The Complete Guide to PayPal’s Fees, Rates, and Pricing

As a consumer mobile wallet, PayPal is darn-near ubiquitous. But with more than 17 million merchants worldwide calling PayPal their payments processor, it’s also a massive force in the merchant services industry. So if you’re looking for a quick and easy way to get set up with credit card payments, whether for a POS system or online, PayPal is probably going to be on your radar, and with good reason.

But should you choose PayPal as your payments processor, and what will it cost? The good news is that PayPal offers transparent, pay-as-you-go pricing with no monthly fees, no account termination fees, or other hidden costs. You can predict fairly well what you’ll pay with PayPal, and all payment processing fees are deducted before PayPal deposits funds in your account.

The one major drawback is that PayPal is a third-party processor, also referred to as an aggregator. That means the company essentially onboards merchants as sub-users of one, giant merchant account that includes the entirety of PayPal’s merchant base. This means that the company does minimal underwriting before approving an account. You don’t need to provide much info beyond confirming your identity to open an account. However, this does mean you face a greater amount of scrutiny after opening an account, and PayPal can terminate your account or place a hold on funds with no notice to you.

That sounds worrisome, but the reality is it only happens to a small percentage of merchants. You can also take steps to protect yourself by recognizing the common red flags that processors look for and avoiding them. Check out our article on how to avoid merchant accounts holds and terminations to learn more.

PayPal obviously isn’t the right choice for everyone. There are restrictions on the types of products merchants can offer, and it doesn’t support certain business models. High-risk businesses should look somewhere else for a merchant account. However, most merchants should be fine with a PayPal account for payment processing.

Read on for a closer look at what you can expect to pay with PayPal as your business’ credit card processor! You can also check out our PayPal and PayPal Here reviews for a focused look at the products and services.

Payment Processing Fees

The major concern for most merchants who use (or are considering using) PayPal are the payment processing costs, so we’ll start there. PayPal offers predictable, flat-rate pricing for all merchants. You don’t have to worry about higher interchange for American Express cards, or MCCs, or qualified vs non-qualified transactions. Your exact rate will depend on the type of transaction.

Merchants who use PayPal’s mPOS app, PayPal Here, or integrate with one of PayPal’s POS partners (such as Vend), will pay the following for in-person transactions:

  • 2.7% per swiped, dipped or tapped transaction
  • 3.5 + $0.15 per keyed transaction

For online transactions, including monthly subscription charges, donations, and digital invoices, PayPal charges the following:

  • 2.9% + $0.30 per online transaction

That’s it. Really. The simplicity of PayPal’s pricing is one of the biggest draws for merchants. You can predict fairly easily what your pricing will be and, because PayPal deducts its fees before depositing funds in your account, you don’t have to worry about an end-of-the-month invoice or going over a limit and incurring additional fees.

What About Alternative Payment Processing Rates?

If you’re wondering whether PayPal offers any sort of alternative payment plans, the answer is yes. Merchants with an average transaction size under $10 can opt for the micropayments plan. PayPal also offers a nonprofit discount for online transactions to qualified 501(c)(3) nonprofits.

  • Micropayments Plan: 5% + $0.05 per transaction. (Note: This rate applies to all transactions, even those above $10)
  • Nonprofit Discount (Online Only): 2.2% + $0.30 per transaction

If you integrate with one of PayPal’s partner POS systems, such as Vend or TouchBistro, you may be eligible for special discounts  (presumably volume-based) or other promotions. However, these offers aren’t clearly disclosed, just advertised on the POS software sites.

Other PayPal Fees For Payment Processing

While PayPal does charge a few extra fees relating to payment processing, they aren’t many. But these are what you might come across:

  • 1.5% Cross-Border Transaction Fee: For US merchants who accept online payments from buyers out of the country, or in-person transactions involving a card from outside the US, PayPal charges a 1.5% cross-border fee. That means, for example, that a US merchant accepting a Canadian card at a POS terminal will pay 4% of the transaction value to PayPal.
  • 2.5% Currency Conversion Fee:  If PayPal has to convert the currency before it deposits the funds in your account, you’ll pay another 2.5% conversion fee. Whether you have to pay the conversion fee depends on the customer’s bank and whether it will handle the currency conversion (usually at a cost to the customer).
  • $20 Chargeback Fee: Chargeback fees are pretty standard, and if a customer files a chargeback against you, PayPal will assess a $20 fee in addition to withdrawing the funds to cover the transaction amount.
  • Refund Fee: In the event of a refund, PayPal will refund the percentage-based fee from the transaction to you, but keep the fixed fee. For most in-person transactions that means you’ll pay nothing. However, refunds on keyed transactions mean you’ll pay $0.15. Refunds on online or invoiced transactions will cost $0.30. PayPal can be a bit confusing about how this works in its transaction summaries, but be aware that you will pay a fee for most refunded transactions, albeit a small one.
  • 1% Instant Transfer Fee: If you’d like to move your PayPal balance to a bank account immediately, you can do that — for a fee. PayPal charges merchants 1% of the transfer value, capped at $10 per transfer, but your funds will be available typically within 30 minutes (s0 long as your bank’s system isn’t incredibly slow). You’ll have to connect an eligible debit card to support instant transfers as well. However, if you prefer to have instant access to funds without paying a fee, don’t forget that PayPal offers a business debit card that’s linked to your PayPal balance, too.

Software Fees

One of the big draws for PayPal is the lack of software fees. Instead of paying a monthly fee for PayPal’s ecommerce features, you pay only the payment transaction costs (in most circumstances — but we’ll come back to this in a moment). While you’ll need to arrange for your own domain and web hosting, you can implement PayPal’s “buy” and “donate” buttons with no additional costs. You can send digital invoices for free and only pay the transaction cost when the invoice is paid.

Likewise, access to PayPal’s mPOS app, PayPal Here (read our review) is also free. However, if you opt to integrate PayPal into a POS app, invoicing software, or another platform, you’ll be responsible for those software costs. PayPal doesn’t charge anything for use of the integration.

Also, take note: PayPal doesn’t charge merchants any PCI compliance fees, account maintenance fees, customer service fees, or termination/account closure fees.

However, PayPal does offer a couple of advanced software options that come with additional costs:

  • PayPal Payments Pro: The “Pro” plan from PayPal has two advantages. One, it includes a virtual terminal to accept payments over the phone by keying in a card from a browser window.  Two, it allows merchants to keep the checkout process on their own website rather than redirecting to PayPal to complete a transaction. This does come with a couple of concerns. For one, you’re not automatically PCI compliant and you’ll need to take additional steps to handle your PCI compliance. Two, $30/month for a virtual terminal is pretty pricey considering you’ll still pay higher rates than swiped/dipped/tapped transactions. Square and Shopify both offer free virtual terminals. Also, opting for PayPal Payments Pro and the Virtual Terminal will mean a few different transaction fees to worry about:
    • 3.5% American Express Fee: Any Amex cards will process at the higher 3.5% rate if you’re on the Pro plan.
    • 3.1% + $0.30 Virtual Terminal Fee: Any transactions processed through PayPal’s Virtual Terminal process at 3.1% + $0.30, plus the international transaction fee if applicable.
  • Recurring Billing: If you’d like to sell subscriptions (software, gift boxes, etc.), PayPal does offer a set of recurring billing tools. Recurring payments are available with PayPal’s Express Checkout Option at no additional charge, but if you have PayPal Payments Pro and want advanced tools, they’ll cost you $10/month. This doesn’t apply to “Donate” buttons, which have their own option for donors to choose between a one-time or recurring donation.

  • Mass Payouts: If you need to distribute funds to multiple parties, PayPal’s Mass Payouts feature might be an appealing option. You have two options here: using PayPal’s API to handle the command, or uploading a spreadsheet. Which method you choose affects how much you pay — if you opt to upload a spreadsheet through PayPal’s website, you’ll pay 2% per transaction, capped at a maximum $1 USD, which is pretty reasonable. If you opt for the API, you’ll pay a flat fee of $0.25 USD per payment. This is a great way to distribute payments to contractors, for example, or manage marketplace payments if you use PayPal’s platform.

