How To Accept Credit Cards Online

So you’ve realized you want to start selling online. Good for you! The ecommerce market is certainly booming. But before you can start raking in the money, you probably have a few questions, like “how do I make a website?” and “how do I accept credit cards online?” Here’s the good news: There are plenty of software options and payment processors to choose from! The bad news? There are plenty of software options and payment processors to choose from. So how do you choose?

As always, there’s no one perfect solution for everyone. You need to know your business (and where you want to go with it) and have a rough idea of what you need. If you have no idea where to start, never fear! In this article, we’ll cover some of the basic considerations about accepting credit card payments online, as well as types of payment processors and how to accept credit card payments online with and without a website. We’ll also discuss some of our favorite solutions for ecommerce and provide resources to help you learn more.

5 Questions To Ask Before You Start

It’s really important, before you dive headlong into any kind of financial investment in your business, to sit down and make sure that you know what you want and what you need. I say that a lot, but with selling online it’s especially important to look before you leap because if you get any component of your setup wrong, redoing it will cost time and money.

So before anything, here are some questions to consider:

  1. How technologically savvy are you? Simply put, are you even able to build and maintain your website yourself? If you’re not exactly a technological wizard, your priority should be finding an easy-to-manage solution. You can also outsource tasks you can’t handle yourself, such as design or even data entry for the creation of products. Of course, if you have an ambitious idea and no ready-made solution exists, or you need a lot of customization, you might need a developer who can work with software APIs to create what you need. You can find freelance developers to help out as you go, but the more high-tech you go, obviously, the more you should consider having a full-time developer.
  2. Do you already have a website? If yes, do you like your website? Would you rather abandon it for a better site with more features? If you already have a site and don’t want to go through the effort of creating a new site to sell a handful of products, payment buttons or plug-ins are better options. If you don’t have a site or you don’t mind nixing your current site in favor of something better, shopping cart software might meet the brief nicely. But of course, you don’t need a website to accept payments online. We’ll talk about all of these options more below.
  3. What’s your budget? When it comes to numbers, you need to look at both upfront costs and monthly (or yearly) costs. How much can you spend at the outset, and how much do you expect to be able to afford on a monthly or annual basis? Keep in mind the more technically advanced your website, the more you can expect to pay to build and maintain it. Likewise, the busier your site — the more products you have and the more sales you make — the more you can expect to pay. Don’t forget the tangential costs, such as hiring a designer or a developer, or data entry, and of course, the costs of payment processing itself!
  4. What are you selling? Whether you’re offering digital goods, subscriptions/services, or retail products, look for service providers that cater to your industry so you don’t have to find creative workarounds. Many solutions are generalized for a broad array of merchants, but with add-ons and integrations to make them more tailored. You can also find payment processors and software that offer ready-made specialized solutions and service plans, such as micropayments for merchants who sell low-priced digital goods.
  5. How comfortable are you with handling security features? If you want to sell online, you have to make sure your website is secure. That means ensuring your site is PCI compliant. The more involved you are in the payments process and the more sensitive information your website handles, the more of a burden you are taking upon yourself. Fortunately, many payment processors and other software providers offer solutions to keep your customers’ information secure and reduce your PCI burden — in some cases, you may not need to do anything at all.

Once you’ve got the answers to these questions and a list of the features you need and want, it’s time to actually start looking at your options. One of your primary considerations should be finding a payment processor. However, depending on your business model, you might want to first look at what kind of ecommerce options work for you and then select a payment processor from the available options.

We’ll begin by talking about payment processors and go on to look at what other software or platforms you should explore.

Types Of Payment Processors

No matter how you go about finding a payment processor — choosing a standalone, going with the default processor included with your shopping cart, or choosing a recommended partner from a software provider — you need to consider what kind of business model the processor uses. If you’ve been here before and read any of my other articles, you know that I am talking about the difference between third-party payment processors versus traditional merchant accounts.

Traditional merchant accounts are very stable. It would take a clear violation of either your contract or card network rules in order to trigger an account termination, and you’re unlikely to encounter a hold on funds unless you’ve had a series of issues with chargebacks or fraudulent transactions. However, most merchant account providers expect you to have an established business and a monthly volume of $10,000 in credit card transactions. Plus, setting up a merchant account will typically take a few days. It could take longer depending on how many processors are on your short list and how much negotiation is required.

Third-party processors are not quite as stable as merchant accounts. That’s because instead of issuing separate accounts for each of their merchants, everything is lumped together in one giant, communal merchant account. It takes very little effort to apply for an account with one of these processors, and you can often get approved and set up to accept credit cards online within a day. Factor in no monthly minimum volume requirements and third-party processors provide a great way for new businesses to take payments. However, the trade-off is that you’ll face greater scrutiny and a higher risk for account holds or terminations, often with no warning. Check out our article on how to prevent merchant account hold and freezes to learn how to reduce your risk.

While third-party processors are riskier than merchant accounts, they are a great option for new businesses who don’t know what sort of volume they can expect and don’t have an established history. Even for established businesses, there are some advantages: namely, third-party processors offer predictable, flat-rate pricing, so you know exactly how much you’ll pay. The best merchant account providers typically offer interchange-plus pricing, which, while clear and transparent, doesn’t make it easy to accurately estimate processing because interchange rates vary.

It’s up to you to decide which type of processor is right for your business. I do want to point out that some software companies (ecommerce shopping carts, point of sale solutions, invoice platforms, and more) often build white-label payments into their solutions. These solutions can take the form of third-party processors or merchant accounts, so make sure you investigate before just going with the default processor. In addition to their native payment processing services, most ecommerce software providers support integrations with an assortment of merchant accounts and third-party payment processors.

Square is our top-pick for third-party payment processor. In addition to predictable, flat-rate pricing with no monthly fees or contracts, Square offers a whole suite of seamlessly integrated apps to address in-person and online sales at no charge at all. eCommerce transactions process at 2.9% + $0.30 each.

For merchant accounts, we recommend CDGcommerce, which offers flat-rate pricing and an interchange-plus option depending on the merchant’s payment volume. There are no monthly minimums and no contracts, just a $10 monthly fee. Low-volume merchants will pay 1.95% + $0.30 for most transactions, or 2.95% + $0.30 for premium, corporate, or international cards. Merchants who process more than $10,000/month are eligible for interchange-plus pricing with a 0.30% + $0.10 markup.

Does Your Payment Processor Include a Gateway?

If you want to accept credit card payments online, it’s not enough to find a credit card processor. You also need a gateway. As the name suggests, a gateway is an intermediary software program that transfers the payment data from your website to the customer’s bank to be approved or declined (and then routes the money to your merchant account).

Many payment processors offer gateways as part of their services. For example, PayPal, Square, and Stripe all offer gateways bundled with the rest of their services at no additional cost. CDGcommerce offers its Quantum gateway as part of its services for online merchants.

However, some processors will charge you a setup fee and/or a monthly fee for use of the gateway. While it’s fair and legitimate to charge for this service (especially if you’re being offered other discounts or freebies in exchange), there’s no reason for you to overpay, either. Make sure you know how much a gateway service will cost if it’s not offered for free.

While it’s rare to find a processor that doesn’t include some sort of gateway access, they do exist. In the event that you find yourself leaning toward one of these processors, you can find your own gateway. Authorize.net is nearly universally compatible and reasonably priced, which makes it a good option for most merchants. (Worth noting: CDGcommerce’s gateway, Quantum, also includes an Authorize.net emulation mode to maximize compatibility.)

Want to know more about how payment gateways figure into your ecommerce setup? Check out our article, The Complete Guide to Online Credit Card Processing With a Payment Gateway, for more information.

How To Accept Online Payments With A Website

A website is a pretty integral part of selling online (but it’s not 100% necessary — we’ll look at some alternatives in the next section). As mentioned above, the first question to consider is: Do I already have a website? Then ask yourself: Do I like that website, or would I rather start over completely? Fortunately, there are solutions for both of these scenarios. For existing sites, you can implement payment buttons or seek out a plug-in or extension that supports ecommerce.

Adding Payments To An Existing Site

best templates

If you’ve used a site builder such as WordPress, Weebly, Wix, or Squarespace, it’s fairly simple to implement online payments. Simply check out the sitebuilder’s available third-party apps, extensions, and plugins. If you already know which payment processor you want to use, you can search directly for an available add-on. Otherwise, you can browse and see what options are ready-made for you. These add-ons will allow you to securely collect payment information from your customers as well as manage the order fulfillment process. Do your research and go with solutions from your site builder rather than third parties, if possible. Check reviews of any plugins or extensions you add and make sure they are well supported and any glitches are fixed in a timely manner.

If you run a WordPress site, WooCommerce or Ecwid could be good starter options. WooCommerce is actually a free plug-in to add to your site, with a basic theme and your choice of payment processors. It’s a very modular setup, so you can choose from a mix of free and paid extensions that allow you to customize WooCommerce to your needs. That includes payment processors, subscription tools, the ability to create add-ons (such as gift wrap for products), and more. Most WooCommerce add-ons are charged on an annual basis, which could require more of an up-front investment than a monthly subscription, so be aware of this fact.

Ecwid is another plug-in designed for WordPress. However, it also works on an assortment of other website-building platforms, including Wix and Weebly, Ecwid does offer a free plan for businesses with 10 or fewer products, but for higher-tiered plans you’ll pay a monthly subscription fee. Ecwid supports a wide assortment of integrations, including payment gateways. With higher plan tiers, you also get access to expanded sales channels.

Wix and Weebly’s website builders can be used for blogging, personal portfolios, and any other purposes. They both offer online store modules. Online stores from Wix start at $20/month with no transaction fees and your choice of processors. Upgrading to an eCommerce plan is fairly simple from within the Wix dashboard and won’t require any substantial reworking. Simply add the “My Store” module to your dashboard, make the upgrade, and start creating products.

Finally, there’s Weebly. Square actually bought Weebly in the spring of 2018, so it’s possible we could see Weebly start to favor Square pretty heavily in the future. For now, though, Weebly’s online store plans start at $8/month (on a yearly plan), with a 3% transaction fee on top of your processing costs. The transaction fee drops off with higher-tier plans, leaving just the monthly fee.

The other way to add payments to an existing site is to look for a payment processor that supports customizable payment buttons. A good payment button creator will give you power over the appearance of the buttons as well as the settings for transactions. The obvious, go-to solution for many is PayPal, which offers a pretty powerful array of tools. PayPal’s buttons are a good option whether you are selling a single product or multiple ones. You can set up payment buttons to allow products to be added to a cart or to go directly to checkout. PayPal even allows nonprofits to create a “Donate” button for their site, which can be configured for one-time and recurring donations.

An alternative to PayPal is Shopify Lite, an entry-level solution. For $9/month plus transaction costs (2.9% + $0.30), you can accept payments on your website by adding payment buttons. The plan also includes access to Shopify’s mPOS app and the ability to sell on Facebook (we’ll talk about that option in the next section, too.) And it’s worth mentioning that Ecwid also supports the creation of custom buy buttons.

While adding payments to an existing site is incredibly convenient and often requires little work, you won’t get quite as many tools as you would with a hosted ecommerce software solution. Which brings us to the best solution if you would rather build a new site or have no website to start with:

Building A New Site With Shopping Cart Software

eCommerce software apps, sometimes also called shopping carts or shopping cart software, are hosted, all-in-one solutions to online sales. Adding an ecommerce feature to an existing website requires you to choose a platform, buy the domain, and pay for hosting, but with shopping carts, you’ll get everything in a single package: online sales and product management, hosting, and sometimes even the ability to buy a domain name directly. Typically, shopping carts will also help you centralize control of sales across multiple channels, so that if you sell on social media, on eBay, or through another channel, you can handle order fulfillment through a single platform. That even includes buying postage (at a discounted rate) and printing the shipping labels. Some shopping carts will offer marketing tools or integrations with marketing platforms, as well as integrations with point of sale systems.

As far as payment processing goes, some shopping carts have opted to include their own white-label payments as a default part of their services. One such cart is Shopify, which offers its own Shopify Payments service (read our review). However, this is just a white-label version of Stripe. Be aware that choosing a payment processor other than the default can incur additional fees.

Generally speaking, even if a shopping cart doesn’t offer all of the features you want, you can search the app market for available extensions and integrations to get what you need. It’s worth researching the available add-ons as well as the native software features.

There’s a lot to consider and compare with a shopping cart. Obviously, you can use a sitebuilder such as Weebly or Wix, which both offer eCommerce modules. Then there are ecommerce-exclusive platforms, including Shopify and BigCommerce, which make it easy to build your site and customize the design (and even offer blogging so you can centralize control of your website).

If you want a whole lot of freedom and have coding knowledge, an open-source platform such as Magento might be more to your liking. Open-source platforms tend to be chock-full of specialized features (particularly if they have attracted active user communities) and you have almost limitless control of your site. A closed-source, SaaS platform is certainly a lot easier and more convenient for business owners who are just starting out and want to go the DIY route.

If you aren’t sure what you want, we recommend you start by checking out Shopify and BigCommerce, both of which are affordably priced for new businesses and offer extensive customer support resources. They also both offer multi-channel sales manage so you can sell through your own site and through other platforms but manage all of your orders from a single portal.

If you’re still curious about what makes a great ecommerce platform, check out some of our other resources!

  • The Beginner’s Guide to Starting an Online Store (eBook)
  • Shopping Cart Flowchart: Choose the Right eCommerce Software for Your Business (Infographic)
  • Shopping Carts 101: How to Choose a Shopping Cart for Your Business (Article)
  • Questions to Ask Before You Commit to a Shopping Cart (Article)

Managing Services, Subscriptions & Other Recurring Charges

A lot of merchants, from accountants and other professional service provideres to lawn care and cleaning services, could benefit from being able to automate recurring charges. And of course, the ability to automate charges is essential for SaaS providers and subscription-box sellers.

Generally speaking, the ability to accept recurring payments — for monthly services or subscriptions — isn’t a default option for payment processors or shopping carts, which tend to be retail-focused. However, you can find plenty of solutions that will work with your existing eCommerce setup. For example, Stripe and Braintree both offer extensive subscription management tools along with their payment gateway and processing services. Add-on services such as Chargify, Recurly, and ChargeBee work with a variety of processors. Zoho Subscriptions and Freshbooks also offer recurring billing tools. PayPal offers recurring billing tools for its merchants; Square offers “recurring invoices” but not a lot of advanced customization for subscription billing.

Proper research will be very important when selecting a provider that offers all of the features you need, whether you require metered billing for usage-based online services, the ability for customers to upgrade to a higher tiered plan mid-billing cycle, the ability to offer free trial periods and extend them, or a way to calculate taxes. Tools that automatically update expired cards can also help reduce failed charges and therefore improve revenues and reduce customer loss.

