A common self-help truism is that we accept the love we think we deserve. If you put up barriers, no matter how much love you give, love will never succeed.
Just as a would-be romantic is ready to accept love, a small business must also be ready to accept payment. Fortunately for business owners, vendors known as payment processors can make the process easier. Of course, accepting love is an even trickier problem.
What is payment processing for small businesses?
Payment processing is an important business function that accepts payments from customers for goods and services. Online payment processing involves the customer, the merchant, the payment processor, the payment gateway (for online transactions), the customer's bank or credit card company, and the merchant account.
Payment processing needs to be efficient, secure, affordable, and user-friendly. To accept credit card payments, debit card payments, and digital wallet payments (such as Apple Pay and Google Pay), businesses must partner with a third-party payment processor that communicates between the parties involved in the transaction.
What to consider when choosing payment processing for your small business
The ultimate goal of partnering with a payment processor is to increase profits and customer satisfaction while reducing administrative burden. To achieve these goals, small business owners evaluate transaction fees, pricing structures, ease of use, included features, and quality of customer service.
transaction fees
Although credit card transactions typically have higher merchant fees than debit or ACH transactions, many small businesses accept credit card payments because of their popularity with customers. Credit card payments are so popular that payment processors are often referred to as credit card processors, even though most credit card processing companies also process his ACH and debit card transactions.
If your business accepts credit cards, pay particular attention to credit card transaction fees and other variables. For example, many credit card payment processors charge higher fees for online credit card payments than for in-person transactions. If your business accepts a large amount of online credit card payments, look for a small business payment processing plan that offers low fees for these types of transactions.
Price system
Pricing structures offered by payment processors also vary, and the most cost-effective model depends on average transaction volume, average transaction value, and accepted payment methods.
Common credit card payment processing pricing structures include flat rate pricing and interchange-plus pricing. The flat fee pricing structure charges the merchant the same percentage (calculated as a percentage of the total transaction cost) regardless of the type of card used, whereas the interchange plus pricing structure charges the merchant the same percentage (calculated as a percentage of the total transaction cost) regardless of the type of card used. are different.
Some credit card payment processors also offer subscription models that waive certain fees per transaction in exchange for a monthly membership fee. For businesses that process high volumes of transactions, membership plans can provide a cost-effective way to lower per-transaction fees.
excellent customer service
Payment solutions need to be easy to use for both you and your customers. It must also be reliable. If a credit card processor malfunctions, customers may be unable to make purchases, customer relationships may be impaired, and revenue generation may cease. Many payment processors offer 24/7 support via phone or chat, making it easy to reach out for help if you have questions or run into problems.
Choosing a credit card processing company with strong merchant support will ensure you can quickly resolve issues and accept payments from your customers.
simplicity
Card processing is complex, and many credit card processors offer additional services and add-ons that may or may not be beneficial to your business. For example, providers offer both online and in-store payment options, point-of-sale (POS) systems that include payment gateways and physical or virtual terminals, integrated merchant accounts that help streamline payment processing and business accounting, and may provide special software. Analysis and inventory management.
To maximize efficiency (and minimize costs), look for plans that provide the services you need, rather than those you don't. Choosing the simplest payment solution possible will ensure that processing fees don't subsidize services that benefit your competitors instead of you.
6 payment processing companies popular with small and medium-sized businesses
Many popular credit card processing companies offer payment processing for small and medium-sized businesses. Understanding their features, advantages, and disadvantages will help you choose the best payment solution for your business.
1. Clover
Founded in 2012, Clover is a cloud-based POS system and merchant services provider offering in-store and online payment processing technology. Clover uses a flat fee structure. For in-person payments, the rate is 2.3% to 2.6% plus 10 cents per transaction, while the online rate is 3.5% plus 10 cents per transaction.
Features
Clover offers more than just debit and credit card processing. Additional services include:
- Payment with mobile device
- wireless processing
- POS system
- virtual terminal
- Analysis and reporting
- Integrated merchant account
- A vast app marketplace
Strong Points
Clover offers many features. If you're looking for a payment processor that can support inventory management and employee scheduling, manage customer relationships with an integrated CRM, and provide advanced analytics for merchants, Clover could be your partner. .
Cons
Cost is a key concern for small businesses when processing payments, and Clover's prices aren't cheap. Monthly subscription fees for the software are up to $69.95, higher than many competitors' prices, and POS hardware is prohibitively expensive for small business owners, ranging from $49 to $1,649.
2. Square
Square is an inexpensive payment solution that works on a flat fee structure and has no monthly subscription fees. Square's fees are 2.6% plus 10 cents for in-person transactions and 2.9% plus 30 cents for online transactions.