PayPal Hardware Costs

Unless you’re integrating PayPal with a POS system or using the free mPOS, PayPal Here, you won’t have to worry about hardware costs. But if you do, you’ll have a few options for card readers:

  • Chip & Swipe Reader: PayPal’s entry-level chip reader sells for $24.99. In addition to EMV capabilities it supports magstripe transactions, but no contactless payments. However, it does connect to phones and tablets via Bluetooth and comes with a convenient mounting clip.
  • Chip & Tap Reader: To get a credit card reader that supports magstripe, EMV, and contactless payments, you’ll need the Chip and Tap reader, which sells for $59.99. We’ve already reviewed this reader as well as the optional charging dock ($30 separately, or bundled for $79.99), with a very positive rating. Again, the Chip and Tap reader connects via Bluetooth. In addition to the charging dock, it comes with a convenient mounting clip.
  • Chip Card Reader: The Chip Card Reader was the first EMV-enabled card reader PayPal offered, and it’s still the only hardware option for merchants who want to integrate with one of PayPal’s POS partners. It sells for $99 on the PayPal site, with an optional charging dock. Given the price point, it shouldn’t surprise you to learn that this all-in-one reader connects via Bluetooth.

  • Mobile Card Reader: PayPal used to offer its entry-level swipe-only reader for free, but now it sells for $15 because PayPal, like most processors, really wants you to start accepting EMV. Use of the mobile reader comes with limitations on accounts, so if you do a decent volume of credit card transactions and don’t want to encounter any holds on your funds, you should avoid the mobile reader at all costs:

*Key-in transactions and sales over $500 in a 7-day period made with the Mobile Card Reader are subject to an automatic 30-day reserve where funds are held in your PayPal account to cover the high risk associated with these types of transactions. For increased protection from fraudulent transactions, we recommend using a chip card reader. All PayPal accounts are subject to policies that can lead to account restrictions in the form of holds, limitations, or reserves. Additional information about these policies can be found in the PayPal User Agreement.

Apart from the cardreaders, PayPal doesn’t offer any proprietary hardware. If you need a countertop register setup, you can choose from an array of tablet stands, receipt printers, and cash drawers. A few select models are confirmed to work, while many others are “unofficially supported” in that they’re likely to work in most cases. The PayPal Here app doesn’t officially support any external barcode scanners (it supports in-app scanning using the device’s camera), but Bluetooth-enabled scanners may work with your setup.

Is PayPal Actually a Good Value?

We’ve talked pretty extensively about the cost of using PayPal, but we haven’t really talked about value. Because value is so much more than just the actual, physical cost. Value encompasses convenience, customer service, and other extra factors that could easily justify paying more than the absolute lowest prices.

PayPal isn’t the absolute cheapest processor out there — especially not for businesses that handle more than $10,000/month in credit card transactions. Larger businesses may be eligible for merchant accounts with volume discounts. For low-volume businesses, PayPal often does offer more competitive pricing because of the lack of monthly fees. The flat-rate pricing, especially for in-person transactions, can mean cost savings over interchange-plus.

But the real value in PayPal is the massive consumer trust and convenience. Just about everyone recognizes the PayPal name, and with 200+ million consumer users around the world, it’s safe to say a lot of people have PayPal accounts. The barriers to entry are minimal — you don’t need a huge amount of technological experience to implement PayPal for in-person or online payments. As long as you aren’t using PayPal Payments Pro, you don’t even have to worry about PCI compliance. PayPal handles it for you, at no additional cost.

Apart from the issue of account terminations or funding holds, the only other consistent complaint about PayPal is its customer service, and reports vary. Some merchants say they’ve never had a problem with customer service. Others say that their support reps have been downright unhelpful when they’ve called in. Fortunately, PayPal offers extensive self-help resources so you should be able to deal with most technical issues without having to contact PayPal directly.

I can’t say unequivocally that PayPal is right for everyone. It’s not. But it is a really good option for a lot of merchants, especially low-volume businesses that are just starting out. For a closer look at PayPal and all its services, we recommend checking out our PayPal and PayPal Here reviews.

If you’re not sure PayPal is right for you, I suggest looking at our Square vs. PayPal article, as the two companies are fairly similar in their business models and offerings.

Thanks for reading! If you have any questions or comments, we’d love to hear from you, so please drop us a comment!

The post The Complete Guide to PayPal’s Fees, Rates, and Pricing appeared first on Merchant Maverick.

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The 10 Best Restaurant Management Software Apps

It’s almost 2019, if you can believe it, and more than fall leaves or pumpkin spice lattes, tech fans like myself relish the smell of a freshly unboxed smartphone (thanks to Apple’s annual September unveiling). But it’s not just consumers who love mobile tech; businesses do too.  As mobile technology becomes more powerful, businesses — including restaurants — enjoy increasingly robust mobile hardware which can handle more powerful and nuanced software functions.

Indeed, restaurant managers, in particular, have an increasing number of mobile management applications at their disposal. From tablet-based POS systems that accept mobile payments to online reservation services that let customers reserve a table with an app, more restaurant management functions are being conducted online and on mobile devices. But with all the restaurant apps out there, how do you know which ones you should use? Think of it kind of like cooking: if you use too much or too little of an ingredient, it ruins the dish. Similarly, if you use too many management apps, there’s too much overlap in services (not to mention the fact that you’ll run out of bandwidth and money), and if you use just one or two services, you may miss out on critical features.

To help you out, I’ve put together this list of the top restaurant management apps in terms of both quality and popularity. From employee management to accounting to raw ingredient tracking, modern mobile restaurant software can help you with every restaurant management task you can imagine.

I’ve divided these top 10 best restaurant management apps into restaurant point of sale (POS) software apps—which are often complete restaurant management systems with few if any third-party add-ons required— and other restaurant management apps which offer more specific, targeted functionality.

Restaurant POS Systems

Toast TouchBistro Breadcrumb ShopKeep Lightspeed Restaurant

Toast

TouchBistro

Breadcrumb POS by Upserve

ShopKeep

Lightspeed Restaurant

ShopKeep alternatives for restaurants

Visit Site 

Review

Visit Site 

Review

Compare 

Review

Visit Site 

Review

Visit Site 

Review

Monthly fee

$79+

$69+

$99+

Get a quote

$69+

Cloud-based or Locally Installed

Cloud-based

Locally installed

Cloud-based

Hybrid

Cloud-based

Compatible credit card processors

Toast only

TouchBistro Payments, Square, PayPal, Moneris, Cayan, Chase Paymentech & more

Upserve Payments only

Shopkeep Payments & some others; contact your processor to see if they are supported

Cayan or Mercury in US; iZettle in Europe

Business size

Small to large

Small to medium

Small to large

Small to medium

Small to medium

The awesome thing about today’s app-based restaurant point of sale systems is that they are often complete restaurant management systems. Or if they do not include essential restaurant management functions, they will typically have integrations that work together with other restaurant management apps (for accounting, staff scheduling, inventory management, etc.). As such, your restaurant POS system is a good basis on which to build any other add-ons to your restaurant application suite.

1. Toast

Review Visit Site

Highlights

  • Android-based restaurant POS
  • All-in-one restaurant management system
  • Advanced inventory management
  • Add-ons for kitchen display system, kiosk POS, online ordering, delivery management, and more

Try it out: Schedule a Toast demo

Toast is a complete, Android-based restaurant point of sale system and restaurant management system for restaurants of any size. With strong front-end and back-end features, Toast not only takes payments with integrated payment processing, but also tracks your sales, labor, and inventory, organizing that information into useful, internet-accessible reports.

With mobile POS tablets, servers can send orders directly to the kitchen and even process payments right from the table. Kitchen display system and kiosk ordering are some other high-tech add-ons available for purchase from Toast.