Accepting Online Payments Without A Website

Most people equate taking payments online with having a website. That is the most common option, but you don’t actually need your own website. Let’s talk about a few of the alternatives for how to accept credit cards online.

Creating Online Invoices

You could create your own invoices in Microsoft Office and send them out via email, but then you’ve got to keep track of which invoices have been sent and which have been paid — and you’ve still got to deal with waiting for the check in the mail. Online invoicing solutions can eliminate every single one of these hassles.

Generally speaking, invoicing software is cloud-based, so you can access it anywhere. You can customize invoices and send them via email (or generate a shareable link to the invoice). But unlike old-fashioned invoicing, these invoices include a link to pay directly in the invoice. Your customers follow the link, enter their payment details, and bam! You get paid much quicker.

Depending on which invoicing software you choose, you can get some powerful features. For example, PayPal allows you to enable partial payments on an invoice if you are willing to accept installment payments. Square’s invoicing links up with the platform’s customer database, allowing you to send recurring invoices and even store customer cards on file to make getting paid even easier. Zoho Invoice, which starts at $0/month, also allows for a customer database, as well as project management (so you can generate an invoice based on the number of hours worked). Shopify offers invoice creation within its platform at no additional charge as well — and this feature is even available on the Lite plan.

For most merchants, Square Invoices may be the most appealing, as it’s available with a Square account at no additional charge. However, Shopify’s built-in invoicing will work for merchants who want to sell with or without a website. Merchants who need project management as part of their invoicing should look at Zoho Invoice.

Using Online Form Builders

So you don’t have a website, but you still need to collect user information and accept payment. Online form builders offer an easy way to do both. Plus, you can post links to forms on social media or send them out via email.

Off the top of your head, you might think of Google Forms, which is free to use and quite advanced for a freemium software. However, it doesn’t integrate seamlessly with payment processors. Your best option, in this case, would be to use PayPal’s embeddable buy buttons and include the button in the form’s submission confirmation page as a second step. However, you’ll have to manually reconcile the payment records versus form submissions.

Subscription-based form builders will cost you money but offer far more capabilities than Google Forms, including direct integrations with payment processors/gateways such as PayPal, Stripe, Square, and Authorize.net. Subscriptions generally work on annual or monthly plans, but one option, Cognito Forms, offers an entry-level plan that charges 1% of the transaction amount instead. (Note, that’s in addition to any processing fees.) Other form solutions worth looking into are Zoho Forms and Jotform. Zoho Forms starts at $10/month and includes unlimited forms and up to 10,000 submissions. It integrates with both PayPal and Stripe. Jotform’s paid plans start at $19/month and are limited to 1,000 submissions, but include integrations for quite a few payment processors, including PayPal, Stripe, Square, and even Dwolla. Cognito Forms’ paid plans start at $10/month plus 1% of the transactions and include up to 2,000 form submissions. Integrations include PayPal and Stripe.

And we haven’t even talked about event registration sites. There are a lot of them, but the one many people are likely familiar with is EventBrite. EventBrite allows you to put all the details of your event online and sell tickets — including setting multiple tiers of admission and promotion cards, automatically setting price changes for registration deadlines, and so on. You can even collect marketing data about your patrons, from their zip codes to how they heard about the event. Your event is searchable from within the EventBrite platform, allowing people searching for something to do to discover your event as well. EventBrite does charge fees on top of processing costs, but these can actually be passed onto event registrees, saving you some money at least.

Selling On Social Media

It wasn’t all that long ago that the idea of being able to buy products directly through social media channels was novel and experimental, but nowadays you can create your own online shop through Facebook, or sell on Instagram or even Pinterest.

With Facebook, you just need a Facebook business page to get started. You can choose your payment processor (PayPal or Stripe) and start manually uploading products, all of which have to be reviewed by Facebook before they can go live. An easier option is to link your Facebook shop to an online store builder such as BigCommerce, Ecwid, or Shopify.

Shopify is actually an interesting solution because, while its core offering is an online shopping cart, it offers a “Lite” plan for $9/month that includes access to its mPOS app, buy buttons for a website, and a Facebook store with automated tools to make the process easier. You wouldn’t necessarily have to go through the hassle of building a website with Shopify just to sell on Facebook, but you still get more tools than you would by going through Facebook directly. Check out our Shopify Lite review for an in-depth look at the plan and all its features.

Selling on Instagram requires you to have a Facebook shop (because Facebook owns Instagram) to create what it calls “Shoppable posts.” That shop can be managed directly via Facebook itself, or via Shopify or BigCommerce as one of multiple sales channels. I’d like to point out that Instagram isn’t available as a sales channel with the Lite plan; you’ll need to upgrade to Shopify Basic at $29/month to be able to manage sales via Instagram.

Lastly, Pinterest allows merchants with a business account to create “Buyable pins,” so you can sell from your Pinterest page. Unlike Facebook, where you can manage the buyable pins from the platform, to sell through Pinterest you will need to go through either Shopify or BigCommerce and actually apply for approval before you can start selling.

Shopify Lite is an ideal option if you want to start with Facebook and maybe add buy buttons to a website. You can upgrade to Shopify Basic ($29/month) to get your own site, plus access to Instagram and Pinterest if that appeals to you.

Selling In Marketplaces

Online marketplaces are a good alternative to having your own website if you’re selling retail goods. You don’t have to pay for hosting or invest anything in web design. You simply create your product listings using the tools provided and publish them. Marketplaces allow you to get your products in front of a large audience without you having to build a stream of traffic yourself. However, the trade-offs are that you generally pay more in fees (listing fees, seller’s fees, and payment processing) than you would with your own website, and you have zero control over the design of the site or even how your products are displayed. Generally speaking, you are limited to using whatever payment processing the marketplace offers as well.

A few popular marketplaces include:

  • eBay
  • Etsy
  • Amazon
  • Jet (owned by Walmart)
  • Ruby Lane

Accepting Payments Through Virtual Terminals 

The final alternative is a bit of a stretch, I’ll admit, but it can be a powerful tool for some merchants. A virtual terminal is a web portal where you can manually enter credit card information to process a transaction. (There’s the stretch: VTs require an internet connection, so they’re technically online payments.)  Virtual terminals are a necessity for merchants who want to accept payments over the phone (or even by mail).

Some payment processors offer a virtual terminal as part of their software package, others as an add-on. These providers include PayPal, Payline Mobile, Square, and Fattmerchant. However, if you want the best value for a virtual terminal, we recommend Square. You pay only the payment processing costs (3.5% + $0.15) and it is interoperable with the rest of Square’s platform.

Beyond Credit Cards: Alternative Online Payment Methods

Credit cards are the go-to for accepting payments online, but they aren’t the only options. For starters, there are ACH bank transfers, which are generally less expensive for merchants to process. They’re often preferred in B2B environments, but some consumers favor them too.

Offering ACH processing as an additional option, especially if you’re in the B2B space, could win you more customers. According to a 2017 Payment Benchmarks Survey by the Credit Research Foundation and the National Automated Clearing House Association (NACHA), ACH transfers currently account for 32 percent of B2B transactions, lagging behind checks, which took the no. 1 spot at 50 percent. Credit cards account for just 11 percent of B2B transactions. By 2020, the survey estimates that ACH will take the top spot and account for 45 percent of B2B transactions.

Despite this, most merchant accounts or even third-party processors don’t offer ACH by default. Some offer it as an add-on plan, others may require you to look for a supplemental option for ACH acceptance.

ACH is far from the only option as far as “alternative” payment processing now, too. Mobile wallets are bridging the gap between in-person and online payments, and card networks have implemented their own online checkout options for cardholders. The major advantage to accepting these options is that they offer an extra layer of security for consumers. For example, Apple Pay on the web still requires biometric authentication before approval.

Some of these alternative payment methods include:

  • Apple Pay on the Web
  • Google Pay
  • Microsoft Pay
  • Chase Pay
  • MasterPass
  • Visa Checkout
  • Amex Express checkout

Apple Pay and Google Pay are fairly widely supported, but you may not see the other options on this list everywhere.

Two noteworthy providers that offer ACH, as well as other alternative payment options, are Stripe and Braintree. However, both are developer-focused platforms, so you’ll need someone with the technical know-how to implement them. Merchant accounts that specialize in eCommerce and provide a solid gateway might offer these options too.

We recommend Stripe because of its extensive developer tools, customizable checkout, and resources for recurring billing. The company also offers round-the-clock customer support (an admittedly recent addition to its feature set). Plus, Stripe is great for international merchants who want to be able to accept localized currencies in Europe and Asia.

Begin Accepting Payments Online

Starting an online store and learning how to accept credit cards online can seem like a daunting task! There are so many factors to consider, but I hope I’ve been able to shed some light on the process and point you in the direction of some good options. A merchant account can give you security and stability, but it may not be the most cost-effective option for low-volume merchants. A third-party processor can get you set up quickly with predictable pricing that often favors low-volume merchants, but the trade-off is account stability. And of course there’s the matter of compatibility: You need to make sure that whatever payment processor you choose offers a gateway compatible with the software (and sales channels) you want to use.

But you also need to have a good idea of what you can afford to spend up front and on a monthly basis and understand your limitations when it comes to technology and software. If you want to go the DIY route, you’ll need to be fairly tech-savvy. Otherwise, be prepared to outsource tasks to designers, developers, and even admin assistants. Some software solutions make it incredibly easy to do everything yourself, others will require lots of hands-on effort to make them work.

If you’re still not sure where to go from here, we recommend you check out our article: The Best Online Credit Card Payment Processing Companies. You can also view our merchant account comparison chart for a quick look at our favorite providers.

Have questions? We’re always happy to hear from our readers, so please leave us a comment!

The post How To Accept Credit Cards Online appeared first on Merchant Maverick.

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Quick Business Loans: The 6 Best Lenders And 10 Tips For Fast Approval

Good things take time. Patience is a virtue. We all know the sayings. But let’s face it, when it comes to making critical business investments—whether it’s new technology/equipment, a new location, or even just a new employee on the payroll—you usually don’t have unlimited time to come up with the needed funds. A quick loan or line of credit is often the best bet to take your business to the next level (or simply keep your company afloat).

If you’re reading this article, you’re probably in a hurry, so let’s dive right in. Here is a list of the quickest small business lenders, followed by a list of general tips for fast loan approval.

6 Best Lenders For Quick Business Loans

The following are some of the fastest and most reputable small business lenders. There are a lot of speedy “payday” loans out there, but most of them are dodgy at best (and outright scams at worst) and will end in you paying back way more money than you anticipated. The following lenders are reputable, and while the fees might be higher than what you’d pay with a bank, the financing offered is much faster and easier to qualify for than a bank loan.

We chose these lenders based on their stellar reputation and user feedback, as well as our own experiences reviewing their services.

One term you need to understand before we get started is “time to funding.” This refers to the amount of time from submitting the initial application to when the funds arrive in your account.

Top Quick Business Loans At A Glance

categories OnDeck/Credibly LoanBuilder/BlueVine Fundbox/Kabbage

Borrowing Amount

$5,000 – $500,000

$5,000 – $500,000

Up to $100,000

Term Length

3 – 36 months

13 – 52 weeks

12 or 24 weeks

Required Time in Business

12 months

9 months

N/A

Required Sales

$10,000 per year

$42,000 per year

N/A

Required Credit Score

550

550

N/A

Review

Review

Review

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Borrowing Amount

$5,000 – $250,000

Up to $5 million

Up to $250,000

Term Length

6 – 24 months

13 weeks (invoice factoring)

6 – 12 months (line of credit)

6 or 12 months

Required Time in Business

6 months

3 months (invoice factoring)

6 months (line of credit)

12 months

Required Sales

$15,000 per month

$100,000 per year (invoice factoring)

$120,000 per year (line of credit)

$4,200 per month

Required Credit Score

500

350 (invoice factoring)

600 (line of credit)

N/A

Review Review Review

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1. OnDeck

ondeck logo

Time To Funding: 2–5 days

The Basics: OnDeck is one of the few reputable online lenders willing to lend to less-than-qualified candidates: to qualify for a short-term loan ranging from $5,000 to $500,000 or a line of credit up to $100,000, you’ll only need a credit score of 500, 12 months in business, and $100,000 annual revenue. OnDeck has somewhat higher factor rates than some its competitors in the short-term lending space, but they have a good reputation for transparency, and it might be worth paying the extra cost if you have poor credit and need fast funds.

The Application: OnDeck’s application is fast and easy, and they don’t ask for a lot in terms of documents.  To make the process even faster, have all of this information ready to submit:

  • Business Tax ID
  • Bank statements for the previous 3 months
  • Social Security number of business owner(s)
  • Driver’s license number and state of issue

When applying, take advantage of the live chat feature so that the rep can guide you through the application and answer any questions you might have. After you submit your application, a rep will typically reply with an offer within 24 hours, and after you accept the offer, the money will be in your account within one or two days.

Another cool thing about OnDeck for customers who want fast funds? If you have an eligible debit card linked to your business bank account, you can take advantage of OnDeck’s Instant Funding, wherein you can transfer your line of credit funds to your account instantly, rather than waiting the standard 1-2 days for an ACH transfer.

Apply For An OnDeck Loan

2. LoanBuilder: A PayPal Service

loanbuilder logo

Time To Funding: 1–3 days

The Basics: LoanBuilder, a business financing service offered by PayPal, can potentially put money in your account in just a day. Like OnDeck, LoanBuilder offers short-term loans of $5,000–$500,000. They will lend to applicants with bad credit and newer businesses as well (minimum credit score of 550 and 9 months in business).

LoanBuilder has moderately high rates, but these are competitive with or lower than those of similar lenders. Additionally, this lender does not charge an origination fee, which means no money will be subtracted from the total loan amount. Also, repayments are automatically deducted from your account on a weekly, rather than daily basis (unlike many other short-term lenders). Keep in mind that you will have a maximum of 12 months to finish repaying your loan, and the combination of weekly repayments plus a short repayment term means your loan repayments will be higher than they would be with other types of business financing products.

One great thing about LoanBuilder is that what you see really is what you get. All fees and terms are spelled out before you see the loan and you even have the option to adjust the loan terms to your liking to “build” the perfect loan. LoanBuilder has a tool that lets you tinker around with your prospective loan before applying. For example, if you want longer repayment terms, you can adjust the term and see how that will affect your weekly repayments.

The Application: To apply for a LoanBuilder loan, simply fill out a 5-10 minute online questionnaire. If your business is eligible, you will be able to fill out a complete application. In some cases, the only required documents might be four months of your recent business bank statements. LoanBuilder says that signed contracts received before 5 PM will lead to funds being deposited the next day so long as all documentation is in order.

