No matter how small your business, “cash only” is no longer a viable option. But for both businesses and customers, the dilemma of how to get paid by customers and clients still persists. The issues of security, speed, cost and convenience are the top concern, but with so many choices, how does a small business know which one to select?
Below is a comprehensive review of the top choices for small business owners, including price, options, and more. While there is no one-size-fits-all service for small businesses, by looking at this review, hopefully you can pick the best choice for you.
Your online storefront needs an easy, secure way to process payments. But in addition to security, your e-commerce payment solution should also provide the ability to export data to your accounting software. The following services are great options for small businesses.
- PayPal Business–Since many customers already have PayPal accounts, providing it as a payment option can increase sales. Instead of having to input a long credit card number, buyers can simply enter a PayPal password to pay. Your business can accept PayPal for free, but to fully integrate it into your site, you’ll need the Pro version, which is $30 per month. Customers without PayPal accounts can pay using a major credit card. PayPal will charge your business 2.9% plus $.30 per transaction.
- Google Checkout–Like PayPal, Google Checkout is a viable option because so many customers already have Google accounts. However, those customers will be required to set up a Google payment account but once set up, they’ll be able to use it for other purchases. There are no setup fees and businesses are charged the same transaction fees with Google Checkout and PayPal for transactions under $3,000. Each transaction is charged 2.9% plus $.30 per transaction.
Card readers have taken off in the past year, with even sole proprietors now able to accept credit card payments on the go. As every business steps forward to offer their own mobile swipe technology, here is a look at the most popular.
- Square–The original mobile card reader is ideal if you plan to stay in the U.S. Currently, the service has no support for international swipes. With a fee of 2.75% per swipe or a flat rate of $275 per month, this reader may be the best choice for businesses that plan to do a high-dollar volume, although there are restrictions on the company’s flat rate.
- PayPal Here–While PayPal boasts “immediate” availability of funds, it’s important to note that those funds are immediately available in a business’s PayPal account. Funds must be transferred to a bank account, which takes up to three days, compared to Square’s next-day availability. PayPal Here may be the best option for businesses with a lower volume of sales, since the per-transaction rate beats Square’s rate slightly at 2.70%.
- Punchey–In an attempt to beat both Square and PayPal Here, Punchey has launched a service with competitive transaction fees. Designed for businesses that sell products or services that cost $50 each or higher, Punchey charges only 0.75% on its side, with the business paying the additional “interchange” fee charged by the bank. This fee generally runs between one and three percent, making it a better choice for businesses with higher transactions.
For sole proprietors like freelancers and contractors, getting paid can be more complicated than swiping a credit card. For any individual, the best source to process a paper check is his or her own bank. Many banks now offer electronic check capture, by which a customer can simply snap a picture using a smartphone and deposit the funds electronically. For paperless options, here are the best services for sole proprietors.
- PayPal eCheck–For freelancers, PayPal is still the best way to be paid. If, for some reason, a business needs to pay a contractor via check instead of credit card or direct bank account draft, eCheck may be an option. The system isn’t fraud-proof, however, so the traditional way to pay is always preferred. PayPal charges a 2.9% fee plus $.30 per transaction.
- Intuit eCheck–Intuit Payment Solutions allows businesses and sole proprieters to accept a check by simply typing in the customer’s banking information. No more filling out deposit slips or even taking a photo of the check. This is a good option for someone who finds themselves with multiple checks each month, since Intuit charges a monthly fee of $12.95, plus $.30 per check.
- Zipmark – Zipmark is a digital check solution that allows your customers / clients to send money directly into your bank account. Funds are typically available within 24 hours, but the best part is the Zipmark free: 1% of the transaction with a cap of $5.
The world of payment processing is constantly evolving. Chances are, each process will become more streamlined and more convenient as time goes on. Businesses simply need to consider the fees and find the most affordable option for them.