Useful Features:

  • Customer data management system
  • Menu creation with comprehensive modifier system
  • Labor management including employee time tracking
  • Inventory management system that includes a recipe costing tool, food cost calculator, and menu engineering chart that shows you your best-selling and most profitable menu items
  • 24/7 customer support
  • Online ordering (extra monthly charge)
  • Delivery management system (extra monthly charge)
  • Customer loyalty program (extra monthly charge)
  • Gift cards (extra monthly charge)

Integrations With Other Restaurant Software:

  • Compeat
  • PeachWorks
  • CTUIT
  • CrunchTime
  • PayTronix
  • Bevager
  • GrubHub (online ordering and delivery)
  • Samsung Pay
  • Kitchensync

Toast also has an open API which lets you create your own applications, should you be so inclined.

The Quick & Dirty:

Pricing for this complete POS and restaurant management system starts at $79/month. Overall, Toast is a good option for restaurants that want a complete restaurant POS and management system and prefer a non-iPad POS.

2. TouchBistro

ShopKeep alternatives for restaurants

 

Review Visit Site

Highlights

  • iPad POS system for restaurants
  • Affordable
  • Locally installed
  • Compatible with multiple payment processors
  • Table management with reservations add-on

Get started with TouchBistro: Get a custom quote

TouchBistro is a bestselling iPad POS app for restaurants. While it isn’t an “all-in-one” restaurant management system like Toast, it’s cost-effective, easy to use, and very good at what it does. TouchBistro runs as an app on via one or more iPads, with multi-iPad setups keeping in sync via a local Apple server.

TouchBistro does have some online reports allowing you to view your restaurant metrics anywhere with an internet connection, but it does not require a WiFi connection to operate, other than to process credit card payments. TouchBistro integrates with multiple payment processors.

Useful Features:

  • Tableside ordering
  • Table management with visual layout
  • Menu management
  • Kiosk option
  • Employee management
  • Loyalty program (extra monthly charge)
  • Reservations function with TouchBistro Pro

Integrations With Other Restaurant Management Software:

  • 7Shifts
  • Xero
  • Shogo
  • Square
  • Quickbooks
  • JUST EAT (for online ordering)

The Quick & Dirty:

In summation, TouchBistro a very capable iPad POS for small-to-medium restaurants that are budget-conscious and may not have a powerful internet connection. Pricing starts at $69/month.

3. BreadCrumb POS By Upserve

Review

Highlights

  • All-in-one restaurant POS and restaurant management system
  • iPad-based
  • Fully cloud-based
  • Fully integrated online ordering
  • Must use Upserve for payment processing

Compare: Compare Breadcrumb with other top-rated iPad POS software

Breadcrumb is an all-in-one restaurant management and iPad POS system which could perhaps be considered the iPad-based answer to Toast. Comprehensive restaurant-centric management features that let you manage tables, employees, and menu items with a few finger taps make this restaurant software application suitable for any full-service or quick-service restaurant, no matter the size.

Breadcrumb is fully cloud-based and requires no on-premise server. In-house payment processing is provided exclusively by Breadcrumb’s parent company, Upserve.

Useful Features:

  • Customizable interface
  • “Offline” mode allows you to continue using POS and taking payments if internet goes down
  • Table management with color coding and meal progression graphic
  • Choice between “Server” mode with table view and “Quickserve” mode for bartenders and other quick orders
  • Fully-integrated online ordering system
  • Detailed online reporting suite
  • 24/7 support

Integrations With Other Restaurant Software:

  • Grubhub
  • Shogo
  • Restaurant 365
  • CTUIT
  • Peachworks
  • 7Shifts

The Quick & Dirty:

Breadcrumb pricing starts at $99/month. Again, it’s a solid all-in-one restaurant POS system for iPad with an array of restaurant features. When compared to Toast, however, Breadcrumb might come up slightly short in some respects, such as inventory management. However, Breadcrumb offers integrations with third-party restaurant apps to help fill in any functionality gaps.

4. ShopKeep

Review Visit Site

Highlights

  • Powerful retail and restaurant tools
  • Available on iPad (Analytics app on iOS)
  • Multiple hardware options available
  • Pricing based on custom quotes 
  • Loyalty program only as add-on

Excellent all-around POS: Get your custom quote

While it can be used for either restaurant or retail environments, ShopKeep is a great all-around POS software system that’s reasonably priced and extremely easy to use. Aimed at small businesses in particular, this iPad POS software has a pleasant, Apple-centric interface with convenient register buttons for the most popular menu items. ShopKeep uses a “hybrid” data storage system in which data is stored locally on your restaurant’s iPads, and then syncs back to the cloud when there is an internet connection.

As with the other restaurant POS apps on this list, ShopKeep has integrations to make up for any restaurant management features it doesn’t have, such as advanced inventory management and online ordering.

Useful Features:

  • Integrated ShopKeep Payments payment processing
  • Comprehensive register functionality
  • Extensive back-office reporting suite
  • Raw ingredient inventory management
  • 24/7 customer support
  • Staff management tools
  • ShopKeep Pocket App to track restaurant metrics from iPhone or Android

Integrations With Other Restaurant Software:

  • MailChimp
  • ChowBot (online ordering and delivery)
  • Quickbooks
  • AppCard

The Quick & Dirty:

ShopKeep is an affordable and capable iPad POS that works well for small restaurants of any type. ShopKeep pricing is customized based on your individual business’s needs and is comparable to TouchBistro or Lightspeed Restaurant. Note that while Shopkeep does provide fairly priced in-house payment processing via Shopkeep Payments, you can also use an outside payment processor.

5. Lightspeed Restaurant 

Review Visit Site

Highlights

  • Affordable iPad POS for restaurants
  • Fully cloud-based
  • Also works on iPhone and iPod touch
  • Best for small-to-medium restaurants

Try out Lightspeed Restaurant: Free trial offer

Lightspeed Restaurant is an app-based iPad POS system built specifically for—you guessed it—restaurants. Lightspeed is not the most complete restaurant POS out there, but it is highly mobile-friendly and certainly delivers a lot of bang for your buck.

The Lightspeed Restaurant app requires iOS 9.3 or later to operate and you can access the backend via any internet-connected web browser. In addition to iPads, Lightspeed can even be used on an iPhone or iPod touch, though using the app on those two devices is best for basic features such as clocking in and quick orders.

Useful Features:

  • Intricate employee management
  • Raw ingredient tracking
  • Tableside ordering lets servers show pictures of menu items to customers
  • Floor planner
  • 24/7 phone support excluding holidays
  • Ability to set up timed promotions
  • In-depth reports

Integrations With Other Restaurant Management Software:

  • Resengo
  • Orderlord
  • QuickBooks
  • Xero
  • MarketMan
  • AppCard
  • Multiple online ordering services

The Quick & Dirty:

Lightspeed Restaurant pricing starts at $69/month. This cloud-based iPad POS app is perfect for small-to-medium restaurants of any type.

Other Restaurant Management Apps

What follows are some more restaurant management apps. Rather than the complete restaurant management tool that POS systems provide, these apps have a limited, specific function — like reservations or email marketing — and may integrate with your POS system or be used separately.

opentable

6. OpenTable

OpenTable is an online reservation and waitlist system that’s convenient to use for both restaurateurs and customers. You can access the app on your smartphone or tablet to view or change reservations, and to see your waitlist in real time. OpenTable is a highly useful tool for restaurant managers and waitstaff alike.

Useful Features:

  • Guests can make online reservations from your website, the OpenTable app or website, or third-party
  • Monitor status of each table in your restaurant
  • Shift management tool

POS Integrations:

  • Aloha
  • Micros
  • POSitouch
  • Heartland Dinerware
  • Squirrel Systems
  • Toast (coming soon)

The Quick & Dirty:

OpenTable is online reservation software for restaurants of any type, especially favored by trendy, upscale bars and eateries. OpenTable’s “Connect” option has limited features but only costs between $0.25 and $2.50 for each booked guest. The “GuestCenter” option with more advanced restaurant management features and POS integration is $249/month + $1 per reservation.

