Are you a small business owner looking to start accepting credit card payments? Don't worry, it's not as complicated as it seems. There are only two things you need - a credit card processing service and a way to collect your customer's credit card information. With so many options available, we know it can be overwhelming. That's why we've broken down each aspect and provided guidance to help you find the best option for your business.
The first decision you'll have to make is between a traditional merchant account or a third-party payment processor like PayPal or Square. To determine the best fit for your business, consider the type of payments you'll be accepting - online, in-person, or by phone.
In many cases, payment service providers include some form of payment entry at no additional cost, making it easier for small businesses to get started.
If you plan on accepting payments over the phone, you'll need a point-of-sale system that allows you to manually enter the card details. This type of transaction is known as a card-not-present transaction and is common for businesses like restaurants and florists. Keep in mind that these transactions usually come with a higher fee due to the increased risk of fraud.
To accept credit card payments on your smartphone, you'll need a mobile card reader. These readers can connect to your phone through a plugin or Bluetooth and come in magnetic stripe (magstripe), EMV chip, or contactless options. Popular payment processors like Square or PayPal offer these readers.
One of the key factors to consider when it comes to accepting credit cards is the transaction fees. These fees are a percentage of the sale price that you pay for each transaction and can be confusing as they may vary based on different factors.
If you opt for a traditional merchant account, your transaction fees may vary based on:
According to Reuters, industry analysts estimate the average processing fee to be between 1.5 to 3.5%.
Alternatively, using a third-party payment processor usually means a flat rate for transaction fees. For example, HubSpot Payments charges a simple 2.9% regardless of the type of credit card used by your customer.
With so many payment processing services available, it can be challenging to determine which one is best for your business. To make it easier, here are the top five recommended for small businesses:
HubSpot Payments is a seamless payment tool that integrates with your CRM. It allows you to accept all major credit and debit cards, ACH payments, and even recurring payments. Plus, you can accept payments directly from your website or through shareable payment links embedded in emails, text messages, or invoices. It also offers the added bonus of syncing sales data with customer records and reporting.
If you're a U.S.-based user with a starter account or above on Sales Hub, you can access HubSpot Payments with no setup fees or monthly charges, and a flat rate transaction fee of 2.9%.
Why We Like It:
Stripe offers a Bluetooth card reader that can handle swipe, EMV chip, and contactless payments, including Google Pay and Apple Pay. It's a great option for businesses looking for flexibility in payment methods. However, Stripe truly excels in the realm of online payments. It offers pre-built payment pages or the option to embed its checkout cart directly into your website. For those with coding experience, you can also customize your own checkout cart.
In today's world, it's crucial for businesses to accept credit and debit cards as a form of payment. Luckily, there are plenty of credit card processing options available to meet the needs of your customers and your business. Here are the top choices to consider.
Square offers a range of services beyond just mobile payments, including retail registers, point of sale software, and manual entry options. It also provides user-friendly invoicing and appointment scheduling software, and the option to add a payment portal or build an online store for free. For a one-time fee of $49, you can upgrade to a card reader that accepts chip cards, contactless payments, Apple Pay, or Google Pay. With fees starting at 2.6% plus $0.10 per transaction for in-person payments, Square is a versatile option for businesses of all types.
Known for its reliability and name recognition, PayPal is a popular choice for businesses looking to build trust with their customers. It offers a wide range of payment solutions for both online and in-person transactions, including credit cards, peer-to-peer payments, and Venmo. Customers can choose from swipe, chip, contactless, or QR code payments at checkout. With a one-time fee of $29 for a card reader, PayPal is a convenient and secure option for businesses of any size.
In addition to offering in-person and online payment solutions, Shopify is well-known for its ecommerce platform. With a simple drag-and-drop store builder and built-in checkout cart, setting up an online store is easy. You can also monetize your existing website by adding product cards and a "buy now" button. With features like in-store pickup for online purchases and a POS system to connect your in-store and online sales, Shopify has all the tools you need to run a successful online business. Plus, with fees starting at 2.4% per transaction and no monthly costs, it's a cost-effective choice for businesses of all sizes.
