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Credit Card Processing
Sep 23, 2017

Unless you do a lot of credit card processing to collect business payments, we typically advise our clients against paying the monthly fee required for a full-time merchant service provider through a bank. Instead, until it is cost-effective, we recommend using PayPal or Square. We have used both, and find that each offers benefits, depending on the required need.

If you are doing any online auctions via eBay, we strongly recommend PayPal. Though eBay no longer owns PayPal, they are still completely integrated. We no longer accept any payment options besides PayPal for our online auctions, as it is the fastest and easiest way to get our money. In addition, for online retailers with only a few items for sale, PayPal’s shopping cart is the easiest and most affordable solution for processing credit cards. It also makes subscriptions, invoicing and non-profit donations (at a discounted rate) a breeze. PayPal is even offered as a payment solution for many large online retailers, including WalMart and Best Buy.

For mobile sales applications, we have used PayPal Here and Square, and found that Square beats out PayPal Here.  Both solutions offer a free credit card reader, which plugs into the audio jack of your mobile device, but Square does it better. Square allowed us to easily set up our items for sale, and using a mobile device, even a novice can add items to the shopping cart, and swipe a credit card or accept cash or check. Square has many other features, which we have not used yet, but find helpful for small businesses, including an online store front, invoicing, employee time-keeping, separate user logins for tracking sales and receipts, as well as payroll. Square has very detailed and user friendly sales reporting. The only downside we encountered with the Square solution, is that Square deposits all the credit card income to the linked bank account the next business day. So, the funds are assured to arrive quickly, which is not necessarily a bad thing, but we prefer the option, as provided by PayPal, to choose when to transfer funds to our bank. However, as a mobile “cash register” solution, we have happily switched to Square. Use this link to signup for Square, and Square will reimburse the processing fees on your first $1,000 of card sales. After that, it’s just 2.75% per swipe.

Once you have sufficient credit card business to justify paying for a full-time merchant service provider, we strongly recommend shopping around, as rates vary greatly. We understand that it is convenient to simply go to your local banker for this solution, but we find that most major banks have very high costs. As the majority of merchant service providers offer similar services and equipment to enable credit card processing in person, via phone and online, you only need to compare monthly and per transaction fees. In addition, it is highly likely that your bank uses another company to provide the merchant services, and it may be cheaper to contact the merchant services provider directly. We recommend doing a bit of research, both online and in non-traditional places, such as at your local warehouse store, to find the best deal…and as always, read the small print to ensure that the great rate is not just an introductory rate.

Square Sign-up