How Do The Best Credit Card Processors Compare To One Another Based On Cost
We wanted to give you an idea of the per-transaction cost you can expect from the processors we listed above. We ran a simulation for two different types of transactions that companies may deal with — a low $10 charge and a more expensive $200 charge. These estimates, while not exact, can give you some idea of how these merchants compare to one another. We still encourage you to obtain quotes, as different companies may be able to provide you with special discounts depending on the type of business you run. We also included a couple of other good credit card processors to provide better contrast. Helcim is very similar to Dharma Merchant Services in terms of features, while eMerchantBroker.com is a decent high-risk credit card processor.
Note: We excluded Payline Data from the calculation, as the company doesn’t disclose rates for its high-risk merchant processing. However, we estimate the costs would be significantly higher than the ones listed above in both cases.
Paypal Best Simple Solution For Small Business Payment Processing
- Trusted well-known brand
PayPal has been a giant in the world of processing transactions for more than a decade. Theres a good chance that youve used PayPal in some form or another in your personal life.
While PayPal has always been known for its P2P payments, its also a great choice for businesses to use as a payment processing service.
You can use PayPal to accept payments both online or in-person. I highly recommend it for low-volume businesses to get paid online.
I recently wrote an article comparing PayPal vs. Stripe for ecommerce. While Stripe definitely has its fair share of advantages, the PayPal technology is much simpler. Its also extremely easy to set up. You wont need to worry about all of the developer features like you do with Stripe.
Lets take a closer look at PayPals processing fees:
- Online payments and invoicing 2.9% + $0.30 per transaction
- Mobile and in-store payments 2.7% per transaction
- Manual entry transactions 3.5% + $0.15 per transaction
Pricing is nearly identical to Stripe.
One of the best parts about using PayPal as your online payment processor is that youll be able to accept PayPal, Venmo, and PayPal credits in addition to all major credit and debit cards. That flexibility is a huge boon for your customers.
This is a massive advantage over other payment processors, where you would need to integrate PayPal separately.
Best Value Card Reader
The Ingenico iPP320 is a lightweight, compact countertop terminal;that can process contactless, EMV, NFC, Chip-and-PIN, and magnetic stripe payments. The iPP320 is available in the U.S. and Canada and comes with an RS-232 port, an ethernet port, and a USB port for simple hardware and POS connectivity. It does not appear to be compatible with phone line connections. The iPP320 comes with a color LCD screen and backlit buttons, and can be programmed to include optional customer menus in the checkout process. The iPP320 is an affordable option that meets EMV requirements and provides a great deal of flexibility for merchants who want to accept other payment types. We recommend the Ingenico iPP320 for retail environments that utilize an ethernet connection or an internet-connected POS system. .
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What Paypal Is Missing
There have been complaints by users that PayPal is quick to hold funds that it deems suspect, such as if you have a sudden increase in sales or go well beyond your average sales earnings. Its also been known to freeze accounts without warning, a potentially disastrous thing for a business that depends solely on PayPal for processing.
PayPal charges nearly 50 cents per transaction in addition to the percentage. If your sales are generally small and frequent, you may find this more expensive than Square, and for high-volume sales, youll probably benefit from an interchange-plus payment processor like Dharma, Payment Depot, or Payline, who all charge a monthly fee as well but offer much lower rates.
Sumup Best For Occasional Phone Sales On Any Device
SumUp is mostly known for its low-cost card readers. They dont advertise its Virtual Terminal, but if you have a SumUp account, you can message customer support to get the virtual terminal activated. SumUp will ask you to complete an application and submit documentation and proof of your online presence, which they will check. If all goes well, the virtual terminal will be activated for use in your account.
SumUp Virtual Terminal has a simple layout, in line with all of SumUps no-fuss products.
The virtual terminal costs nothing in monthly fees, but transactions are charged at 2.95% + 25p regardless of card type or sales volume. Although higher than some other virtual terminals card fees, the lack of monthly costs could still mean this is the most economical solution for occasional phone payments.
SumUp merchants taking card payments through the Air or Solo card reader can benefit from keeping both face-to-face and phone payment transactions viewable in the same account, or exported to Excel for accounting purposes.
The virtual terminal accepts Visa, Mastercard, Maestro, American Express, Diners Club, Discover and JCB, which is the largest selection of accepted cards included as default.
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What To Look For In A Virtual Terminal
If you already have a point-of-sale system for your business and you want to add a virtual terminal for limited use, then your best option would generally be to use your existing provider. On the other hand, if more than about a quarter of your transactions are entered manually, a payment processor offering a robust virtual terminal could be a smart choice.
Free Credit Card Machines
Some businesses are attracted to offers of free credit card machines. While everyone likes getting things for free, with credit card machines, its not truly free. Instead, the cost is built in somewhere else; most often in the form of higher processing fees.
