information, giving an inherent level of security on those transactions. As previously mentioned, you don’t need a PIN pad to run these types of transactions. A signature debit card is processed just like a credit card, but the money comes directly from a customer’s checking account. However, in most instances, the merchant is still charged the same rate as if the transaction was run as credit.

One of the more recent changes in the world of credit card processing has been the introduction of the chip card. EMV (which stands for Europay, Mastercard, VISA) is a method of payment based on a standard for cards and machines that is meant to dramatically reduce the possibility for fraud when it comes to credit card payments. EMV cards store data in a chip within the card that is scanned when it is “dipped” or inserted into a card reader or payment machine. Companies have been steadily trying to meet EMV standards and the majority of processors and point of sale companies are now EMV compliant or claim to be in the process of becoming compliant in the near future. VISA and Mastercard have also issued standards for card-not-present transactions as a way to increase security measures in the world of eCommerce.

It’s difficult to predict what the future will look like when it comes to payment processing, but one trend that seems like a near sure bet is that consumers will continue to seek out convenience. This means that services like Apple and Android Pay will probably continue to spike in popularity. Given society’s increased dependence on iPhones for everything from communication to driving directions, the ability to pay with one’s phone is something all companies will want to make sure they can handle — sooner rather than later.

Looking for a credit card machine for your business? Buy, don’t lease! 

Virtual Terminals

What is a virtual terminal? Let’s delve in deeper to get a sense of whether or not it’s a solution your business needs. Virtual terminals are online applications that allow customers to input credit card information directly online to then be processed electronically. These terminals allow for transactions to be processed even when a credit card is not physically present. This can be an ideal solution for any business that is highly mobile or conducting transactions remotely with clients.

Many companies, including PayPal and Helcim, offer the ability to use a virtual terminal for payments. The implementation process is exceedingly simple. Generally, for a small, monthly fee, your processor can give you the ability to enter payment information from pretty much anywhere with an internet connection. Most companies will offer a percentage rate and a flat fee for virtual terminal transactions. This fee is often slightly higher than it would be for a typical transaction as card-not-present transactions have a slightly higher risk of fraud.

With PayPal, for example, all you need is a phone, tablet or computer and you can quickly log in to your account and go to the virtual terminal setting. This leads you to a screen similar to one you would see if you were entering your own information online for a purchase. Once the information is entered, you’ll receive confirmation. 

This simplicity and flexibility has made the virtual terminal an increasingly popular way for businesses of all types — not just mail order or eCommerce businesses — to accept payments. An increasing number of companies are now also offering USB card readers that connect directly to your terminal. These automatically take the card information and run it through your virtual terminal, keeping your transactions in the same location but charging you a lower rate since the card is present at the time. Some of these same companies offer pads which can collect customer signatures in the same way. Even with an external card reader, virtual terminals are usually not designed to accept advanced payment types, like contactless payments, from mobile wallets such as ApplePay. If you want to accept contactless payments, you’re better off getting a standard NFC-enabled credit card machine or credit card reader.

Virtual terminals can also take automated clearinghouse (ACH) payments for one-time or recurring transactions. These payments are processed in bunches, meaning the payment is usually received a little later. However, you aren’t subject to interchange fees for these payments.

Obviously, when making or accepting payments where credit card information is simply entered online, security is going to be of the utmost importance. It is highly recommended that you choose a payment provider that encrypts credit card data; this both reduces the risk of theft and the scope of the Payment Card Industry (PCI) compliance.

From there, you will generally have two options.

You can choose a non-validated solution which can cut down the risk of having data stolen. This is an affordable option that is offered by most processing companies, though these solutions are not defined as secure by the PCI. In other words, there is an increased chance that hackers could gain access to encryption keys which could eventually lead to a data breach.

The other option is a PCI point-to-point (P2PE) provider which meets all of the PCI standards and includes secure hardware. Processors that provide this level of protection must accept Merchant P2PE Implementation Responsibilities. Because of this added security, a much smaller number of processors offer this service (although that list is growing). If you are set on providing increased security, you will need to make sure you have hardware that meets these standards — you will also have to submit to regular security check-ups.

Merchant Services

When we talk about merchant services, what exactly do we mean? In simple terms, ‘merchant services’ is a broad term to describe the hardware and software products that make it possible to accept credit and debit card transactions. These companies and services help to connect the issuing bank (the bank that gave your customers their credit cards) and the merchant bank (the bank that is behind your merchant account). In the last couple of decades, this term has expanded to include much more than just your standard terminal scanner. The internet has opened the door for payments to be made online and those purchases can be tracked and managed from your computer or mobile device.

Merchant services providers are any businesses which accept payments (aside from just cash and checks). These can include credit and debit card processors, point of sale terminals, analytic software etc. There are a handful of different kinds of merchant services providers, including:

  • Merchant Account Providers: These providers can set you up with a merchant account and services that allow you to collect your money following a debit or credit card transaction. Some larger companies also come with direct processing services.
  • Payment Service Providers: Even though it’s advisable, it’s not essential to have a merchant account to process payments. Payment service providers, like the ubiquitous PayPal, don’t give you an ID number and are popular because they generally do not come with account fees or long-term contracts. These accounts can be frozen, sometimes without notice, and customer service can be sketchy. However, for smaller or seasonal businesses, payment service providers are a popular choice.
  • Payment Gateway Providers: Payment gateway providers represent a service provider that has emerged with increased popularity of eCommerce. These providers may or may not come with a merchant account. Some give you a choice of using their own merchant account or using a gateway with an existing account. Others only offer a gateway service, meaning you’ll have to have a merchant account from a third party.

When you’re looking at various card processors, there are a few things that you should keep an eye on. Perhaps most importantly you’ll want to research the company’s reputation. Processing payments is a crucial aspect of your business and an unreliable company can give you a lot of headaches (and affect your bottom line).

You’ll also want to compare the costs and potential fees that various processors implement. Square, for example, charges no monthly fee, which is yet another appeal for smaller or mid-sized companies. However, they also implement a 2.75% fee on transactions — if your business takes off and you’re suddenly processing a high number of transactions, those fees will add up and quickly wipe out any savings you’re receiving from not paying a monthly fee.

You’ll also want to doublecheck the compatibility of your processor. If, for instance, you’ve found a point of sale system that you are comfortable with, you’ll want to make sure that the processor integrates seamlessly without additional costs. If you’re forced to set up an aforementioned gateway, you could end up paying a large monthly fee.

To enable transactions, merchants will have to fill out an application. If you’re opening a merchant account, this process can take a little longer than going through a third-party processor. One of the reasons smaller and mid-sized merchants lean towards a third-processing account like Square is that you can be up and ready to take payments almost immediately. The price for that instant gratification, however, is an increased likelihood for potential account freezes later on.

When you’re in the process of picking out a processor, you’ll also want to pay close attention to transaction fees. The best merchant account providers usually offer what is referred to as interchange-plus pricing. This means that the provider takes the wholesale cost of the transaction and tacks on a small, standardized markup. This ensures an affordable and transparent pricing plan. It also means a slightly higher rate for transactions when a card isn’t physically present since those transactions have a higher frequency of fraud. Third-party processors sometimes provide a flat rate for all transactions — this is convenient and offers a simple way to quickly figure out your fees. However, it may not be the most cost-efficient in the grand scheme of things. A company like Square, which offers a flat rate for swiped and dipped transactions, also charges a slightly higher rate for key-in and eCommerce transactions.