7. Fivestars

fivestars logo

Fivestars is a mobile rewards program for local businesses such as restaurants. Customers sign up for Fivestars’ loyalty program either at your restaurant or via the Fivestars mobile app and start earning rewards and receiving promotional offers via text, email, or push notification. Your staff then redeems your customers’ rewards and offers from your POS or a mobile device.

Fivestars also has a lot of cool marketing features that vary depending on which plan you choose. Whether you want to encourage repeat business or gain a competitive edge on other restaurants in your area, Fivestars will help you do both.

Useful Features:

  • Automated rewards and promotions
  • Send one-time offer anytime your sales need a boost
  • Multiple options for setting up rewards system, e.g., customers could earn points per-dollar, per-visit, etc.
  • Social media integration
  • Customer data collection

POS Integrations:

  • Clover Station
  • Clover Mini
  • QuickBooks POS
  • Harbortouch
  • Aloha
  • Aldelo
  • Windows POS

The Quick & Dirty:

Fivestars online loyalty software is especially popular among cafes and coffee shops, but it’s also used by full-service restaurants, bars, bakeries, smoothie shops, and every other type of brick-and-mortar eatery. Fivestars’ starter plan—which includes two customer-facing tablets, POS integration, the Autopilot program, onboarding and three training sessions—is $279 per month.

Best Accounting Mobile Apps

8. QuickBooks Online

QuickBooks is essential accounting software for small businesses, and restaurants are no exception. In recent years, this quintessential business software has become has become more online and mobile-friendly, with the introduction of QuickBooks Online and excellent mobile apps for iOS and Android.

Besides making accounting tasks simple and affordable for independently owned restaurants, cloud-based Quickbooks Online also integrates with most modern restaurant POS systems.

Useful Features:

  • True double-entry accounting
  • Live bank feeds for easy bank reconciliation
  • Unlimited estimates and invoices
  • Accounts payable with ability to create purchase orders and convert them to bills
  • Easy-to-use payroll and other employee management features (for additional cost)

POS Integrations:

Quickbooks Online integrates with most restaurant POS systems. Usually, the question is not whether Quickbooks integrates with your POS, but rather, the quality of the Quickbooks/POS integration. A direct, seamless integration is ideal. Here you can read about 7 POS system that have direct integrations with Quickbooks.

The Quick & Dirty:

QuickBooks online is cloud-based accounting software for any internet connected device. Depending on which features you need, QuickBooks online will set you back between $15 and $50/month.

Xero logo

9. Xero

Xero is a QuickBooks alternative which many restauranteurs around the world use every day to manage their restaurant’s accounting tasks. Just like QB Online, Xero has both iOS and Android apps and can be accessed via any internet-connected device. Xero also integrates with many cloud-based restaurant point of sale systems.

Xero doesn’t have as many features as QuickBooks; for example, payroll support is limited to only 37 states and there is no job-costing feature. However, Xero also costs a lot less than QuickBooks.

Useful Features:

  • Accounts payable feature with recurring bills and purchase orders
  • Unlimited users with extensive user permissions controls
  • Double-entry accounting
  • Excellent customer service
  • Easier to use than QuickBooks (in most respects)
  • 500+ integrations

POS Integrations:

While Quickbooks is the most popular accounting software system, Xero is catching up and most major POS systems integrate with Xero as well as Quickbooks. Some of these systems include:

  • Square for Restaurants
  • Nobly POS
  • TouchBistro
  • Lightspeed
  • Vend
  • Shopify POS

The Quick & Dirty:

With pricing starting at just $9/month, online accounting app Xero is a more affordable QB alternative for restaurants that don’t need every advanced accounting feature.

10. MailChimp mailchimp logo

MailChimp is email marketing software you can use to boost the online marketing efforts of your restaurant. While most POS apps include some email features, they are usually somewhat lacking. With a fully featured email marketing program like MailChimp, you can set up automated email campaigns to build customer loyalty, advertise promotions, and grow your social media following.

MailChimp is entirely cloud-based; the company also offers a mobile app for iOS and Android devices.

Useful Features:

  • 23 basic templates and hundreds of theme templates
  • Easy list segmentation
  • Advanced email campaign reporting
  • Robust free plan includes up to 2,000 subscribers and sends up to 12,000 emails per month.

POS Integrations:

  • Revel Systems
  • Shopkeep
  • Lightspeed
  • Epos Now

The Quick & Dirty:

MailChimp has a very decent free plan and paid plans start at $25/month, scaling up depending on how large your list is (and how many features you want). This easy-to-use ESP supports both small start-ups and large corporations.

Final Thoughts

A successful restaurant business has the same basic ingredients it did 20 years ago or even 200 years ago: delicious food, happy customers, excellent service, and organized behind-the-scenes processes to keep everything running smoothly. However, the tools used to achieve restaurant success have changed with advances in technology. Everything from taking payments, to advertising, to bookkeeping, to employee management has been digitized.

One important job of restaurant management that can’t be replaced with automation is the restaurant manager herself. Being awesome at your job, I’m sure you will do a great job selecting the management apps that work for your unique restaurant business. Have fun with the selection process and make sure you utilize free trials of all of these apps so you can be sure the restaurant management software you choose works great for your needs before you commit.

The post The 10 Best Restaurant Management Software Apps appeared first on Merchant Maverick.

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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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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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Are HubSpot’s Inbound Marketing Services Right For You?

If you are a marketing guru with loads of experience in the trade, you probably know all about inbound and outbound marketing. And the world absolutely needs people like you. But if you are like the rest of us, just trying to get your product noticed and understood by the teeming masses, these terms are just more industry jargon gibberish.

Fortunately, Merchant Maverick is here to provide definitions and cut through the jargon. Basically, an inbound marketing methodology requires you to market yourself in such a way that customers naturally find their way to you, rather than employing more aggressive marketing efforts and strategies (like cold calls).

What Is Hubspot?

Apps like HubSpot are designed to be the backbone of your inbound system. Visit the HubSpot website and you will see multiple references to the company’s commitment to inbound marketing. Specifically, HubSpot offers three separate products that each address a distinct aspect of a business’s inbound marketing strategy. The first is HubSpot’s “free-forever” customer relations management (CRM) system; the second is HubSpot Marketing. Finally, HubSpot offers a Sales tool. But what exactly do these products offer subscribers? And are HubSpot’s inbound marketing services right for you? Join us as we dive into the deep end of inbound marketing. We’ll cover HubSpot pricing, support, and more.

HubSpot CRM Tool

As mentioned above, HubSpot’s CRM tool is free forever. Now, I have been writing and reviewing tech products for a while now, and I have come to expect a few things when I see the “free forever” label. Usually, that just means there is a free version of a software, but with most useful features removed. HubSpot’s CRM is not like that. There are no other subscription tiers, no other fees. HubSpot CRM is 100% free.

But what does it do?

Basically, this tool is designed to help you manage your interactions with customers. When adding a new contact into your database (that can hold up to 1,000,000 people), the CRM begins cataloging every interaction. As you communicate with prospective customers, you retain access to your entire history with them. No more losing emails in the depths of your inbox. All the details are saved and easy to access. In addition to the microscopic view of each contact, the CRM also provides you a broad perspective on what HubSpot calls your “sales funnel.” Using the dashboard, you can quickly identify which customers are locked in on the road to closing a deal and which ones might need more assistance. You can use this tool to automate those communications as well, ensuring no customer falls through the cracks.

So do you need HubSpot’s CRM? Basically, if you are attempting to sell any sort of customizable product where different customers will receive individually tailored products, then you definitely want some kind of CRM service. And HubSpot’s is free. Not only that, but it works, and works well. So yes, you probably want to at least try it out.

But what about HubSpot’s other products? Let’s take a look.

HubSpot Inbound Marketing

You may have a way to manage your relationships with all your customers, but how do you get those customers in the first place? The obvious answer is that you need to market yourself somehow. Fortunately, HubSpot also offers an inbound marketing service that works seamlessly with their CRM product. You can use the free-forever version of this product, but really you will want to start at the $200/month “Starter” level, which includes such crucial features as Calls To Action pages for your website and email marketing. HubSpot pricing for larger subscriptions (which run into the $2,400/month range) includes marketing automation, A/B testing, and custom event triggers.