Features
Squares offers a variety of features designed for small and medium-sized businesses. They include:
- POS system
- Free invoicing function
- free mobile device card reader
- API integration
- analysis
- Software solutions for retail and restaurants
Strong Points
For enthusiasts of the Square payment system, price is a big selling point. Square does not charge early termination, activation, refund, or chargeback fees, nor does it charge monthly subscription fees or PCI compliance fees. PCI compliance fees are additional charges for complying with payment transaction security standards known as Payment Card Industry Data Security Standards (also known as PCI DSS). PCI). It also comes with free POS software and a free mobile device card reader.
Cons
Square doesn't work with high-risk merchants, meaning those who have been declared by credit card companies to have a particularly high risk of fraud or the potential for large returns. Some payment processors charge higher fees to high-risk merchants, while others, like Square, don't do any transactions at all. Also, Square offers 24/7 customer support only for paid plan options.
3. Stax
Stax is a membership-based merchant account provider that charges businesses a monthly subscription fee of $99 to $199, an interchange fee, and a per-transaction fee of 8 cents to 15 cents per transaction.
Features
Stax offers a variety of merchant services, including:
- 24/7 customer service
- POS system
- physical credit card terminal
- free virtual terminal
- payment gateway
- Same day financing options
- PCI compliance
- Integrated merchant account
Strong Points
Stax offers 24-hour customer service and same-day deposit options. Also includes PCI compliance features. Stax's Interchange Plus pricing structure does not include any additional percentage-based processing fees, making it a cost-effective option for businesses processing high volume transactions. Stax also does not require a contract.
Cons
Stax requires a flat-rate subscription that ranges from $99 to $199 per month. This makes it a poor choice for businesses that process a small amount of monthly transactions. Stacks also does not deal with high-risk sellers.
4. Stripes
Stripe is a flat-fee credit card processing company that charges 2.9% plus 5 cents for online payments and 2.5% plus 30 cents for in-person transactions.
Features
Stripe's features are tailored for both retail and e-commerce companies. The main contents are as follows.
- virtual terminal
- physical terminal
- Large library of platforms and extensions
- Accept international payments and over 135 currencies
- 24/7 customer service
- Integrated billing and invoicing
Strong Points
Stripe doesn't charge monthly subscription or setup fees and offers 24/7 customer service. It also accepts payments in 135 different currencies and currently offers a variety of advanced features such as sales analytics, inventory management, customer management, and tax calculator tools. The Stripe platform also includes invoicing and billing functionality.
Cons
Like Square, Stripe cannot do business with high-risk sellers. Stripe's application programming interface (API) also requires more advanced software development skills than many competing platforms.
5. Payment Depot
This membership-based merchant account provider charges fees ranging from 7 cents to 15 cents per transaction in addition to exchange fees.
Features
Payment Depot is a merchant service provider with a number of features, including:
- free virtual terminal
- physical card terminal
- 24/7 customer service
- PCI compliance
- payment gateway
- Integrated merchant account
Strong Points
Payment Depot offers a 90-day risk-free trial with no cancellation fees for merchants. We also offer PCI compliance and 24/7 customer service. Unlike other payment processors that use Interchange Plus pricing, Payment Depot does not charge more for online transactions than in-person transactions. Instead, Payment Depot determines transaction costs by plan type. For example, a $79/month plan adds 15 cents to the interchange fee on each transaction, and a $199/month plan adds 7 cents to the interchange fee on each transaction.
Cons
Payment Depot does not cater to high-risk merchants, and its membership pricing makes it a poor choice for businesses with low monthly credit card income. Cheaper plans also include maximum monthly transaction limits.
6. Helshim
Helcim is a merchant account provider and charges interchange fees plus 0.3% of total transaction costs plus 8 cents per transaction for in-person payments and interchange fees, and 0.05% of total transaction costs plus 25 cents per transaction for keyed transactions. We charge a fee plus cents.
Features
As a full-service merchant account provider, Helcim includes a wide range of payment processing capabilities.
- PCI compliance
- No monthly fee
- Integrated merchant account
- virtual terminal
- POS system
- Mobile device processing
Strong Points
Helcim has no monthly subscription fees, no setup fees, no PCI compliance fees, and no cancellation fees. We also offer discounts to businesses that process more than $25,000 in transactions per month.
Cons
Helcim does not deal with high-risk sellers or provide 24/7 support. Volume discounts also make Helcim a better choice for high-volume businesses than low-volume ones.
Frequently asked questions about payment processing for small businesses
How do small businesses process payments?
Small businesses can process payments in person or online, and often accept payment methods such as cash, checks, ACH transfers, and credit and debit cards. Many small businesses use third-party payment processors to accept credit and debit card payments.
How does my business process payments?
Businesses process payments both in-person and online and frequently use payment processors to accept online payments, including ACH transfers and debit and credit card payments.
How can small businesses accept payments online?
Payment processors allow small businesses to accept online payments via debit cards, credit cards, and ACH transfers. Different payment processors operate with different fee structures and offer different benefits, and some merchant service providers offer payment processing, payment gateways, and integrated merchant accounts.
