Would My Business Benefit From Using A Contactless Virtual Terminal?

Every business operates differently, but the one thing they all have in common is that every business accepts payments. New payment tools like NFC contactless payments that help your business grow and provide a high-quality customer experience are in high demand. And while solutions like POS systems are perfect for in-person payments, what about when you need to offer remote billing or refunds, or if you need to process a customer’s credit card over the phone?  With a virtual terminal, this functionality allows your business to accept credit and debit card payments with nothing more than a computer and an internet connection.

Although it’s not a necessary tool in every small business owner’s arsenal, the contactless virtual terminal is a smart solution for some types of businesses, like those that take payments online or over the phone. But what exactly  is a contactless virtual terminal and can your business benefit from adding it to your payment solutions? In this article, we’ll dive into everything you need to know about virtual terminals, and how to pick the best virtual terminal on the market. 

TL;DR

  • Basically, a virtual terminal is a web-based application that allows you to enter credit card details manually via the internet. This solution allows you to accept payments over the phone or in person from your computer, all without needing a physical card reader or point of sales terminal.
  • A virtual terminal is fit primarily for businesses such as food delivery services, professional services, freelancers, and healthcare providers. These businesses often conduct most of their business over the phone, submit electronic invoices, or have recurring monthly membership services fees.
  • Virtual credit card processing terminals provide several up-to-the-minute security features, keeping your customers’ financial information safe. Because the transaction takes place through a payment gateway that utilizes data encryption or tokenization to secure sensitive information during transmission, accepting payments using a virtual terminal from Stax (which is PCI compliant) is secure.

What Is a Contactless Virtual Terminal?

Basically, a virtual terminal is a web-based application that allows you to enter credit card details manually via the internet. It allows you to accept payments over the phone or in person from your computer, all without needing a physical card reader or point of sales terminal.

Built for recurring billing and online invoicing, a contactless virtual terminal is fit for (eCommerce) businesses that primarily operate over the phone and take mail orders, handle online invoicing, or have recurring monthly memberships. An added benefit of using a contactless virtual terminal is the increased flexibility in accepting payments over the phone, online, and in-person, all without ever having to use a physical card.

Still confused about how a virtual terminal works? Think of it as a digital credit card reader, which means you need no extra equipment besides a secure wifi connection to process card-not present transactions and payments.

How Does a Contactless Virtual Terminal Work?

Powered by a payment gateway, a contactless virtual terminal provides payment processing and authorization services through an online platform. Without any required hardware you can get paid faster and more conveniently while still offering you the flexibility to accepting credit cards, debit cards, and ACH payments. All you need to do is log into your virtual terminal through a computer or mobile device, enter payment information into a form, and with the click of a button, the system processes the payment.

Virtual terminals also verify the purchase, issue customer receipts, and report all transactions within the dashboard. The business dashboard shows sales trends in a simple view, making you aware of growth or areas of concern for your business.

A contactless virtual terminal can also serve as a backup to your point of sale (POS) system. Having a virtual credit card processing terminal on standby adds additional flexibility and simplicity to your business.

Can My Business Use a Contactless Virtual Terminal?

A virtual terminal is fit primarily for businesses such as food delivery services, professional services, freelancers, and healthcare providers. These businesses often conduct most of their business over the phone, submit electronic invoices, or have recurring monthly membership services fees.

Having the ability to take payments by phone or online by adding a virtual terminal to your payment offerings allows increased flexibility and accessibility. For example, if you’re a restaurant that requires a deposit when booking, a virtual terminal can be a great solution that’ll allow customers to quickly and securely book using their credit card info.

Plus, by providing a more seamless and streamlined payment option, you can easily improve your customer’s check-out experience. Faster, more secure, and effortless transactions provide opportunities for more sales in less time and less abandoned sales due to a hassle-free shopping experience.

RELATED: What to Look for When Choosing an In-Person Terminal For Your Bar

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Is the Contactless Virtual Terminal Secure?

As a business owner, you must safeguard your customers’ payment details. Not doing so could create distrust among your customers and seriously impact your business. Virtual credit card processing terminals provide several up-to-the-minute security features, keeping your customers’ financial information safe. That’s why all payment data submitted via the contactless virtual terminal has to go through PCI Compliant procedures, since it helps make sure that your customers’ sensitive information is always safe.

Because the transaction takes place through a payment gateway that utilizes data encryption or tokenization to secure sensitive information during transmission, accepting payments with the use of a virtual terminal is secure. Despite these built-in safeguards, it’s important to be cautious. After all, human error is still a factor. To help mitigate these risks, make sure your employees never write down credit card information on a piece of paper or store it in any way outside of your virtual terminal.

What Are the Benefits of Using Stax Contactless Solutions?

With Stax, not only will your business have access to the wholesale card-not-present rates, but you’ll also gain access to the contactless payments tool kit including the Stax Contactless Solutions. In addition to a full-featured invoicing and billing platform, you’ll have the option of creating an online shopping cart for your business and the ability to communicate with your customers quickly and efficiently through 2-way text messaging.

Here are just some of the perks of our  Contactless Virtual Terminal:

  • Instant Online Shopping Cart – Add items or services to your catalog, then publish them to your online shop in one click. No domain purchase needed!
  • Text2Pay – Text message requests have a 97% open rate with an average customer response within 90 seconds. With 2-way text messaging,merchants and customers can talk back and forth, make changes, and even make payments.
  • Customer & Catalog Management – Track relevant customer information, including tokenized cards. Store catalog items and keep track of inventory and sales against certain goods or services.
  • Quick Payment for Keyed-In Phone Payments – If a customer orders over the phone for curbside pickup, employees can securely key in sensitive payment information while on the phone.
  • Recurring & One-Time Invoicing – Send professional electronic invoices via email or text and allow customers to pay via email or text. Set up recurring payments or invoices for the customers as needed.

Stax Contactless Virtual Terminal Pricing

At Stax, we’re fully committed to offering transparent pricing and transaction fees, no matter which of our products or services you need. The same goes for our virtual terminal: with membership-based pricing, we guarantee access to our wholesale credit card processing rates. Plus, there are no hidden fees or lengthy contracts, meaning you can cancel your virtual merchant account whenever you want instead of being tied down to a long contract. (If you’re curious to learn more about our pricing for our virtual terminal services, click here.)

