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In this article:\nAccepting credit card payments without a merchant account\nPros and cons of using a third-party payment facilitator\nAdditional resources for credit card processing\nIn this day and age, it is absolutely essential for your business to have the ability to process credit card payments, no matter what type of business you have or how small it is. Customers expect the ability to just swipe their cards or run their credit card numbers to easily pay for your products or services. \nThe traditional method of running credit card payments is to apply for a merchant account through a bank, and/or get set up for accepting credit cards via a merchant processor. This can take anywhere from a few days to several weeks to get the account approved and have the ability to start processing payments. However, you can possibly get better rates and  more personalized service via a traditional merchant processor, so keep that in mind.\nIf you choose not to get set up with your own merchant account and/or processor in order to accept credit card payments, today’s third-party payment facilitators are good option, particularly for truly small, one-person businesses.\n \n\nHow to accept credit card payments without a merchant account\nThird-party payment facilitators or “aggregators” (like Square, Stripe, etc.), allow you to get set up to accept credit cards quickly and usually will give you a basic card reader for free. These third-party companies generally offer simple, flat-rate processing, which some businesses prefer, though you should be aware that you’ll generally pay about 20% more for flat-rate processing than if you go throught the hassle of getting set up with a traditional payments processor and use “interchange plus” pricing.\nOne reason that you don’t need a merchant account to use a third-party payment facilitator is that each facilitator has their own large merchant account that all of the funds go through. \nSo, funds from your customers’ credit cards go through your payment facilitator, into your payment facilitator’s large merchant account, and then into your bank account. \nOne of the largest problems that business owners face with third-party services is deciding which one to use. There are dozens of options out there to choose from, so narrowing it down can quickly become overwhelming. \nNot sure if a third-party service is right for you? We’ll go over some of the pros and cons to help you make an informed decision. \nPros of using a third-party payments facilitator\nThird-party payment processors have gained popularity with new business owners in particular because of the following:\nQuick and simple set-up process that doesn’t require extensive documentation\nEasy-to-understand, flat-rate transaction fees (but remember, you may be paying more for this convenience)\nCapabilities for customers to pay online or in person\nUsually no long-term contracts\nCons of using a third-party payments facilitator\nWhile third-party solutions are simpler to set up and understand than some merchant processor accounts, there are several drawbacks to the third-party facilitators:\nThere is little to no flexibility on rates, and you will probably pay a little more for processing. Traditional merchant processors will often negotiate their rates and fees, while third-party services keep it simple with one rate system for everyone (but again, you may pay more for the convenience)\nService interruptions or cancellations can occur for businesses in specific industries (For example, some third-party facilitators don’t allow clients to sell firearms or related products—they may even let you set up an account but then cancel it when the first order goes through)\nLimited customer service; not all third-party providers offer free customer support or 24/7 support which can be a problem if your system has a malfunction late in the day. In addition, you may prefer interacting with a real person, such as your processor’s merchant-level service agent, who can talk you through the process, explain and modify your processing agreement, help with any issues, and become a trusted business advisor\nJust be sure to do your research and find the payment processor or facilitator that best suits your needs. \nCheck out this articles for more information about credit card processing fees: \nCredit card processing fees: what small businesses need to know\n\nWith almost too many credit card payment processing solutions to choose from, this task can quickly become a burden on any small business owner. We want to help make that process a little easier for you.\nSolo makes it easy to pay and get paid\nSolo is not a bank, but is a financial super-app for small businesses, freelancers, sole proprietors, contractors, and more. Solo is the easy way to pay and get paid. Your customers don't have to sign up to pay you, and can use several payment methods, including Apple Pay, Google Pay, and cards. QR codes make it easy to get paid, and you can easily cashout your Solo account balance for free, or spend it using your Solo Cash Card anywhere Visa is accepted. Learn more at \nSolo.co\n.

Do I need a merchant bank account to accept credit card payments?