This is where HubSpot’s “inbound marketing” philosophy really starts to show through: Most of the marketing that you will do with this product involves creating content that draws prospective customers to you. Inbound methodology could entail content marketing, like writing blogs, or optimizing your website to bring in customers rather than investing in outbound marketing through social media sites Facebook, Google, or other advertising platforms. It is organic lead generation, in other words. Keep in mind that you will need a website already in order for this to work. If you’re using a hosting service like Squarespace or Wix, you will need to add a few lines of code (provided by HubSpot) to the source in order to integrate with HubSpot. If you use WordPress, on the other hand, you can simply install the HubSpot plug-in. So far so good.

But what do you actually get from there?

Like I mentioned above, the idea of HubSpot’s marketing service is to attract customers organically to your own content by optimizing your website. HubSpot provides blog and email templates designed to look great across devices, then allow you to insert the all-important ‘Call to Action’ boxes that encourage people to enter their information to your email list and start that customer relationship. The more money you spend per month, the more automated this process becomes.

So do you need inbound marketing services through HubSpot? In my opinion, yes. This service is worth at least the $200/month subscription. From there you will have to decide how much you want to spend on increased automation.

HubSpot Sales

So now you have a way to attract potential customers and manage your relationship with them. But really the whole point is to convert those leads and prospects into sales. Once again, HubSpot offers a product to fill that gap. HubSpot Sales Hub is all about communicating with customers, lead nurturing, and centralizing the process of negotiation so that you can focus on the warmest leads without sacrificing the others. The free version of this product is relatively viable, including meetings, calls, task tracking, and more. However, by paying for the $50/month subscription, you also gain features like live chat, prospects, and dedicated customer support. For a whopping $400/month, you can automate your sales process, as well as unlock HubSpot’s excellent Salesforce integration.

Like all of HubSpot’s products, the Sales Hub is built with centralization in mind. All your leads are kept in the same place, organized to keep them from getting mixed up or lost. The focus in sales, though, is on communication with clients. All subscribers gain access to HubSpot’s calls feature, which simplifies the process of scheduling phone meetings with customers. You also get access to powerful email marketing tools, allowing you to track which customers read your messages or downloaded your attachments.

So do you need it? I think the free version of the software is definitely worth a try. If you find you like your experience with the free version, you might consider paying a higher price for some more advanced features.

HubSpot Service Hub

Offered at $400/month, HubSpot’s Service Hub is the final square in the grand customer management quilt that HubSpot has created. As with all their other products, the key to understanding the Service Hub is organization. The goal is that you will be able to keep all your customer interactions organized and arranged so that no one gets left out.

The Service Hub comes with several communication tools, including a live chat and enhanced email inbox to ensure your customers never feel ignored. Additionally, you can create a “knowledge base” of self-service articles to allow your more independent customers a chance to figure out their problems on their own. There is even a feature allowing you to create chatbots to increase the efficiency of your customer service interactions. Finally, use comprehensive data insights to make sure you are getting optimal interactions every time.

So do you need the sales hub? Really, it will only be useful if you have a lot of customers every month. Of all the HubSpot products I have reviewed in this post, this is the one I would recommend skipping out on, at least at first. Having said that, if your products require extensive customer service, this might be a great option for you.

Why Go Hubspot?

HubSpot provides products that cover every facet of customer interaction, from marketing to sales to leads to customer service. Supporting all other products is the Hubspot CRM, which serves as the bedrock product that makes the others work smoothly.

But do you need HubSpot? Frankly, I think you do. If you are trying to market or sell a product on the internet today, you will want to use these kinds of products in some way, even if you use low-level or free subscriptions for some of them. The only possible exception would be the customer service hub, depending on the level of service required by your product.

Fortunately, most of HubSpot’s products have a free-forever option, so you can try before you buy. I recommend signing up and putting the different apps through their paces before committing to paying a monthly subscription.

The post Are HubSpot’s Inbound Marketing Services Right For You? appeared first on Merchant Maverick.

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How To Advertise On Pinterest Effectively

How to Advertise on Pinterest Effectively

Pinterest was launched in 2010 and has grown to at least 200 monthly active users in 2017. The social sharing platform is designed to help people discover information on the internet. Therefore, just creating an account on Pinterest can draw viewers to your brand.

Pinning content from your own website puts it in front of a new audience. Even pinning other people’s content can draw followers to your Pinterest account. You can get more data from your account. Optimizing the SEO of your Pinterest boards can boost their organic search rankings in Google. All of these strategies are free.

The platform began experimenting with monetizing certain pins in 2014, initiating an effective way for companies to advertise. Nowadays, advertisers can create Promoted Pins, which show up alongside all of the other pins on the page. In this image, you can see that the pin that says “Get 500% more traffic” indicates that it’s promoted by Pinterest in the description below it:

In this case, Pinterest is using its platform to advertise tips for businesses. It’s always encouraging to see a company using its own advertising services. That’s one way to know that the system works.

What Is Pinterest?

First, let’s discuss Pinterest and how it works. Some people say that Pinterest is a social network. Others refer to it as a search engine. Through Pinterest, you create a profile and then “pin” visual content onto different “boards.”

It’s like a collection of virtual bulletin boards. Instead of cutting out paper images from magazines, though, you save images that you find on the internet. You can write a description or include a link with those images so that you can refer back to the website from which they came.

You can create several boards and label them however you’d like. Most people set up boards for different categories. For example, you might have boards that are labeled:

  • Home décor
  • Fun summer activities
  • Dessert recipes
  • Knitting and crochet
  • Boho style

If you’re looking for inspiration for a project, a shopping venture or content that falls in line with your interests, you can search for it on Pinterest. Your search results appear as visual pins with short descriptions underneath them. This is what came up when we searched for “watercolor tutorials”:

To find out more about each search result, you can click on it. From here, you can see the full description, the URL from which the image came, when it was published and any comments that other users have left.

Here’s where things get social. You can leave a comment or ask a question. You can also follow the original poster’s account. Therefore, simply pinning items that interest you can drive traffic back to your Pinterest page and potentially to your website.

Emarketer says that there are 2 billion monthly searches on Pinterest. The platform drives about 5 percent of referral traffic to websites.

When you log onto Pinterest, you’ll see your feed, which shows the pins that the platform thinks that you’ll be interested in. You might see pins from people you follow or a combination of content that you might care about, based on other items that you’ve pinned.

However, Pinterest prefers to show content from trusted sources in users’ feeds. Therefore, if you’re using Pinterest for your business without advertising, you need to make sure that you pin high-quality content and that your pins are receiving engagement in the form of click-throughs, saves and comments.

Why Pinterest Advertising Works

While Facebook is the largest social media platform, Pinterest is competitive with Instagram, LinkedIn, Reddit, and Twitter, according to Pew Research. Twenty-six percent of all American adults use Pinterest, and most of them are women. Pinterest reports that 40 percent of people who actively pin have a household income of at least $100K. If you sell products targeted toward women who want to shop, you’re in the right place.

Here are some other statistics about Pinterest users and their purchasing power:

  • Millenials use Pinterest as much as Instagram.
  • People who use Pinterest are ready to make a purchase.
  • 93% of active pinners use the platform to plan future purchases.
  • 73% of pinners say that brand content makes the platform more useful.
  • 61% of pinners have bought something after viewing a promoted pin.
  • 75% of saved pins are initiated by businesses.
  • People who use Pinterest spend 29% more on retail than non-users.

People search the platform for information that they can use to fuel upcoming purchases for things like home renovations, weddings, parties, vacations or having a baby. This is the place where people are looking for new information, ideas and brands. If you can provide these new ideas, you can make connections with a new audience.

Pinterest advertising looks natural. It fits into place with the other pins in your feed, and it doesn’t detract from or interrupt the user experience. Promoting your pins puts you in front of a receptive audience who is looking for products and ideas that will help them make their next move.

