Modern options for collecting payments in a small business
Modern Payment Services
For a generation the only way for a business to process electronic payments was to run credit cards through traditional merchant services. These merchant services charge for equipment leases, monthly service fees, statement fees, batch fees, per transactions fees, and a percentage of the sale. For a small business this drains capital needed for products, rent, labor, and expansion. These traditional merchant services are still around but now we have better, more affordable options for processing credit cards and payments in more innovative ways. One of the most important developments is the availability of payment processing for the individual (person-to-person and person-to-business).
Dwolla - PayPal Replacement
Accepting Dwolla payments saves you the fees involved with processing credit cards. You can't process credit cards though Dwolla but technology is changing how people interact making this PayPal replacement the next natural progression. It doesn't cost you anything to add this "social" payment system to your customer service arsenal. Check it out. https://www.dwolla.com/point-of-sale
Stripe - Website & Mobile App Integration
Integrating a credit card payment system into your website used to be a real problem, and it still is in many cases with traditional merchant services. The people at Stripe built a merchant service that excludes the headaches. Fees are low, integration is super easy, and security is top priority. These days a responsive website that adapts to mobile devices is crucial for connecting with customers--millions of people begin product research from mobile devices. Stripe has provisions for integrating their payment service with responsive websites and mobile apps; featuring native iOS and Android development libraries. Tell your web developer about Stripe, and if they don't get excited that's your clue to get another web person. https://stripe.com/
Square - Payments on the go
I hate their website, but Square has greatly simplified credit card processing for the average person. The service is very simple so it may not fit everyone's needs, but the whole experience hinges on mobile devices making this a natural fit for transient businesses. Square offers the hardware and software needed to assemble a tablet-based point of sale system for in-store action as well. The fees are low, there are no upfront costs, and you get a free card reader for your mobile phone. https://squareup.com/
Traditional Merchant Service Companies
The following table is a list of established, reputable merchant service companies. Most offer a full range of hardware, software, virtual terminals, payment gateways, merchant accounts, and other "payment processing" services. Want to know what all these terms really mean?
|Heartland Payment Systems||1997||???||Link||Process 11 million transactions a day|
|CapitalOne Merchant Services||1988||???||Link||The usual "good deal" from CapitalOne|
|Chase Paymenttech||1985||Yes||Link||Processes 1200 transactions per second|
|Merchant Services, Inc.||1989||No||Link||They use independent salespersons, negotiate!|
|Authorize.Net||1996||Yes||Link||Over 375,000 merchant customers|
|VeriFone||1981||Yes||Link||Operates in 150 countries with over 5000 employees|
|ProPay||1997||Yes||Link||Private company, and part of TSYS with 1.3 million merchants|
|Merchant Warehouse||1998||Yes||Link||Very clean, informative website--best website of the bunch|
The Real Processors
Your merchant service links to the Visa and MasterCard systems through the following companies who take care of the actual authorization (point of sale swipe communication) and settlement of the purchases against a cardholder's account. Most of these processors also have their or merchant services they offer to the public, making them competitors with their own customers.
- TSYS - Total System Services, Inc. (largest processor)
- First Data Corporation (Owns STAR ATM network)
- Elavon, Inc. (Part of US Bancorp)
- Global Payments, Inc.