In this article:\nWhat things affect credit card processing fees?\nWhat types of fees and rates are available to small businesses?\nWhat are some add-on fees you need to be aware of?\nAs a small business owner, you obviously need to get paid for your offerings, whether you own a small retail business, hair salon, pet services business, or something else entirely. Credit cards have grown to become and will continue to be (in some form) the most common form of payment from your customers, so it’s important to have the right tools to be able to accept credit cards. \nWith credit card processing providers and platforms, you can offer this payment method to your customers and use it to your advantage in gaining new customers. But credit card processing can be complex (and expensive), and there are many little things that you should know and understand before committing to one processor or payments provider over another. \nWe want to walk you through the complexities of credit card processing fees, including what you should be paying, and some things you should watch out for. \nWhat are credit card processing fees?\nCredit card processing fees generally refer to the transaction fees associated with accepting a credit card or debit for payment. Many popular processing companies that cater to smaller businesses charged a fixed dollar amount plus a small percentage of the total transaction each time a credit card is processed. \nThis fee will typically vary depending on how the card is processed (in person, swiped, hand entered, online, via the phone, etc.) and other factors, which we’ll discuss below.\nThere are other fees that come into play when you decide to start processing credit cards too. We’ll go over each of these fees so that you know what to expect as you start shopping for the best credit card processing solution for your business. \nLearn more: \nSmall business guide: What is credit card processing?\nWhat things impact credit card processing fees and rates?\nBefore we dive into each type of processing fee, we want to cover some of the basic things that can impact your fees. Be thinking about these as you try to determine which platform to use. \nMethod of processing\nThe processing method of the credit card can impact your fees. Swiping or inserting a chipped credit card in-person has a lower risk of fraud and chargebacks, which allows your process or or payments provider to offer you lower processing fees. \nWhen a card isn’t physically processed—like if your customer enters their information online or pays over the phone, or if the magnetic strip or EMV chip isn’t working correctly with your point of sale (POS) hardware and the cashier has to enter the number manually—there is a higher risk for fraud since it is more difficult to protect the information, resulting in higher fees. \n(Image)\nSize of your average transaction\nMost credit card processors require a small fee to be paid with each purchase, on top of the percentage that they require. If your average purchase size is low, then you might be paying a lot more in transaction fees. \nFor example: Let’s say you have 100 $5 transactions and 5 $100 transactions and your service provider charges $0.10 for every transaction. You’d pay that $0.10 fee 100 times for the smaller transaction, but only and five times for the larger transaction. This is one reason some retailers have a minimum purchase amount required for credit card purchases. For very small purchases, it might actually cost you money to sell those items! \nConsider what your average transaction size is as you look at fees from different companies. \nBusiness type\nEvery business has a Standard Industrial Classification Code and a Merchant Category Code. These codes help card providers and processors see what kind of business their customers are involved with. Riskier businesses generally have higher fees associated with their transactions. \nThere can also be a certain amount of social pressure for processing companies to charge higher fees (or avoid providing service altogether) for some types of businesses. Firearms-related companies or shooting ranges, adult entertainment companies, and cannabis businesses are only some that have had issues getting credit card processing services at various times.\nWhat types of fees are associated with credit card processing?\nWhen it comes to credit card processing, the fees can really start to add up, which is why we encourage you to shop around and look at several different options before signing a contract. It’s important to understand what types of fees exist and how your individual business can be impacted by them. \nRemember the things that can impact your fees as you explore what types of fees generally come with credit card processing. \nMerchant account fees\nIf you are using a merchant account, there are generally two types of fees you’ll have to pay in order to process credit cards. \nInterchange fees\nInterchange fees are non-negotiable fees determined by the issuing bank and card network (like Visa or Mastercard). Whenever a customer uses their credit card, an interchange fee is charged. It’s usually a fixed dollar amount plus a small percentage, like 2% + $0.15. So, on a $10 transaction, the interchange fee would be $0.35. \nMarkup fees\nMarkup fees are the negotiable fees that your provider adds on top of their interchange fees. This is the “markup” they get for providing you this service. Again, this is generally a small percentage and fixed dollar amount on top of the interchange fee. \nOne-time fees\nSome fees are unavoidable, like transaction fees and equipment fees. But if you read the fine print, you can make sure you don’t have any hefty termination fees to pay later down the road. \nSetup