Types Of Pinterest Advertising

There are several types of Pinterest ads, including:

  • Promoted pins
  • Promoted video pins
  • One-tap pins
  • Promoted app pins
  • Cinematic pins

Promoted pins look just like a regular pin, except that they have the word “Promoted” at the bottom of the pin. Businesses pay Pinterest to give these priority over non-promoted pins. Once someone saves your promoted pin, it’s considered an organic find, and that person will no longer see the word “Promoted.” Other people who follow these pinners may find and save these pins, bringing you added traffic for free.

If your promoted pin contains a video, it will appear in search results, news feeds and a “More Like This” section that comes up below a clicked pin and shows similar content. The video will play automatically.

One-tap pins bypass the close-up image and “more details” page that normally shows up when you click on a pin in your feed. When a user clicks on these ads, they go straight to a landing page that you designate. You might think that this is a great way to get your audience in your lap, but some users are surprised by the change in the normal process and click off of your website quickly to get back to Pinterest.

If you are promoting an app, you can use a promoted app ad to get people to install it. The ad will include an app icon and install button so that users don’t have to leave Pinterest to sign up for your app.

Cinematic pins contain animation that moves when a user scrolls. This captures users’ attention and makes them feel like they’re in control without missing the end of the video.

5 Things To Do Before Advertising On Pinterest

Paying to promote pins can be an effective marketing strategy. However, there are a few steps that you should take before you set up your first advertisement on Pinterest.

1. Register For A Business Account

If you haven’t used Pinterest before, you’ll need to create a new account. It’s free to set up, and it takes less than a minute. Start by going to Pinterest’s Business Account page and clicking “Sign Up.”

Enter your email address, password and business name, select your business category from the drop-down menu and click “Create account.”

Follow the next steps, which are self-explanatory. These include selecting your language and country, adding your website URL and picking at least five categories in which you’re interested.

If you already have a Pinterest account, log in and click on Settings. It will say “Business Account Basics” on the top left if it’s a business account. If it’s a personal account, you can convert it to a business account by going to this link.

2. Claim Your Website

When you set up your business account, you should have added your business website URL to your profile. If you didn’t do that yet, go to your settings by clicking on the profile image on the top right when you’re logged into your account. Scroll down until you see the “Claim Website” section.

After you claim your website, you can utilize features such as:

  • Website analytics – Track traffic to pins from your site.
  • Featured logo – Add your profile picture to any content that’s pinned from your site.
  • Early access to tools – Be the first to hear about new business tools that Pinterest rolls out.

To claim your website, you’ll need to either add a bit of code to the <head> section of your website’s index.html file or download a file from Pinterest and upload it to your site’s root directory. After you do that, you can submit your website to Pinterest for review.

3. Install A Conversion Tag

You can add another Pinterest code to every page that you want to track on your website. The code is the same for every page, but you can use it to retarget people who have visited specific pages on your website.

To do this, click on “Ads” on the top left of your account, and then select “Conversion Tracking.”

Choose “Generate Pinterest Tag.” You’ll get code that you can insert between the <head> and </head> elements in the HTML of every page on your website for which you want to track visitors.

4. Upload Your List

If you have amassed a list for your newsletter, you can upload it to Pinterest so that you can target the same users with your Pinterest ads**. Just create a .csv file with the email addresses that you’ve collected over the years. Log into your Pinterest account.

**If you go this route – you need to have your audience’s consent. If you are in the EU, because it’s the law. If you are outside the EU, because you need to be cool, not creepy.

Click on Ads > Audiences.

Then, click on “Create Audience.” Choose “A list of customers that you upload” from the window that appears. Name your audience, and include the date so that you can update it a few months from now.

Pinterest will match up the email addresses from your list with those of its users so that you can show ads to the same people. In the future, you can also create “an actalike audience that behaves similarly to the one you already have.” This will choose people with similar demographics and interests as the people on your email list.

5. Pin Some Content

You can’t promote a pin unless you’ve pinned it publicly. Therefore, if you have created a new Pinterest account in hopes of setting up some ads, you should take some time to create boards and pin content for free before you put money into it.

Make sure that all of your pins contain high-quality images. The visuals are going to grab people’s attention before anything else. Therefore, they need to be top-notch.

Vertical Pins

Pinterest displays images vertically. Therefore, you need to use the correct aspect ratio to get the most out of your pins’ appearance. For years, Pinterest has claimed that a 2:3 aspect ratio is ideal. However, some pinners said that posts with these dimensions didn’t perform well. Some people even created extra-long posts to capture people’s attention.

As of June 2018, however, Pinterest said that those “giraffe pins” may be cropped and won’t show up as frequently in people’s feeds. The ideal aspect ratio is 600 pixels wide by 900 pixels high (720 x 1080 works well too). Square images look good, and they are easy to import from Instagram.

An aspect ratio of 600 x 1260 (with 1260 being the height in pixels) won’t be cropped. Anything taller will.

If you’re creating long giraffe pins, make sure that they add value. Infographics and step-by-step tutorials are ideal for these space-hogging pins.

Rich Pins

Creating Rich Pins can help people learn more about your products. Rich pins contain additional information, including:

  • App – Takes viewers to the app store for download
  • Article – Includes a headline, author and story description
  • Product – Includes pricing, availability and purchase location
  • Recipe – Includes title, ingredients, cooking times, serving information and ratings

By adding the metadata directly to the pin, brands can increase engagement. Picture a recipe that contains a gorgeous picture of the food that you’re eating with the recipe itself below it. The pins pull from the metadata on your website.

Creating Rich Pins is a two-step process. First, you must add metadata to the articles, products and recipes on your site. If you have a WordPress site, you can do this easily with a plugin like Yoast. Then, you need to verify your Rich Pins with Pinterest. Once you validate one URL with a Rich Pin on your site, you’re all set. You don’t need to validate all of the URLs with Rich Pins.

Buyable Pins

Pinterest rolled out Buyable Pins in 2015 to make it easier for its audience to shop directly from a pin. These pins list the price in blue and contain a Buy It button so that people can make a purchase right from the app. When someone clicks Buy It, they go directly to the checkout, where they can pay with a credit card or Apple Pay.

If you’re a retailer or sell your own products, you’ll need to have a Shopify store that’s linked with the Pinterest sales channel to take advantage of Buyable Pins. As long as you point a pin’s URL to the product detail page on your Shopify store, it will activate as shoppable.

Pinterest automatically matches your product feed with your pins and generates Buyable Pins for any products that you have already pinned. For any other product, you should create pins from scratch. These can include additional images so that more people can discover your products.

Buyable Pins are similar to Rich Pins in that they display additional information. Rich Pins, however, don’t send you to the checkout when you click on them.

How To Set Up A Pinterest Ad

If you’ve decided to spend money on advertising, you might wonder how to advertise on Pinterest. This is a step-by-step tutorial that teaches you how to do it.

1. Create The Ad

When you’re ready to start advertising, click on the + sign that appears toward the top right, and then select “Create Ad.”

This brings you to your Ads Manager, where you can create your campaign.

2. Set Your Goals

You’ll begin by selecting your campaign objective.

Then, you’ll enter your campaign details. You’ll have to come up with a name for your campaign if it’s new, or you can select an existing campaign from the drop-down menu. You’ll also designate your daily and lifetime budget for the campaign here.

Then, decide on your campaign placement, which includes whether you want to make your ads one-tap. This feature can’t be edited once your campaign starts running.

If you’re creating an app install ad, you will have the option to select whether to optimize the campaign for completed installs or visits to the app download page. Both are charged on a cost-per-click basis. Pinterest also has direct integrations with mobile measurement partners, or MMPs, which help you track the install performance.

Finally, click “Create campaign and continue.”

3. Set Up An Ad Group

An ad group is a set of promoted pins that fall under the same campaign. You can have multiple ad groups for one campaign, which means that you will have a separate budget for your ad groups than you do for the campaign as a whole.

Understanding Ad Groups

Each ad group can have multiple promoted pins within it. You can assign different budgets and targets to each ad group, though. Therefore, you can use ad groups to set up unique budgets for different marketing areas, such as regions, demographics or products. You can also use ad groups to test the design, placement and objectives of your advertisements without building separate campaigns.

