The most popular payment processing companies for small businesses
We live in a complicated world, and even the simple process of exchanging money for goods or services isn’t as straightforward as it used to be.
We are becoming a cashless society, and most transactions are made with credit and debit cards, or digital wallets and tap-to-pay interfaces.
According to a June 2019 report by the Federal Reserve Bank of San Francisco, even in transactions occurring in person, such as buying something at a convenience store, cash is only used 35% of the time. The rest is done digitally.
This is where the complication comes in.
When a payment is made digitally, there are dozens of invisible processes that have to occur in order to complete a transaction. And it’s all handled by a payment processing company.
As a business owner, you have payment providers to thank for actually getting the money into your bank account.
Credit card networks are still fairly limited, with most people only using Visa, Mastercard, American Express and Discover. However, the number of payment providers are multiplying quickly, differing in their costs and fees, what types of payments they can process, and how securely or quickly they operate.
From restaurants to ecommerce shops, every small business owner is going to have different needs from a payment provider.
Here’s a look at the most popular platforms on the market:
By now, almost everyone has seen that credit card swiper or chip reader that plugs into your phone. Square has been around since 2009, created by Twitter co-founder Jack Dorsey as a way to empower everyone to process credit and debit card payments. Since its inception, that white, square-shaped card reader has evolved into hardware like cash registers, and the company has expanded service offerings to include payroll software, scheduling, and online payment services for ecommerce.
Though not to be confused with the Squarespace web design platform, Square’s software is just as simple and intuitive to use.
Businesses that are mobile, such as food trucks or pop up shops, that need both physical payment and online payment solutions.
The platform integrates seamlessly with many bank accounts, including Azlo.
Learn more about Square’s processing fees, here.
Stripe is all about making it easy for businesses to accept credit card payments and manage their transactions online. Entrepreneurs can open an account almost instantly because there is no underwriting required. The dashboard is incredibly intuitive to use and designed to easily track payments and analyze revenue data. The platform only works on computers, but the company does offer hardware such as card readers in order to facilitate in-store transactions.
This platform is ideal for small business owners that are not particularly tech-savvy or used to dealing with digital payments. However, even with its simplicity, some pretty valuable reports can be generated from the dashboard to give deeper insight into revenue and transaction trends.
Stripe integrates seamlessly with Azlo and other bank accounts as well.
Learn more about Stripe’s processing fees here.
The biggest—and one of the very first—digital payment companies, PayPal launched in 1998 as a way to process charges on eBay. It quickly evolved into a “digital wallet,” where money could be collected outside of a traditional bank account, spent with participating vendors, or transferred to other PayPal users. As adoption of the platform grew beyond its original purpose, the company was officially spun off into its own entity in 2015.
The PayPal Express Checkout service allows vendors to accept payments directly from customer’s PayPal virtual wallet accounts. This method of payment is considered to be more secure than paying via credit or debit card, since those account numbers are not shared with the business.
Businesses that want to give their customers more ways to pay than just credit and debit cards.
Learn more about this platform’s transaction fees here.
Acquired by PayPal in 2013, integrating this platform as a payment provider for your business allows customers to pay both from their PayPal wallets, as well as with debit and credit cards tied to their PayPal accounts. This offers more ways to pay while still providing the same level of security and convenience as paying just from their PayPal wallets.
Businesses who want high levels of support from their payment providers but are comfortable waiting a few days before having their accounts approved.
More information is available about Braintree’s pricing here.
Apply Pay allows consumers to make contactless payments from their phones, either from their Apple Pay digital wallet or from the wide array of credit and debit cards they can connect to their accounts. This service offers even more convenience to customers, who simply have to hold their phone up to a card reader to make the transaction. In our post-coronavirus world, this type of payment is expected to become even more popular as a way to cut down on transmission of germs.
Businesses that want to provide even more convenience to their customers, as well as limit potential contamination from human contact.
Learn more about Apple Pay’s fees, here.
Similar to PayPal, Amazon Payments is a digital payment platform that allows consumers to pay for goods and services directly with the payment types and information stored in their accounts. Providing this as an option also allows your customers to shop with their voices via Alexa Skills.
Businesses who want to ensure sales conversions by eliminating purchase barriers. By having Amazon Payments as an option, customers won’t have to enter their credit card and billing info.
Stay up to date about Amazon Pay’s pricing, here.
Intuit’s Quickbooks is one of the most popular bookkeeping platforms in the world. The Quickbooks Payments service takes it to a whole new level. Once a merchant account has been approved, it allows businesses to accept payments online via credit and debit cards from any invoices generated, even those that were snail-mailed or faxed.
Businesses that already use Intuit Quickbooks to keep track of their finances. The ability to collect payments online even from printed invoices could be ideal for businesses dealing with a mixture of high-tech and old-school clients.
Read about the fee models, here.
Google Pay allows users to store multiple credit and debit cards on one account and select which they use when checking out. If a business offers Google Pay as an option for their customers, this provides their customers with the same level of security and convenience as PayPal, Apple, and Amazon Pay: all of their commonly used cards are stored in their accounts, and the card numbers are shielded from the business.
Businesses who want to offer their customers more ways to pay, while limiting liability from exposure to their data.
Learn about merchant fees for Google Pay, here.
With so many options for payment providers on the market, the best one for your business depends entirely on your situation. Beyond whether or not you need to process transactions in brick n’ mortar spaces or exist entirely online, it’s also important to consider the preferences of your customer base. If you have Apple Pay but you constantly get feedback from customers that they only have Google Pay, that’s a strong sign you should consider offering both platforms or considering switching over to Google Pay.
Also, pay close attention to the transaction fees associated with each platform and determine which one makes the most sense for your bottom line, or adjust prices accordingly.
Hi there! This post exists to offer you (hopefully) useful information and insights, but it cannot take the place of personalized professional advice. Please consult a qualified expert if you have questions about your business. Also, Azlo doesn’t endorse any third-party sites that are linked here.
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