Would My Business Benefit From Using Contactless Virtual Terminals

Whether it’s invoicing, recurring billing, pay by phone, contactless or credit card payments, or a one-click shopping cart, Stax offers multiple virtual payment options that can help your business streamline payments and foster sustainable growth.. Start saving on payment processing fees with Stax. Contact us for a demo today.

You Might Also Like: How a Restaurant Supply Company Can Improve Sales With a Virtual Terminal

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FAQs about Virtual Terminal

Q: What is a virtual terminal?

A virtual terminal is a web-based application that allows merchants to process credit card transactions without the need for a physical card reader or point-of-sale (POS) system. It enables merchants to enter credit card details manually into an online interface to process transactions. Virtual terminals are typically used for phone or mail orders, or in situations where the physical card is not present.

Q: What does a virtual terminal do?

A virtual terminal serves as an online interface for payment processing. It allows merchants to input payment information received from customers via phone, mail, or in person without swiping the card. The terminal connects to a payment processor to handle the transaction, including authorization, settlement, and management of the payments. It can also store transaction records and provide reports.

Q: What is the difference between POS and virtual terminal?

A POS system is a combination of software and hardware designed to facilitate sales transactions at a physical location. It often includes a physical card reader, barcode scanner, cash register, and a computer or tablet to run the POS software. Unlike a POS system, a virtual terminal is software-based and does not require specific hardware. It is primarily used for transactions where the card is not physically present, such as over the phone or via mail.

Q: What is the difference between a physical terminal and virtual terminal?

A physical terminal is a device that allows for card-present transactions. Customers can swipe, dip, or tap their card to make a payment. These terminals can be standalone devices or part of a more extensive POS system. A virtual terminal, on the other hand, is software that processes card-not-present transactions. It requires manual entry of card details by the merchant. Virtual terminals do not require physical interaction with the customer’s card.

Q: Can I use a virtual card at the point of sale?

Yes, but indirectly. A virtual card is a digital version of a physical card that exists only in a digital wallet or app. At a physical point of sale, you can use a virtual card if the POS system accepts contactless payments (NFC technology), and your virtual card is stored on a device that supports this technology (like a smartphone or smartwatch). However, a virtual card itself cannot be used directly with a traditional card reader that requires swiping or dipping a physical card.

 

Q: Is a virtual terminal a gateway?

They’re closely related, but a virtual terminal isn’t the same as a payment gateway. A payment gateway is the service that authorizes and processes credit card transactions online, securely transmitting data between the merchant and the acquirer. A virtual terminal is a tool or interface that uses a payment gateway to process transactions.

Tap to Pay: What It Is and How It Works

Since the first plastic credit card was issued by American Express in 1959, payment tech progress has been growing exponentially. Magnetic stripe payments enjoyed a 30-year reign between the ’70s and ’90s. EMV chip card technology had a good two decades or so, beginning in the mid-’90s. And the winner of the 2010s and beyond is the NFC-powered, contactless sensation that is tap-to-pay.

Contactless payments became a must-have during COVID. Most modern card readers and payment terminals are NFC-equipped. But tap-to-pay is transcending that plastic card of the last 60+ years. NFC technology is in the midst of an evolution. Customers are driving digital advancements, and savvy small business owners should be aware of what’s to come.

In this article, we’ll dive deeper into the tap-to-pay movement, where it is now, where it’s going, and how businesses can implement tap-to-pay for smooth, future-proof card transactions.

TL;DR

  • The 2010s marked the era of NFC-powered contactless payments, and unlike its predecessors, this technology has the sticking power to take it beyond our traditional plastic cards.
  • NFC payments are faster, more secure, and more versatile than any other payment solution we have seen before
  • Implementation is smooth, and the possibilities go far beyond accepting payments. Tap-to-pay technology will take us to advanced loyalty, marketing, and end-to-end customer satisfaction solutions.

History of Tap to Pay

Although contactless payments weren’t widely adopted until the 2010s, the technology actually dates back to 1995. In Seoul, South Korea, the Seoul Bus Transport Association introduced the UPass, a contactless payment card that commuters could tap on as they entered the bus. Almost ten years later, the US tried the technology, and it was four years after that when all EMV cards became NFC-equipped.

Despite the tap technology being available on most major cards, it was the smartphone advancements that really pushed consumers to adopt it. Tapping their phone to a terminal proved far more exciting than tapping the card.

Google was the first, in 2011, to enable contactless payments via their mobile app. Apple Pay caught up in 2014; in 2015, the wearables market made everyone aware of the tap’s potential.

Once the thought of the tap was there, the behavior followed. In 2015, many merchants switched to NFC-enabled terminals; by 2019, most banks were issuing contactless cards.

How Tap to Pay Works

Tap-to-pay, whether used with a contactless card or a smart device, operates through Near Field Communication (NFC) technology. This short-range wireless communication technology allows data exchange between devices close to each other, typically within a few centimeters.

NFC operates on radio-frequency identification (RFID) principles and electromagnetic induction, enabling communication between devices without needing physical contact or Wi-Fi connectivity.

Here’s how it works:

  1. NFC-enabled devices: The customer’s payment card (credit, debit, or mobile wallet app) and the merchant’s payment terminal must be equipped with NFC technology.
  2. Close proximity: The customer holds their NFC-enabled card or smartphone close to the merchant’s NFC-enabled terminal to make the payment.
  3. Data transmission: The NFC antennas in both devices communicate with each other. The customer’s payment information is securely stored in the NFC chip and transmitted to the merchant’s terminal.
  4. Authentication: The payment terminal validates the transaction by sending the payment details to the payment network (such as the card issuer—e.g. Visa, Mastercard, and the customer’s bank) for authorization.
  5. Secure transaction: The payment network verifies the transaction details, ensuring sufficient funds and confirming the transaction’s authenticity. A unique, one-time code is generated for that specific transaction if approved.
  6. Completion: The transaction is completed, and the customer receives a payment confirmation. The entire process is fast and secure and does not require physical contact between the card or smartphone and the payment terminal.