fees\nSome providers charge fees for a technician to help you get set up on their payment processing software and equipment. These vary by provider, and some providers don’t require any setup fees. \nTermination fees\nTermination fees come when you cancel a contract or end your service with a provider. This is one where you’ll want to read the fine print. Make sure you understand the terms of your contract and termination fees before committing to anything. \nEquipment fees\nEquipment fees come into play when you need a terminal, phone add-on, or tablet for running credit cards in-person. Sometimes you can buy the equipment outright, and sometimes you may need to finance or lease the equipment, depending on the cost. \nRecurring fees\nBe aware of the different recurring fees you may see on your statements from credit card processing providers. Some of these may be completely unnecessary for your desired level of service, so make sure you understand exactly what you need to be paying for. \nMonthly subscription fees\nMany service providers require a monthly subscription fee for customer support and PCI compliance. If you don’t see this fee on your bill, make sure that you’ll still have access to some kind of customer support in case you run into problems. \nMonthly minimum fees\nSome providers require monthly minimum fees to ensure that they get their “cut” even when you are having a slow sales month. \nStatement fees\nIf you receive paper or online statements, your provider may require a service fee for each statement you receive. It may be called a “processing fee” or “miscellaneous fee.” Sometimes you can save this fee by opting out of mailed, paper statements.\nIRS fees\nSome providers might charge an “IRS reporting fee,” where they charge a fee to report your transactions to the IRS and provide you with the necessary documentation. This is a spammy practice that should be disputed. Most providers should do this for you at no cost. \nPCI fees\nIf your provider offers PCI compliance and support, then they may require a fee to help with this. This may be included in your monthly subscription fees. But sometimes this fee is charged when there is no benefit to the customer, so make sure you’re getting what you pay for. \nPayment gateway provider fee \nWhen you sell products/services online, those payments go through a payment gateway provider to ensure the information is encrypted and secure. Some of these providers may require fees, but several don’t have fees. Your payment processor may even have a preferred payment gateway provider that comes with their service.\nBe sure to ask if there are any additional fees for this service.\nProcessing fees\nThese fees are the general “credit card processing fees” that you may be somewhat familiar with, and they can encompass some of the fees we’ve already discussed. \nTransaction fees\nTransaction fees are the fees that occur each time a credit card is processed. They generally have a fixed dollar amount and a small percentage, similar to interchange and markup fees. Depending on the type of provider you are using, your transaction fees may be the interchange and markup fees. Some providers only charge one fixed rate per transaction.\nFlat fees\nFlat fees will vary between each type of payment processor. These are your monthly fees, equipment costs, and any other recurring fees that have the same rate each time you pay it. \nIncidental fees\nIncidental fees happen on a case-by-case basis. Generally, you’ll have an incidental fee if there is a chargeback or insufficient funds to cover the transaction. Card not present (CNP) fees may be considered incidental fees as well, if your processor charges an additional fee or a special rate for this type of transaction. \nBe sure to discuss the fee structure with your merchant services provider or processor representative so you have a very good idea of what to expect for all fees related to accepting credit cards so there are no surprises.\n(Image)\nTraditional vs. “new age” credit card processors\nTraditionally, every brick and mortar business would need to work through a merchant account and their bank to have the ability to process credit cards. It was a time-consuming and often expensive proposition to get a card reader hard-wired into the system, terminals set up at your place of business, approvals, etc. \nThis is where a lot of the fine-print (and potentially unnecessary) fees we’ve referred to can sometimes come into play. \nMerchant accounts generally have an interchange fee that is required with each transaction, and then on top of that you are required to pay the markup from your provider. \nYou can often negotiate with your merchant services provider to get preferred or lower rates, and sometimes salespeople will offer very low rates in order to sign your business. This can be to your advantage, so be sure to ask around and talk to several companies, and be sure to get the full details and read the fine print for whatever company you’re considering.\nSources:\n
\nhttps://www.creditdonkey.com/credit-card-processing-fees.html\n
\nhttps://www.fundera.com/blog/credit-card-processing-fees\n
\nhttps://www.merchantmaverick.com/clover-pos-cost\n

Credit card processing fees: what small businesses need to know