In terms of ease, transparency, and the reputation for speed and quality synonymous with the PayPal name, LoanBuilder is a great choice for small businesses who want fast funding, even those with bad credit.

Apply For A LoanBuilder Loan

3. Fundbox

fundbox loans

Time To Funding: 1–2 days

The Basics: Fundbox provides invoice financing and revolving lines of credit up to $100,000. Repayment terms are for 12 or 24 weeks, depending on the product and what works better for your business.

Fundbox has no minimum credit score requirement or time-in-business requirement, making its line of credit product, “Direct Draw,” a good loan for businesses with poor credit or little time in business. Meanwhile, Fundbox’s invoice financing offering, “Fundbox Credit,” is a favorite of companies that have cash flow problems due to outstanding invoices; Fundbox will lend you the full value of the unpaid invoice(s) with a 0.5–0.7% weekly borrowing fee.

The only borrower requirement to qualify for Fundbox financing is that you use compatible accounting or invoicing software for at least 3 months, or a compatible bank account for at least six months.

The Application: To apply, simply make an account, enter some basic information (such as your name, email, and phone number), and hook up your accounting or invoicing software account or your business bank account. Fundbox typically makes a decision within minutes of receiving your application, after which you can start requesting funds immediately should you accept their offer.

Fundbox requires very few fees—you will not have to pay a draw fee or a prepayment penalty. Although Fundbox’s borrowing rates are higher than what you’d get from a bank, they are in line with other online lenders’ fees. Having a revolving line of credit like the kind Fundbox offers is also a good way to ensure you never need to take out another fast business loan, because you’ll always have access to cash on-demand.

All in all, Fundbox is one of the fastest small business loans around. It’s an excellent option for businesses that struggle with cash flow issues, especially less-established businesses that can’t qualify for a bank line of credit.

Apply For A Fundbox Loan

4. Credibly

credibly loan

Time To Funding: 2–5 days

The Basics: Credibly offers short-term loans and merchant cash advances with loan amounts of up to $250,000. This lender has relaxed borrower qualifications—to be approved for their business expansion or working capital loan, you only need a credit score of 500, 6 months in business, and revenue of $15,000 per month. For expansion loans, your average daily balance needs to be at least $1,000. As is the case with most business lenders, more qualified applicants will receive better interest rates.

The Application: To prequalify for a Credibly loan, use the easy online application to enter some basic information about yourself and your business. Credibly will then let you know whether you’re eligible and how much money you qualify for. If you’re eligible, a representative will call you and work with you to get the rest of the documentation you need. The docs you might need to supply include:

  • Business lease agreement or business mortgage statement
  • Picture ID of all business owners
  • Most recent business tax return
  • Bank statements for the last 3 months

After you send all the documents, it typically takes about a day to receive a finalized quote. Should you accept the offer, it takes about 1-3 days to receive the funds in your account. Note that while Credibly advertises 48-hour funding, that means you will receive the funds within 48 hours from the moment your loan application is approved.

We like Credibly for their transparent terms, easy application, low borrowing prerequisites, and responsive customer service.  Credibly is one of the few, well, credible players in the short-term lending space.

Apply For A Credibly Loan

5. BlueVine

Time To Funding: 2–7 days

The Basics: BlueVine offers invoice factoring as well as traditional lines of credit up to $5 million. Borrower qualifications vary by product. The minimum required personal credit score for a 6-month line of credit is 600. The minimum score for invoice financing is just 530; for this type of financing, your customers’ creditworthiness is a bigger consideration than your own.

The Application: The process to pre-apply for either the invoice financing or line of credit service is fast and simple: simply create an online account and answer some basic questions about yourself and your business. You’ll also need to provide either the most recent three months of bank statements or allow read-only access to your bank account. A BlueVine rep will then call you and walk you through the process and answer any questions.

Initial approval for either service takes about a day. Once you are approved, you can begin drawing from your credit line or selling invoices immediately. Money transfers normally take one to three business days. If you’re selling an invoice from a customer unfamiliar to BlueVine, it will take an additional 24 hours to see the funds in your account, because BlueVine has to assess your customer’s creditworthiness.

Apply For BlueVine Financing

6. Kabbage

Time To Funding: 2–3 days

The Basics: Kabbage is one of the quickest channels to get a business line of credit. Kabbage sells lines of credit up to $250,000, with zero required collateral – no blanket lien and no personal guarantee. Kabbage also provides borrowers with a spending card so you can spend funds from your line of credit instantly, without having to wait the typical 2–3 days for an ACH transfer period.

Note that Kabbage is bad-credit friendly and does not have a specific credit score requirement. However, the service not suitable for startups; to qualify, you need 1 year in business and must have made at least $4,200 for the last 3 months. It’s also important to keep in mind that while Kabbage is super convenient, this convenience isn’t free—fees are on the high side, and you’ll have to pay back your loan in just 6 to 12 monthly payments. Nevertheless, Kabbage a fast and easy way to get a line of credit if you don’t qualify elsewhere.

The Application: When applying for Kabbage financing, you will have to allow read-only access to your business bank account and any other data channels you use (such as PayPal or QuickBooks). Kabbage uses this information to determine your monthly fee and maximum credit line. Usually, it only takes a few minutes for the system to decide whether to approve or deny your application. Kabbage might request additional information in order to grant you a credit line larger than $150,000.

When you have been approved, you can begin requesting funds immediately. As mentioned, you can also request a Kabbage Card free of charge to pay for goods and services right from your credit line.

Apply For A Kabbage Line Of Credit

Which Loan Should I Apply For?

So, now you know of some quality lenders that can put money in your account within days of your application. To determine which loan is right for your business, consider the services they offer (and how well these services meet your needs) and whether you meet the lender’s minimum qualifications, which are as follows:

  • OnDeck: Short-term loans up to $500,000 and lines of credit up to $100,000; need 12 months in business, 500 credit score, and $100,000 in annual revenue
  • LoanBuilder: Short-term loans up to $500,000; need 9 months in business, 550 credit score, and $42,000 in annual revenue
  • Fundbox: Revolving LOC and invoice financing up to $100,000; need to have been using compatible invoice or accounting software for 3+ months, or compatible business bank account for 6+ months.
  • Credibly: Short-term loans up to $250,000; need 6 months in business, 500 credit score, and $15,000 in monthly revenue.
  • Bluevine: Lines of credit and invoice financing up to $5 million; for invoice financing need 3 months in business, 530 credit score, and $100,000 in annual revenue; for 6-month line of credit need 6 months in business, 600 credit score, and $120,000 in annual revenue.
  • Kabbage: Lines of credit up to $250,000; need 12 months in business and monthly revenue of $4,200 for the last three months, or $50,000 annually (no specific credit score requirement).

Note that if you only meet the bare minimum requirements, you may not be eligible to borrow the maximum amount advertised by each lender; your qualifications will determine how much money you can borrow.

The above loans are unsecured (meaning they don’t require you to list any specific business collateral), though borrowers may have to sign a blanket lien and/or a personal guarantee.

Fast Loan Approval Tips

How fast your loan is approved and received depends in large part on you. For example, if you procrastinate in turning in the necessary documents needed to get approved for a loan, or you apply for loans you aren’t qualified for, you will be wasting precious time!

What follows are some general recommendations to ensure a speedy time to funding. This includes pre-application preparedness tips to make your application process quicker, advice on what to include in your application in order to get approved fast, and considerations as to which type of quick loan you should apply for.

1. Check Your Credit Score

First, you want to check your personal credit score so you don’t waste time applying for loans you’re not eligible for. Of course, if you want to position your business to get good rates on a “quick” loan, you’ll want to your credit score to be as high as possible. While improving your credit is not something you can do overnight, before applying for loans, be sure to at least check your credit history to see if there are any major issues. Also, pay off whatever outstanding debts you might have (if you can afford to do so).

To check your credit score before you start applying for fast loans, you can use one or more of these Best Free Credit Score Sites. And whatever you find, don’t worry—there are still plenty quick financing options even if your credit score isn’t high enough to qualify for every loan.

2. Have Your Documents Ready

Having all your business documents ready and in one place will make for a speedier application process. Here are some examples of documentation the lender might ask for:

  • Tax returns (personal and business)
  • Seller’s permit
  • EIN certificate
  • Business license
  • Balance sheets
  • Bank statements
  • Proof of ID
  • Proof of address
  • Incorporation paperwork
  • Copy of business lease

Different lenders may require different and more/fewer documents. It’s a good idea to find out what paperwork the lender requires before you get pre-approved.

3. Prepare A Proposal

Many lenders require your loan application to include a detailed proposal and/or a business plan. This is often true even of “quick” loans. A proposal generally includes information such as how much money you need, what you will use the money for, and how you will repay the loan. As with your all your important business documents, the loan application process will be speedier and smoother if you have this information prepared and ready to go before you apply.

This resource from the SBA includes the information you should include in a loan proposal – although you should note that the SBA requires more information than do most “fast loan” options.

4. Be Thorough On Your Application

The more relevant information you reveal about yourself and your business on your loan application, the better. The whole process will be faster and less painful if you provide everything upfront. That way, there will be less back and forth between you and the lender as they work with you to get the information you didn’t supply initially. You are also more likely to get approved for a loan if you have a more thorough application.

5. Consider All Your Options (Even Unconventional Ones)

Assuming you have all your ducks (and docs) in a row, it’s time to look at your best options in terms of financing. In some cases, you might not even want to get a “loan” in the traditional sense; a line of credit or cash advance might be a faster or better option for you, depending on your situation. If speed is of the essence, you should consider the following loan products, through which you can potentially get funds as soon as a day or two of applying:

  • Short-term installment loan
  • Short-term line of credit
  • Merchant cash advance
  • Equipment financing
  • Invoice financing

You also might want to consider the following unconventional financing options:

  • Peer-to-peer loans
  • Business crowdfunding
  • Personal loan
  • Microloan

All fast financing options have their own pros and cons, of course. Merchant cash advances, for example, tend to be some of the most expensive forms of capital, though they are usually the fastest. Of the unconventional options, P2P loans and personal loans tend to be the fastest, but you’ll generally need to have good personal credit in order to qualify for these options.

6. Apply For Online-Only Loans

So here’s the quick-and-dirty about bank loans vs. online loans: bank loans are not only much more difficult to qualify for, they also take a lot longer to come through than online loans. If you want your loan fast – potentially even as soon as a day or two – online is the way to go. Interest rates are typically higher than with bank loans, but if you shop around, you might be able to get a low-interest small business loan online, especially if you have good credit.

7. Use A Loan Aggregator

A loan aggregator service lets you apply for multiple online business loans at once. Using a service lendio logolike Lendio you can fill out a single application with your business information and be pre-approved for multiple loan options. This is one of the quickest way to apply for online loans, as you save the time it takes to apply for multiple loans individually. Loan matchmaking services are also typically free; if you do accept a loan offer, the lender pays a referral fee to the matchmaker. You never have to pay the matchmaker directly.

Compare loans with Lendio

8. Consider An Online/SBA Loan Hybrid 

If you’re looking to borrow from the SBA, you probably know this isn’t the fastest form of financing around. And if speed is your top priority, you probably shouldn’t bother applying for an SBA loan, bank loan, or any other type of long-term loan. With that said, the SBA offers high quality, low-interest loans, and if you qualify for one, it might be worth waiting a little extra time for. To make the SBA loan application process faster and easier, you can apply for an online/SBA loan hybrid.

SmartBiz is one example of an online service that facilitates SBA-backed loans. Your funds might still take up to a few weeks to come through, but it will be quicker than applying directly through the SBA.

9. Don’t Forget About Your Business Credit Card

Taking out a business loan isn’t your only option if you need fast cash. You can also charge major expenses on your business credit card and pay them off later as you are able. Be sure to check out the Best Business Credit Cards for 2018 to find a good credit card that earns rewards and doesn’t charge an exorbitant amount of interest.

If you need a large sum of liquid cash, you might also consider a credit card cash advance. You need minimal qualifications in order to qualify for such an advance; if you have a business credit card, you will probably be approved for an advance. Once you sign up for your card’s cash advance program, you can typically begin withdrawing cash right away.

The downside to credit card cash advances is that the APR and cash advance fees are usually quite high. Since you’re borrowing against your own credit limit, this can also temporarily lower your credit score by affecting your credit utilization ratio. Nevertheless, credit card advances are a fast and easy business loan alternative available to virtually anyone who has a credit card.

10. Don’t Be Too Hasty

Finally, when getting a fast business loan, it’s important to take your time and read the fine print. In many cases, the super-quick “next-day” loans you find online will have less than ideal terms. You’ll likely have to pay your loan back rapidly at a high rate of interest.

Ideally, of course, you will find a great lender that gives you a fair rate and terms. Check out our Small Business Loan Calculators to calculate your total repayment, financing cost, daily/weekly/monthly payments, APR, and cents on the dollar.

Final Thoughts

Fast business loans can serve as a lifesaver for businesses that need working capital, have cash flow problems, and other financing issues. Although banks can take weeks to issue business loans (if you can even get approved for one), alternative lenders can put money in your bank account within a couple days. However, the reason that online/alternative lenders are willing to give you money so quickly is that you are paying a premium for speed—meaning, you’ll pay more than you would for a bank loan, and you’ll pay the loan back much quicker than you would other types of financing.

To avoid getting ripped off by a predatory lender or agreeing to a bad loan because you are desperate, be sure to compare multiple loan offers. It’s important to do your due diligence to ensure you get the best loan possible, i.e., the one with the lowest fee and repayments you can reasonably afford. Remember that you can pre-apply for multiple loans online without affecting your credit score.

Bear in mind that there are indeed some legitimate, quality lenders (like the ones on this list) that provide quick capital. What’s more, you can take certain actions to speed up your loan application process and time to funding. Be sure to organize and present all your business documentation at the start of the application process. And save time by applying for multiple loans at once with a loan matchmaker service like Lendio.

Lender Borrowing Amount Term Interest/Factor Rate Req. Time in Business Min. Credit Score Next Steps
$2K – $5M Varies As low as 2% 6 months 550 Apply Now
$5K – $500K 3 – 36 months x1.003 – x1.04/mo 12 months 500 Apply Now
$5K – $500K 13 – 52 weeks x1.029 – x1.1872 9 months 550 Apply Now
$20K – $500K 1 – 4 years 7.99% – 29.99% APR 2 years 660 Apply Now

The post Quick Business Loans: The 6 Best Lenders And 10 Tips For Fast Approval appeared first on Merchant Maverick.