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Safety and Security

Within the NFC transaction process are encryption protocols to secure the data being transmitted. These protocols ensure that the data exchanged between devices is encrypted and cannot be easily intercepted or tampered with. The authentication methods verify each party’s identity before exchanging sensitive information. This prevents unauthorized devices from participating in transactions. In addition, many NFC transactions often use dynamic data, meaning that a new, unique code is generated for each transaction. This dynamic data makes it difficult for attackers to reuse intercepted information for fraud.

Despite the thorough processes embedded in this transaction type, merchants still play a role in enhancing security through considerations like:

  • Only using EMV-compliant terminals
  • Ensuring network connections are secure
  • Implementing tokenization via their payment processor
  • Regularly updating software
  • Monitoring transactions
  • Implementing strong access controls.

Customers can also take precautions to protect their information when using NFC, particularly when using it through a mobile device. These include:

  • Using secure devices
  • Enabling device lock
  • Only using official payment apps
  • Turning off NFC when not in use
  • Using strong authentication
  • Only enabling NFC on a secure internet connection.

Tools compatible with contactless payments

Contactless cards are most commonly used for contactless payments, but smartphones, smartwatches, and other smart mobile devices (even implants) are now enabled with this technology through their digital wallets.

Contactless cards

All cards today can come contactless. There are contactless credit cards, debit cards, and even gift cards. If it has a contactless symbol such as a checkmark or four curved lines indicating a communication frequency, it’s NFC enabled and can be used in-store wherever the merchant has an NFC reader.

iPhone

Apple’s iPhone and Apple Watch use Apple Pay.

Android

Google’s Android devices use Google Pay, and Samsung’s Android devices use Samsung Pay.

These are all enabled through the respected devices’ payment app, where the cardholder can store their card information on their phone or device to enable secure contactless transactions.

Benefits of Using Tap to Pay

During the pandemic, the number one benefit of contactless technology was the simple fact that it is contactless. No contact, no germs. But the benefits made known during that time were more aligned with the original reason for its development.

It’s faster

Contactless technology speeds up the payment process. Rather than “dipping” the card into the machine, merchants can quickly pass the reader close to the customer. The customer taps the card, and the transaction is complete. NFC devices facilitate the fastest and most convenient data exchange available today.

It’s secure

NFC transactions are secure due to the short distance over which they occur. Moreover, NFC devices can be secured with encryption and authentication protocols that ensure the confidentiality and integrity of the transmitted data, such as the cardholder’s personal information and card number.

It’s universally compatible

Unlike the chip card and magnetic stripe, NFC technology is standardized. This ensures compatibility between different devices and applications. Standardization enables seamless integration of NFC into more devices, including smartphones, tablets, payment cards, and other smart gadgets. It can power a payment future beyond our current plastic cards.

It’s versatile

One way to verify the longevity of a technology is to look at its usability outside of the obvious application. Businesses are using contactless loyalty cards and even loyalty apps that allow customers to store those loyalty cards digitally. Interactive marketing lets customers tap NFC-enabled promotional material to access offers, discounts, and product information. Beyond retailers and accepting payments, NFC is used for public transport, access control systems, smart advertising, data exchange between devices, and interactive gaming. NFC even enables smart packaging to provide customers with product and usage information at the point of sale.

How Businesses Can Implement Tap to Pay

The tap-to-pay revolution is here, and it’s not going anywhere. Any SMEs not yet on board should be looking to change that soon. Here’s how:

Research and choose the right vendor

Many different POS (point of sale) providers offer contactless payment capabilities. There will be a long list with a search online, but not all providers suit all businesses. There are a few options.

Full-service POS and credit card payment providers

Full-service providers like Stax offer complete POS solutions and backend payment processing, which are essential to accepting contactless payments.

At the front end (the POS), all-in-one providers like Stax offer hardware, software, and additional services tailored to specific industries. Stax specifically is POS agnostic, allowing merchants to use any preferred POS hardware, unlike many POS specialists that force merchants to use theirs only. Then, they also handle payment processing services in the backend, ensuring seamless transactions by securely authorizing and settling payments.

These types of all-in-one providers often have direct relationships with card networks, allowing for competitive transaction rates.

Specialist POS providers

Specialist POS providers, such asSquare, offer simple solutions, often appealing to smaller businesses and individuals. The emphasis is on user-friendly interfaces and quick setup. They may lack some advanced functionality but often have low entry costs, making them attractive to small businesses with limited budgets.

Some specialist POS providers offer payment processing services but do not have direct relationships with the card networks. At the entry-level, their fees are low, but once businesses are processing high volumes, these often work out much more costly than full-service providers.

Payment aggregators

Payment aggregators, such as PayPal, have a unique system that doesn’t require businesses to set up a merchant account. Instead, PayPal and other aggregators group all of their clients’ transactions into one. This makes businesses sub-merchants under PayPal’s own merchant account.

Aggregators are appealing for their convenience, but they can be very expensive for merchants processing a high volume of transactions.

Evaluate costs, fees, and customer support

Providers often have different costs and plan structures as they serve different types of businesses. Full-service providers like Stax use flat-rate subscription pricing, which keeps fees low when businesses process high volumes. However, subscription pricing may seem high for businesses with a low transaction rate. So always run the numbers and consider your transaction volume when selecting a merchant service provider. 

Fees, too, differ among providers. Cheap vendors often have hidden fees. Look out for:

  • Transaction fees
  • Chargeback fees
  • Monthly minimums
  • Statement fees
  • Gateway fees
  • PCI compliance fees
  • Upgrade and support fees
  • Cancellation fees
  • Additional hardware costs.

Once the provider is identified, the steps are simple.

Upgrade or purchase necessary hardware

As technology advances quickly, even merchants with NFC-enabled terminals or readers should look at whether theirs is up to date. There may be a need for additional infrastructure, like Wi-Fi or data connectivity, which is not essential for the transaction but is necessary for some of the advanced features this technology offers.

Train staff

To achieve the smooth process promised by contactless card or mobile payments, staff must know how to use and troubleshoot the system. Formal training helps bring everyone up to speed, developing super users who can use the technology and effectively educate customers on the benefits.

Promote the new payment option

The extra security offered by NFC technology is a great benefit to customers. It should be promoted and used to emphasize that customer privacy and security are important. This message will bode well for building loyalty. It may also be worth offering promotions and incentives to encourage the initial usage of this technology, especially for businesses that plan to utilize NFC loyalty cards or other NFC-enabled solutions.

