Most traditional small businesses need in-person credit card processing. It's a reality of life, and a popular approach is using a smartphone with a mobile reader and app. One of the more visible names among business owners has been Square, which recently added availability of a prepaid debit card linked to a Square Cash account. But something that hasn't changed is the processing fee for getting paid. The company moved from a flat fee to a percentage a few years ago and, frankly, the 2.75% swipe fee (3.5% plus $0.15 per transaction when you key in the number instead) isn't necessarily the best.

Sure, you get free next day deposits (1 to 2 days to your bank is typical) -- or, for an additional 1%, instantly or later that day (a service not available from all) -- and a free magstripe reader. But if you want the optional chip card reader, and you do because otherwise you could potentially face greater liability from swiping chip cards, that's another $29. To accept EMV chip cards and NFC payments like Apple Pay and Android Pay (generally at the same rate as swiped transactions for any of these companies), you'll need the $49 reader. However, if you get many American Express payments, it may make sense. Square advertises the 2.75% swipe rate as applying to all major credit cards, and American Express is usually more expensive with other processors.

In other words, choosing a credit card processing provider and system can get confusing. With all of Square's exceptional marketing to small businesses, you might think it's the only game in town. But it isn't. Here are some other services with pricing details, some of which are more attractive. There will be others, of course, but always check the fine print and look into longevity. Many companies come and go. Even Amazon announced a service and then a year later said it would phase out the offering.

Capital One Spark Business

You see their credit card commercials all the time. But Capital One Spark Business also offers its Spark Pay app-based payment systems. There's a free mobile card reader, but no mobile equivalent that takes EMV and NFC payments. You can get a wired ($99) or wireless ($619) terminal that handles both, but it's intended for a relatively static location. There are also digital cash registers from $499 to $599, not including an iPad. There are two plans. One has no monthly fees, 2.65% rates for swiped Visa/MasterCard/Discover, 3.7% for swiped American Express, 3.7% for keyed entries, and a $0.05 transaction fee that applies to all, whether swiped or keyed. The other plan has a $19 monthly fee, a 1.99% rate for swiped Visa/MasterCard/Discover, 2.8% for swiped American Express, 2.8% for keyed, and a transaction fee of $0.05. Capital One has an online calculator to help you determine which would be most cost-effective, depending on your transaction volume.

EMS

Electronic Merchant Systems, or EMS, has been in the card processing business for a claimed 25 years. It offers a mobile credit card processing system with free a 2.25 percent swipe rate (2.95% for American Express) and a manual keyed rate of 3.5% plus $0.15 transaction. You get a free swipe reader, using an app for either iOS or Android. For EMV processing, there is a combination EMV and contactless/NFC reader and printer that is $149. If you process $3,000 in payments within 90 days, you get a $100 rebate, making the final cost $49, or comparable with Square's unit.

Intuit

The company may be more often associated with accounting and tax preparation software, but Intuit has its QuickBooks GoPayments program with an associated app for either iOS or Android. It accepts all credit and debit cards and you get the usual free basic card swipe device. You can also either key-in a number or take a photo of the card, and record cash payments. There are two plans. In one, you're charged 2.4% for swipes and 3.4% for keyed-in transactions. But there is a $0.25 transaction fee that applies to all, whether swiped or keyed. The other plan costs $20 a month and offers a swiped rate of 1.6%, keyed rate of 3.2%, and, again, the $0.25 transaction fee. EMV is available through a special $69.99 terminal, which also lets you manually enter numbers or even electronically process checks through ACH presentation, but it requires a PC and, according to the salesperson I spoke with, does not support NFC transactions.

Payline Data Services

I'm including Payline to offer a broader view of how credit card processing can work. There are programs for mobile, retail, and online. For a comparison, look at two of their processing programs. One, called Payline Start, has a free reader and software for swiped transactions and no monthly fee. The cost -- and here's where things get interesting -- is the interchange rate plus 0.5% and a $0.20 per-transaction fee. The other program, Payline Surge, is $9.95 a month, has a reader that does EMV and NFC, and charges interchange plus 0.3% and a $0.20 per-transaction fee. The interchange rate is the amount charged by the particular card network and can vary by the type of transaction, region, and other factors. I downloaded MasterCard's 2017-2018 U.S. region interchange rates and found that they run anywhere from 1.10% to 2.30%, depending on the nature of the business transaction. So, for MasterCard payments specifically, you could end up paying 1.6% to 2.8% plus the transaction fee. Depending on the average order amount and the interchange rates of different cards, you might end up paying less than one of the flat percentage programs.

PayPal

PayPal has a number of programs, many focused on integrating its payment system into your ecommerce site. But let's focus on the PayPal Here option, for taking credit cards where you're doing business. You'll need an iOS or Android device for the app. The simple swipe reader is free for the first one and $14.99 for additional units. You can also choose a $79 device that processes swiped cards, EMV chip, and NFC, with a numeric keyboard for manual entry if necessary. You can also issue electronic invoices for later payment and record cash and check payments. The swipe transaction fee is 2.7%. If you key in a transaction, it's 3.5% plus $0.15. Invoicing is 2.9% plus $0.30. You'll need a PayPal account. It can take a few days to transfer money from the account to your bank, but payment appears immediately in the PayPal account itself and you can get a debit card that pairs with the account for faster access when necessary.

SumUp

SumUp is an EU-based payment processor that also operates in the U.S. It's a bit different from the other choices, as it doesn't give its card reader away. Instead, you pay $69 and get a device that processes magstrips, EMV chip cards, and NFC contactless (so you can handle Android Pay and Apple Pay). The reader connects to your iOS or Android phone or tablet via Bluetooth. Transaction rates are 2.75% each with no additional fees for card types, including American Express, and it also accepts Diners Club in addition to MasterCard, Visa, and Discover. Payouts go right to your bank account within a day or two. However, it won't let you key in transactions, so if someone's card doesn't work with the reader, you can't process the payment.

No matter what you pick, be scrupulous in reading all the information available as there may be limitations and special conditions. For example, some services may not offer cheaper rates for rewards cards, corporate cards, and certain other types.

Also, the information above came from a combination of the companies' respective websites and phone calls to sales and support numbers at the time of writing. Information changes over time, so it's wise to double-check.

 

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