There are a few other things you’ll want to watch out for when finalizing your decision about a merchant accounts provider. Along with the potential for account freezes or funding holds, keep an eye on how businesses handle chargebacks (where customers dispute a charge) and fraudulent charges in general. There are ways to mitigate these dangers, of course. You can use fraud management tools, including things like address verification services. Using a chip card terminal also dramatically cuts back on fraudulent charges.

Here are a few of our most highly recommended processing companies:

  • Fattmerchant: Fattmerchant is one of the best companies for eCommerce transactions. Its pricing is transparent without undisclosed fees. There is also a 0% markup, meaning you pay only the wholesale cost plus the monthly fee and a small authorization fee. Fattmerchant also has terrific customer service.
  • Dharma: Dharma provides a full array of processing services and also has a simple, affordable pricing structure without hidden fees. They exclusively use the interchange-plus format and are a particularly good choice for non-profits, as they offer a discount to those companies.
  • Helcim: For slightly large companies, Helcim is a very strong option. While offering a wide range of services, they have extremely competitive rates for companies that process more than $2500 a month. They also have very strong customer service and their fee structure is transparent and easy to understand.
  • Square: For companies that don’t provide a full-service merchant account, Square is the standard bearer. There is no monthly account fee and they offer free or low-cost readers. Square also doesn’t force you to sign up for a long-term contract or charge you for early termination.

Your POS System

Another way to process payments is through your POS or point of sale system. Point of sale systems have come a long way, especially in the past decade. Today, you can virtually run your entire business from one, simple device. With the influx of cloud-based systems, you can make snap decisions and check the status of your operation from anywhere with a wireless connection.

With so many options available, and with point of sale systems offering more and more features all the time, choosing the correct system to meet your needs is an important decision. The first thing you’ll need to decide is whether you want a system that is cloud-based or locally installed. Most companies have been moving toward cloud-based options for numerous reasons. First and foremost, it’s incredibly convenient. All of your data is automatically stored off-premise, so if something happens to your store or to your system, all of your payment, customer, and inventory information is still accessible. These systems are often extremely user-friendly as well, designed to be intuitive with very little training time needed. They tend to be sleek, modern, and visually appealing both to your customers and employees.

Many cloud-based systems also perform routine updates automatically, fixing bugs and adding new features so that you always have the most current software at your fingertips. Along these same lines, the best POS systems sync seamlessly to any number of integrations that can help your business in ways you may not have even considered before.

When you’re looking at purchasing a POS system, there are a number of factors to keep in mind. First and foremost, it’s likely that the cost of the POS hardware and software is going to play a large role. Some systems allow you to purchase your system and all necessary hardware upfront for a flat rate, allowing you to own the software. But if dropping a few thousand dollars isn’t something you’re comfortable with, the majority of point of sale companies offer monthly rates. A few companies, such as Square, offer a free version of their software that is generally suited for small operations, though most other POS software systems run anywhere from $39 to $99 a month for basic services while often offering advanced packages with additional features.

Let’s talk about some features you can expect to find in pretty much any good, modern point of sale system:

  • Inventory Management: Not only can you view all of your stock on hand, you can set your POS to alert you when certain products are running low or, even more conveniently, you can set the system to automatically reorder products when they hit a certain level. This can be an enormous time saver and, in most systems, inventory management can be accessed remotely. You can set up quick transfers across multiple locations and, in many cases, create and print your own purchase orders.
  • Employee Management: Likewise, your staff is easy to track and manage from your centralized POS station. You can set permissions and create alerts for suspicious transactions to cut down on fraud. Employees can be given unique codes when they log into the system and can view their hours and current schedules.
  • Customer Management: Many point of sale systems come with their own built-in loyalty programs or integrate with other companies for a small monthly fee. But these days, your POS can help with so much more when it comes to analytics and marketing. Most systems allow for customer data to be stored and easily searched. Customers can look up their own loyalty points and control their own profiles in some cases. More useful for business owners, however, is the ability for the system to analyze what items are being purchased by certain customers, assessing buying habits and creating personalized marketing campaigns that can be implemented with ease, helping to maximize profits. The same can be done with coupons, targeting customers to boost repeat business.

You will also want to do your research to see what systems specifically cater to your particular business. For example, if you’re opening a pizza shop, you may want to look for a system with built-in features that makes online ordering simple, or functions that allows customers to create a custom order which is then automatically sent to the kitchen, freeing up your employees. There are also niche POS systems for specific types of businesses. Quetzal, one of our highest-rated systems here at Merchant Maverick, is built for the retail industry with a significant bent towards shoe stores.

Many POS software systems have their own app store, like Clover, or integrate with scores of apps that might help your business out tremendously. If you’re technically savvy, most POS providers also give you access to an open API, meaning that you or a developer can create your own apps within the software.

When you’re doing your research there are a number of other features you’ll want to keep an eye on. Definitely check to see what features come in the form of add-ons which will increase your monthly fee. You will also want to make sure you have appropriate, compatible POS hardware. Several companies offer hardware packages that can be purchased directly through their websites.

A robust reporting feature should be available in most highly-rated systems and many offer their own eCommerce platforms, making it easy to set up your own website and sell online, all from your POS device.

Another key factor to research is what credit card processors are compatible with your system. While some offer a wide range of choices, integrating with most major companies, others lock you into a limited number of options or offer their own processing services for credit card payments, for better or worse.

You’ll also want to see what your system has in terms of an offline mode. Most point of sale systems have evolved to now offer at least some offline functionality, but what you can actually do in the case of an outage can vary. Many systems still function as normal, allowing you to process credit cards, encrypt transactions, and store the data to be run once the internet is restored.

It’s difficult to make a decision, but at Merchant Maverick, we’ve come across a number of point of sale systems that we would happily recommend depending on your business.

  • Shopkeep: Shopkeep is routinely on the top of our lists. This simple and reasonably priced system features everything you would expect in a point of sale system. It’s well suited for small to mid-sized retail shops and restaurants with a sleek design, excellent reporting and management tools, and terrific customer service.
  • Revel: For slightly larger restaurants or retail establishments, we often recommend Revel, a product that can manage multiple locations and large amounts of inventory with ease. Revel is intuitive and extremely robust with a top-notch kiosk function and Kitchen Display System.
  • Lightspeed: Lightspeed is another highly rated company and offers both a Retail and Restaurant product. Lightspeed has great customer service and is easy to set up while also providing intuitive front end and back end features. It also has an excellent and simple to use eCommerce platform.
  • ERPLY: ERPLY is one of the top retail point of sale systems that we’ve reviewed. One of its biggest features is the ability to integrate with most major credit card processors. It also has terrific shipping integrations and excellent customer management tools, particularly when it comes to loyalty.

Final Thoughts

There is obviously a lot to process when it comes to… well… credit card terminals and payment processing. If you’ve made it this far, hopefully you’re feeling a little more confident about your knowledge of credit card processing machines, virtual terminals, merchant services, point of sale systems, and what you should be looking for from the various companies that provide this technology. Make sure you have a good grasp on what each company charges for different transactions and what might be the best option for your type and size of business. Also don’t overlook things like a company’s customer service reputation. It’s a competitive market and you have the ability to make sure you end up with a credit card terminal and processing system that can best help your business thrive.