Regularly review and update the system

Providers will regularly update software to improve services. These improvements then flow onto customers and merchants alike. Keeping the software updated ensures it will run for optimal security and performance.

Finally, it’s worth soliciting customer feedback to learn what they think of these NFC-enabled solutions. This insight can inform how advancements in this technology may be used to improve business offerings. 

The Future is Tap to Pay

The era of traditional payments is coming to an end. Tap-to-pay has ushered in a new direction for the payments industry.

For almost a decade, tap-to-pay has offered seamless, secure transactions that can be made in seconds with the wave of a hand. That convenience and advanced security capabilities have solidified this technology as the go-to payment method.

NFC technology has already given businesses the tools to introduce tech-advanced payment solutions, from mobile wallet payments to digital loyalty programs on both cards and phone apps. For those that it benefits, this technology can extend to in-store NFC promotions and pioneering packaging that takes customers straight to the information they need at the moment they need it.

Tap-to-pay is the future, and Stax Payments offers the front and backend tools to power this progress.

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FAQs about Tap to Pay

Q: What is Tap to Pay?

Tap to Pay is a technology allowing users to make payments by tapping or hovering their contactless card or NFC-enabled device over a payment terminal. It’s a fast, secure, and convenient way to handle transactions.

Q: How does Tap to Pay work?

Tap to Pay operates through Near Field Communication (NFC) technology, a short-range wireless communication system that allows data exchange between devices in close proximity. The customer’s payment information is securely stored in the NFC chip and transmitted to the merchant’s terminal for authorization. The process is fast, secure, and does not require physical contact between the card or smartphone and the payment terminal.

Q: What are the benefits of Tap to Pay?

Tap to Pay offers several benefits. Firstly, it is faster and more convenient than traditional payment methods. It is also secure due to the short distance over which transactions occur and the encryption and authentication protocols embedded within the NFC technology. Moreover, it is universally compatible and versatile, opening doors for applications beyond payments, such as loyalty programs, smart advertising, and interactive gaming.

Q: How can businesses implement Tap to Pay?

Businesses can implement Tap to Pay by upgrading or purchasing necessary hardware, training staff, promoting the new payment option, and regularly reviewing and updating the system. It is also important to research and choose the right vendor, considering factors such as costs, fees, and customer support.

Q: What devices are compatible with Tap to Pay?

Most modern devices are compatible with Tap to Pay, including contactless cards, smartphones, smartwatches, and other smart mobile devices. Many of these devices come with digital wallets such as Apple Pay, Google Pay, and Samsung Pay, which can store card information securely and enable contactless transactions.

Q: How secure is Tap to Pay?

Tap to Pay is highly secure. The NFC transaction process includes encryption protocols to secure the data being transmitted, ensuring that it cannot be easily intercepted or tampered with. Additionally, many NFC transactions use dynamic data, generating a new, unique code for each transaction, making it difficult for attackers to reuse intercepted information for fraud.

Q: What is the future of Tap to Pay?

Tap to Pay is seen as the future of payment methods. The convenience, security, and advanced capabilities it offers have made it the preferred payment method for many. With advancements in NFC technology, businesses have the tools to introduce tech-advanced payment solutions, from mobile wallet payments to digital loyalty programs, marking a new direction for the payments industry.

Q: What role did smartphones play in the adoption of Tap to Pay?

Smartphones played a significant role in the adoption of Tap to Pay. Tapping a smartphone to a terminal proved far more exciting than tapping a card for many consumers. Companies like Google and Apple introduced contactless payments via their mobile apps, pushing consumers to adopt the technology.

Q: What are some precautions to protect information when using NFC?

Some precautions include using secure devices, enabling device lock, only using official payment apps, turning off NFC when not in use, using strong authentication, and only enabling NFC on a secure internet connection.

Q: How can Tap to Pay be used beyond accepting payments?

Businesses are using contactless loyalty cards and even loyalty apps that allow customers to store those loyalty cards digitally. Interactive marketing lets customers tap NFC-enabled promotional material to access offers, discounts, and product information. Beyond retailers and accepting payments, NFC is used for public transport, access control systems, smart advertising, data exchange between devices, and interactive gaming. NFC even enables smart packaging to provide customers with product and usage information at the point of sale.


 

How Adopting Mobile Payments Can Help Your Business Grow in 2024

Let’s time travel back, just 20 years ago, to the shopping mall. You’re making a purchase at a retail store, and the cash register is large, clunky, and painfully slow, even for 2004. 

Fast forward to now where much has changed, and research anticipates contactless mobile payments to exceed one billion users globally by 2024. Customers can pay with their watch or phone just by tapping it on a card reader, and businesses can host an entire POS system on a mobile phone. A lot has changed in 20 years, and businesses must either adopt a modern and mobile payment infrastructure or risk becoming about as relevant as the cash register in a mall department store.

So how can you adopt mobile payments for your business, and how can you benefit from these payment services? Thanks to the advancements in payment technology, the answers are not difficult to find. From hardware equipment to specialized merchant services, here’s how you can use mobile payment services to grow your enterprise this year.

TL;DR

  • Mobile payments have evolved significantly over the past 20 years, with current tech enabling payments through watches or phones. 
  • Major companies like Apple, Samsung, and Google have championed mobile payments through NFC-enabled digital wallets; businesses need compatible hardware for adoption. 
  • Adopting mobile payments is crucial for modern businesses to cater to broader audiences, streamline the checkout experience, and ensure operational relevance in the future.

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Upgrade Your Legacy Equipment for Mobile Payments

The world’s foremost mobile phone manufacturers, Apple and Samsung started to foster the use of mobile payments as early as 2014 and 2015, respectively. By using near-field communication (NFC), Apple Pay, and Samsung Pay services turned each company’s mobile devices into highly secure digital payment wallets. Google was a little late to the party, but it also followed with its method called Google Pay in 2016.

Thanks to these modern payment solutions, credit card, and debit card users can now complete their purchases without swiping or inserting their cards at the point of sale (POS) terminals. Instead, they can tap their mobile devices against supporting POS terminals to process their payments securely and efficiently by way of a digital wallet.

Why Is Adding Mobile Payments Important to Businesses Today?