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How to Analyze Your Credit Card Processing Statement

Here at Merchant Maverick, we’ve received countless questions over the years from concerned business owners regarding their merchant account statements. In fact, our website owes a large part of its very existence to the complex pricing, convoluted statements, and hidden markups that are hallmarks of the card processing industry. This is the unfortunate state of affairs that keeps us researching, writing, and advocating for small business owners.

Questions we frequently field from our readers about their processing bills include:

  • Am I paying too much for card processing? (That’s the big one everyone wants to know!)
  • Why did my processing costs suddenly go up this month?
  • What is this unexpected/oddly-named/junky-looking fee? Is it legit?
  • Is there anything I can do to lower my costs without changing providers?
  • Should I change account providers?

Only a thorough understanding of your own statements will yield the answers to these important questions. The inherent difficulty of the task is that you can’t completely rely on your provider’s statement guide, nor its sales or customer service reps, to explain all the fees. If your account provider is being sneaky about extra markups and unnecessary fees, the responsibility falls directly on you to decipher what’s really going on.

There’s no one-size-fits-all method for analyzing a statement, because every business and situation is a bit different. Still, there are definitely some foundational concepts that should help demystify the process. For example, here’s one quick tip to kick things off: Examine more than one statement side-by-side to avoid missing anything. Often times you need two months of statements just to completely view one month’s worth of charges. So, grab at least two or three consecutive statements and let’s get started!

Detail Vs. Big Picture

Analyzing a processing statement is always a balancing act between the details and the big picture. If you’re worried about a questionable charge, or suspect you’re paying too much overall, you may need to check every fee on your statement to identify its source and confirm the amount is what it should be. I’d encourage all merchants to at least give this a try on a few statements. If anything, you’ll verify that the fee schedule from your merchant agreement was implemented as you expected.

On the flip side, you actually needn’t worry too much about all the individual fees and rates on your statement if you track the big picture numbers (your overall costs) month-over-month. As long as the big picture amounts remain reasonable and consistent, you’re pretty much good to go. If they do change significantly, though, you’re back to looking at the details of your statement to figure out why. Fortunately, if you’ve already mastered the baseline details of your statements, you’ll easily identify the culprits that are most impacting your costs.

In short, understanding the interplay of your big picture numbers (what you’re paying overall) and detailed costs (why you’re paying it) is the best way to protect yourself from paying too much.

With that bit of philosophy out of the way, let’s look at the main big picture percentage that all merchants can calculate.

Effective Rate

Your effective rate is the “all-in” percentage rate you’re paying for the privilege of accepting card payments. All business owners should take a first crack at calculating this rate before conducting any detailed analysis. It’s a simple formula:

(Total monthly fees / Total monthly sales) x 100 = Effective Rate

By total monthly fees, we mean processing charges, gateway fees, statement fees, monthly fees, equipment leases, weird fees you can’t figure out — everything. Sometimes you can grab these numbers from a summary section, as below:

calculating-effective-rate-statement

$5,907.03 / $98,511.45 = 0.0599, or an Effective Rate of 5.99%

I still always recommend calculating your effective rate again once you’ve analyzed your statement in full. That way, you can ensure your summary section didn’t sneakily omit any charges. You’d be surprised how often this happens. (Or, maybe you wouldn’t be!)

Your effective rate provides a basic answer to “How much am I being charged for card processing?” and “Am I paying too much?” The precise answer to that second question is, of course, more nuanced for each business. For a large retail corporation, a 2.5% effective rate might be too high. For a high-risk ecommerce operation with lots of small transactions, 4.5% might be a screaming deal. Even with this variation, however, the effective rate gives you an important birds-eye view of where you stand.

Types Of Fees

You’re probably already aware that there are multiple layers to the card processing industry. Not surprisingly, each entity involved takes a cut of your card sales in one form or another. We’ve covered a lot of this territory in our complete guide to rates and fees, but I’ll quickly recap the main players in the industry, and whether they each charge wholesale costs (fixed throughout the industry) or markups (variable and negotiable depending on your business situation and account provider).

Wholesale

  • Card Networks: We’ve all heard of these folks — Visa, MasterCard, and the like. These associations take their cut of processing costs in the form of card association fees and assessments. If you don’t think you’d be able to recognize these charges on your statement, head over to our card brand fee article for an explanation and full reference list.
  • Card-Issuing Banks: The banks that have issued credit and debit cards to your customers charge interchange fees — the cost of running each individual type of card and transaction. The card associations actually set these fees for the issuing banks, and also publish and frequently update lists for merchant reference.

Not everyone will be able to see pure wholesale costs on their statements. This is because sometimes wholesale costs are passed through directly to merchants, while in other cases they’re blended in with markups. This mostly depends on your pricing model (we’ll have a section on that topic coming up). Still, regardless of what “should” be happening with wholesale charges according to your pricing model, it’s worth checking to see if any have been passed through to you, and if the amounts are correct. Interchange fees are usually pretty easy to spot — they’re typically in a giant itemized list if you can see them at all. Card brand fees can be more difficult to identify, so definitely consult a reliable reference list.

Markup

Everything besides those two types of wholesale fees we’ve just discussed counts as a markup. Here are the main players that add costs above wholesale:

  • Processor/Acquirer: You may know some of the big ones — First Data, TSYS, Vantiv/Worldpay, Chase, Elavon, etc. These entities are also usually involved with an acquiring bank (e.g., Wells Fargo or B of A) if they aren’t already one themselves. The processor behind your merchant account can add its own extra fees and markups.
  • Merchant Service Provider (MSP): This is the entity that actually sets up and manages your merchant account — the company you interface with most directly. You also access your monthly statements through your MSP, even though the statement might have the big processor’s name across the top. You may have signed up for your account with the MSP department of one of the large processors we’ve already mentioned, or you may have used a separate MSP/ISO that has teamed up with one or more processors to provide accounts. Regardless of the setup, your merchant services provider adds its own markups as well.
  • Additional Service Providers: Charges from other third parties (such as gateway or equipment providers) may also show up on your merchant account statement.

A word of caution about “pass-through” fees: Just because your MSP claims to be merely “passing through” a fee to you “at cost,” doesn’t necessarily mean it’s a wholesale charge (from the card associations or card-issuing banks). As you can see above, the big processor/acquirer behind the scenes may also charge its own fees and markups, and often other third-party equipment and software providers do as well. These “pass-through” fees should be counted as variable markups, even though your MSP may not see any money from the charges.

Effective Markup

If you can see all interchange fees and card brand fees (wholesale costs) itemized on your statement, you can calculate your effective markup. Let’s take a look at what this is, and why it’s an advantageous number to crunch if you can swing it.

Remember, the markup is the piece that varies between MSPs. Not only can the overall amount vary widely, but the way markups are charged is also variable between providers. For example, one MSPs might charge a low markup percentage on your individual transactions, but several different monthly fees as well. Meanwhile, another MSP might charge a high markup percentage on transactions, but hardly any monthly fees. Which one’s a better deal? This is why it’s good to know your markup as an overall percentage.

You’re effective markup not only lets you know how much you’re really paying in controllable costs each month, but it’s also a handy figure to have if you’d like to compare your statement with other merchant account offers.

Here’s the basic formula (always multiply by 100 to convert to a percentage):

Markup Fees  / Total Sales = Effective Markup

Depending on how your statement is laid out, here’s another way to think of the calculation that might be more helpful:

[Total Fees – (Interchange Fees + Card Brand Fees)] / Total Sales = Effective Markup

I like this second way because it’s a clear process of elimination. Once you’ve got all the wholesale fees accounted for and subtracted away from your total fees, you automatically know everything else you’re charged is a markup.

You might have a summary section on your statement that divides up your fees in such a way to make this calculation simple. It’s more likely, however, that you’ll have to pick through your statement to make sure you understand your pricing structure and the true classification of each fee before you can add up the numbers and perform the effective markup calculation with confidence. Call me paranoid, but I have a mistrust of so-called “summary” sections on statements. Been burned way too many times!

What if you can’t calculate your effective markup at all, because your statement doesn’t make it possible to see all wholesale fees separately? That’s fine — just focus on tracking your effective rate for now. It’s not as telling a number as your effective markup, but it’s an excellent starting point for staying on top of your costs.

Pricing Model

Knowing your pricing model is absolutely critical to understanding your statement, so if you don’t already know it, now is the time to figure it out! We have an article that walks you through the process of identifying your pricing model by looking for specific, telltale signs on your statement, as well as in-depth articles on each of the four main models most MSPs offer.

We’ve already alluded to the fact that your pricing model determines whether or not you can distinguish wholesale costs from markups. You’ll never know exactly where you could be saving money (or where you’re getting ripped off) if you can’t make this distinction.

This is a complicated topic, so it may take you a while to wrap your mind around which model you have and how it impacts your statement. That’s okay — take your time. We do also occasionally come across some interesting hybrid models, so if you still need assistance figuring out your model, feel free to reach out to us.

So, how do the pricing models work? Well, the models were developed based specifically on interchange fees and whether or not they are blended in with MSP rate markups. (Card brand fees are not tied as tightly to your pricing model, so I’d just recommend checking your own statement to see if any are passed through.) Below are links to articles on each of the models, as well as a super-brief overview of each.

Interchange separate from markup:

  • Interchange-Plus (Cost-Plus) Pricing: Interchange rates are itemized and passed through separately from the MSP markups. Rate markups typically include a percentage markup and a per-transaction fee markup.
  • Membership (Subscription) Pricing: A version of interchange-plus pricing in which a monthly membership fee is charged as a markup in lieu of a percentage markup over rates.

Interchange blended with markup:

  • Tiered Pricing: Interchange rates are blended in with markups to create multiple rate tiers.
  • Flat-Rate Pricing: Interchange rates are blended in with markups to create a flat processing rate (most often used by merchant aggregators like Square, Stripe, and PayPal — not traditional MPSs).

In theory, you should be able to calculate your effective markup if you have one of the first two models, because wholesale fees are kept separate. This is one reason we favor MSPs that offer transparent interchange-plus or subscription models to all merchants. For the other two blended plans, you’ll need to stick to monitoring your effective rate only.

Billing Cycle

Beyond understanding your pricing model, you should be aware of exactly when you’re charged the various fees and rates due on your account. A closer look at your billing cycle could potentially reveal that you’re not calculating your effective rate properly, or that you’re paying higher processing rates than you originally thought. Here are a couple of tricky billing methods to watch out for:

Daily Discount (Vs. Monthly Discount)

“Discount” here refers to your card processing fees (as opposed to scheduled monthly fees). Your discount method is totally irrespective of your pricing model. Most merchants are on a monthly discount plan, meaning their discount fees are all charged in one lump sum at the same time as the rest of their scheduled monthly fees. In other words, you receive gross deposits from your batch settlements throughout the month, and then pay all your discount fees along with all other scheduled fees all at once.

On a daily discount cycle, your discount fees (or a portion of them) are deducted from each batch settlement as the month progresses. This leaves you with net deposits from your batches, and all your other scheduled fees are charged in a separate chunk. You can often tell if you are on a daily discount cycle if your statement contains terms like “less discount paid,” or shows net versus gross amounts in sales columns. With daily discount, you must be careful to add the discount fees you’ve already paid throughout the month to the other monthly fees you still need to pay. Don’t be mislead by the “total charges” figure, which may not include the discount fees you’re already paid.

Add together the “less discount paid” of $168.03 and “total card fees” of $50.95 to find the actual amount that is paid for the month: $218.98!

Billback

This is a rolling billing method that is technically different from (but often combined with) both a daily discount setup and a tiered pricing model. On a normal tiered plan, you’re charged the different rate tiers (qualified, mid-qualified, non-qualified) for your transactions all in the same month. With billback, however, you are charged the qualified (lowest possible) rate for all your transactions first, but then charged a fee the next month to recoup all the extra cost for any higher-tiered transactions you ran.

With this rolling system, you actually need two months of statements to even calculate your effective rate for a given month, since your charges for one month are split over two months — possibly more. Even worse, the Enhanced Billback method (a.k.a. Enhanced Recovery Reduced) adds an additional markup to the next month’s recouping fee. You may see BB, EBB or ERR abbreviations (along with a past month’s abbreviation) listed on your statements if you’re in a billback situation, but you may just need to spot the extra fees on your own.

enhanced billing merchant services

Billback statement: Extra fees for April transactions charged in May.

Nitty-Gritty Numbers

As we discussed at the beginning of the guide, you needn’t identify every fee every month into eternity, but I’d strongly recommend going for it on a few statements. Maybe you’re just curious and would like to become a more cost-savvy merchant, or maybe you suspect a hidden fee, or maybe your processing bill has spiked lately and you want to know why. Not to mention, sometimes statements contain run-of-the-mill mistakes that need catching! After all, not all MSPs are pure evil. Just most of them.

Of course, I can’t tell you every fee you’ll ever see on a statement and whether it’s legit. What I can do is offer you a few general tips I’ve found helpful as I’ve analyzed statements:

  • Identify Percentages vs. Dollar Amounts: Costs may come through as percentages of sales volume, per-transaction fees, or flat fees. At times, half the battle is just confirming which fees are percentages and which are dollar amounts, because they may all be shown in decimal form (and all mixed into the same columns!). The good news is that a quick calculation of your own can usually confirm which are which.
  • Use Fee Guides: Absolutely make use of any statement guide from your provider, but also check out an outside resource or two. Our fee guide lists the common fees you’ll encounter on a statement, and our fee infographic shows the typical cost range of many standard charges. I know I’ve said this a bunch of times already, but you’ll also need a good card brand fee reference list to confirm these fixed-yet-esoteric charges.
  • Ask Yourself Fee ID Questions: As you work through each charge, see if you can answer the following queries:
    • Who charges this fee/rate? (see “Types Of Fees” section above for possible culprits)
    • Is this charge a markup, wholesale cost, or a blend of the two?
    • Is this wholesale charge correct according to interchange tables or the card brand fee list?
    • Is this markup (or blended cost) correct according to my merchant fee schedule from my MSP?
  • Don’t Trust The Layout: We’ve dissected some horrifically disorganized statements over the years, which has only confirmed in my mind that you simply cannot rely on the sub-headings on a processing statement to properly categorize your fees. Wholesale fees are very often interspersed with markups and vice versa, so be on your guard. I’m particularly vigilant about “authorization” sections —  the perfect hiding spot for extra per-transaction fees.
  • Don’t Trust Fee Names: This last tip sounds strange at first, but hear me out. Names and abbreviations for fees have little standardization across the industry — even wholesale fees that are supposed to be the same for everyone! This makes it all the more difficult to identify extra or padded fees on a statement. If you’re trying to pin down a particular charge, it’s often best to consider the amount first while taking the fee’s name with a grain of salt. Here’s one good rule of thumb: Just because a charge has a card brand abbreviation in front of it doesn’t guarantee it’s all from the card brand!