Goldman Sach has published \nan infographic \nthat details exactly why there’s so much fuss over the so-called Millennial generation (those born between 1980 and 2000). Here are a few highlights:\nMillennials are the largest generation in history, at 92 million people in the U.S. alone. Compare that to 77 million Americans who are, or were, part of the Baby Boomer generation\nThey use technology to make better informed decisions on the fly. As one example, 57% compare prices in stores, often using their mobile devices to do so.\nSocial media plays a big role in their overall social behavior. In fact, 34% of Millennials say they like brands that have a social media presence better, compared to just 16% of older consumers.\nIn summary, Millennials are quickly becoming the main consumer force in America and beyond, and everyone is trying to figure out how to better sell to them, including one-person startups, sole proprietorships, contractors, and more.\nA changing payments landscape\nSmall businesses, solopreneurs, and freelancers, need to adjust, also. In addition to thinking about ways to make your products and services more compelling to younger buyers, it’s important to make payment easier, as well.\nResearch shows that small businesses are doing a better job of accepting credit cards, which is an important starting point. The vast majority of consumers prefer to pay with credit or debit cards, and small businesses are making more money from card transactions thanks to getting on board.\nSmall businesses must accept peer-to-peer payments\nAnother avenue worth exploring to attract younger consumers who’ve grown up with social media is accepting payments from peer-to-peer applications like Venmo or Cash App. If you’re not familiar, these payment apps allow consumers to pay each other, which is helpful if you’re splitting a restaurant bill, bar tab, or just want all your friends to know where you’re spending money.\nHere’s how \nFortune Editor Adam Lashinky described Venmo\n, which processes about $8 billion in peer-to-peer transactions every quarter: "\nIf you haven’t used Venmo, it’s tough to understand what millennials might have to do with cash transfers. The reason is that Venmo makes it easy to tell one’s friends about transactions, like: “Just split a meal with Britney.” I use Venmo, which fundamentally works a lot like PayPal and Square Cash, in that it links to a checking account and makes it easy to send cash to personal contacts."\nOne of the interesting aspects of peer-to-peer payment apps is that Millennials, in particular, treat them like a social media platform, kind of like Facebook, Instagram, or Twitter. They login to see what their friends are doing, not just to send them money.\nIf younger buyers are attracted to the uniqueness and originality of your business in the first place, it’s likely that they’ll want to share the fact that they’ve spent money with you online, as well. So, accepting payments from these kinds of apps could be beneficial in two ways: first, because Millennials like to make their payment experiences social and simple, and second, because it’s free publicity when others see that their friends patronized your business.\nIf you’re not accepting credit card payments, start there. If you are, consider whether accepting peer-to-peer app payments is right for your business.\nSolo makes it easy to pay and get paid\nSolo is not a bank, but is a financial super-app for small businesses, freelancers, sole proprietors, contractors, and more. Solo is the easy way to pay and get paid. Your customers don't have to sign up to pay you, and can use several payment methods, including Apple Pay, Google Pay, and cards. QR codes make it easy to get paid, and you can easily cash out your Solo account balance for free, or spend it using your Solo Cash Card anywhere Visa is accepted. Learn more at \nSolo.co\n.

Should your small business be accepting payments from peer-to-peer apps like Venmo or Cash App?

In this article:\nBest small business checking accounts\nCredit card options\nAlternative payment methods\nThings to watch out for\nIt’s important for every business, big or small, to have its own bank account. This includes gig workers, sole proprietors, solopreneurs, content creators, freelancers, and more. Keeping your personal and business finances separate makes things much simpler when tax season rolls around. \nMost banks offer some kind of business account, and some offer several. So, it can be difficult to narrow down your options and determine which one is the best for your business. \nWe’ve pulled together a small list of some of the best banking (and alternative payment method) accounts for small businesses to help you in your search. \nAnd, because it can be nice to keep your checking and credit accounts with the same vendor, we’ve included the best credit options from several banks as well. \nChase Total Business Checking\nThe Chase Total Business Checking account is a great starter for small businesses. The fees are low and they have tons of awesome benefits that your business should take advantage of. \nFeatures of a Chase Total Business Checking account:\nLow monthly service fee of $15/month (this is waived if you keep a daily minimum of $1,500 in your account)\n100 transactions per month with no charge\nUnlimited electronic deposits\n$5,000 in cash deposits per statement cycle without additional fees\nInternational wire transfers\nAccount alerts\n16,000 ATMs and 5,000 branches\n$200 cash bonus*\n*You can qualify for the $200 cash bonus with the Chase Total Business Checking account if you deposit $1,000 into your account within 20 days of opening it, maintain that balance for 60 days, and complete at least 5 qualifying transactions within those 60 days. \nCredit cards from Chase\nChase has some great credit card options for small businesses too. We’ve included three cards and the benefits they can offer your business. \nChase Ink Business Unlimited\n$500 bonus cash back when you spend $3,000 in the first 3 months\nUnlimited 1.5% cash rewards for every business purchase you make on this card\n0% annual interest in the first 12 months, and 14.99%-20.99% after that\nNo annual fees\nChase Ink Business Cash\n$500 bonus cash back when you spend $3,000 in the first 3 months\n5% cash rewards for select business purchases \n0% annual interest in the first 12 months, and 14.99%-20.99% after that\nNo annual fees\nChase Ink Business Preferred\n80,000 bonus points ($1,000 in travel rewards) when you spend $5,000 in the first 3 months\nEarn additional reward points on select business categories and travel expenses\n17.74%-22.74% annual interest\n$95 annual fee\nCapital One Spark Business Checking\nCapital One Spark Business Checking is another popular checking account for small businesses. They offer some great rewards and convenient benefits to make banking with them easy. And a bonus, the Capital One Spark plan has an entire suite of banking options, including lines of credit that your business should definitely take advantage of (more on these below).