Contactless payments are quickly gaining traction among users, and it’s not just younger generations and tech-savvy consumers. Major card issuers such as Visa, MasterCard, and American Express each have hundreds of millions of NFC-enabled (near-field communication) debit and credit cards in circulation. Further, the adoption of various digital wallet app options—including Apple Pay, Google Pay, Samsung Pay and Google Wallets—make accepting mobile payments a must-have for modern businesses.

Due to its simple yet effective way of making mobile payments, this method is one that is rapidly growing. Many enterprises are now focusing on making it a part of their checkout experience, whether they offer retail services or run other businesses in specific industries. With the promise of increased sales and a better reputation, it seems like it is par for the course to adopt a mobile payments solution.

But even as the adoption of tap-to-pay increases, contactless card and digital wallet payments through Apple Pay, Samsung Pay, and Google Pay need compatible hardware to work at POS terminals.

What Can You Do to Adopt These Mobile Payments Solutions?

Contactless payments are relatively new, only arriving in the U.S. in 2014. Because of this, outdated POS systems lack the ability to accept NFC-enabled credit and debit cards or mobile wallets. So, for businesses working with antiquated POS terminals, now is the time to upgrade to be able to better serve a wide swath of users with contactless cards and mobile wallets.

But not to fear—with the help of your payment processing partner, you can easily modernize your infrastructure and make sure your business is equipped to offer the latest payment processing hardware. So, if you’re operating with older hardware that only accepts EMV chip cards and swiped credit and debit cards, it’s time to talk to your payment processor and enter the modern era. Not only will this be a more secure option and allow for more efficient transaction processing, you’ll also deliver a better customer experience.

How Can Mobile Payments Help?

By accepting these mobile solutions, your business can cater to a broader customer base that now prefers using mobile payments. Accepting mobile payments streamlines the checkout experience for these customers, leaving them with a good impression of your business. After all, especially with a younger generation of patrons expecting modern technology, businesses not only need to but also benefit from meeting their customers where they are.

In the long run, this also future-proofs your operations for when these mobile solutions become the primary way to process payments. Instead of upgrading your payment infrastructure at the last minute, you can benefit from modern merchant services that will take on the challenge of changing times.

Use Card Readers to Turn Mobile Devices into POS Equipment

If the above information tells you anything, it’s the importance of modern payment terminals, including mobile POS systems that complement standard POS terminals. . But what if your business sells its services in the field? That’s where you can turn to mobile payment systems. There are many options available that plug into existing smartphones and tablets , such as the Swipe Simple B250 Reader available from Stax, to solve this problem effectively.

Some mobile card readers attach to modern smartphones or tablets to turn them into payment card processors, and some work on their own as separate devices. This means that these compact devices can work anywhere your customers are or wherever your services can go.  A standalone mobile point-of-sale system, such as the Clover Flex or Dejavoo QD Series are great options for dedicated mobile payment transactions.

Offering mobile payment options is attainable for small businesses and large enterprises alike as well. These compact options are compatible with Apple, Android and other smartphones and have the full functionality needed to process payments in the field.

Leveraging Peer-to-Peer Payments

One trend gaining traction with mobile payments is the use of applications such as PayPal and Venmo for more than peer payments. Many businesses, particularly small businesses, are using mobile payment apps to allow their customers to leave their physical cards at home and submit payments directly from their Venmo, Cash App or PayPal account to the merchant, and the funds are then transferred to the merchant bank account. Because the customer already has their bank account, debit card or credit card information connected to the payment app, the payment can be completed easily within the familiar payment app ecosystem, creating a seamless user experience.

While the fee structures for this service vary depending on the provider, peer-to-peer (P2P) payments are much more than money transfers between friends. There are also several authentication measures, such as verifying the phone number of the recipient or using a QR code to validate that funds are being transferred to the correct account. 

How Mobile Payments and Online Payment Options Intersect

For businesses doing business both in-person and online, you’ll find a lot of the widely used payment technology intersects. From a user experience perspective, making an online payment where all of your information needs to be entered manually is a huge hassle. 

Many modern businesses now accept mobile wallets when processing an online payment, meaning the customer can simply click to pay, with all their shipping and payment information automatically populated. Not only is that easier for the customer, but it is also more secure than traditional payments as all mobile wallet payments use tokenization to secure the payment information—meaning the customer doesn’t physically enter their card information into a browser to complete a purchase. 

This is the same technology as accepting digital wallet payments in person, so for businesses that implement standard POS and mobile payment options for in-person transactions and also do business online, you can serve all of your customers using the same payment technology.

How is This Relevant to Your Business?

With well-received trends such as pop-up stores and food trucks, businesses have found a lucrative model in mobile operations. Instead of waiting for customers to come to brick-and-mortar stores, you can now take your services to them. This increases your exposure and your ability to sell, while also cutting infrastructure costs. It’s a win-win situation from every aspect. It also applies to employees who deliver services through field services and delivery.

To go even further, the various types of mobile payments and NFC payments allow your business to move quickly and better service your customers. Mobile payment technology has come a long way in the last decade, not only in the NFC technology, mobile payment systems, and payment options available but also in its adoption by consumers of all ages. So, whether you’re reading this as a food truck owner, small retail business, professional services provider, or a multi-national large enterprise, mobile payments and digital payment trends are highly relevant to you.

What Can You Do to Adopt These Mobile Payments Solutions?

Mobile card readers are now supported by major credit card processors such as Visa, MasterCard, and American Express. This means that you can now get modern payment solutions quickly via credible merchant services providers.

To implement mobile payments—or any payments for that matter—the first step is to choose a trusted payment processing partner. Your payment processor has a huge impact on what you pay and the experience you and your customers have. Choose a processor with POS hardware and software relevant to your business and the ability to scale if and when your business grows. 

There is also a lot of research to do when evaluating options—it’s an important comparison to look at the cost and capabilities. At Stax, we want you to know how we stack up against the competition, which is why we frequently share a side-by-side analysis of our solutions compared to your other options. For more information, check out some of our comparison articles.

Now, let’s assume you made a choice you’re happy with and have all the equipment and software needed to process mobile payments. Educating your employees is the next hurdle to clear. Especially if the technology is new to your workforce, this is a make-or-break moment. Resistance to new technology can be a tough obstacle, so invest in training and make sure your employees are comfortable and well-versed. When your employees are on board, it’s far easier to get your customers accustomed to the new payment options.