Poor layout example: An MSP markup fee buried in the middle of a giant alphabetical list of wholesale card brand fees. And, the section name is just “Other Fees.” Not cool! (Note: this is an old statement with non-current card brand fee amounts)

Fine-Tuning Fees

We’re about take this detailed numbers analysis thing to the next level. Ready?

So, remember how we said that wholesale fees are fixed, non-negotiable and completely out of your control, and that markups from your MSP are the variable, negotiable costs of processing? Well, in reality, this is a slight oversimplification of the system. There are some nuances and gray areas that once recognized on your statement can help you catch problems, and potentially even adjust your processing habits to save money.

  • Avoidable Penalty Fees: Most card brand fees are simple, blanket assessments on your transactions, but others are in place specifically to punish you for not following the proper protocols for authorization and settlement. They’re small fees, but can add up fast if they’re applied to a large portion of your transactions. If you’re seeing a lot of transaction “integrity” type fees, you should take the initiative to find out why this is happening. (While we’re on the topic, don’t forget that MSPs can also charge avoidable penalty fees — a PCI-non compliance fee is one common example.)
  • Optimizing Interchange Rates: While interchange rates themselves are fixed and pre-established across the processing industry, you may have more control over which categories of interchange your transactions fall into than you think. The process of ensuring you get the best interchange rates possible is called interchange optimization. B2B transactions using commercial cards can be processed with additional Level 2 and Level 3 data to get the optimal interchange rate, for example. Transactions can also end up “downgraded” to higher-cost interchange categories if you do not authorize and settle them properly (in this way, downgrades are basically another type of penalty fee). Interchange downgrades happen more commonly to card-not-present businesses because there is more margin for data-entry error and omission than when cards are read directly by processing equipment. Common statement codes for downgraded interchange rates include EIRF (electronic interchange reimbursement fee) and STD (standard). It’s normal for a few transactions to be downgraded, but if you’re seeing interchange downgrades on the majority of your transactions, this is a definite red flag.

This merchant’s largest Visa Card Brand fee for the month was $25.30 for 253 transactions that didn’t follow proper authorization/settlement procedures. It’s likely these transactions are getting downgraded to higher-cost interchange categories as well. The merchant should look into adjusting its processing procedures to avoid these unnecessary costs.

Pulling It All Together

After you’ve worked through the details of your 2-3 consecutive statements, it’s worth repeating your effective rate calculation on each one, just to ensure you didn’t miss any charges. You may have also spotted an extra or padded fee here and there that you’re ready to confidently take up with your MSP. You should also be able to locate any anomalies that occurred during a given month (e.g., excessive penalty fees, chargebacks, one-time incidental fees, etc.) that may have impacted your effective rate.

If your statements itemize interchange rates and card brand fees separately from markups (interchange-plus or subscription models only), you’re finally ready to do that magical effective markup calculation accurately. Remember to only count interchange fees and card brand fees as true wholesale. Everything else is technically a markup!

Final Thoughts

We’ve covered a lot of ground in this guide, but hopefully you’re ready to tackle some big picture calculations (like your effective rate), as well as better identify any specific “what the heck is that?” charges from your statement. If you’re ready to become the consummate master of your processing statements from here on out, the first step will be to get on a cost-plus pricing model (interchange-plus or subscription/membership). This is the only way you’ll see what you’re paying each month above wholesale processing costs that are largely out of your control. All but very small merchants will benefit from one of these pricing models from a trustworthy MSP. If you’re not on a cost-plus plan already, make it a priority if you change providers.

Meanwhile, keep on tracking that effective rate (and effective markup if your statement allows) month-over-month for the lifetime of your merchant account. Once you’ve got a handle on your statement, it will be totally worth the 12 seconds the calculation will take you each month. I’m a super detailed-oriented person as a matter of principle, and even I give you my blessing to pretty much ignore all the stupid little fees and markups your processor or MSP may charge, as long as you’re satisfied your big picture numbers are remaining sensible and consistent. Just know I’ll send you right back into the details if those effective numbers go up!

Still need help with pricing or statements? Check out the transparent pricing of our highest-rated merchant account providers, or try these additional resources:

  • Never Overpay for Credit Card Processing Again
  • How Much Should You Pay for Credit Card Processing?
  • How to Negotiate the Perfect Credit Card Processing Deal

The post How to Analyze Your Credit Card Processing Statement appeared first on Merchant Maverick.

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Webbased.com: An Alternative To Website Builders

webbased

As a reviewer of website builders, you might say I have a vested interest in promoting the main idea undergirding the DIY website builder: The notion that anybody, given access to inexpensive online editing tools, can create a perfectly functional website for their business or for themselves. However, there are plenty of reasons why a prospective website owner might seek to go another route. Perhaps you want more functionality out of your website than Squarespace or Wix can provide. Or maybe you simply have more pressing business or personal priorities than personally creating the website you want.

An obvious alternative to using a website builder is to hire a web designer to create your site. Sadly, this option is out of the reach of anybody who doesn’t have thousands of dollars (or more) on hand to spend on a website. That’s where intermediary web companies like Webbased.com come in. Webbased.com is a company that offers a variety of web services, including web design, SEO, support, and marketing. It’s meant to be kind of a one-stop shop for getting your website created, marketed, and monetized. Let’s take a closer look at what they have to offer.

Webbased.com: Services Offered

Here are the service packages webbased.com has to offer:

  • Web design services
    • 5 to 15 unique page designs
    • $99/month to $249/month
  • Local search engine optimization
    • Get found by local clients
    • $299/month to $999/month
  • National search engine optimization
    • Boost your search rankings in Google, Yahoo, and Bing
    • Get a marketing dashboard with stats
    • $698/month to $2978/month
  • Pay-per-click management (eCommerce)
    • ECommerce PPC management — best for businesses with products with SKUs
    • $158/month to $298/month
  • Pay-per-click management (local)
    • Increase brand exposure in a specific geographic area
    • $218/month to $1480/month
  • Pay-per-click management (national)
    • PPC management services
    • $478/month to $3198/month
  • Pay-per-click management (retargeting)
    • Boost your ROI by re-engaging previous users
    • $158/month to $398/month
  • Animated video explainer
    • Boost your conversion rates with explainer videos
    • $199/month to $529/month
  • Video production services
    • Get videos made for any marketing purpose
    • $249/month to $625/month
  • Social media management
    • Social media team manages your social media presence
    • Detailed auditing and reporting
    • $199/month to $999/month
  • Logo design services
    • $299 (one-time charge)
  • Landing page design
    • $229/month
  • WordPress maintenance and hosting
    • Get maintenance, security, and updates for your WordPress site
    • $44.99/month to $99.99/month
  • WordPress optimization and performance tuning
    • $99/month to $369/month
  • WordPress support and help
    • Get updates and maintenance on your WordPress website
    • $59 (one-time charge)
  • Merchant services
    •  Better rates than PayPal and Square
    • Fully integrated into your site
    • $20/month

Additionally, if you have an existing business website, webbased.com will analyse your site, free of charge, and send you a report assessing your site based on a number of metrics: speed, security, page views, conversion rate, mobile-compatibility, and SEO.

Here’s webbased’s full list of services, detailing everything that’s included in their product packages along with pricing.

Customer Service & Support

Webbased.com provides a plethora of ways to get in touch with a company rep. In addition to the standard email contact form, there’s a phone support line and live chat. There’s even a chat room you can join between the hours of 9:30 AM and 2:30 PM Pacific in which you can chat with Webbased’s developers about any issues you might have with your website.

Reviews Of Webbased.com

On its website, webbased.com actually directs users to review their services on both Google and Yelp — a sign of confidence in its products. The reviews posted by customers on these two sites are almost entirely complimentary, with users praising both the services offered and the customer support they received. One user’s opinion is fairly representative:

They provided creativity, valuable feedback, analysis and guidance in designing our logo, website, SEO optimization and producing our live company video.

The users with complaints get replies from the company — it’s always good to see companies responding in good faith to the complaints of their users.

Final Thoughts

Not everybody has the time and/or patience to build a website on their own, and it’s not easy for the layperson to personally negotiate with individual web designers over the particulars of services and pricing. Services like webbased.com help give aspiring webmasters the ability to select from a menu of services to get exactly what it is they need in a website. If you feel like passing on the heavy cyber-lifting to a team of experts, webbased.com is worth investigating.

The post Webbased.com: An Alternative To Website Builders appeared first on Merchant Maverick.

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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
Read Review Read Review
Visit Site Visit Site

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.

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

The post The Cheapest Credit Card Processing Companies appeared first on Merchant Maverick.

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Best Cash Flow Loans For Small Businesses 2018

Best Cash Flow Loans For Small Businesses

You can’t run your business with an empty wallet. In life, money isn’t everything, but in business, cold hard cash is what makes the world go round. It’s what lets you continue your sales operations, pay your employees on time, manage your operating expenses, and turn a profit.

But what do you do when cash is running low or not coming in as quickly as you like? One option is to take out a business cash flow loan.

Not sure which type of cash flow loan is right for you, or where to find the best cash flow loan lender? We’ve got you covered. The article discusses the top seven cash flow loans for small businesses.

Let’s start by taking a look at this quick comparison chart of cash flow lenders.

StreetShares OnDeck LoanBuilder
Products Offered • Term loans
• Lines of credit
• Contract financing
• Term loans
• Lines of credit
• Short-term loans
Best For Small- to medium-sized businesses looking for a working capital loan or line of credit. Small- to medium-sized business looking for fast funding. Small businesses looking for a short-term loan with weekly repayments.
Required Time in Business 12 months 12 months 9 months
Required Revenue $25,000 /year $100,000 /year $42,000 /year
Required Credit Score 620 500 550
Read Review Read Review Read Review
Visit Site  Visit Site  Visit Site
Fundation BlueVine Fundbox
fora financial logo
Products Offered • Term loans
• Lines of credit/td>
• Lines of credit
• Invoice factoring
• Lines of credit
• Invoice financing
Best For Established businesses looking with good credit looking for installment loans or lines of credit. Small businesses looking for a line of credit or invoice factoring for consistent cash flow. Small businesses looking for a line of credit or invoice factoring for consistent cash flow.
Required Time in Business 12 months 6 months N/A
Required Revenue $100,000 /year $120,000 /year N/A
Required Credit Score 600 600 N/A
Read Review Read Review Read Review
Visit Site  Visit Site  Visit Site

There are more details about each lender below. Read on to learn which cash flow solution is right for you.

Best Types of Loans For Cash Flow

There are several types of loans that can be great options for increasing cash flow:

  • Installment loans
  • Short-term loans
  • Lines of credit
  • Invoicing financing

We’ll go over each type of loan so you can know exactly what to expect and choose which type fits your business’s needs best.

Installment Loans

Installment loans, also called term loans, are loans in which the borrower receives a lump sum of money that is paid back in regular installments. Interest is charged throughout the duration of the loan. Many times, you can save money by paying the loan back early (so long as your lender doesn’t charge a pre-payment penalty).

Installment loans are paid back in regular installments, usually on a monthly basis. Each payment goes to paying a portion of the principal (the borrowing amount) and the interest (a fee based on a percentage of your remaining principal). Most installments loans have term lengths between 1 and 25 years.

Installment loans can be used for multiple business needs, including short-term cash flow and long-term business growth plans. Common uses for installment loans include:

  • Working capital (or everyday expenses)
  • Inventory purchasing
  • Equipment
  • Business expansion
  • Business acquisition
  • Debt refinancing

Because of the longer term lengths, installment loans are considered higher risk than other types of loans, and young and unstable businesses might have trouble qualifying. These loans are best for established businesses that want a longer period of time to repay their debt.

Short-Term Loans

A short-term loan is a lump sum of money granted to a borrower and paid back in frequent, regular installments over a short period of time. Unlike an installment loan, a short-term loan does not have an interest rate; instead, this type of loan has a factor rate — a multiplier used to calculate a fixed fee that is added to your loan. The fixed fee is only calculated once and is repaid in along with the principal.

Short-term loans are paid back in regular fixed installments on a weekly, or even daily basis. For this reason, short-term loans are ideal for businesses with enough cash flow to afford these payments. Most short-term loans have term lengths between 3 and 18 months (with some up 24 or 36 months).

Short-term loans can be valuable for multiple types of business needs. Common uses for short-term loans include:

  • Working capital
  • Inventory purchasing
  • Equipment purchasing
  • Business expansion
  • Hiring or training new employees

Short-term loans are considered low risk and are generally known for low borrower requirements, fast funding, and no specific collateral. This type of loan can be ideal for businesses in need of extra cash who have the existing cash flow to make frequent repayments.

Lines of Credit

Unlike short-term loans and installment loans, lines of credit aren’t lump-sums of money handed to you all at once by a lender. Instead, when you are approved for a line of credit, a lender gives you access to a credit line with a certain amount of money that you can draw from at any time. 

Any draws made on a line of credit are paid in regular installments. Most lines of credit are revolving — as soon as you pay off the amount you used, it’ll be added back into the total available on your credit line. This means you can keep using the same funds again and again without reapplying for a loan.

Lines of credit are great for short-term, everyday business need, making them a great cash flow solution. Lines of credit also are a great cash cushion for unexpected expenses and emergencies. Common uses of a line of credit include:

  • Working capital
  • Payroll
  • Overhead costs
  • Seasonal expenses
  • Inventory purchasing
  • Unexpected expenses

Lines of credit are fairly easy to qualify for because they are offered by such a wide variety of lenders. They are ideal for nearly any type of business in need of a cash flow solution or looking for peace of mind regarding unexpected expenses. The only downside is that if you use up all of your credit line at once, you may not have access to the cash you need until you pay some of it back.

Invoice Factoring

Invoice factoring is a cash flow solution in which you sell your unpaid invoices to an invoice factor in exchange for immediate cash. The tradeoff is that the invoice factor keeps a portion of the cash from the invoice on reserve until your customer pays. Once paid, the factor will grant you the rest of the reserve, minus a small fee.

Contract lengths, and the invoices eligible for factoring, vary by lender.

Invoice factoring allows businesses to receive cash faster than they normally would. The money received from invoice factors can be used to meet various business needs:

  • Working capital
  • Payroll
  • Inventory purchasing

Invoice factoring is a great solution for businesses that suffer from slow paying customers and are in need of immediate cash. You do lose a small portion of your invoice sale to the factor’s fees, but this can be more than worth the cost for many businesses that rely heavily on invoices.

The Best Cash Flow Loan Lenders

StreetShares

Best For…

Small- to medium-sized businesses looking for a working capital loan or line of credit.