\nFeatures of Capital One Spark Business Checking:\nFirst deposit minimum of $250\nMonthly fee of $15 (maintain a balance of $2,000 to waive this fee)\nUnlimited fee-free transactions (including deposits, withdrawals, and transfers)\nFree electronic invoicing\n100% digital checking account complete with mobile and desktop apps\nCredit cards from Capital One\nHere are some of the credit cards that you can get with the Capital One Spark suite, and if you have Spark Card and a checking account, your monthly maintenance fee for the checking account will be waived. \nCapital One Spark Cash\n$500 bonus cash back when you spend $5,000 in the first 3 months, and $1,500 when you spend $50,000 in the first 6 months\n$0 annual fee for the first year, $95 after that\n18.74% APR\nUnlimited 2% cash back on every purchase\nFree employee cards with spending limits\nNo foreign transaction fees\nCapital One Spark Miles\n50,000 bonus miles when you spend $5,000 in the first 3 months, and 150,000 bonus miles when you spend $50,000 in the first 6 months\n$0 annual fee for the first year, $95 after that\n18.74% APR\nUnlimited 2x miles per every dollar spent\nFree employee cards with spending limits\nNo foreign transaction fees\nCapital One Spark Cash Select\n$200 bonus cash back when you spend $3,000 in the first 3 months\n$0 annual fee\n0% APR for first year, then 14.74%-22.74% after that\nUnlimited 1.5% cash back on every purchase\nFree employee cards with spending limits\nNo foreign transaction fees\nAxos Bank Basic Business Checking\nAxos bank is a great option for you if you want your banking experience to be completely digital. They don’t even have any physical banking locations, but they do offer surcharge-free ATM transactions when you use their national ATM network. \nFeatures of the Axos Bank Basic Business Checking account:\nMinimum opening deposit of $1,000\n200 free transactions each month (after that each transaction costs 30 cents)\n60 free deposits each month with their remote deposit capabilities\nNo monthly service fees\nFirst set of 50 checks free\nCompatible with Quickbooks\nAxos Bank doesn’t offer credit card options like other banks. They do offer some lending options, but these are on a much larger scale than most small businesses are looking for. If you want the Axos Bank checking account experience, we recommend choosing a Capital One Spark card to go along with it. \nSome things to watch out for when choosing a business bank account\nLooking at the features of different business checking accounts can make them seem appealing, but it’s important to be aware of any fees they might be hiding before going all in. \nHere are some common fees that banks aren’t typically upfront about, so be sure to know which fees will be associated with the bank account you choose for your business. \nMonthly transactions\nMost banks put a limit on the number of free transactions you can make with your business checking account. And then there will usually be a 30-50 cent fee for each transaction after that. Make sure you know what your limitations are.  \nBalance and deposit requirements\nIf your account balance falls below a certain amount, you may be subject to some additional fees. Know what that amount is for your bank and be sure to keep that average or daily balance where it needs to be. \nService fees\nCheck with your bank to see if there’s a monthly service or maintenance fee associated with your account. Most banks do require a monthly maintenance fee but will waive this if you keep a certain balance in your account or have multiple products with them. \nCash deposit fees\nEven though a bank may say they have “unlimited free transactions,” this doesn’t usually include cash deposits. Most checking accounts allow you up to a certain dollar amount in fee-free transactions, and then after that they’ll start charging you a small amount to deposit more cash within a statement period. \nFor example, you may be allowed to deposit $5,000 in cash each statement cycle, and after that they’ll charge you $1 for every $1,000 you deposit. It’s not a huge amount, but it’s good to be aware of these fees. \nBank location and size\nThe size and location of your bank is important to be aware of, especially if you travel a lot. If your bank doesn’t have a wide network of ATMs and you frequently need to pull out cash while traveling, then you might start racking up the fees from ATM transactions. \nFind out where your bank has ATMs and if it has a network of ATMs outside of their own that you can use without a surcharge. \nIt all comes down to doing your research and knowing which banking option is the best for your business. How many transactions or deposits are you making? What is your cash flow like? Do you prefer working with a local, hometown bank, rather than a bank with branches across the US? These kinds of questions can help you determine the best options for you.