Interested in learning more? Download our free Beginner’s Guide To Payment Processing.

The post Complete Guide To Credit Card Machines And Terminals appeared first on Merchant Maverick.

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The Complete Guide To QuickBooks Desktop Pricing

A Quick Guide To QuickBooks Pro Pricing

The Price Is Right is more than just a funny game show; it’s a real principle that we judge nearly all of our purchases by. If the price is right, then it’s a good investment — if you don’t get enough bang for your buck, you’re likely to walk away and find something else.

If you’re considering purchasing QuickBooks, you’re probably wondering this same thing: how much is this going to cost me? And is that cost worth it?

With three distinct QuickBooks Desktop options, the pricing structure of QuickBooks Desktop can be confusing, to say the least. What’s more, Intuit makes it incredibly difficult to track down prices for all of the additional charges you may face. That’s why we’ve created this post. By the end, you’ll know how much QuickBooks Pro, Premier, and Enterprise cost and be aware of any additional fees you might encounter.

Read on to learn more.

QuickBooks Desktop Products

There are three different QuickBooks Desktop products: QuickBooks Pro, QuickBooks Premier, and QuickBooks Enterprise. These locally-installed desktop accounting programs are similar, with the same UI organization and design. What sets these three programs apart is their features, pricing, and target business type and size.

  • QuickBooks Pro: Ideal for small businesses with 1-3 users.
  • QuickBooks Premier: Ideal for small to medium businesses with 1-5 users.
  • QuickBooks Enterprise: Ideal for large businesses with 1-30 users.

In the next few sections, we’ll cover the pricing structures of QuickBooks Pro, Premier, and Enterprise in more detail. We’ll also discuss the features included with each product and give you some guidance on how to choose the right QuickBooks Desktop edition for your business.

QuickBooks Pro Pricing

You have two options when it comes to buying QuickBooks Desktop Pro (sometimes referred to as QuickBooks Desktop or QuickBooks Desktop Pro). You can either purchase a single QuickBooks Pro license or you can purchase an annual QuickBooks Pro subscription (called QuickBooks Pro Plus or QuickBooks Desktop Pro Plus). There are a few differences between the license and the subscription, which we will cover in more detail, but the main difference is the price.

QuickBooks Pro

A QuickBooks Pro license costs $299.95 on Intuit’s website. While you can purchase a QuickBooks Pro license elsewhere, Intuit often runs promotions where this cost is discounted.

A QuickBooks Pro license is good for three years, after which Intuit drops support for the product. You can still use the software after the three years are up, but the Intuit team won’t be able to help you if you have any questions or run into any issues. This license supports a single user and is locally-installed. You can install the product on up to three computers; however, this creates three separate company files, so your company file data will not be synced from computer to computer.

Here are some features that come with QuickBooks Pro:

  • Invoices and estimates
  • Contact management
  • Expense tracking
  • Journal entries
  • Chart of accounts
  • Accounts payable
  • Inventory
  • Project management
  • Time tracking
  • Reports
  • Budgeting
  • Tax support

For more features, read our complete QuickBooks Desktop Pro review.

QuickBooks Pro Plus

QuickBooks Pro Plus costs $299.95 each year. Instead of paying a one-time flat fee of $299.95, you’ll be paying for an annual subscription. The annual subscription comes with all of the same features as QuickBooks Pro, but you also receive:

  • Annual upgrades
  • Free phone support
  • Free automatic data backups

QuickBooks Pro Plus is also often discounted on the Intuit website.

QuickBooks Pro vs QuickBooks Pro Plus

When choosing between QuickBooks Pro and QuickBooks Pro Plus, it really comes down to your business’s needs and budget. As we mentioned earlier, each version comes with the same exact features, so the main difference is the price:

QuickBooks Pro QuickBooks Pro Plus
Pricing $299.95 $299.95/yr
Annual Upgrades $299.95 Included
Phone Support $89.95/3 mo Included
Data Backups $9.95/mo Included

If you plan to use a QuickBooks Pro license for three years before switching and don’t mind paying extra for phone support, QuickBooks Pro price is a more economical choice. However, if you want annual upgrades and anticipate needing a lot of customer support, QuickBooks Pro Plus might pay off in the end.

To determine which version is right for you, consider these questions:

  • Do I want annual upgrades or can I use the same edition for three years?
  • Do I have the budget to support an annual subscription?
  • Do I need phone support?
  • Do I want automatic data backups?

Additional QuickBooks Pro Fees

When considering purchasing QuickBooks, there are several additional fees to be aware of. Intuit isn’t always very forthcoming with these fees and their prices, which is why we wanted to share them.

QuickBooks Payroll

QuickBooks offers three payroll plans: Basic, Enhance, and Full-Service. QuickBooks payroll pricing ranges from $29/mo – $109/mo depending on your businesses needs. Each plan also charges $2/ per employee. Learn more about what each QuickBooks payroll plan offers.

Note: QuickBooks is often running payroll promos, so be sure to take advantage of any discounts offered.

Upgrades

QuickBooks Pro users can purchase an upgrade for $299.95. Annual upgrades are included with the QuickBooks Pro Plus plan.

Additional Users

Additional users cost $250/per user. There is a maximum of three users total for QuickBooks Pro and QuickBooks Pro Plus.

Tech Support

When it comes to customer service, most representatives all give you a different quote on how much support costs. There is only one fee that is consistent across the board: tech support is $89.95/3 mo.

QuickBooks Pro Plus comes with built-in tech support. Some QuickBooks Pro issues are also covered for free, like error codes and installation support.

Live Bank Feeds

Some banks charge a fee for connecting directly with QuickBooks via live bank feeds. This fee can run anywhere from $10-$15/mo depending on your banking institution.

Automatic Data Backups

Backing up a single PC costs $99.95/yr or $9.95/mo; backing up a company file costs $49.95/yr or $4.95/mo. Automatic data backups are included with the QuickBooks Pro Plus plan.

Hosting

If your company is in need of mobility and cloud capabilities, you can purchase online hosting at an additional cost. QuickBooks partners with Right Networks to provide hosting. Hosting costs an additional $450/yr per user.

Tax Forms

QuickBooks Pro supports W-2s, 1099s, W-3s, and 1096s. You can order tax forms directly from Intuit. The cost begins at $17.95 and varies depending on which form you need and how many. Tax forms are included with the Enhanced and Full-Service payroll plans.

Checks

You can purchase checks, voucher checks, business wallet checks, and more from QuickBooks. Standard checks begin at $56.99/per 50 checks. Prices vary by check type and amount.

Now you have a clear idea of exactly how much QuickBooks Pro costs. If you’re already sold on QuickBooks Pro, read our complete QuickBooks Pro review or go ahead and get started with the software. If you’d like to learn about the other QuickBooks Desktop pricing options, read on.