Related Article: Your Definitive Guide to Mobile Payments

What is the Best Way to Use Mobile Payments?

One of the simplest ways to implement mobile payments is to turn your employees’ mobile phones and devices into credit card and debit card processors by using a plug-in card reader or accepting peer-to-peer payments such as Venmo or PayPal.

As a result, you can accept payment cards and other payment types virtually anywhere you sell your products and services. Mobile card readers can also cut through the time it takes for them to accept payments for a sale or after delivering a service. To add to their advantages, some mobile card readers also help you in preventing cash tracking issues by connecting with your POS software.

Of course, another simple option is to upgrade your POS options to handheld mobile terminals and a payment processor that supports your business in more ways than hardware.

At Stax, our modern payment services focus on going beyond ordinary merchant accounts. The Stax Platform allows for mobile swipe capabilities through our Stax mobile app. You can also key in payments or add the optional mobile reader to start swiping. Enjoy the ease and convenience of sending invoices and storing payment methods through the Stax Platform.

Contact us at Stax for a custom quote today to learn how our solutions can help you keep up with mobile payments this year. We will be happy to help you find the right solution for your enterprise.

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FAQs about Mobile Payments

Q: What are mobile payments and how have they evolved over the years?

Mobile payments refer to payment services that are operated under financial regulation and performed from or via a mobile device. Over the past 20 years, mobile payments have evolved significantly, with advancements in technology enabling payments through wristwatches or smartphones. Major tech giants like Apple, Samsung, and Google have pioneered mobile payments through NFC-enabled digital wallets.

Q: Why is adopting mobile payments crucial for businesses today?

Adopting mobile payments is vital for modern businesses to cater to a wider audience, streamline the checkout experience, and ensure operational relevance in the future. With an increasing number of customers preferring contactless payments for their convenience and security, businesses need to adapt to this trend to stay competitive.

Q: How can a business adopt mobile payments?

The first step to adopting mobile payments is upgrading your current payment processing systems to be compatible with the latest NFC-enabled devices and digital wallets. This might involve partnering with a reliable payment processing provider and investing in modern POS hardware and software. It’s essential to train your employees on the new technology to ensure a smooth transition and positive customer experience.

Q: What are the benefits of adopting mobile payments for businesses?

Mobile payments can help businesses cater to a broader customer base, enhance the checkout experience, and future-proof their operations. By accepting mobile payments, businesses can also increase their sales, improve their reputation, and stay relevant in a rapidly evolving digital landscape.

Q: What is the role of card readers in facilitating mobile payments?

Card readers can transform mobile devices into POS equipment, enabling businesses to accept payments virtually anywhere. Some mobile card readers can be attached to smartphones or tablets, turning them into payment card processors. This offers a practical solution for businesses that sell their services in the field.

Q: How do mobile payments and online payment options intersect?

Many businesses now accept mobile wallets for online payments, providing a seamless and secure checkout experience for customers. The technology used for accepting digital wallet payments in person is the same as that used for online transactions, allowing businesses to serve their customers with the same payment technology across different platforms.

Q: What is peer-to-peer (P2P) payment and how is it relevant to businesses?

Peer-to-peer payments allow users to transfer funds directly from one party to another through their mobile devices. Many businesses, especially small ones, are leveraging P2P payment apps like PayPal and Venmo to provide customers with a seamless payment experience. This method is secure, easy, and efficient, making it a popular choice for modern businesses.

Q: How can businesses leverage mobile payments for growth?

Businesses can leverage mobile payments to enhance customer experience, streamline operations, and expand their customer base. By adopting mobile payments, businesses can also stay ahead of the competition, increase sales, and improve their reputation in the market.

Q: How do mobile payments impact businesses offering mobile services?

For businesses offering mobile services like pop-up stores and food trucks, mobile payments allow for quick transactions and better customer service. They also help increase exposure and selling ability while reducing infrastructure costs. The various types of mobile payments and NFC payments enable businesses to move quickly and service their customers more effectively.

Q: What is the future of mobile payments?

The future of mobile payments looks promising. With the continued advancement of technology and increasing consumer demand for convenience and security, it’s expected that mobile payments will become the primary way to process payments in the future. Businesses that adopt mobile payment solutions now are positioning themselves for success in this evolving landscape.


 

The Impact of EMV Technology on Payment Transactions

EMV is an acronym for Europay, Mastercard, and Visa as these are the three companies that came together to create the EMV standard. An EMV card is a type of smart card. It can be a card that needs to be inserted into a card reader or a contactless card that uses NFC (Near-Field Communication) technology.

EMV cards have quickly become an integral part of keeping businesses and their customers secure. Chip cards work to protect businesses by decreasing losses and fraud liability related to credit card fraud and creating a safer payments ecosystem.

Hence, most debit and credit cards these days are EMV cards. When you look at your EMV payment card, you will see a small, shiny, square chip on it—this is the EMV chip. EMV cards are much safer than traditional magnetic strip cards as the chip generates a unique verification code for each transaction. 

Data is stored on the IC (Integrated Circuit) chip of an EMV card as well as the magnetic strip. This allows EMV cards to be backward compatible, which means that they can be used on older card readers and payment terminals. These cards are also known as IC cards, chip cards, and integrated circuit cards. Card issuers can choose various authentication methods like digital signatures or PINs for their EMV cards. Depending on the authentication method, EMV cards can also be called chip-and-signature or chip-and-PIN cards. 

Figures published by EMVCo, the company that manages EMV specifications, in 2021 show that by the end of the year, there were 21 billion EMV cards in circulation worldwide. The report also highlighted that the number of EMV cards rose by 1.1 billion when compared to the previous year and that when it comes to card-present transactions, 90% of them are made with the help of EMV technology. 

TL;DR

  • EMV is an acronym for Europay, Mastercard, and Visa as these are the three companies that came together to create the EMV standard. An EMV card is a type of smart card. It can be a card that needs to be inserted into a card reader or a contactless card that uses NFC (Near-Field Communication) technology.
  • EMV chip cards are more secure because they contain a microchip that, generates a code for each transaction. This code is unique and cannot be reused, so even if the cardholder’s information is obtained from stolen cards, if the card is copied, or if the credit card number falls into the wrong hands, fraudsters wouldn’t be able to complete a transaction.
  • The first step to implementing EMV chip technology is to ensure that you have the right equipment. In some cases, you may also need to guide your customers on how to use an EMV debit or card payment card.