Best banking accounts and credit cards for small businesses

In this article:\nMerchant accounts and traditional payments processors\nPayment service providers\nEcommerce solutions\nIn today’s digital world, customers expect to be able to make their purchases with a credit or debit card, even when paying super-small, one-person businesses. Fewer people carry cash or checks than ever before, so having some kind of credit card payment capability will be a valuable asset for your business. \nWe’ll walk through the most common ways to accept credit card payments and help you determine which way will work best for your business. \nHow to accept credit card payments in your business\nThere are three main ways to accept credit card payments:\nUse a merchant account/traditional payments processor\nUse a payment service provider\nUse an ecommerce solution\nIn some instances, you may even use a combination of some or all of these methods. \nMerchant accounts / payments processors\nA merchant account is essentially a bank account that assists businesses in accepting credit card purchases. You can use a merchant account through your bank or another financial institution that offers this service. \nMerchant accounts are not business bank accounts though. Their purpose is to accept the funds from your credit card transactions, and the money will then need to be moved into your business bank account once the transactions are complete. \nCheck out this article: \nSmall business guide: What is credit card processing?\nMerchant account providers will generally set you up with the tools and equipment you need to process credit card payments too, like a terminal, tablet, or phone add-on. These are commonly called POS (Point Of Sale) systems. Your bank may act as the “payments processor” or they may have an agreement with one of the many payments processor companies.\nIf you use a smaller bank that doesn’t provide payments processing or merchant accounts including credit card processing, ask around the local small businesses in your area and ask them who they process with, and see if they like their solution, POS system, and rates.\nOne thing to keep in mind is that most merchant accounts require you to sign a contract for a set amount of time. So before getting too deep into this process, make sure you are ready to commit to the provider you have selected. A good merchant services provider can explain all the rates and fees to you, and may be able to get you better rates overall than some of the third-party service providers, particularly if you do a lot of business.\nPayment service providers\nPayment service providers are third-party services, like Square/Block, Stripe, etc. that provide simpler online methods for processing credit cards. While you can still use a merchant account with this method, you don’t need to have one in order to use a payment service provider. \nThis is one reason why these payment service providers has been so disruptive to the traditional payments processor market space. They streamlined and simplified the process of accepting credit cards for small businesses, and their fee structure is very easily understood. This is all good for small businesses, particularly those who don’t know the ins and outs of the “payments” space.\nHowever, depending on your merchant account, you might actually get a better deal from one of the more traditional processors, so be sure to ask around, speak to your merchant services agent or salesperson, and ask whether they can give you better rates.\nMany payment service providers can provide you with a terminal for your store or office, mobile devices and add-ons, and online integrations for processing credit card payments. \nSome payment processors even have their own POS systems that you can use to track inventory, customer order history, and more. If you need or want a multifunctional POS system, be sure to ask your representative and compare features and prices between providers and processors. \nNote for independent contractors, micro-businesses, and one-person shops: Depending on the size of your business, you may also benefit from payments service providers like PayPal, Zelle, or Venmo. These allow bank-to-bank and person-to-person transfers for a fee (or sometimes no fees, depending on the funding source). If you are a one-person operation just starting out, you may be able to utilize this type of payment. PayPal users can pay you with a credit card (and you will have to pay the fee, about 3%, which is close to what accepting payments via a typical business processing setup would cost you). Learn more in our article: \nWhat are alternative payment methods and why should your business consider them?