Read Our QuickBooks Pro Review

Get Started With QuickBooks Pro

QuickBooks Premier Pricing

QuickBooks Premier’s pricing structure is the exact same as QuickBooks Pro’s. There are two options when it comes to purchasing QuickBooks Desktop Premier. You can either purchase a QuickBooks Premier license (sometimes referred QuickBooks Desktop Premier), or you can purchase an annual QuickBooks Premier subscription (called QuickBooks Premier Plus or QuickBooks Desktop Premier Plus). There are a few differences between the license and the subscription, which we will cover in more detail, but the main difference is the price.

QuickBooks Premier

A QuickBooks Pro license costs $499.95 on Intuit’s website. While you can purchase a QuickBooks Premier license elsewhere, Intuit is often running promotions where this cost is discounted.

If you purchase a QuickBooks Premier license, the license will last you three years, after which Intuit drops support for the product. (You can still use the software for more than three years, but the Intuit team won’t be able to help you if you have any questions or run into any issues). This license supports a single user and, like QuickBooks Pro, is locally-installed onto a computer. Again, like you can with QuickBooks Pro, you can install the product on up to three computers, though you’ll run into the same problem with information syncing from one computer to another.

Here are some features that come with QuickBooks Premier:

  • Invoices and estimates
  • Contact management
  • Expense tracking
  • Journal entries
  • Chart of accounts
  • Accounts payable
  • Inventory
  • Project management
  • Time tracking
  • Reports
  • Budgeting
  • Tax support
  • Sales orders

For a full list of features, read our complete QuickBooks Premier review.

QuickBooks Premier Plus

QuickBooks Premier Plus costs $499.95 each year. Instead of paying a flat fee of $499.95, you’d be paying for an annual subscription. The annual subscription comes with all of the same features as QuickBooks Premier, but you also receive:

  • Annual upgrades
  • Free phone support
  • Free automatic data backups

QuickBooks Premier Plus is often discounted on the Intuit website.

QuickBooks Premier vs QuickBooks Premier Plus

Since both QuickBooks Premier and QuickBooks Premier Plus offer the same software features, which version is right for you will depend entirely on your business’s budget and needs. These are the main pricing differences between the two options:

QuickBooks Premier QuickBooks Premier Plus
Pricing $499.95 $499.95/yr
Annual Upgrades $499.95 Included
Phone Support $89.95/3 mo Included
Data Backups $9.95/mo Included

If you will use a QuickBooks Premier license for three years before switching and don’t mind paying extra for phone support, QuickBooks Premier could save you a big chunk of money. However, if you want annual upgrades and anticipate needing a lot of customer support, QuickBooks Premier Plus might be worth it in the long run.

To determine which version is right for you, consider these questions:

  • Do I want annual upgrades or will I use the same software for three years?
  • Do I have the budget to support an annual subscription?
  • Do I need phone support?
  • Do I want automatic data backups?

QuickBooks Premier Industry Editions

One of the biggest difference between QuickBooks Pro and QuickBooks Premier is that Quickbooks Premier offers six industry-specific version of the software in addition to the standard version. These industry editions add customized features and reports to better fit your businesses needs.

You can choose the Standard Edition of QuickBooks Premier or one of these six editions at no additional cost:

  • Contractor
  • Manufacturing & Wholesale
  • Nonprofit
  • Retail
  • Professional Services
  • Accountant

Visit QuickBooks Premier’s webpage to learn everything these versions are capable of.

Additional QuickBooks Premier Fees

QuickBooks Premier has almost all of the same potential additional fees as QuickBooks Pro, with a few minor variations in cost. Be sure to take these into consideration when determining how big of a dent QuickBooks Premier is going to leave in your wallet.

QuickBooks Payroll

QuickBooks offers three payroll plans: Basic, Enhance, and Full-Service. These plans range from $29/mo – $109/mo plus $2/ per employee. Learn more about what each QuickBooks payroll plan offers.

Note: QuickBooks is often running payroll promos, so be sure to take advantage of these discounts.

Upgrades

For Premier, the QuickBooks upgrade price is $499.95. Annual upgrades are included with the QuickBooks Premier Plus plan.

Additional  Users

Additional users cost $450/per user. There is a maximum of five total users for QuickBooks Premier and QuickBooks Premier Plus.

Tech Support

Like QuickBooks Pro, QuickBooks Premier tech support costs $89.95/3 mo. QuickBooks Pro Plus comes with built-in tech support. Some QuickBooks Premier issues are also covered for free, like error codes and installation support.

Live Bank Feeds

Some banks charge a fee for connecting directly with QuickBooks via live bank feeds. This fee can cost anywhere from $10-$15/mo depending on your banking institution.

Automatic Data Backups

Backing up a single PC costs $99.95/yr or $9.95/mo; backing up a company file costs $49.95/yr or $4.95/mo. Automatic data backups are included with the QuickBooks Premier Plus plan.

Hosting

If your company is in need of mobility and cloud capabilities, you can purchase online hosting at an additional cost. QuickBooks partners with Right Networks to provide hosting. Hosting costs an additional $450/yr per user.

Tax Forms

QuickBooks Premier supports W-2s, 1099s, W-3s, and 1096s. You can order tax forms directly from Intuit. The cost begins at $17.95 and varies depending on which form you need and how many. Tax forms are included with the Enhanced and Full-Service payroll plans.

Checks

You can purchase checks, voucher checks, business wallet checks, and more from QuickBooks. Standard checks begin at $56.99/per 50 checks. Prices vary by check type and amount.

Now that you know exactly how much QuickBooks Premier costs, you can make an informed decision about whether or not it’s right for you. If so, get started using the software right away, or read our complete QuickBooks Premier review for more details.

Read Our QuickBooks Premier Review

Get Started With QuickBooks Premier

QuickBooks Enterprise Pricing

Unlike QuickBooks Pro and Premier, QuickBooks Enterprise is only available through a subscription. For Enterprise, there are three QuickBooks price levels: Silver, Gold, and Platinum.

Each plan varies significantly in terms of feature availability and pricing.

Silver

QuickBooks Enterprise Silver starts at $1,100/yr. This number can vary significantly business by business.

The price ranges depending on how many users your business needs. You can calculate how much your QuickBooks Enterprise software will cost on the Intuit website by inputting in the number of users you need. (To give you an idea of how much this price fluctuates, one user on the Silver plan would cost $1,100/yr, while 30 users would cost upwards of $7,000/yr). Luckily, Intuit is often running promotions and discounts on the Intuit website.

Here are some of the features QuickBooks Enterprise Silver includes:

  • Invoices and estimates
  • Contact management
  • Expense tracking
  • Journal entries
  • Chart of accounts
  • Accounts payable
  • Inventory
  • Project management
  • Time tracking
  • Reports
  • Budgeting
  • Tax support
  • Sales orders
  • Advanced reporting
  • Lead management
  • Loan manager
  • Business plan tool

These features are available in every QuickBooks Enterprise subscription. Read our complete QuickBooks Enterprise review for more details.

Gold

QuickBooks Enterprise Gold starts at $1,100/yr. The price ranges significantly depending on how many users you need.

In addition to the basic QuickBooks Enterprise features, QuickBooks Enterprise Gold also includes payroll services.

Platinum

QuickBooks Enterprise Platinum starts at $1,760/yr.  Again, the price varies depending on how many users your business needs.

In addition to the features offered by the Silver and Gold plans, QuickBooks Enterprise Platinum adds advanced inventory and advanced pricing capabilities.