For example, you could create separate ad groups with maximum daily budgets to target:

  • Your email list
  • People who have visited related pages on your website
  • Actalike audiences

To keep everything straight, you should name your ad group based on its organizational structure, such as who you’re targeting or what promoted pins are showing up within that group.

4. Create A Target Audience

On the ad group page, you’ll be asked to create a target audience. This helps you get your ads in front of the right people. You can target viewers based on the following criteria:

You’ll need to give this audience a name and description. If you choose to retarget people who have visited your website, you’ll have to create a Pinterest tag to track them. If you choose to target individuals from an email list, you’ll be asked to upload the list.

You’ll be able to further clarify your audience by interests, such as boards and pins that they’ve interacted with in the past, keywords, languages, locations, devices and genders.

5. Create Your Maximum CPC Bid

On the page where you create your ad group, you’ll be asked to set a maximum CPC bid. This is the maximum amount that you want to pay per audience action, whether that’s impressions, clicks, engagement or app download. You won’t be charged the full bid unless it’s necessary to beat out the next-highest bidder.

6. Select Your Promoted Pin

Now, you can select the pin that you want to promote. You can only choose from items that you’ve publicly pinned. The pin doesn’t have to be one that you have initiated through your own website, although it would probably be a good idea to use an image that you’ve created.

Next, you’ll give the promoted pin a name (optional) and set the URL of the landing page that you want visitors to end up on when they click on it.

Consider the URL carefully. Ideally, you’ll send people who click on your ad to a page dedicated to your Pinterest audience. The landing page should have something to do with the pin that led people to it. If you’ve added Pinterest tag code to your website, you’ll be able to track the success of each promoted pin.

Click “Promote Pin” when you’re finished. The ad will go to Pinterest for review, which can take 24 hours. At this time, add your billing details so that you can pay for your ad once it’s approved.

The Quick Way To Promote A Pin

Pinterest also provides a way to promote your pins in about 10 seconds. Go to your profile and hover over a pin that you want to advertise. Click on the Promote button.

A window will open up where you can add all of the promotional details, including the URL, daily budget, campaign duration, target audience and keywords.

Tips And Tricks For Optimizing Your Pinterest Advertising

Just putting yourself out there isn’t always enough to gain an audience. Instead of wasting your dollars by advertising blindly, follow this advice to get the most out of your budget.

Promote The Best Pins

You might wonder what pins to promote when you advertise on Pinterest. Those with strong visuals do best. Making multiple pins for the same product is a good idea. You can show different angles, styles and descriptions to pull in different customers. Adding your brand name or logo to the image improves credibility.

If you sell products, Pinterest says that photographing them in lifestyle shots is more effective than displaying the product on its own. For example, a fashion pin should show someone wearing the clothing in a real-world setting. Home décor pins do better when they concentrate on the product instead of people. Hair and beauty products get great engagement when the items are displayed against a plain, contrasting background.

Most experts recommend promoting pins that are already doing well. Even though you might figure that boosting a low-performing pin could help it get in front of your audience, promoting a high-performing pin is more likely to give you results. Wouldn’t you want to pay for results as opposed to a lackluster reception to your ad?

When you’re picking a pin in step 3 of the ad creation process, you have the option of choosing from all pins, 30-day most clicked pins or 30-day most saved pins. Use this to your advantage to promote your most engaging content.

Add Text To Your Pins

Even though Pinterest relies on photos, it doesn’t hurt to add a little text to your images. The text overlay should clarify what viewers are looking at without detracting from the design as a whole. The words shouldn’t detract from the aesthetic. A simple overlay works wonderfully.

Make sure that you’re using the description wisely too. A call-to-action helps users stay engaged. You can ask people a question or give an instruction, such as “Learn more” or “Buy now.” You might even try having your call-to-action say, “Pin this for later” to remove the urgent sales quality but encourage people to save your pin.

Consistently Monitor And Analyze Your Ads

It’s hard to predict what’s going to resonate with viewers. Pinterest is a visual platform, and some images may capture more attention than others. When you’re just starting out, test everything, including the:

  • Image
  • Description
  • Call-to-action
  • Keywords
  • Bids
  • Audiences

After doing this consistently for a while, you’ll begin to notice which combinations are more effective.

Focus Your Keywords

Although you’re allowed to include up to 150 keywords with a promoted pin, you don’t have to use all of them. If you’re all over the place, you won’t get many click-throughs. Think about the way that your audience interacts with Pinterest.

The keywords should match the way that your target audience uses the platform (similar to how you “theme” keywords for SEO). Make sure that the keywords are also consistent with the information in the pin and the landing page to which they’re directed.

Because Pinterest is a search engine, keywords are crucial to your pins’ visibility. Create your descriptions the way that you would create meta tags for a web page’s title and description. Using trending keywords earlier in the text will help your pins get noticed.

When you place pinnable images on your website, make sure that you include keywords in the alt text. Your boards should contain long-tail keywords. Use Pinterest Analytics to track which pins get the most impressions and experiment with the keywords that you use.

Add Value

The best practices for advertising on some other platforms involve using a call-to-action to send people to a lead page. However, people who search using Pinterest are looking for information. They might get annoyed if they come across your promoted pin, click on it to investigate it further and reach a page that simply asks them for their email address.

An effective way to use Pinterest for advertising is to send people to a landing page where they can explore what you offer. You can certainly include a lead generation form on this page, but don’t make it the only asset at that URL.

Group Boards

Group boards are sometimes referred to as shared, community, collaborative or contributor boards. Using them can lead to significant increases in traffic.

More than one person can add pins to a group board. Therefore, when anyone adds pins to the board, those pins may appear in the home feed of anyone who follows any of the board members. This exponentially increases your reach.

If you focus on sharing your own content to group boards, you’ll gain exposure for your brand. Keep the content relevant, however.

Because Pinterest rewards high-quality pins with exposure, make sure that you join the right group boards. Those that are targeted to a specific theme usually have more traction with an audience and get more engagement. Click on several of the pins on a group board that you’re thinking of joining to make sure that the links aren’t broken or redirect to a spammy or inappropriate site.

Pinterest is an opportune way to expose your brand to a new audience. The platform isn’t just used by crafty people, DIY-ers and foodies. Travel, fashion, design, hobbies, health and beauty, entertainment, accessories and sporting goods are commonly searched categories on Pinterest. Creating a business account for your brand is free, and you can play around with promoting your pins at a low cost to determine whether it works well for your business.

Next Steps

Pinterest holds a lot of opportunity for businesses of all sizes. It’s also straightforward and fairly risk-less to experiment there.

You’ll learn more from running a single experiment than any blog post – so go for it!

If you want to know other ways to use Pinterest for marketing, check out Nate’s post on Pinterest & SEO research in addition to Using Pinterest Analytics.

The post How To Advertise On Pinterest Effectively appeared first on ShivarWeb.

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The Cheapest Credit Card Processing Companies

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

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

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

The Overall Cheapest Credit Card Processing Companies for 2018

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

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

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

Types Of Providers

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

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

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

How We Chose

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

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

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

Square Payments

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

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

 

Cheapest Mobile Credit Card Processing Company

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

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

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

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

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

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

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

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

PROS:

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

CONS:

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

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

Payline Data

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

 

Cheapest Merchant Account Provider

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

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

For more information, see our complete Payline Data review.

CDGcommerce

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

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

Good Option for Online Payment Processing

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

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

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

Simplified Pricing:

  • Online: interchange + 0.30% + $0.15 per transaction
  • Retail (swipe or POS): interchange + 0.25% + $0.10 per transaction
  • Mobile: interchange + 0.25% + $0.10 per transaction
  • Non-profit: interchange + 0.20% + $0.10 per transaction

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

PROS:

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

CONS:

  • Only available to US-based merchants

For more information, see our complete review here.

Dharma Merchant Services

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

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

Dharma Merchant Services review

Good Option for Nonprofits and B2B Payments

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

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

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

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

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

PROS:

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

CONS:

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

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

Helcim

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

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

 

Good Option for Canadian Businesses

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

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

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

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

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

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

PROS:

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

CONS:

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

For more information, see our complete review here.