Products Offered

  • Installment loans (or term loans)
  • Lines of credit
  • Contract financing

Founded in 2013, StreetShares is a peer-to-peer (P2P) lender created by veterans for veterans, although now any eligible merchant can access funding. This lender offers installment loans, lines of credit, and contract financing (similar to invoice factoring). StreetShares boasts no prepayment penalties, an easy application process, and excellent customer service.

Borrower requirements:
• Must be in business at least 12 months with a revenue of $25,000 per year (sometimes StreetShares will make exceptions for high-earning businesses at least 6 months old).
• Must have a personal credit score of 620 or above.
Visit the StreetShares website
Read our StreetShares review

Here are the rates for StreetShares installment loans and lines of credit:

Borrowing amount: Up to $100K
Term length: 3 – 36 months
Interest rate: About 6% – 14%
Closing fee: 3.95% or 4.95% (installment loans)
1.5% draw fee (lines of credit)
APR range: 7% –  39.99%

These are the rates and fees for StreetShares’ contract financing:

Credit facility size: Max $500K per invoice
Advance rate: Up to 90%
Discount rate: Varies
Max overdue account: 180 days
Additional fees: None
Contract length: N/A
Monthly minimums/maximums: None
Factor all invoices: No
Recourse or non-recourse: Non-recourse
Notification or non-notification: Notification

How To Apply For A StreetShares Loan

To apply for funding from StreetShares, you’ll need to fill out an initial questionnaire. If approved, you’ll be asked to provide additional information, and then StreetShares will come back with an offer (or offers). The whole process takes between two and seven days on average.

Takeaway

StretShares offers competitive installment loans, lines of credit, and contract financing to eligible small and medium businesses. If you have fair credit and a need for additional cash flow, StreetShares is a great business financing option.

OnDeck

Best For…

Small- to medium-sized business looking for fast funding.

Products Offered

  • Short-term loans
  • Lines of credit

One of the first online lenders, OnDeck offers fast approval for lines of credit and short-term business loans. Although OnDeck’s fees can get a little pricey, the service is a convenient and quick way for businesses to access cash. Eligible OnDeck applicants usually receive funding 24 to 48 hours after their initial application.

Borrower requirements:
• Must be in business at least 12 months with a revenue of $100,000 per year.
• Must have a personal credit score of 500 or above.
• Must not be in one of OnDeck’s restricted industries.
Visit the OnDeck website
Read our OnDeck review

Here’s what to expect from an OnDeck short-term loan:

Borrowing amount: $5K – $500K
Term length: 3 – 36 months
Fixed fee: x1.003 – x1.04 per month
Origination fee: 0% – 4%
APR: Approx. 7% – 98%
Collateral: UCC-1 blanket lien, personal guarantee

And here’s what to expect from an OnDeck line of credit:

Borrowing amount: $15K – $100K
Draw term length: 6 months
Draw fee: None
Maintenance fee: $20/month
APR range: 13.99% – 39.9%
Collateral: Personal guarantee

How To Apply For An OnDeck Loan

To apply for OnDeck financing, fill out an application online and OnDeck will let you know if you’re approved (usually in less than 24 hours). You may then need to provide additional documentation before receiving your funding. Typically, the loan can be approved and funded within one to two days.

Takeaway

If you’re looking for quick cash to cover working capital expenses or expand your business, OnDeck could be a great option. While the fees may get a bit spendy, the convenient, quick approval and low borrower requirements are more than worth it for some small business owners.

LoanBuilder

Best For…

Small businesses looking for a short-term loan with weekly repayments.

Products Offered

  • Short-term loans

Acquired by PayPal in 2017, LoanBuilder is a lending service offering short-term business loans to both PayPal users and non-PayPal users alike. LoanBuilder offers low borrower requirements and fairly reasonable rate and fees.

Borrowing amount: $5K – $500K
Term length: 13 – 52 weeks
Flat fee: 2.9% – 18.72%
Origination fee:  N/A
Effective APR: Learn more
Collateral: UCC-1 blanket lien

How To Apply For A LoanBuilder Loan

LoanBuilder allows potential borrowers to investigate their potential loan before applying. You simply enter some basic contact information and use their tool to check your eligibility, and then you can finish your application online.

Takeaway

With low borrower requirements and competitive rates, LoanBuilder can be a great option for small businesses looking for a short-term loan. Unlike some short-term loans, LoanBuilder offers weekly repayments instead of daily repayments which may make this loan more manageable.

Fundation

Best For…

Established businesses looking with good credit looking for installment loans or lines of credit.

Products Offered

  • Installment loans
  • Lines of credit

Founded in 2011, Fundation is an online lender that offers competitive installment loans and lines of credit without the long, complicated process of applying for a bank loan. Fundation also offers strong customer support and has very few negative complaints.

fundation logo
Borrower requirements:
• Must be in business at least 12 months and make at least $100,000 annually.
• Must have a personal credit score of 600 or above.
• Must have at least three full-time employees (yourself included).
Visit the Fundation website
Read our Fundation review

These are the terms and fees for Fundation’s installment loans:

Borrowing amount: $20K – $500K
Term length: 1 – 4 years
Origination fee: Up to 5%
APR: 7.99% – 29.99%
Collateral:  Personal guarantee, UCC-1 blanket lien

Here’s what to expect from Fundation’s lines of credit:

Borrowing amount: $20K – $100K
Term length: 18 months
Additional fees: $500 closing fee
2% draw fee
APR: 7.99% – 29.99%
Collateral:  Personal guarantee, UCC-1 blanket lien

How To Apply For A Fundation Loan

The Fundation application process includes filling out an online application, documenting your business’s ID and finances, and speaking with a representative directly to see if you’re a good fit for a Fundation loan. After speaking to a rep, your application will go through to underwriting and you may hear back in as early as 24 hours.

Takeaway

Fundation is a great option for established businesses looking for rates and fees as competitive as bank loans, without the long, complicated application process. Because of the more stringent borrower requirements, Fundation is not ideal for startups; but, if you do qualify, this financing option is well worth looking into.

BlueVine

Best For…

Small businesses looking for a line of credit or invoice factoring for consistent cash flow.

Products Offered

  • Lines of credit
  • Invoice factoring

Founded in 2013 on the idea that small business financing should be easy, BlueVine offers lines of credit and invoice factoring for small businesses. The company is known for revolutionizing the invoice factoring world and helping business owners get quick cash for unpaid invoices. With relaxed borrower requirements, BlueVine may be ideal for young businesses.

bluevine logo
Invoice factoring borrower requirements:
• Must be in business at least 3 months with a revenue of $100,000 per year.
• Must have a personal credit score of 530 or above.
• Business must be B2B and invoice customers.
Line of credit borrower requirements:
• Must be in business at least 6 months with a revenue of $120,000 per year.
• Must have a personal credit score of 600 or above.
• Lines of credit are not available in all states. See full review for details.
Visit the BlueVine website
Read our BlueVine review

Here are the rates for BlueVine’s lines of credit:

Credit facility size: $6K – $5M
Term length: 6 or 12 months
Interest rate: 0.3% – 1.5% per week
Draw fee: 1.6% – 2.5% per draw
APR: 15% – 78%
Personal guarantee: Yes

Here are the rates for BlueVine’s invoice factoring:

Credit facility size: $20K – $5M
Advance rate: 85% – 95%
Discount rate: 0.3% – 1% per week
Max overdue account: 13 weeks (91 days)
Additional fees: $15 wire transfer fee (no charge for ACH transfers)
Contract length: N/A
Monthly minimums: No
Factor all invoices: No
Recourse or non-recourse: Recourse
Notification or non-notification: Both (see below)

How To Apply For A BlueVine Loan

To apply for BlueVine funding, you’ll need to answer a few basic questions about yourself and your business. You’ll then speak with a representative who will ask several additional questions. Typically, you’ll hear back in about 24 hours.

Takeaway

With relaxed borrower requirements and an easy application process, BlueVine can be a great choice for small businesses looking to increase their cash flow with invoice factoring or a line of credit. Be sure to check that BlueVine lines of credit are supported in your specific state before applying.

Fundbox

Best For…

Microbusinesses looking for invoice financing or a line of credit to increase cash flow.

Products Offered

  • Lines of credit
  • Invoice financing

Similar to BlueVine, Fundbox is an invoice financing solution created to help small businesses have more consistent cash flow. Since its inception in 2013, Fundbox now offers lines of credit as well. Fundbox offers relaxed borrower qualifications, making it ideal for less established businesses, and there are no additional fees.

Borrower requirements:
• No revenue or time in business requirements, but must use compatible accounting or invoicing software for at least 3 months, or a compatible business bank account for at least 6 months.
• No specific credit score requirements.
Visit the Fundbox website
Read our Fundbox review

Here are the rates for Fundbox’s invoicing financing (called Fundbox Credit):

Credit facility size: Up to $100K
Advance rate: 100%
Advance fee: 0.4% – 0.7% per week
Term length: 12 or 24 weeks
Additional fees: None
Contract length: N/A
Monthly minimums: No
Factor all invoices: No
Recourse or non-recourse: Recourse
Notification or non-notification: Non-notification

Here are the rates for Fundbox’s lines of credit (called Direct Draw):

Borrowing Amount: $1K – $100K
Term Length: 12 weeks
Borrowing Fee: 0.5% – 0.7% per week
Draw Fee: None
Effective APR: 12% – 54%

How To Apply For A Fundbox Loan

Fundbox’s application is a bit unique. To apply, you simply create an account and hook it up to your existing accounting software or bank account. Fundbox then uses the information to determine whether you qualify for a loan. This process is extremely quick and most applicants will receive a funding decision in minutes.

Takeaway

Fundbox can be a great financing solution for small businesses in need of low borrower qualifications and quick cash. Fundbox’s borrowing amounts may be too small and the rates too steep for larger businesses, but for less established businesses that don’t qualify elsewhere, Fundbox can be a cash flow solution.

Which Cash Flow Loan Is Right For My Business?

With seven great options, it can be hard to know which is right for your business. When choosing a cash flow loan, ask yourself these questions:

  • What is the purpose of the loan?
  • Which type of loan is best for my business needs?
  • What’s my credit score and monthly/yearly revenue?
  • How much do I need to borrow? (And especially, how much can I afford to borrow?)
  • How quickly do I need the funding?

All of these factors will play a role in deciding which lender you should go after. If you need additional help or want to see even more financing options, check out our comprehensive small business loan reviews.

The post Best Cash Flow Loans For Small Businesses 2018 appeared first on Merchant Maverick.

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15 Best Touchscreen POS Systems

touchscreen cash register

Touchscreens are everywhere, and the point-of-sale industry is no exception. Touchscreen POS systems are more intuitive and easy to learn than traditional legacy POS software, and many cloud-based systems employ the same kind of iPad and Android tablets that your employees already use every day at home. Whether you’re running a restaurant, a retail outlet, or another type of business, a modern touchscreen POS system helps keep your sales moving and your business data secure. Besides simple point-of-sale features, most of these cloud-based systems also have advanced reporting capabilities, business management features, and integrations with other popular business software.

Arguably, the only problem with touchscreen point of sale systems is that there are so many different products to choose from. Do you go with a proprietary-hardware solution like Clover, an Android POS system like Toast, an iPad POS like Revel, or an open-source POS like Vend? In my opinion, the most important consideration when choosing a touchscreen POS is not just iPad vs. Android. More important are your industry type, your specific business needs, and user reviews. To help you get started in your search, I’ve put together this list of my favorite highly rated touchscreen POS systems, sorted by industry. Most of these are iPad-based, though I included some Android and open-source options as well.

To make it easier to find the best touchscreen system for your business type, I’ve sorted the following 15 POS systems into restaurant, retail, and hybrid (systems that can be used for either restaurant or retail) categories. Be advised that the order in which I’m listing these excellent systems does not indicate their ranking.

Restaurant POS Systems

The following restaurant point of sale systems can be used by just about any type of food industry business, from drive-thrus to fine dining:

1. Breadcrumb

  • iPad POS for restaurants
  • Pricing starts $99/month/location
  • Must use with Upserve payments (interchange plus $0.15 fee)
  • Multi-location support
  • Online ordering

breadcrumb by upserve pos logo

Cloud-based Breadcrumb POS by Upserve (see our review) is a highly versatile restaurant POS, suitable for full-service restaurants, take-out, delivery, bars, and multi-location eateries. With Breadcrumb’s acquisition by Upserve in 2016 (Breadcrumb was previously owned by GroupOn), the company has expanded its restaurant management infrastructure, making this POS a complete business management system for just about any type of restaurant.

Breadcrumb is not the cheapest restaurant POS in town, but nor is it short on features. Some of the system’s strongest features include table management, employee management, customer management, and tableside ordering. Breadcrumb also recently teamed up with GrubHub to offer online ordering and delivery (at the $249/month/location “Pro” subscription level).

One thing Breadcrumb users really like about this system is that it is specifically designed with restaurant employees in mind. While we find Breadcrumb to be a very solid all-around POS/restaurant management system, a couple potential downsides are 1) you can’t use your own merchant account (you need to use Upserve Payments) and 2) there are occasional issues with outages. Learn more in our Breadcrumb by Upserve review.

2. Toast

  • Android POS for restaurants
  • Pricing starts at $79/month
  • Must use with Toast credit card processing
  • Multi-location support
  • Exceptional customer service

toast pos logo

Android-based Toast POS (see our review) is another robust, cloud-based POS system for restaurants. It can accommodate any size or type of restaurant, and features like tableside ordering, labor management, and inventory management make Toast a force to be reckoned with on both the front and back end. Toast is intuitive and easy to use for servers, while also providing detailed reporting, customer data, and menu options.

Although we love Toast’s strong feature set and the fact that it uses Android tablets instead of iPads (cheaper hardware costs, less of a theft risk), keep in mind that if you want every single feature Toast offers, it’s gonna cost ya. For example, online ordering, table management, delivery management, and gift card support all carry an extra monthly charge. You also can’t choose your own credit card processor to use with this POS and must use Toast’s in-house processor (which Toast users seem to like, at least). What really sets Toast apart from a lot of other cloud-based POS systems, however, is their excellent customer support – an indispensable quality in any POS, given the inherent complexity of a system that lets you take payments, process orders, and manage almost all aspects of your business.

3. TouchBistro

  • iPad POS for restaurants
  • Pricing starts at $69/month
  • Compatible with multiple payment gateways
  • Best for single-location businesses
  • Locally installed system (not cloud-based)

touchbistro POS

Elegant and easy to use, Ontario-based TouchBistro (see our review) has the distinction of being the top-grossing POS Application on Apple’s App Store in over 35 countries. TouchBistro is one of the few systems on our list that, while tablet-based, is not cloud-based; rather, your store data is stored locally on your restaurant’s iPad or Mac.