Remember, the machine is a one-time cost. Your processing fees are ongoing. It doesnt make sense to get a one-time lower fee if it means youll be paying more for every credit card you accept.
In general, if a processor offers competitive pricing, their margins wont be large enough to provide you with a free machine.
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Should I Avoid Tiered Credit Card Processor Pricing
Most of the time, the answer is yes. With tiered pricing, credit card processors bundle the interchange rate, assessment fees and markup into one pricing plan. Because it is bundled together, it’s difficult to tell what you are paying for each item. It also makes it hard to comparison shop. Unless the vendor is willing to break out its fees, it’s best to avoid a tiered pricing structure. ;
How Did We Choose These Credit Card Readers
To narrow the list of best credit card readers for small business to five, several criteria were considered. Simplicity was essential since most small business owners don’t have the time to set up an intricate card payment process for their business. Devices that are “plug and play” and have solid customer support available were a priority.;
In addition to ease of use, costs were another important factor. Depending on what phase the small business is in, equipment costs, card processing fees, and monthly charges could affect a company’s bottom line. We chose companies offering card readers with affordable, transparent pricing and a simple fee structure without a long list of hidden charges.;
Lastly, scalability was important. Knowing you can upgrade to a more advanced credit card reader with the same processor or platform can save you valuable time as your business grows.
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Benefits Of Using Credit Card Processing
The main benefit of credit card processing is that it allows you to accept credit and debit cards and, in many instances, mobile wallets like Apple Pay and Google Pay. Acceptance of these types of payments is increasingly important for nearly every type of business, as many customers don’t carry cash anymore.
National Processing: Best For Small Business
National Processing is one of the best payment processing companies for small businesses. National processing caters to the budget-conscious business owner. It offers no-frills credit card processing along with transparent pricing plans and no monthly minimum volume. Its straightforward products have won over customers and industry critics alike.
National Processing sells four different credit card processors. The Clover Go, a portable all-in-one terminal, serves as the most affordable option and includes a user-friendly display. The Clover Flex works on cell phones and has integrations that can replace traditional cash registers and receipt printers.
Even National Processing’s more elaborate equipment maintains credit card processing flexibility. Vendors can use the Clover Mini POS system like a handheld register that handles barcode scanning and printing. The Clover Station offers comprehensive features for expedient point-of-sale transactions and accepts the following payment options:
- Visa
- Electronic checks
- Online transactions
Pricing plans start as low as $10 per month, with options tailored to restaurants, retailers, and e-commerce stores. The credit card processor also has enterprise pricing plans with a 0% surcharge. Regardless of which option you choose, you’ll get the lowest possible price, or National Processing will pay you $500.
- Great credit card processing service for any small business owner
- Low-cost ACH transaction fees
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What Are The Other Benefits Of Credit Card Processing
Another important benefit is that credit card processors make it easy to accept payments across multiple sales channels.
- In person: You can accept payments at your brick-and-mortar location with a payment terminal, card reader or POS system. You can also accept payments offsite with an app and mobile card reader.
- Over the phone: Using a virtual terminal, you can manually record card details in your computer.
- Online: You can accept online payments in various ways. On your website, you can embed a payment form or hosted payment page. On social media channels and in your text messages, invoices, and emails, you can post payment links.
Shopify Card & Swipe Reader
BLUETOOTH CONNECTIVITY
Admittedly, it can be a little annoying to constantly plug mobile card readers into your phone and then unplugging them when you dont need them. The Shopify Card & Swipe Reader connects to your mobile phone or integrates with your POS system via Bluetooth, so you dont need to physically connect anything to your phone. Customers can swipe their cards or have the chips read for extra protection. You can even capture signatures using the Shopify POS.
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Should I Buy Lease Or Accept Free Processing Equipment
Nearly every credit card processing company has some sort of free equipment offer. Some processors give you a terminal if you sign a contract, while others have a free placement program in which you borrow the equipment.
Accepting free equipment sounds like a great way to save money, but as a perceptive businessperson, you know that “free” often isn’t really free, and you need to do the math to determine whether the free offer is actually the best option for your small business.
Purchasing Credit Card Processing Equipment
Buying processing hardware outright is nearly always your best bet. Although it may be a big upfront cost, it’s less expensive and less restrictive over time than other equipment options. You can keep your purchasing costs low by shopping around for the best price, choosing a basic terminal instead of a fancy POS system, and asking if used equipment is available for purchase.
As you shop around for equipment, find out if the equipment is proprietary or “locked.” This is an important consideration, because you don’t want your purchased equipment to be unusable if you switch processors. If you already own unlocked equipment or decide to shop for new or used equipment online, ask your new processor how much it charges to reprogram the equipment, including shipping and handling costs, and how long the process takes. Many processors offer this as a free service.