\n\nEcommerce solutions\nIf you only want to sell online and don’t have a need for accepting payments in-person, then an ecommerce solution like Etsy or Shopify could be a great option for your business. \nThese ecommerce platforms have credit card processing built-in to them for all of their users to take advantage of. \nAgain, this can also be combined with one or both of the other two methods. It doesn’t have to be an online-only solution. You could have a physical store with a merchant account or payment processor and then use one of these ecommerce solutions for your online store. \nYou might be interested in: \nHow to get your business started selling online\nThere may (well, there WILL) be fees associated with each of these methods for accepting credit card payments. Within each method, there are several solutions available to choose from. Determine the method that seems the most fitting for your business and then research the different platforms available to find the most competitive offers and prices. It’s can be a good idea to talk to a local merchant services provider and develop a relationship there. They will may be able to provide you the best prices and service, and it doesn't hurt to check.\nHow to choose which way to accept credit card payments\nOnly you can decide which form of credit card processing will be the most beneficial to your business, but we’ll provide some instances when each of these methods can be useful. \nTraditional merchant accounts are the most beneficial for brick and mortar businesses or businesses where you are physically selling something in-person. If you have offerings online, ask your merchant services provider if they offer an online store/shopping cart or ecommerce solution in addition to your merchant account, as many do.\nPayment service providers are generally great for self-employed individuals and businesses that offer in-person and online solutions. Whether you are selling a product or a service, you can use this solution to allow your customers to pay online. The added benefit of including flexible and often lower-cost POS systems with your provider can be especially handy for retailers whether you have an online store or not. \nEcommerce solutions are great when you are selling a product online, particularly if you start small and sell only online. This allows you a way to start marketing your products without having to invest in a storefront. \nSolo makes it easy to pay and get paid\nSolo is not a bank, but is a financial super-app for small businesses, freelancers, sole proprietors, contractors, and more. Solo is the easy way to pay and get paid. Your customers don't have to sign up to pay you, and can use several payment methods, including Apple Pay, Google Pay, and cards. QR codes make it easy to get paid, and you can easily cash out your Solo account balance for free, or spend it using your Solo Cash Card anywhere Visa is accepted. Learn more at \nSolo.co\n.

3 most common ways to accept credit card payments for your small business

In this 5-minute read:\nWhat’s the lowest-cost option for processing credit cards\nFlate-rate processing vs. interchange plus\nSubscription flat-rate processing pros and cons\nExamples of credit card processing fees for different business models\nOne reason that many small business owners are reluctant to get set up to accept credit cards is that the fees for the service eat into their profits. Depending on your business model, your processing agreement, and the number and amount of your transactions, these fees can be significant. \nHowever, today’s customers expect every business—even super-small, local businesses and roadside carts—to accept credit cards, so not having a credit card payment option can prevent your small business from growing and staying profitable.\nLet’s go over what credit card processing really costs so you can determine a good fit for your business. \nThe “interchange plus” credit card processing pricing model is usually the lowest cost overall\nA lot of small businesses use one of the newer payments services providers or “aggregators” (like Square, Stripe, Clover, etc.) because they seem simpler and people can easily understand “flat rate” processing.\nWhat is flat-rate processing?\nIn typical flat-rate processing agreements, you pay a simple percentage for each card transaction (typically between 2.4% and 3.5% of the total purchase price) plus a fee per transaction (usually between $.10 and $.30). That’s it. This may seem like a good deal, especially when most of these payments providers will give you a simple card reader for free and get you set up to accept payments relatively quickly.\nHowever, you may get the lowest rates and pay the least overall if you opt for a traditional processor who offers competitive “interchange plus” pricing.\nWhat is interchange plus processing? \nEvery credit card network (Visa, Mastercard, American Express) charges an interchange fee that your processor pays to facilitate each transaction. Providers that use “interchange plus” pricing model charge the interchange rate plus a markup. So for interchange plus pricing, you pay the current interchange rate, plus your processor’s markup, plus a transaction fee (similar to the transaction fee added to flat-rate purchases discussed above), plus sometimes an additional monthly fee.\nThis may sound complicated, as interchange rates are subject to change so you might not always be paying the exact same fees for processing card transactions. But the fact is the interchange rate doesn’t vary much, and most businesses find that a reliable processor charging interchange plus will save them around 20% on processing costs (or more) compared to the flat-rate aggregators.