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The History of EMV

Europay, Mastercard, and Visa were the founding members of this standard, creating the name EMV in 1993. They were later joined by Discover, JCB, UnionPay and American Express to form EMVCo.

The first version of EMV came out in 1994, although it took a few years before it saw widespread use across Europe. Issuers in Europe adopted this standard because phone line card authorization was prohibitively expensive for them. Due to international call rates, the cost to authenticate cards was 80 to 90 percent higher in Europe.

It took until 2015 for the United States to start its EMV migration. Companies were slow to adopt the more secure payment system because of the expense and lack of synchronization among retailers, credit card providers, and banks.

On October 1, 2015, an EMV liability shift was created, which required businesses to be able to accept EMV cards or risk being liable for fraudulent transactions if it were to occur, pushing for synchronization across the board.

EMV cards have now become the standard, as they are more secure and smarter than magnetic stripe cards or cash transaction.

How EMV Chip Technology Works

EMV chip cards are more secure because they contain a microchip that generates a code for each transaction. This code is unique and cannot be reused, so even if the cardholder’s information is obtained from stolen cards, or if the card is copied, or if the credit card number falls into the wrong hands, fraudsters wouldn’t be able to complete a transaction.

In contrast, card transactions involving magnetic stripe cards are less secure because magstripe cards are only able to store static information. This makes it easy to produce counterfeit cards. An EMV chip card needs to be inserted into a special slot in the card reader or POS terminal to complete a process that is called “dipping.” In comparison, a magnetic strip card is swiped at the payment terminal so that the static card data can be read. 

It must be noted that with EMV cards the card number is never transmitted unlike with magnetic strip cards. The unique code generated by EMV cards is used instead to authenticate the transaction.

Once an EMV card is inserted, the data on the computer chip is read and the card is verified by the terminal. As the EMV verification process is more complex than that of magnetic strip cards and because a unique code is generated each time the card is used, it takes a bit longer to complete a dipped transaction.

Chip-and-signature transactions are still the most common EMV transactions in the US. Here, a customer must also sign on the receipt after the card is dipped to complete the transaction. Chip-and-PIN transactions are more popular outside the US where a customer types in a four-digit PIN during payment processing. In general, the latter is considered to be safer. 

Newer EMV cards can also be used for contactless payments. Customers can simply tap or wave the card across an EMV-enabled terminal, and the card would generate a one-time code for the transaction.

From the customer’s side, using a card with EMV chip technology is quite simple. They present the card at the point of sale (POS), but instead of swiping it, the shopper dips or taps their card using the merchant’s card reader. Once the transaction is authorized, they can proceed with the sale.

EMV Cards Are Safer

Previous methods using magnetic-stripe cards meant that cashiers had to look at the card and signature to verify a purchase. Card information on these cards is stored data statically, meaning that it can be pulled from the stripe with a simple piece of hardware.

The chip in the EMV cards provides stronger security for transactions through cryptographic algorithms, uniquely encrypting the data each time you use it. Authenticating your purchases are made easier with the use of a personal PIN number, instead of requiring a signature.

EMV cards provide a two-fold confirmation during card-present transactions, using the physical card and the customer’s PIN. This verifies the cardholder, allowing the one-time-password (OTP) generated by the chip to be confirmed and approved. In situations of card-not-present purchases these options are unavailable as the card won’t be in the merchant’s hands, making it easier to exploit than retail fraud. Some methods and tools for eCommerce sites to implement verification are to:

  • Continue PCI compliance and follow the specific rules for data security and management.
  • Verify card security codes.
  • Use an address verification service (AVS).
  • Analyze priority shipping requests (especially if free shipping is offered).
  • Validate unusual orders from repeat and regular customers.
  • Confirm the phone number and transaction information before shipping products.
  • Take advantage of fraud prevention services available from credit card companies such as Verified by Visa or Mastercard SecureCode

Keeping a well-maintained authentication system will significantly reduce your business’ risk, while your customers enjoy the ease of purchasing your products with a business that establishes trust and security with CNP payments.

EMV Cards Are Smart

Every chip on an EMV card contains an embedded microprocessor, a type of small computer that provides strong security features and other capabilities not possible with traditional magnetic stripe cards.

When you insert this card into a terminal, the reader is able to exchange data with the card easier. Contactless EMV cards allow for an exchange of data via radio frequency without the card ever leaving the customer’s hand. With contactless cards, a customer does not have to verify the transaction by providing a signature or PIN, which makes contactless transactions much faster than chip and magnetic strip cards. The cashier also does not have to print out a receipt unless specified by the customer. 

How to Implement EMV Chip Technology in Your Business

The first step to implementing EMV chip technology is to ensure that you have the right equipment. Your credit card readers must be EMV enabled in order to support chip-and-pin and chip-and-signature transactions.

The good news is that most credit card terminals these days can support EMV, so if you recently purchased your credit card machines, they’re likely EMV-compliant.

If this isn’t the case, contact your payment processor or hardware provider to discuss your options.

If you already have an EMV card reader or EMV terminal, you should be good to go from the technical side of things. You may need to orient your staff on how to use the terminals if they’re unfamiliar with the technology.

In some cases, you may also need to guide your customers on how to use an EMV debit or card card.

Final Words

As more transactions become digitized, data security is of the utmost importance. 

Additionally,  businesses and their customers need to be educated on how they are transferring money and the tech behind these products that protect their payments.

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FAQs about EMV Technology

Q: What does EMV stand for?

EMV stands for Europay, Mastercard, and Visa. These are the three companies that came together to create the EMV standard.

Q: What is an EMV card?

An EMV card is a type of smart card containing a microchip that generates a unique code for each transaction. This makes EMV cards more secure than traditional magnetic stripe cards.

Q: How does an EMV card work?

When an EMV card is inserted into a card reader, the terminal reads the data on the chip and verifies it. The card generates a unique code for each transaction, which is used to authenticate the transaction.