TouchBistro is not a full “restaurant management system” like Toast or Breadcrumb, but it’s good at what it does, and can readily handle the POS needs of just about any size/type of eatery, from a food truck to a full-service restaurant. Since TouchBistro stores data on local servers, it’s probably best for single-location restaurants (if coordinating data between locations is important to you). Keep in mind, though, that you will need an internet connection to process credit cards.

Some great features of TouchBistro include table management, menu management, kiosk option, tableside ordering, split-payment option, bar tabs, and sales reports. Customer service doesn’t seem to be as responsive as some users would like, though 24/7 support via phone and email is included in the standard cost. TouchBistro is compatible with Mercury, Cayan, Moneris, PayPal and several other gateways.

4. Lavu

  • iPad POS for restaurants
  • Pricing starts at $69/month with annual contract or $79/month without
  • Can use in-house payment processing or BridgePay, Heartland, PayPal, Nets, or Vantiv Integrated Payments
  • Multi-location support
  • Option to install in-house server backup in case you lose your wireless connection

lavu pos logo

Lavu (see our review) is yet another highly popular iPad POS system for restaurants, used in more than 20,000 restaurant terminals across 88 countries.

Lavu is not the most advanced restaurant POS there is, but it is equipped to handle the needs of most small-to-medium restaurants (or cafes, bars, coffee stands, etc.). Some features that make this POS system a hit include its customizable table layout and menus, easy employee management, advanced menu management, and useful integrations. Lavu also has renowned customer service, which is included in the standard monthly fee. You can add both a loyalty program and gift cards onto your subscription for just $40 a month.

Customers have complained about occasional glitches with the Lavu software, but the company releases frequent updates to solve any bugs or complaints. Affordable and highly customizable, Lavu is a strong and growing contender in tablet POS systems for restaurants.

Retail POS Systems

The following POS systems are suitable for retail store establishments, such as clothing boutiques, toy stores, electronics shops, and many others.

5. Lightspeed Retail

  • iPad and web browser POS for retail
  • Pricing starts at $99/month (billed annually)
  • Integrates with Vantiv Integrated Payments (Mercury), Cayan, and izettle
  • Multi-location support
  • Bike rental store add-on

lightspeed retail pos logo

Lightspeed Retail (see our review) is one of the most fully featured tablet POS systems out there for retail. While Lightspeed can support up to enterprise-level size businesses, this cloud-based system is ideal for small and medium-sized businesses that want powerful functionality — think unlimited inventory, integrated eCommerce, work order management, and customer relationship management. Lightspeed Retail also makes it easy to transfer inventory between different store locations.

Lightspeed is among the pricier systems on this list, and various integrations to extend its functionality, such as eCommerce, can make it even more expensive. So, it’s not going to be the right POS every business. But if you want a super robust POS that you can operate from any desktop browser (meaning, you don’t have to buy expensive iPad registers), Lightspeed Retail might just be right for you. The POS is especially suited for apparel businesses but can accommodate virtually any type of retail setup, including rentals.

Note that there are several Lightspeed products in addition to Lightspeed Retail. These include Lightspeed Onsite, Lightspeed Restaurant, and Lightspeed eCommerce.

6. Vend

  • iPad and web browser POS for retail
  • Pricing starts at $69/month
  • Compatible with Vantiv, PayPal, and Square
  • Multi-store support
  • Apple Pay-capable

vend pos logo

Vend (see our review) was actually the very first web browser-based POS system when it was introduced back in 2010. Today, it is still a big force to be reckoned with in the retail POS world, used by more than 20,000 businesses in 100 countries.

Cloud-based and scaleable for retail stores both small and large, Vend uses an HTML5 browser (such as Google Chrome), or an HTML5 iPad app, for all operations. If the internet goes down, Vend can keep operating locally using the cache and will sync back up with the cloud once the connection resumes. Being browser-based means you can run Vend on a PC, Mac, or iPad. Some features on Vend we really like include customer management, eCommerce, built-in loyalty program, inventory management, and a good selection of third-party software integrations. Vend doesn’t have as much functionality as a POS like Lightspeed or Revel – for example, Vend doesn’t have item modifiers – but it is cost-effective and a good choice for a store (or even chain of stores) that doesn’t need every single “business management” feature out there.

Note that Vend’s email support is free, but 24/7 phone support costs an extra $19 per month, unless you have the multi outlet subscription ($199/month billed annually).

7. Shopify POS

  • iPad POS system for retail (Also supports mobile sales on iPhone and Android phones)
  • Pricing starts at $9/month for mobile and Facebook sales, or $54/month to also include Retail Package for in-store sales
  • Integrates with Shopify Payments and many outside processors
  • Multi-store support
  • Instant syncing with your Shopify online store

shopify pos logo

Shopify (see our review) started as an online shopping cart for businesses who wanted an easy way to sell their products online. Eventually, Shopify extended their offering to include a POS system for in-person sales. As you might expect, Shopify POS does a great job integrating online and offline sales for retail businesses that also do eCommerce with Shopify.

Shopify’s pricing structure is a little convoluted, but the most important thing to know is that if you have a brick-and-mortar store, you’ll need to purchase the Retail Package, which costs $45/month on top of whatever other package you select — the $9/month Shopify Lite plan, the $29/month Shopify Basic plan, or another higher-tier plan. The Basic plan plus the Retail Package will cost $74/month and provide pretty much everything most retailers need for both online and in-store sales. You also have the option to get better credit card processing rates at higher price tiers.

Most Shopify POS features are comparable with other top iPad retail solutions, and they have strong customer service too. The thing that really sets Shopify apart is their seamless online/offline sales integration. So, if you already use Shopify for online sales or would like to, this might be the right POS for you.

8. Quetzal

  • iPad POS for independent fashion retailers
  • Pricing starts at $75/month per location
  • Integrates with Evo Payments International, Velocity, CardSmith, National Discount Merchant Services, Vantiv, and Moneris
  • Multi-store support (max. 10 locations)
  • Clothing/shoe matrix

With its exclusive focus on fashion retailers, Quetzal (see our review) is an iPad POS that’s tailor-made (ha-ha) for stores that sell clothing, shoes, and/or accessories. This aesthetically appealing system has a streamlined iOS aesthetic; the interface seriously looks like it could have been designed by Apple itself, and Quetzal even has an iTunes app that lets managers check in on their store from their Apple Watch. Quetzal also uses a compact, sleek register, Star Micronics’ mPOP system.

Of course, functionality is more important than aesthetics when it comes to a POS, but Quetzal doesn’t come up short in terms of function either. We like the clothing/shoe matrix, in-depth sales reports, “tag cloud,” loyalty program, employee leaderboard, and “sales thermometer,” in particular. At only $75/location price is right as well, especially as there is no charge for additional users or terminals. A couple downsides are that after setup and installation, customer support costs extra, and also there is no QuickBooks integration.

While it doesn’t have a huge marketshare of the overall retail POS segment, Quetzal’s niche focus makes it a functional, affordable, and visually appealing choice for emerging independent clothing brands.

Hybrid POS Systems

These POS systems are flexible in that they are equally suited to retail and restaurant environments. Service-based industries such as beauty salons, rental businesses, and hospitality businesses also often use hybrid POS systems.

9. Shopkeep

  • iPad POS for retail and quick serve restaurants
  • $69/month/register ($29/month/register for fourth register and beyond)
  • Integrates with Shopkeep Payments and outside processors
  • Multi-store support
  • Matrix inventory feature

shopkeep pos logo

Shopkeep (see our review) is an affordable and enjoyable-to-use POS system that runs locally from an iPad and syncs data back to the cloud. Shopkeep is used in both retail and restaurant environments, and while it’s more feature-rich on the retail side of things, it will more than meet the needs of most quick-service/coffee carts/food truck businesses.

Some things about Shopkeep we especially like include its comprehensive register functionality, in-depth reporting suite, mobile app to view your business stats on the go, and unlimited inventory matrix (which includes raw goods management). Shopkeep also offers unlimited 24/7 customer support (though premium phone costs an additional $30 per month). This POS integrates with MailChimp for email marketing, QuickBooks for accounting, and BigCommerce for eCommerce.

Shopkeep is a wise choice for a small-to-medium retail business or restaurant that doesn’t need extensive restaurant-centric features like table management. Note that ShopKeep is currently only available on iPad but is in the works to make its service available on the Clover Station via a recent partnership with First Data.

10. Revel Systems

  • iPad POS for retail, restaurants, hospitality, and more
  • Supports numerous payment processors
  • Custom pricing based on industry and individual business needs
  • Multi-store support
  • Ethernet internet connection

revel systems logo

Revel Systems (see our review) is arguably the holy grail of iPad POS systems. Revel is powerful enough that franchises like Cinnabon use it, and flexible enough that it can support businesses in virtually any industry, from brewpubs to gas stations. It’s also the only iPad POS system that offers a “wired” ethernet connection for a faster an more reliable internet.

Revel POS pricing is determined by which industry-specific package you choose, but depending on your needs, you can expect to pay about $80 to $200/month per location. Myriad add-on applications and integrations extend Revel’s functionality to make it do just about anything you can imagine, though this naturally increases the system’s cost as well. Some of Revel’s more impressive features include its kiosk mode, digital menu board, and ability to accept mobile payments (including ApplePay, PayPal, Bitcoin, and others). Because Revel is so powerful and customizable, initial system setup can take a while.

Revel can manage multiple locations and up to 500,000 SKUs. It is optimized for mid-sized businesses, particularly busy quick-serve restaurants that can afford one of the best iPad POS’s money can buy.

11. ERPLY

  • Web browser/iPad/Android/Windows POS for retail and restaurants
  • Pricing starts at $200/month/location
  • Compatible with all big-name payment processors, (though currently promoting PayPal as a preferred processor)
  • Multi-store support
  • Strong inventory features

erply-logo

ERPLY (see our review) originated in 2009 as a retail POS system, though it has eventually expanded support to food service too, now offering food-centric features such as kitchen printing and sell by weight. Whether you run a retail business or restaurant, ERPLY is especially powerful in the inventory management department, with functions like automated ordering, supplier management, and multichannel (online, in-store, phone, email) inventory tracking and transfers.

ERPLY gives you a lot of flexibility as a business owner. Using just about any payment processor under the sun, you can accept traditional swipe, chip card, and mobile payments, including Apple Pay, PayPal, and Android Pay. You also have the option to use pretty much whatever device you want, even without a reliable internet connection, or run ERPLY right from your browser.

It’s actually kind of hard to come up with a feature ERPLY doesn’t have. An open API architecture allows customizability and the ability to develop your own software integrations and customize it to meet your needs (or, have ERPLY make these integrations/customizations for you). Being such a versatile piece of software, it’s one of the pricier cloud-based POS systems. If you have a larger or franchise business, or you just want the flexibility and horsepower this system offers, you might try ERPLY out for size.

12. talech

  • iPad POS for retail and restaurants
  • Standard subscription is $62/month/location (billed annually upfront)
  • Compatible with multiple payment processors
  • Multi-store support
  • Kiosk mode

talech POS logo

talech (see our review) is a smaller player in the iPad POS world, but with their affordable price point and impressive set of more than 100 features, they can certainly give their larger competitors a run for their money. talech is used by both retail and restaurant businesses, but restaurants, in particular, will find a lot of useful features, including table management, coursing, and the ability to split the check by table positioning (seat).

Advanced inventory management, self-service (kiosk) mode, and the ability to generate purchase orders are some more features that set talech apart from some of its competitors in both the retail and restaurant spheres. talech also made it possible for restaurant owners to integrate an online ordering system so that you can manage in-person and online orders all from your iPad POS terminal.

One caveat: being 100% cloud-based, talech is unable to take credit card payments in the event of a WiFi outage, and you also won’t be able to access your back office. However, it’s possible to circumvent such issues by getting a specialized backup router.

13. Bindo

  • iPad POS for retail and restaurants
  • Custom pricing depends on industry and number of SKUs
  • Works with nearly any payment processor
  • Multi-location support
  • “Favorites” grid displays most popular items as register buttons

Bindo POS logo

Bindo (see our review) is a hybrid POS whose varied and easy-to-use features make it suitable for retail or restaurant environments. A reasonable pricetag, clean interface, robust eCommerce storefront, and thoughtful inventory reporting suite make this an especially versatile touchscreen POS option. While fewer than 5,000 businesses use new-ish POS, customer support (included at all price levels) is responsive to these customers’ needs and tech support (also included) issues frequent updates to fix any software glitches.

As with most other fully cloud-based systems, you’ll need fast internet to experience the best functionality. More than one customer has also complained about being stuck in a leasing contract with Bindo for equipment they were not satisfied with (though in general, we do not recommend leasing POS equipment). Since Bindo works with most standard iPad POS equipment and offers a 14-day free trial, it is likely that you’ll be able to test out Bindo using your current equipment before you commit to purchasing.

14. SalesVu

  • iPad POS for restaurant and retail
  • Basic restaurant and retail packages start at $75/month
  • Works with Vantiv, Evo, and WorldPay
  • Multi-location support
  • Allows items to be charged by decimal and fractional quantities

SalesVu (see our review) is another affordable and feature-rich iPad POS system that can be used in many industries, including service industries and traditional retail and restaurant environments. Since this system allows you to ring up transactions in fractional amounts, it’s especially useful for hourly professionals such as therapists or dog walkers, and businesses that sell items based on weight, like fro-yo shops. SalesVu also has an appointment booking system that health, beauty, and hospitality businesses will appreciate. Like the majority of touchscreen POS’s on this list, SalesVu is best suited for smaller to medium-sized businesses, though it has the capacity to scale up if you open a second or third location.

SalesVu runs locally on iPad registers and syncs all your data to your account in the cloud. Though you can use the SalesVu POS app without an internet connection, you’ll need internet to process credit card transactions; however, you can use a specialized router with a 4G wireless modem with a data plan so that you can switch to 4G without any interruption if your main internet connection goes down.