Note: With the purchase of any QuickBooks Enterprise plan, you receive Intuit Field Management access for a single user.

Silver vs Gold vs Platinum

If we’re talking about jewelry the answer is obviously platinum, but when it comes to accounting software the best QuickBooks Enterprise version is going to depend entirely on your business’s needs and budget. Here’s a breakdown of how each QuickBooks Enterprise plan compares:

Silver Gold Platinum
Pricing $1,100+/yr $1,430+/yr $1,760+/yr
Annual Upgrades Included Included Included
Phone Support Included Included Included
Data Backups Included Included Included
Basic Features ✓ ✓ ✓
Payroll $29-$109/mo Included Included
Advanced Inventory ✘ ✘ ✓
Advanced Pricing ✘ ✘ ✓

If you need payroll, advanced inventory, and advanced pricing, then Platinum is the clear winner. If you need more users than you can get with QuickBooks Premier, but don’t need payroll or the advanced features, then maybe Silver is a better option.

To determine which version of QuickBooks Enterprise is best for your business, ask yourself these questions:

  • Do I have the budget for QuickBooks Enterprise?
  • Do I need payroll included or will I save money by paying for a payroll add-on each month?
  • Do I need advanced inventory or advanced pricing?

Most importantly, ask yourself if the benefits of Enterprise outweigh the steep costs. If Quickbooks Premier can do almost everything you need it to, it might be worth the slight downgrade in terms of features.

QuickBooks Enterprise Industry Editions

Once you’ve decided if Silver, Gold, or Platinum is right for your business, there’s one more question to ask yourself: should I use the standard version of QuickBooks Enterprise or one of the six industry-specific versions?

Like QuickBooks Premier, QuickBooks Enterprise offers six industry-specific editions of the software:

  • Contractor
  • Manufacturing & Wholesale
  • Nonprofit
  • Retail
  • Professional Services
  • Accountant

Each of these versions gives you access to specialized features and reports at no additional cost. Read our Quick Guide To The 6 Industry-Specific Editions of QuickBooks Enterprise for more details.

Additional QuickBooks Enterprise Fees

QuickBooks Enterprise has significantly fewer additional fees than QuickBooks Pro and Premier as many features are included with your annual subscription. For example, all QuickBooks Enterprise plans include annual upgrades and automatic data backups, and the two larger plans have built-in payroll. However, there are a few other fees to be aware of.

Payroll

QuickBooks Enterprise Gold and Platinum include payroll at no additional cost. If you want Quickbooks Enterprise Silver, you will have to pay an additional fee each month. QuickBooks offers three payroll plans: Basic, Enhance, and Full-Service. These plans range from $29/mo – $109/mo plus $2/ per employee. Learn more about what each QuickBooks payroll plan offers.

Note: QuickBooks is often running payroll promos, so be sure to take advantage of these discounts.

Hosting

If your company is in need of mobility and cloud capabilities, you can purchase online hosting at an additional cost. QuickBooks partners with Right Networks to provide hosting. For Enterprise, the QuickBooks hosting price is around $50/mo per user. For an exact quote, contact QuickBooks Enterprise’s support team directly.

Intuit Field Service Management

With a QuickBooks Enterprise subscription, you automatically get Intuit Field Service management access for one user. Intuit does not disclose the cost of additional users so contact Intuit’s Field Service Management team directly for a quote.

Tax Forms

QuickBooks Enterprise supports W-2s, 1099s, W-3s, and 1096s. You can order tax forms directly from Intuit. The cost begins at $17.95 and varies depending on which form you need and how many. Tax forms are included with the Enhanced and Full-Service payroll plans.

Checks

You can purchase checks, voucher checks, business wallet checks, and more from QuickBooks. Standard checks begin at $56.99/per 50 checks. Prices vary by check type and amount.

If QuickBooks Enterprise’s pricing didn’t scare you off, take the software for a spin with a free trial or read our complete QuickBooks Enterprise review for more information.

Read Our QuickBooks Enterprise Review

Get Started With QuickBooks Enterprise

Other QuickBooks Desktop Costs To Consider

So we’ve already covered how much QuickBooks Pro, Premier, and Enterprise cost and all of the additional fees to expect with each. But there are a few other costs you’ll want to consider.

Add-Ons

Integrations are third-party add-ons that give you additional features and capabilities. For example, software like Shopify, TSheets, and MailChimp are all integrations. QuickBooks Pro offers 170+ integrations to choose from; QuickBooks Premier has 160+ integrations and QuickBooks Enterprise offers 160+ integrations.

Most integrations come with their own monthly subscription fees, so be sure to account for these extra costs when calculating how much QuickBooks is going to set you back.

Payment Gateways

Payment gateways allow you to accept payments from your customers. Common payment processing options include PayPal, Stripe, Square, and Authorize.Net. QuickBooks Pro offers 14 payment processing integrations or you can use QuickBooks Payments. QuickBooks Premier and Enterprise offer significantly fewer payment gateways, so you’re basically looking at QuickBooks Payments.

QuickBooks Payments charges:

  • $1.00 for ACH fees
  • 2.4% + $0.30 for swiped cards
  • 3.5% + $0.3o for invoices
  • 3.5% + $0.30 for keyed in cards

Whether you use QuickBooks Payments or another payment gateway, be sure to take the credit card fees into account.

Where Can You Buy A QuickBooks Desktop License?

There are several places you can go to buy a QuickBooks Desktop license. You can purchase a license through Intuit using the QuickBooks Pro, QuickBooks Premier, or QuickBooks Enterprise websites. You will almost always find that QuickBooks is running a discount or promotion online.

Another option is to buy a QuickBooks Desktop license from a QuickBooks reseller, like Staples or OfficeMax. Retailers like Best Buy, Costco, and even Walmart often sell QuickBooks, and Amazon sells the software as well.

The QuickBooks software prices vary from reseller to reseller. Sometimes these places offer a more significant discount than Intuit (especially around Black Friday). Other times, they may be offering a far more expensive deal.

Be sure to explore all of your options before buying to make sure you are getting the best QuickBooks price.

Should You Buy An Older Version Of QuickBooks?

One question people often ask is should I buy an older version of QuickBooks?

The answer (like with so many things) is that it depends.

Generally, QuickBooks Pro, Premier, and Enterprise don’t change significantly year by year. The software usually has a few minor updates, maybe some streamlined features, or new additions each annual upgrade. This is why so many QuickBooks users utilize the same version of QuickBooks Desktop for multiple years, and why it may also be okay to buy an older version.

For example, say you want to buy QuickBooks Pro but don’t need any of the new 2018 updates. You may be able to save some money by buying QuickBooks 2017 from a reseller like Amazon or Best Buy. You can search all of the resellers previously mentioned for the best price on QuickBooks Pro 2017. However, note that the support for this version of QuickBooks will expire faster than if you were to purchase QuickBooks 2018.

There are some instances where I don’t recommend buying an older version of QuickBooks, however. For example, the price for QuickBooks Pro 2014 may be enticing, but you’d essentially be signing up for outdated features and no support. Sure, you could theoretically use the software just fine, but your software would not be supported by the QuickBooks team at all.

That means that whenever you have a question or an issue, you’re completely on your own. QuickBooks customer care won’t help. If you want to purchase a significantly older version of QuickBooks, I recommend seriously weighing the pros and cons first and deciding whether lack of support is really worth the few bucks you’d save with a smaller QuickBooks purchase price.