Free Credit Card Terminals
Free Placement Programs
Leasing Equipment
What Is Credit Card Processing And How Does It Work
Credit card processing enables businesses to securely receive payments made through credit, debit, gift, or even loyalty cards.
In the past, the ability to accept card-based sales involved a one-size-fits-all approach, characterized by complex configurations and long delays in the authorization. Today, multiple payment processing options exist, most of which meet specific business needs.
For instance, online credit card processors that an eCommerce merchant may consider are very different from merchant services for a brick-and-mortar retailer and vice versa.
Ultimately, variety in merchant services is a plus since business owners can locate the best payment solutions for their needs. The many options available can be overwhelming.
So, it is important to choose a trustworthy partner who can take you through the entire process from choosing a credit card terminal to processing payments quickly and securely.
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What Are The Best Mobile Card Readers
In the mobile payment world, Square sits on the throne providing many options for your business. But there are a handful of other options from companies like Paypal and Shopify that provide convenient and safe mobile payment receivers.
Below youll find our recommendations for the best mobile card readers.
How Has The Pandemic Changed Credit Card Processing For Small Businesses
The pandemic changed the way consumers conduct business. An IQ code went from a convivence to a life-saving tool. As a result, consumers across the globe are trading cash and physical transactions for contactless and mobile payments. They are ordering and paying for food via kiosks and are increasing their online purchases. What used to be reserved for the early adopters is now used by the masses. That requires small business merchants to adapt, which means contactless payment terminals, mobile and digital payments, and buy now pay later schemes.;
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Paypal Convenient For Paypal Users
PayPal is a popular choice for small business, partly because it is so well-known. The virtual terminal itself is effective and highly secure, but PayPal makes it your responsibility to set up PCI compliance, which can be costly if you require assistance.
PayPal Virtual Terminal accepts Visa, Mastercard and Maestro, and transactions settle in your PayPal account within minutes.
PayPals virtual terminal is simple to use, but costs are a little complicated.
To cut to the chase, the costs of their virtual terminal are some of the highest for small businesses. Firstly, theres a £20 monthly fee for having the virtual terminal in the first place.
The Standard fee for virtual terminal payments is 2.9% + 30p per transaction. Alternatively, you can apply to be on a Blended pricing plan where transactions cost 1.2% + 30p, or Interchange Plus plan where transactions cost the interchange rate + 1.2% + 30p.
Interchange fees range between 0.2%-2% according to the type of card accepted. For example, a UK-issued, personal Visa Debit card will have the lowest fee, while non-UK, premium or corporate cards have the highest interchange rates.
There is no cross-border charge applied for the Interchange Plus pricing structure, but it is applied to the Standard and Blended rates.
A currency conversion fee of 3% on top of the base exchange rate is applied on all plans if the payers account is in a non-GBP currency.
Dharma Merchant Services Features
For B2B services, Dharma merchant offers the MX Merchant system, with its B2B app. In addition to Level 2 and 3 pricing, it may be able to lower your rates further if you process over $6,500 in a sale and gives high-volume discounts for sales of over $100,000 per month. While many of our virtual terminals offer Level 2 or 3 pricing, its not a focus like it is with Dharma.
Dharma usually pays out in 24 hours. Compare this to PayPal, which pays immediately to your PayPal account but can take several days to transfer money to your bank. Most payment processors take one to two business days.
Dharmas virtual terminals can support invoicing and recurring billing and manage customer information. Unlike Square or Shopify, it will not manage inventory.
Dharma processes ACH transactions, but charges an additional $25 per month, with a flat rate of 40 cents per transaction. Compare this to QuickBooks, which does not charge an extra monthly fee but has an upper limit of up to $1 per transaction.
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Advantages Of Accepting Credit Cards
Higher revenue card payments account for over half of all UK transactions, and that number is set to rise year-on-year. Businesses that dont accept card payments will be left in the dark ages.
Credibility as a business, if you dont accept debit and credit card payments you look amateur. Thats a fact.
Better end-to-end customer experience a quick tap or swipe of a credit card is much more convenient for a customer than laboriously counting out cash. Streamline their shopping experience with a card reader. Remember: a satisfied customer is a loyal customer.
Better cash flow providers that specialise in making the best card machines for small businesses prioritise a speedy transfer of funds as part of their service. Cashflow can be a major problem, so having having quick access to the money from card payments is a major benefit.
Upsell its been proven that customers typically spend more when paying by card. Why? Well, when they arent physically parting with any cash, a quick stop for coffee can easily turn into a full blown lunch
Security handling large amounts of cash poses an obvious security risk to your business. Reduce this risk by accepting payments electronically. Plus, the EMV computer chip in modern cards makes them extremely difficult to clone, further reducing the chance of fraud.