Another cool thing about SalesVu is that it will run on an iPhone, allowing you to take mobile sales on the go. The basic mobile POS app without any frills is free, similar to Square. Which brings us to the final favorite touchscreen POS on our list …

15. Square Register

  • Proprietary POS hardware with free cloud software for retail, restaurants, service industry
  • Hardware costs $49/month for 24 months or $999 one-time payment
  • In-house credit card processing is 2.5% + $0.10/transaction or lower for high-volume businesses
  • Multi-location support
  • Best for businesses with average transaction of $40 or higher
  • Ethernet support for more reliable internet connection

While Square‘s popular free POS mobile app has been around for some time, the Square Register is a relatively new product, released in October 2017. There are still no monthly service fees, but rather than selling on your smartphone or iPad, you’re ringing up sales on fully featured POS hardware that you purchase as a complete package from Square. With a concept similar to that of Clover Station (which I didn’t include on this list because it is locked into First Data’s less than stellar payment processing), the Square Register is sleek, proprietary POS hardware that works right out of the box, complete with a customer facing screen and built-in credit card terminal. The Square Register hardware itself costs $49/month for 24 months, or you can simply purchase the system outright for $999.

Note that Square Register users have a different credit card processing rate than the standard Square mobile processing rate. With Square Register, businesses are charged 2.5% + $0.10 on every transaction, vs. 2.75% (+ $0.00) with regular Square. This pricing setup may at first blush look like Square Register has cheaper rates, but if you have a lot of small transactions you’ll actually pay more with Square Register than with the Square mobile POS. For this reason, Square Register is a more appropriate solution for larger businesses with average ticket sizes of $40 or higher. Larger businesses processing more than $250,000 per year and with an average ticket size of $15 or higher may also qualify for lower rates.

As for the specific business type, 100% cloud-based Square can work with just about any industry. Square has a built-in 24/7 online booking system for service-based industries, as well as restaurant-centric features such as suggested tipping amounts and online food orders.

Finally, Square Register is not to be confused with Square’s iPad-only, $60/month solution, Square for Retail (see our review).

Final Thoughts

When sorting through your options for touchscreen POS systems, the plethora of choices may at first seem overwhelming. But that’s why we’re here to help you sort out the stinkers and lead you to the very best tablet point of sale systems. And really, you can’t go wrong with any of the POS software systems on this list. Just check that the touchscreen POS system you’re considering meets your business’s needs in terms of functionality and budget, and test it out with a free trial before purchasing. And of course, don’t forget to check user reviews and complaints on the BBB and other consumer review sites. If you need further help choosing a touchscreen POS system, please contact me in the comments section and I’ll give you some further guidance.

The post 15 Best Touchscreen POS Systems 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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Stripe Payments Competitors And Alternatives

It’s safe to say, Stripe (read our review) has done a lot to change the way people pay online, and it’s opened up the potential for merchants all over the world to sell online and reach customers almost anywhere. The company has grown massively over the years, to the point that Stripe says there’s an 80% chance any given credit/debit card has been used on the Stripe network previously.

In addition to pre-built and customizable checkout forms that you can drop into a website, Stripe integrates into mobile app payments. Square’s documentation has become the gold standard by which all other documentation is judged. Developers love it for ease of use and the extensive support for programming languages.

Merchants also get access to advanced subscription and billing tools, including invoicing. Not only that, but the Stripe Connect platform allows you to create a marketplace for other merchants to sell and easily manage all their payments. However, it’s worth noting that Stripe will charge you additional fees on top of processing costs for using these services.

Plus, Stripe offers more than 300 ready-to-go integrations from eCommerce to invoicing and much more, which can simplify the process of building your business’ back end. Check out Stripe’s Works With page for the full list.

But Stripe isn’t for everyone, and it does have some serious drawbacks. The first among them is its third-party processing model that leads to account holds and terminations for unqualified merchants. The second is the dubious customer service, which includes a lack of phone support.

If you’ve had a bad experience with Stripe in the past, or you’re not sure if Stripe is actually right for you, have no fear! There are some great alternatives to Stripe out there, that offer comparable pricing, similar tools and features, and quality customer support. Let’s take a look at six of the most promising Stripe competitors and see how they stack up for merchants.

Stripe Key Facts 

  • Merchant Account Or Third-Party: Third-Party
  • Pricing Model: Flat-Rate Pricing
  • Processing Costs: 2.9% + $0.30
  • Suitable For Low Volume: Yes
  • Suitable For High-Risk Businesses: No

Alternative #1: Braintree Payment Solutions

Braintree (read our review) is, hands down, the most direct and obvious alternative to Stripe. Its product offerings are nearly identical, documentation is quite good, and pricing is comparable. That means you get access to a pre-built payment form, a customizable form, subscription and recurring billing tools, marketplace tools, an API for custom reporting, and more. Braintree actually outperforms Stripe in terms of global reach for merchants, with more supported countries. However, like Stripe, there is no easy in-person payments option.

You also get access to a huge assortment of supported payment methods. It’s worth noting Braintree is owned by PayPal, so that does mean you can incorporate PayPal and Venmo acceptance, as well. But whereas Stripe will charge you for access to features such as Billing and Radar, Braintree charges absolutely nothing beyond processing costs to use its services.

Braintree doesn’t quite compare to Stripe as far as integrations, but there are some very good options on the list. Check out Braintree’s list of supported third-party integrations for more information there.

In addition, Braintree offers each merchant their own merchant account, which translates to much greater account stability than you get with Stripe. And despite being a PayPal company, reports indicate that Braintree is a little bit better about working with higher-risk businesses. Decisions are made on a case-by-case basis and you may be required to implement a reserve fund, but Braintree is certainly an option if you’ve had trouble with other processors. Braintree also promises “white glove” support, and with a few exceptions the merchant experiences support this claim.

Check out our Stripe vs. Braintree article for an in-depth comparison of the two services.

  • Merchant Account or Third-Party: Merchant Account
  • Pricing Model: Flat-rate
  • Processing Costs: 2.9% + $0.30
  • Suitable For Low Volume: Yes
  • Suitable For High-Risk Businesses: Yes (in some circumstances)

Alternative #2: Adyen

Adyen (read our review) isn’t exactly a big name. In fact, it only has about 5,000 merchants. But despite the small customer base, it had a payment volume of $50 billion in 2015, comparable to Braintree, which has quite a few more merchants. And that’s because Adyen’s built its business by chasing after the big fish. For example, Adyen powers payments for the crafting marketplace Etsy, and it recently wooed eBay away from PayPal.  However, now that it’s established itself, the company is started to court smaller businesses.

Despite providing merchant accounts (which historically translates to better stability), Adyen has one stipulation that makes it very unsuitable for high-risk businesses: a chargeback threshold. The industry standard is 1% (and that includes Stripe) but Adyen will terminate an account or implement holds if it exceeds a 0.5% chargeback rate. Adyen is also unsuitable for low-volume businesses because of its monthly minimum of 1,000 transactions or $120 per month in processing fees.

However, when you get past those concerns, you’ll find that Adyen is most similar to Stripe in its global reach and support for localized payment methods across Europe, the Asia-Pacific region, and North and South America. Adyen even accepts PayPal transactions, which is something rarely available from companies not owned by PayPal. There’s also a decent list of supported partners and integrations.

Adyen has very powerful marketplace tools (it would have to, given the big marketplaces it’s landed as clients), but also a secure, customizable checkout form. It also has advanced tools to reduce chargebacks, increase success rates of transactions, and analyze your business data, all at no additional charge. Plus, Adyen has incorporated support for in-person payments into its package, making it an all-in-one solution. All of that makes it a powerful contender for growing businesses that need advanced technology to power their payments system.

  • Merchant Account or Third-Party: Merchant Account
  • Pricing Model: Blended (interchange-plus for Visa, MasterCard, Discover; flat-rate for Amex)
  • Processing Costs: 0.6% + $0.12 markup for Visa, MasterCard and Discover; 3.95% + $0.12 for Amex; $0.25 + $0.12 (totaling $0.37) for ACH Direct Debit
  • Suitable For Low Volume: Yes
  • Suitable For High-Risk Businesses: No

Alternative #3: PayJunction

PayJunction (read our review) is one of the most developer-friendly merchant account options. While its business model and product offerings aren’t exactly innovative, Payjunction does offer interchange-plus pricing with no additional fees if you process more than $10,000 per month. (Below that threshold, a $35 monthly fee applies).  The markup is a little high, but with no per-transaction fee and no other fees, it balances out and can still yield savings. And then consider that you get access to all of PayJunction’s developer tools and extra features at no additional cost.

One of the more interesting features PayJunction offers is the ability to capture signatures on emailed receipts. Customers need only open the email and they can sign the receipt on almost any device. This is a great option especially for businesses that accept orders via phone, social media, and other nontraditional channels. But more than that, you also get a virtual terminal with invoicing and recurring billing capabilities. PayJunction’s gateway, Trinity, integrates with a huge assortment of shopping carts as well as POS systems to give you an all-in-one setup.

PayJunction isn’t clear about its stance on high-risk businesses, but if you’re not qualified you’ll be told up front instead of after you’ve already set up your account and started accepting orders. In addition, the whole system is not quite as full featured as you get with Stripe, but it can handle all the essentials. Really, the account stability and pricing are the biggest perks of processing with PayJunction. It certainly doesn’t hurt that the company has an excellent reputation for customer service, either.

  • Merchant Account or Third-Party: Merchant account
  • Pricing Model: Interchange-plus
  • Processing Costs: Interchange + 0.75%
  • Suitable For Low Volume: No
  • Suitable For High-Risk Businesses: Not Stated

Alternative #4: Square

Probably the least-expected entry on this list is Square (read our review). What’s a mobile card reader and POS doing in an article about online gateways and developer platforms? But Square has expanded its platform to include eCommerce integrations and a developer platform for ecommerce, point of sale, and much more. It offers seamless advanced inventory management at no additional charge, plus online order management, a customer database, and very solid reporting tools.

Square doesn’t support in-app payments the way Stripe does, and its supported payment types are more limited; however, the biggest drawback is that Square is only available to merchants in a handful of countries whereas Stripe (and many of the other options on this list) have a much more global reach. In addition, Square is a third-party processor just like Stripe, meaning merchants can get set up quickly, but face a potential for funding holds and account terminations.

However, Square’s documentation and APIs allow you to build a system that can easily accommodate online and in-person sales, reporting, inventory, and more, using Square’s already robust tools. Square doesn’t match Stripe for number of integrations, but it does have many options and they span a huge assortment of merchant needs. Check out the app marketplace for a complete list.

It’s not exactly common to find service providers who work seamlessly with online and in-person sales. Square is one of the few that does it exceptionally well, especially when you consider the extras that get thrown in at no charge. The lack of iOS/Android support is disappointing, but not necessarily a deal breaker if you don’t have a native app.

  • Merchant Account or Third-Party: Third-Party
  • Pricing Model: Flat-Rate
  • Processing Costs: 2.9% + $0.30 for online transactions, 2.7% for swiped/dipped/tapped transactions
  • Suitable For Low Volume: Yes
  • Suitable For High-Risk Businesses: No

Alternative #5: PayPal

PayPal (read our review) probably comes to mind when most people think of online payments. The commerce giant has made itself a trusted household name among consumers. But the fact that online transactions redirect and are completed on PayPal’s site isn’t a great solution for every merchant in 2018. PayPal does offer hosted payment pages but they come at a cost of $30/month in addition to payment processing. Recurring billing also comes at a cost of $10/month.

PayPal does offer a suite of developer tools for businesses interested in a custom setup. In addition to providing access to Express Checkout and the Braintree SDK, PayPal’s APIs include tools for invoicing, mass payouts, and marketplaces. However, despite being the parent company of Braintree, it seems that PayPal and its infrastructure haven’t quite kept pace. For starters, PayPal’s marketplace tools are fairly new (introduced in 2017) and they are only available after you go through an application and vetting process. And while the developer tools exist, most of the chatter says they don’t match Stripe for quality.

On the plus side, PayPal also supports a wide assortment of integrations for merchants, including POS integrations. It’s easy to create an all-in-one setup that addresses in-person and online payments. However, the default structure is a little bit cumbersome and getting access to features such as a hosted checkout page will cost quite a bit, compared to other providers who offer them at no additional cost.

In addition, like Stripe and Square, PayPal is a third-party processor and some merchants do run a greater risk of encountering a funding hold or account termination. PayPal certainly has most of the tools merchants need and a widely recognized name. It probably isn’t the best solution if you have extremely specialized needs, but if you want an all-in-one payments experience with some great add-ons thrown in, PayPal could be a good choice.

  • Merchant Account or Third-Party: Third-Party
  • Pricing Model: Flat-rate
  • Processing Costs: 2.9% + $0.30 for online transactions; 2.7% for swiped/dipped/tapped transactions
  • Suitable For Low Volume: Yes
  • Suitable For High-Risk Businesses: No

 

Alternative #6: WePay

We Pay (read our review) isn’t built for merchants who want to accept payments online. It’s actually a payments service for platforms that want to build native payments into their apps or services. That means shopping carts that want to offer a seamless payment processing option, along with crowdfunding, event management, and SaaS products, as well as marketplaces. Even though merchants can’t sign up for processing directly, WePay makes the cut because platform payments is one of Stripe’s core offerings, too.

WePay supports both web-based and in-app payments for iOS and Android, and in addition to cards and ACH transactions, you can implement Android and Apple Pay for the Web, so you have more options for payment methods. You can also use WePay to create a white label mobile POS with the option for a branded card reader.

As with Stripe, WePay is a third-party aggregator, which means that not all merchants who are onboarded via one of these platforms will be approved and they may face sudden account holds or terminations. Also, pricing isn’t disclosed and it’s up to the platform builder to decide what sort of rates it wants to charge and whether it wants to take a cut of the processing costs.

  • Merchant Account or Third-Party: Third-Party
  • Pricing Model: Not Stated
  • Processing Costs: Not Stated
  • Suitable For Low Volume: No
  • Suitable For High-Risk Businesses: No

Final Thoughts

Stripe is a great option for many businesses. The fact that there are no monthly minimums makes it great for startups, and the number of supported countries, supported payment options and supported currencies make it a serious contender for global businesses in particular. The various features make Stripe especially well suited to high-tech businesses that aren’t satisfied with the standard fare in a payments processor.

But the other companies we’ve looked at are all great options, too. And in the end, they all have their benefits and their drawbacks. Stripe, PayPal, Square, and WePay are all third-party processors that put merchants at risk of account freezes and terminations. What’s right for one business may not be right for another.

That’s why you need to have a really good idea of which features are absolute must-haves. You don’t want to start the process of establishing an account and creating an integration only to find out that a processor lacks a key feature and there’s no workaround. You should also consult your developer, as they have hands-on that can help you make a decision.

And finally, you should consider what features you might need in the future as your business grows. Do you plan to expand your sales channels? Do you want to launch additional products or service plans? Think about where you want your business to grow in the future. If you find a processor that can handle everything you want now and in the future, you won’t need to worry about the hassle of switching processors.

As always, thanks for reading! Have questions? Experience using these processors? We’d love to hear from you so leave us a comment and weigh in with your thoughts!

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