How To Upgrade Your Current Version of QuickBooks

You can upgrade (or downgrade) your software at any time. You can switch from QuickBooks Pro Plus to QuickBooks Premier Plus, or go from QuickBooks Premier to QuickBooks Pro — whatever your heart desires (and your business requires).

I do have a couple of tips for upgrading so you can get the best QuickBooks price.

  1. If you are planning on upgrading an annual subscription, wait until the end of your annual subscription or switch within 60-days of your annual renewal (QuickBooks has a 60-day satisfaction guarantee where you can receive a refund for your software). This way you aren’t paying twice.
  2. If you are planning on upgrading a QuickBooks license, see if you can wait it out until the latest version of QuickBooks is released. Annual QuickBooks Desktop upgrades are generally released each September. This way, you get the most up-to-date features and can use your software for longer.

Final Thoughts

I know that was a lot of information, but hopefully, this helps clear things up! Now you know everything you could possibly need to know about QuickBooks pricing.

You learned how much QuickBooks Pro, QuickBooks Premier, and QuickBooks Enterprise cost; the differences between QuickBooks Pro and Pro Plus, QuickBooks Premier and Premier Plus, and QuickBooks Silver, Gold and Platinum;  all of the additional costs to expect; and even where to find the best QuickBooks price.

If you’re still not sure which version of QuickBooks Desktop is right for you, take a look at our Complete QuickBooks Product Comparison Guide where we cover the differences between each software and how to pick which one is best for your business. There’s also a side-by-side QuickBooks features and QuickBooks price software comparison chart.

If you want to learn more, check out our complete QuickBooks Pro review, QuickBooks Premier review, or QuickBooks Enterprise review. In each of these reviews, we rate features, customer support, customer reviews, security, and more. We also give links to free trials of each software. Take a look or get started right away with your favorite version of QuickBooks Desktop.

Get Started With QuickBooks Pro

Get Started With QuickBooks Premier

Get Started With QuickBooks Enterprise

The post The Complete Guide To QuickBooks Desktop Pricing appeared first on Merchant Maverick.

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How To Accept Credit Card Payments For Your Small Business

Whether you’ve been in business for a while or are just starting out, you know how important it is to be able to accept credit and debit cards as payment from your customers. Credit card usage has soared over the past twenty years or so, while the use of traditional payment methods such as cash and paper checks has dwindled. Put simply, accepting credit cards will lead to increased sales and happier customers.

Unfortunately, adding credit card acceptance to your suite of business tools is neither easy nor inexpensive. The credit card associations (i.e., MasterCard, Visa, etc.) charge a fee known as interchange every time their cards are used, and you’ll need to sign up with a credit card processor to process your transactions and pay those fees for you. Your processor will, in turn, add a markup to your processing charges to cover their costs, and – in most cases – also charge you a bewildering variety of fees for maintaining your account.

In this article, we’ll provide a brief overview of the requirements you’ll need to meet to set up credit and debit card processing for your small business. There are a huge number of providers out there on the market, all offering different variations on the same basic services that most companies need. We’ll give you a quick and dirty explanation of how credit card processing works, what a merchant account is, and whether you need one to accept credit or debit cards. We’ll explain the various options for taking card payments, including the required hardware and software you’ll need to get started. Finally, we’ll give you some tips to help you avoid having your account suddenly frozen or terminated – a situation you can and should avoid.

If you’re looking for the best credit card processing companies for your business, you should take a look at our favorite payment processor shortlist to get you headed in the right direction.

How Credit Card Processing Works

You don’t need to be familiar with all the intimate details of processing a credit card transaction, but it’s a good idea to have a basic understanding of the steps involved and how they go together. A little knowledge of how processing works can help you avoid some of the common problems that can result when a transaction doesn’t go smoothly.

First, you’re going to need a way to accept your customer’s card data. This can be accomplished using either a traditional credit card terminal or a payment gateway in the case of online transactions. Another option is a software service known as a virtual terminal, which turns your computer into a credit card terminal and allows you to either input the card data manually or read it using a compatible card reader.

Once you’ve input your customer’s card data, it’s sent to your provider’s processing system for approval. Your provider’s network will check with the cardholder’s issuing bank to confirm that funds are available to cover the transaction. For debit cards, this is a simple check of the remaining balance on the banking account linked to the card. Credit cards require that the cardholder won’t exceed their available credit if the transaction is approved. The processing networks will also run a few anti-fraud checks to (hopefully) detect a suspicious transaction. If sufficient funds are available and there aren’t any clear indications of fraud, the transaction is approved, and you can complete the sale.

At the end of the day, you’ll upload all completed credit/debit transactions to your processor’s network for processing. This usually occurs automatically if you’re using a payment gateway or a modern credit card terminal. For each transaction, your processor will deduct both the applicable interchange (which is then forwarded to the cardholder’s issuing bank) and their markup. You’ll receive whatever is left over after these fees have been deducted. It usually takes another two to three days for these funds to be transferred back to your bank account.

From our payment processing infographic:

Do You Need A Merchant Account To Accept Credit Cards?

For many years, the only way to accept credit cards was to open a merchant account. At its most basic, a merchant account is simply an account to deposit funds into from processed credit/debit card transactions. Of course, maintaining a merchant account also requires transaction processing services, equipment and software to process the transactions, security features, and numerous other services, depending on the needs of your business. Traditional merchant accounts tend to end up being rather expensive, and merchant services providers often require that you agree to a long-term contract with a hefty early termination fee in case you close your account before the contract expires. As a result, traditional merchant accounts tend to be expensive, especially for a small business that’s trying to minimize their expenses.

In recent years, an alternative has become available that lowers costs for small businesses while still providing most of the essential features available with a full-service merchant account. Payment service providers (PSPs) allow you to accept credit and debit card transactions without a traditional merchant account. PSPs such as Square (see our review) and PayPal (see our review) have revolutionized the processing industry by offering simple, flat-rate pricing, no fees for basic services, and month-to-month billing that eliminates long-term contracts. They’re able to do this by aggregating accounts together, so you won’t have a unique merchant identification number for your business. PSP accounts are easier to set up, but they’re also vulnerable to sudden account freezes or terminations which can make them a risky proposition for businesses that depend on being able to accept cards without interruption.

Cheapest & Easiest Ways To Accept Credit Cards Without A Merchant Account

There are now quite a few well-known PSPs on the market, each one specializing in providing credit card processing services to particular segments of the business community. Here’s a brief overview of each of the most popular options:

Square:

This is the best all-in-one solution for low-volume users, especially those in the retail sector. Square also supports eCommerce businesses, but doesn’t have quite as many features for online enterprises as its competitors. Square features a mobile processing system that uses a new, EMV-compliant card reader, no monthly fees, month-to-month billing, and a simple flat-rate pricing system that’s more affordable for a small business than a traditional merchant account. See our review for complete details.

Shopify:

This is the best option for eCommerce merchants looking to easily set up a fully-featured webstore. While Shopify has better eCommerce tools than Square, it’s also more expensive. Pricing starts at $29.00 per month for the Basic Shopify Plan, with a flat-rate processing fee of 2.9% + $0.30 per online transaction. Billing is month-to-month, but you can receive a discount if you pay for a year (or two) in advance. See our review for more specifics.