\nWhat is subscription or “zero markup” flat-rate processing?\nSubscription flat-rate processing is gaining in popularity for a couple of reasons: it’s simple to understand, and it sounds like it would be cheaper than either the interchange plus model or the typical flat rate model. Some providers pump up the “zero markup” angle to imply that you will be paying less per transaction than with other pricing models.\nIn a subscription flat-rate processing agreement, you pay a fixed monthly cost to maintain your processing capability, plus a set fee per transaction. Since the monthly costs and transaction fees for various providers vary widely, it’s not practical to estimate what you might expect to pay for this type of processing from an average provider. Depending on how large your transactions are and how often you transact, a subscription flat-rate processor might be competitively priced with a traditional interchange plus processor, or it might be quite a bit more expensive.\nLet’s look at a couple of examples, as elucidated in \nthis article\n by Ben Dwyer at CardFellow:\nLet’s say that you sell furniture. You’re likely processing higher average ticket transactions, but fewer transactions per day than some other types of businesses. You’ve decided to take credit cards, and you have an offer from Processor A using interchange plus pricing with a markup of 0.10% and 10 cents per transaction and from Processor B using subscription flat rate pricing with a markup of 0% and 25 cents per transaction. Processor A has a $10 monthly fee, and Processor B has a $29 monthly fee.\nYou sell a couch for $2,000.\nWith Processor A, you’d pay $2.10 to the processor for their markup. (2000 x 0.001 + 0.10) With Processor B, you’d pay 25 cents. On the surface, it looks like a no-brainer in favor of the subscription pricing. However, to get the most accurate number, you’d also include your monthly fee divided by your number of transactions for that month. If you only sell that one couch all month, you’d be paying $12.10 to Processor A as a markup or $29.25 as a markup to Processor B.\nIf you sold 10 of those couches in a month, you’d pay Processor A $21 (20,000 x 0.001 + 10 x 0.10) and Processor B $2.50 (10 x 0.25). Again it looks like a big savings with the subscription pricing, but the monthly fee changes that. The monthly fee would add another $1.00 per sale with Processor A for a total of $31 or $2.90 per sale with Processor B for a total of $31.50. Those costs are pretty close, but it’s important to remember that the disparity could be even greater if you have a higher monthly fee for your subscription pricing. Memberships from some processors start as high as $69 for a basic plan.\nBut what if you sell smaller-ticket items but process more transactions daily? Let’s look at another example from Ben’s article:\nNow let’s say that you own a shoe store. Your average sale is $50 and you have 10 sales per day for a total of 300 transactions per month. With Processor A, that’ll cost you 15 cents per transaction (50 x 0.001 + 0.10). Adding in our monthly fee of $10 adds 3 cents per transaction for Processor A, bringing the total to 18 cents per transaction. With Processor B, it’ll cost you 25 cents per transaction, plus the monthly fee of $29 split over 300 transactions, equaling 35 cents per transaction. (29 / 300 + 0.25). For the month, you’d pay a total markup of $55 with the interchange plus pricing (300 x .15 + 10) or $104 with the membership pricing. (300 x .25 + 29). Guess what? That 0% processing just cost close to double as much as the competitive interchange plus processing. It’s easy to disregard the monthly cost because it doesn’t seem like it’s part of your processing costs, but these examples illustrate that it’s important to take it into account. When searching for the lowest cost processing, 0% markup doesn’t automatically equal lowest cost.\nAdditionally, Ben points out that, while the subscription flat-rate model may be a cost-effective option for new and growing businesses, you need to understand that many subscription pricing processors set a limit on the number of transactions you can process at each membership level. If your business processes more transactions, you might need to change to a more expensive monthly membership, which of course means you’re averaging more in overall costs per transaction.\nThe bottom line is that you need to discuss your needs and options with your merchant level sales agent or processor, and determine whether you value simplicity, or the absolute lowest processing cost, or personalized customer service, or useful value-added options that come with many processor agreements.\nSolo makes it easy to pay and get paid\nSolo is not a bank, but is a financial super-app for small businesses, freelancers, sole proprietors, contractors, and more. Solo is the easy way to pay and get paid. Your customers don't have to sign up to pay you, and can use several payment methods, including Apple Pay, Google Pay, and cards. QR codes make it easy to get paid, and you can easily cash out your Solo account balance for free, or spend it using your Solo Cash Card anywhere Visa is accepted. Learn more at \nSolo.co\n.

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