Popular (But Less Reliable) Inexpensive Options

PayPal

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

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

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

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

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

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

PROS:

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

CONS:

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

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

Stripe Payments

Stripe logo

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

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

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

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

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

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

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

PROS:

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

CONS:

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

For more information, see our complete review here.

Final Thoughts

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

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

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

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

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

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

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The Complete Guide to B2B Payment Processing

B2B Payment Processing

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

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

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

What Are B2B Transactions?

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

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

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

Merchant Category Codes (MCC Codes)

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

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

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

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

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

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

Data Levels

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

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

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

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

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

  • Merchant DBA name
  • Transaction amount
  • Billing zip code

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

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

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

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

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

B2B Processing Rate Discounts

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

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

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

Visa Level II & III Interchange Rates - 2018

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

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

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

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

How Processing Rate Plans Affect B2B Processing

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

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

B2B Software Applications

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

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

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

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

Final Thoughts

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

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

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

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The Best Credit Card Machines And Terminals

When you scan or insert your debit or credit card at the mall or your local convenience store, you probably don’t put a lot of thought into what type of machine is reading and processing your payment. And really, why should you? To consumers, they’re all pretty much the same (except for maybe those machines that angrily beep at you to remove your card. Why is that sound so aggressive?) That said, if you’re a retailer and you’re not paying attention to what type of credit card machine you’re using, it could cost you. An unreliable or even just a slow machine can impact your bottom line. It’s imperative to know what you want and need from a credit card machine when you’re purchasing your hardware.

Let’s start out by defining some terms. This post will specifically talk about credit card machines and terminals as opposed to credit card readers. A credit card machine is a device that connects directly to or is integrated with your point of sale system, whereas a reader is a smaller, mobile device that generally connects to phones and tablets and can be used with an app.

While many terminals look similar (big buttons, a place to slide or insert your card etc…) there are a number of other features you should be looking for when you make your purchase.

Credit Card Machine Features

First off, you’ll need to make sure your machine is compatible with your processor. Some companies sell hardware that can only be used with their own processing plans. However, there are many universal options available that will sync up with any processor and will give you more flexibility. Some credit card processors will charge reprogramming fees for hardware not purchased directly, so keep this in mind. 

Your level of connectivity is also crucial as any downtime or lag that impedes your ability to process payments is going to have a significantly negative impact on your business. Most newer machines have both a phone and an internet connection and many are now equipped with wireless capabilities in case your landline connection fails or you are in a place where only WiFi is available.

You’ll also want to assess the type of payments you’ll be accepting. In this day and age, you will almost certainly need to process debit card payments, in which case you’ll want a PIN pad (either separately or built-in) for customers to type in their number. Depending on your industry, you may also need a device that handles EBT (electronic benefits transfer). If you’re accepting checks, you’ll want a device that can process them electronically — the same goes for gift cards if that’s an option your business offers. A more modern way to accept payment, like a tap terminal that allows customers to pay via their phone with a service like Google Pay, may also be advisable.

If you’re buying a new machine or terminal, you’ll almost certainly want to make sure that your system can accept EMV chip cards. These cards are becoming the standard in the industry (as of 2015) for their superior level of security; any quality processing machine should be compliant at this point.

What Do Credit Card Terminals Cost?

Now let’s get into what everyone is really interested in: the cost. Credit card machines are generally a bit more expensive than your standard credit card readers which simply hook up to a phone or mobile device. But, with that added expense, you’re also getting added security. To put it in broad terms, machines can run from anywhere between $50 for a bare bones terminal that simply takes card payments, to upwards of $500 depending on what features you want or need.

Each added feature will typically send the price a little higher. If you want to be capable of accepting mobile payments, like Apple Pay or Google Pay, expect a slightly higher cost. If you need a built-in printer for receipts, expect to pay a little more. If wireless capability is a must, that will also result in a slightly higher cost alongside the expense of a data plan. However, many companies offer payment plans and, depending on what services you’re signing up for, some companies run promotions where you can get hardware thrown in for free or at a discount.

Credit Card Hardware Options

When you’re shopping around for a credit card machine, you won’t be hurting for options. However, there are a handful of companies that you will want to check out.

Ingenico and Verifone have long been the gold standard in the credit card terminal industry, and for good reason. They both offer a wide variety of products that are reliable, durable, and competitively priced.

  • Ingenico: Chances are good you’ve used multiple Ingenico products, perhaps in just the past week. It’s difficult to recommend a specific item as they range from very basic readers with built-in PIN pads to others that accept virtually all forms of payment and can print directly all from a device small enough to fit in your hand. Ingenico’s products thrive on their user-friendliness, from set-up to the customer experience, and they have a highly-rated customer service department. Ingenico is also an international company with products that can function all over the world.
  • Verifone: Verifone is equally user-friendly and has an exceptionally sleek and modern interface in many of its credit card machines. Like Ingenico, they offer a wide range of products from a fully integrated POS to mobile and desktop devices. Verifone prides itself on the speed of its transactions and its versatility. The VX520 has been one of its most popular models and should be able to handle most small business needs for under $300. Verifone packs a lot into its devices and they are highly durable and built to handle large numbers of transactions.
  • Pax: Another company to keep an eye on in the credit card terminal game is Pax. While not as ubiquitous as Ingenico or Verifone, Pax is a cost-effective solution with many of the same features. Pax’s products are brightly colored and aesthetically pleasing. The S80 CounterTop terminal has an inbuilt contactless processor and can handle multiple payment types. Pax’s products offer speed and strong memory capabilities while featuring state of the art security measures. They also offer a wide variety of PIN pad options.

A current trend in the world of processing is fully integrated systems. These systems are ultra-modern with the ability to accept nearly any form of payment. They can connect to existing hardware but they’re also on the more costly side.

  • Poynt: Poynt has become a major player in the past few years. It currently offers a two-screen desktop system and a mobile device that allows customers to make payments from anywhere in your store. Poynt accepts gift cards, EBT, and mobile payments — among others — and has features like signature encryption, EMV, and a receipt printer built in. The system is incredibly simple to use and lets the customer see exactly what is happening with his or her transaction.
  • Clover: A similar product to Poynt is Clover Station, which also features a dual screen model. Clover has been extremely popular since its release. With Clover, you are locked into First Data processing, a fact that is still holding Clover’s devices back in our ratings here at Merchant Maverick. However, there’s still a lot to like with this hardware. The ability to customize your experience with Clover is a huge benefit and Station comes with 20 preloaded apps. There is also fingerprint log-in for employees to increase security. Clover accepts EMV cards and comes with an optional NFC printer, 4 GBs of memory, and access to the Clover app store.
  • Square: One of the newest integrated processing products on the market is Square Register. Square’s reputation and popularity speaks for itself and this rollout doesn’t disappoint. With the same dual-screen format as Poynt and Clover, customers can make payments seamlessly with a recognizable and simple interface. Square offers a simple and consistent plan for processing fees and pairs with existing hardware in seconds. You can literally be up and running in a matter of minutes once you’re registered with Square and it comes with a two-year limited warranty.

It’s likely that you’ll find multiple credit card machines that can offer you the functions and features you’ll need to successfully run your business. That’s why it’s important to go with a trusted company and a product that’s proven to be reliable. Having a credit card machine that processes payments quickly and runs smoothly is one less thing a busy merchant needs to worry about.

Final Thoughts

Make sure that you’re always staying on top of current payment trends. Hardware companies constantly update to make sure that their clients always have access to the latest technology. New ways to give and accept payment are constantly hitting the marketplace, and whether it’s a new app for making payments or the ability to accept crypto-currency, credit card terminals are adapting quickly and many low-cost credit card readers are now on the market as well. Hopefully, this post has made your credit card processing hardware search just a little easier. 

Want more information? Read our Complete Guide To Credit Card Machines and Terminals.

The post The Best Credit Card Machines And Terminals 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.

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