 

PayPal:

Easily the oldest and best-known option for online credit card acceptance, PayPal is now available for retail merchants also. While a standard PayPal account comes with no monthly fee, you’ll have to pay $30.00 per month for the PayPal Payments Pro Plan. This upgraded plan includes a virtual terminal and a hosted payments page. PayPal uses a flat-rate pricing plan for processing fees that’s nearly identical to what Square charges. See our review for details about PayPal’s services.

Stripe Payments:

Stripe logo

Very tech-oriented, Stripe only supports eCommerce businesses. They don’t charge any monthly fees and have no long-term contracts. All transactions are processed at a fixed rate of 2.9% + $0.30 per transaction. Stripe offers a huge library of APIs that allow you to customize your eCommerce website just about any way you like. However, utilizing these features will require either extensive coding experience or the services of a developer. Check out our full review for more details about what Stripe has to offer.

Braintree Payment Solutions:

Braintree Payment Solutions logo

Another eCommerce-only provider, Braintree is very similar to Stripe in terms of features and pricing. The primary distinction is that, unlike Stripe, Braintree is a direct processor. This translates to increased account stability, which is very important for an online business where credit and debit cards are just about the only forms of payment you can accept. Braintree charges 2.9% + $0.30 per transaction, but doesn’t require a monthly fee or a long-term contract. They also offer a variety of developer tools to help you customize your website any way you like. For more details, check out our complete review.

When & How To Set Up A Merchant Account

With so many low-cost alternatives available, you may be wondering why you would ever consider the added expense and complication of a full-service merchant account. The primary reason that merchant accounts are still alive and well today is that for many businesses the overall cost of a merchant account is actually lower – sometimes much lower – than using a payment services provider. How is this possible? It primarily comes down to processing rates and how your monthly volume and average ticket size affect them. With a full-service merchant account, you can obtain interchange-plus processing rates that are significantly lower than the flat rates charged by PSPs. Providers such as Square (see our review) have to charge an inflated processing rate to pay for all the ancillary services they aren’t charging you for with a monthly fee. A traditional merchant account provider bills for those services separately, so they can afford to offer a lower per-transaction markup.

Unfortunately, there’s no easy way to determine the point at which it’s more cost-effective to upgrade to a full-service merchant account. The primary factor you’ll want to look at is your monthly processing volume. Your average ticket size is also important, but to a lesser extent. We’ve seen providers recommend merchant accounts for businesses processing anywhere from $1500 to $10,000 per month at a minimum, and sometimes even more. Where to draw the line will ultimately depend on the unique needs of your business, and what options for upgrading are available to you. You’ll want to compare your current processing costs with an estimate based on a quote from a merchant account provider to see which option is cheaper. Be sure to factor in all the hidden costs that come with merchant accounts. You can usually uncover these in the fine print of your proposed contract.

For more, see our complete guide to credit card processing rates and fees.

Account stability is also an important factor. With a PSP, a single unusually high transaction can be enough to have your account suspended or even terminated. For some businesses, particularly eCommerce merchants, this can be catastrophic. While this situation can still happen with a traditional merchant account also, it’s far less likely and you’ll have better access to customer service to get your account working again if it does occur.

Setting up an account with a PSP is usually very easy. Most PSPs have online application forms that you can fill out and submit without ever having to talk to a sales agent. If you need a card reader, your PSP will mail it to you. Account activation is usually also accomplished online.

Traditional merchant accounts are more complicated to set up. You’ll need to contact the sales team at the provider you’re interested in and negotiate the terms of your agreement. There’s also a lot more paperwork, although some providers now offer you the opportunity to complete your merchant application online. Beware that automation can sometimes work against you when setting up a merchant account, as some sales agents are now using tablet devices to get your electronic signature. This practice often locks you into a long-term contract before you’ve had any chance to review your contract terms and conditions. Insist on a paper copy of all contract documents and study them very carefully before you sign anything. For some suggestions on making this process go more smoothly, please see our article How to Negotiate the Perfect Credit Card Processing Deal.

How To Accept In-Store Credit Card Payments

For retail merchants, you’re going to need at least one credit card machine per location. These days, you have a choice between a traditional countertop credit card terminal and a point of sale (POS) system. Countertop terminals can process transactions, but most models offer little or no other functionality. A POS system, on the other hand, can handle things like inventory management, employee scheduling, and a host of other features to help you run your business. Naturally, POS systems cost more than most countertop terminals, although tablet-based systems such as ShopKeep (see our review) are more affordable (and mobile) than a standalone POS terminal.

Whatever type of equipment you decide to purchase, make sure it’s EMV-compatible. EMV (Europay, MasterCard, and Visa) is now the standard method for accepting credit and debit cards in the United States, and since the EMV liability shift in October 2015, you can be held responsible for a fraudulent transaction if you accept an EMV-enabled card using the magstripe instead of the chip. EMV-compatible terminals are widely available and less expensive than ever. With most customers now carrying EMV cards, there’s really no good reason to continue using a magstripe-only card reader.

If you want the latest and greatest in card acceptance technology, it’s pretty easy to find a terminal or POS system that accepts NFC-based payment methods. NFC stands for near-field communications, and it’s found on payment systems such as Apple Pay, Google Pay, and Samsung Pay. NFC technology is built into most modern smartphones, tablets, and even smartwatches. While it hasn’t seen widespread adoption by the general public yet, it’s gaining in use as more people become aware of its availability and convenience.

Regardless of what type of terminal or POS system you decide to get for your business, we highly encourage you to buy your equipment outright rather than signing up for a lease. Equipment leasing is still being pushed by sales agents, who cite misleading arguments about the low up-front cost and the possibility of writing off the lease payments on your taxes. While these arguments are technically true, they mask the reality that leasing a terminal or POS system will cost you far more in the long run than buying. Equipment leases typically come with four-year contracts that are completely noncancelable. The monthly lease payments will, over the term of the lease, far exceed the cost to simply buy the equipment. Adding insult to injury, you won’t even own your equipment when the lease finally expires. Instead, you’ll either have to continue making monthly lease payments or buy the equipment (often at an inflated price). For more details on why leasing is such a bad idea, see our article Why You Shouldn’t Lease A Credit Card Machine.

How To Accept Credit Card Payments Online

If your business is eCommerce-only, you’ll have it a little easier because you won’t need a credit card terminal or POS system. However, you will need either a payment gateway or at least a virtual terminal to accept payments from your customers. A virtual terminal is simply a software application that turns your computer into a credit card terminal. Mail order and telephone order businesses use them to enter their customers’ credit card data manually. They can also be combined with a card reader (usually USB-connected) to accept card-present transactions. For retail merchants, a virtual terminal can replace a dedicated countertop terminal if you add a card reader. Unfortunately, we haven’t seen many EMV-capable card readers that are compatible with virtual terminals yet.

A payment gateway is a web-based software service that connects your eCommerce website with your processor’s payment networks. Payment gateways allow customers to enter credit card data from wherever they are, as long as they have access to the internet. Most merchant services providers charge a monthly fee (usually around $25.00) for the use of a payment gateway. You might also have to pay an additional $0.05 – $0.10 per transaction for the use of the gateway in some cases. Authorize.Net (see our review) is one of the most popular payment gateway providers, but there are many others today as well. Many of the larger processors now offer their own proprietary gateways that include the same security and ease-of-use features that you’d find in a more well-known gateway. For more information on payment gateways, see our article The Complete Guide to Online Credit Card Processing With a Payment Gateway.

Depending on how many products you sell on your website and the options you want to give your customers, you may or may not need to use an online shopping cart in conjunction with your payment gateway. Shopping carts allow you to feature products, conduct secure transactions online, and perform a variety of other functions related to running your business. You’ll want to ensure that your chosen shopping cart is compatible with your payment gateway before you set up your site. Most of the popular shopping carts today are compatible with almost all of the more well-known payment gateways. For more information on online shopping carts, see our article Shopping Carts 101: How to Choose a Shopping Cart for Your Business.

How To Accept Credit Card Payments With Your Mobile Phone

When Square (see our review) first introduced their original card reader in 2009, it was revolutionary. For the first time, merchants could accept credit or debit cards using their smartphones or tablets. Square was (and still is) a great choice for very small businesses, startups, and merchants who operate seasonally. Naturally, they’ve spawned a lot of competitors, and today almost all merchant services providers offer some type of mobile payment system.

Visit Square

These systems inevitably include both an app for your smart device and a card reader. Unfortunately, many of the apps are very basic and don’t offer the depth of features that Square does. Card readers have lagged behind current technology, with many providers still offering magstripe-only readers. The current trend among smartphone manufacturers to remove the headphone jack has also caused problems, as most mobile card readers use a plug that fits into the jack to connect to the device. Today, Square and a few other providers now offer upgraded card readers that feature both EMV compatibility and Bluetooth connectivity. These card readers are significantly more expensive than the older models, but they’re still cheaper than a traditional countertop terminal. For businesses that need to accept transactions out in the field, they’re lighter and far less costly than wireless terminals, which usually run at least twice as much as their wired brethren and require a separate wireless data plan. For more information on mobile payment systems, please see our article on why accepting credit cards with your phone is the easiest option.

Can You Accept Credit Card Payments For Free?

Whether you ultimately use a PSP or a traditional merchant account, you’re still going to pay several percent from every sale to cover your processing costs. While there are many ways to get this percentage down to a reasonable level and avoid overpaying, at some point you’re going to ask yourself why you have to pay for processing instead of your customers. After all, they’re the ones who consciously choose to pay with credit and debit cards rather than cash or a paper check. Wouldn’t it be nice if there was a way to transfer this expense to your customers rather than having it come out of your profits?

In fact, there is a way to do this. Transferring the cost of processing onto your customers, also known as surcharging, is allowed in 41 states. However, the practice is currently going through a series of legal challenges that will ultimately either lead to it being banned or expanded into all jurisdictions. With surcharging, your processor will calculate the processing charge when a transaction is submitted for approval and add it to your customer’s bill.

Needless to say, your customers aren’t going to like unexpectedly having a few percentage points added to their bill just for using a credit card. For this reason, surcharging isn’t popular with most merchants, and you’ll usually only encounter it in certain industries where it’s become an accepted practice, such as taxi cabs and busses. For most merchants, it’s much easier to “adjust” your prices to cover your anticipated processing costs rather than passing those costs directly onto your customers. For a more in-depth look at surcharging, check out our article The Truth Behind Free Credit Card Processing.

How To Avoid Account Terminations & Funding Holds

Once you’ve got your merchant account up and running, you’ll naturally want it to be available and fully functional every day. While this isn’t normally a problem, account holds, freezes, and terminations sometimes occur. You’ll want to understand how this happens, and what you can do to prevent it from happening to you.

An account hold usually occurs when a single transaction is held up, and you don’t receive the funds you were expecting. In most cases, your processor’s risk department has flagged the transaction as suspicious, and you won’t get your funds until they can investigate and confirm that the transaction is legitimate. A single transaction that’s for much more money than your average ticket size is most likely to trigger a hold. Fortunately, you should still be able to process other transactions while the matter is being resolved.

This isn’t the case with an account freeze, unfortunately. Your processor can and will freeze your account – preventing you from getting paid for previous transactions or processing new ones – if fraud is suspected that would affect your entire account. While the wait can be excruciating, account freezes are usually temporary unless your processor decides to terminate your account.

As the name implies, an account termination is final. Your account is shut down, and you won’t be able to reopen it. The risk of an account termination is higher with a PSP than a traditional merchant account. Account terminations usually occur when your processor determines that you’ve misrepresented your business and the type of goods you’re selling. It doesn’t matter if this was intentional or just an honest mistake on your part. If your business type is one that usually falls into the high-risk category, save yourself the aggravation and get a high-risk merchant account from a provider who specializes in these kinds of accounts. It will cost you more, but you’ll have a much more stable account. For more information on the various hiccups that can affect your merchant account, please see our article How to Avoid Merchant Account Holds, Freezes, and Terminations.

Final Thoughts

If you’ve read this far, you’re probably thinking that merchant accounts and credit card processing are pretty complicated. You’re right! There’s a lot to know, and unfortunately, there’s also a lot of misinformation out there. The credit card processing industry has a lousy reputation for misleading sales practices, high costs, hidden charges, and long-term contracts that are very difficult to get out of. The main reason that PSPs like Square (see our review) have become so popular is that they offer a simpler, more transparent alternative to traditional merchant account providers, both in terms of costs and contract requirements.

For many businesses, however, Square can actually be more expensive than signing up for a traditional merchant account, even when factoring in the various account fees and the cost of buying processing equipment. While we heartily recommend Square for very small businesses and startups, realize that if your business grows large enough, you’ll eventually want to switch to a full-service merchant account. You’ll enjoy lower costs, improved account stability and (hopefully) better customer support. PayPal is also a great choice for eCommerce businesses that are just starting out. Again, if your business grows large enough, a full-service merchant account with a fully-featured payment gateway will be a better choice.

Note that this article only provides a relatively brief overview of the significant factors that affect credit card processing for small businesses. For more information, please take a look at the other articles we’ve linked to above for a deeper dive into subjects you aren’t already familiar with. For an overview of several highly recommended providers, please see our article The 5 Best Small Business Credit Card Processing Companies. You can also compare several excellent providers side-by-side using our Merchant Account Comparison Chart.

The post How To Accept Credit Card Payments For Your Small Business appeared first on Merchant Maverick.

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What Is A Merchant Services Provider?

What is a merchant services provider?

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

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

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

Types of Merchant Services Providers

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

Merchant Account Providers

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

Payment Services Providers (PSPs)

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

Payment Gateway Providers

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

Types of Merchant Services

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

Merchant Accounts

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

Credit Card Terminals

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

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

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

Point of Sale (POS) Systems

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

Mobile Payment (mPOS) Systems

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

Payment Gateway

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

Virtual Terminal

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

Online Shopping Carts

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

eCheck (ACH) Processing

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

Merchant Cash Advances and Small Business Loans

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

Final Thoughts

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

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

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Team Bio Series — Frank Kehl (The Mountain Climber)

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

Name: Frank Kehl

Title: Merchant accounts writer

Hometown: Berwick, Pennsylvania

Current city: Paso Robles, California

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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