Q: What is the purpose of EMV technology?

The primary purpose of EMV technology is to enhance the security of payment transactions. The technology helps decrease losses and fraud liability related to credit card fraud, creating a safer payments ecosystem.

Q: How prevalent is the use of EMV cards?

According to 2021 figures published by EMVCo, there were 21 billion EMV cards in circulation worldwide. Moreover, 90% of card-present transactions are made using EMV technology.

Q: What are the different types of EMV cards?

EMV cards can be categorized based on their authentication method. They can be chip-and-signature or chip-and-PIN cards. More modern EMV cards also support contactless payments.

Q: What is the difference between chip-and-PIN and chip-and-signature cards?

Chip-and-PIN transactions require the customer to type in a PIN during payment processing, while chip-and-signature transactions require the customer to sign on the receipt to complete the transaction.

Q: What are contactless EMV cards?

Contactless EMV cards are a newer type of EMV card that supports contactless payments. Customers can tap or wave the card across an EMV-enabled terminal, and the card generates a one-time code for the transaction.

Q: How to implement EMV technology in a business?

To implement EMV technology, businesses need to have EMV-enabled credit card readers. They might also need to provide guidance to staff and customers on how to use EMV cards.

Q: What is the history of EMV technology?

Europay, Mastercard, and Visa created the EMV standard in 1993. Over the years, other companies joined them to form EMVCo. The first version of EMV was released in 1994, and it gained widespread use across Europe over the following years. The United States started its EMV migration in 2015.

Q: What is the EMV liability shift?

The EMV liability shift, created on October 1, 2015, required businesses to be able to accept EMV cards or risk being liable for fraudulent transactions. This pushed for synchronization across retailers, credit card providers, and banks.

Q: How do EMV cards enhance transaction security?

The chip in EMV cards provides stronger security for transactions through cryptographic algorithms, uniquely encrypting the data each time the card is used. The cardholder’s personal PIN number or the physical card itself helps authenticate purchases.


 

ACH Payments and ACH Transactions: How Do They Work and How Long Does an ACH Transfer Take?

To say there are numerous ways to make or receive payment is a huge understatement.Today, business owners need to consider not only the many payment methods available, but also what options are most cost-effective for the business, and which options will resonate most with their customers. While electronic payments innovations such as mobile wallets and peer-to-peer payments will continue to grow, there are several essentials for all businesses to consider. One of which is ACH transactions, a staple for all businesses for customer transactions, payroll, and more. 

There is a lot of terminology surrounding payment processing, and ACH payments have their own vernacular.This article discusses what you need to know to better understand the ACH payments, including how do ACH transactions work and how long does an ACH transfer take.

TL;DR

  • The terms ACH payment and ACH transfer are interchangeable in meaning and work by moving funds from one bank to another through a centralized system (the Automated Clearing House). 
  • ACH debit transactions typically take 1-3 days to process while ACH credits usually take one day to process; however, same-day ACH payments are also available for most transactions if needed with a small additional cost.
  • ACH transactions are typically far less expensive than wire transfers or credit card fees, especially for larger transactions.

What is the Automated Clearing House (ACH) Network?

The average consumer may not realize they regularly make and receive payments from the Automated Clearing House network (ACH), but this network was responsible for 30 billion in payments, totaling nearly $77 trillion in transactions in 2022.  

Electronic transactions have taken over in popularity, and paper checks are starting to feel like a vestige of a bygone era. The ACH network is already in use for most organizations in the form of ACH direct deposit payroll and recurring payments done outside of debit and credit transactions.

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Two Types of ACH Payments

ACH Direct Deposits

Direct deposits are payments sent from the government or businesses to consumers or employees. This includes government benefits, tax refunds, or your payroll. ACH direct deposts are made to a financial institution using the routing number and bank account number of the receiving institution to direct funds into the checking or savings account of the recipient.

ACH Direct Payments

These are payments used by individuals or businesses to pay for goods or services. ACH direct payments, also known as ACH debit transfers, are a bank transfer from the consumer or business bank account to the recipient account.

Examples of ACH Transactions

93% of Americans are paid through direct deposit, meaning that the Automated Clearing House network is a part of the daily lives of most of the country already. Other types of ACH transfers are as follows:

  • Paying an electricity bill with your bank account
  • Transferring money to a friend from one bank account to another (Venmo, Zelle, PayPal, Cash App)
  • Paying for a wedding venue rental with routing and bank account information
  • Businesses paying for supplies with their business checking accounts

How Long Does an ACH Transfer Take?

One of the most frequent questions we get is, how long do ACH transfers take? An ACH debit transaction such as bill payments through your bank will typically take 1-3 business days to process. ACH credits, such as payroll direct deposit or payment to vendors and third-parties take about one day to process

The ACH network processes payments for 23 ¼ hours each business day and settles transactions in batches four times per day during business hours of the Federal Reserve.

What are same-day ACH transfers?

Starting in 2016, NACHA made same-day processing of ACH transfers available. With a same-day transfer, there are a few considerations to be aware of including the cost and time of day for same-day processing.

First, the originating depository financial institution (ODFI) has two windows of time to submit the transaction to the ACH Operators: a morning submission deadline of 10:30 AM EST with a settlement time of 1 PM EST, and an afternoon submission deadline of 2:45 EST with a 5 PM EST transaction settlement time. 

If the cutoff time is met, the receiving depository financial institution (RDFI) will have the funds available same-day. The RDFI is required by NACHA to receive same-day ACH payments and make them available in the recipient’s account by 5 PM local time (for the RDFI). If the cutoff time is not met, the funds should be available in the receiving bank the next business day.

Also worth noting is there is an additional fee for same-day ACH transfers, this entry fee is 5.2 cents and is paid from the ODFI to the RDFI for each same-day ACH transaction. The collection and disbursement of these fees are handled by the ACH operators and reflected on the monthly statement.

In summary, when processing a same-day ACH transfer, the cutoff timelines matter, but in any case, ACH processing is often even faster than settling a credit card transaction.

How Much Money Goes Through ACH Payment Processing?

Direct deposit combined with other payments and deposits, such as mortgage and utility payments, tuition and recurring subscriptions, made through the ACH network exceed 77 trillion dollars annually.

The terms ACH payment and ACH transfer are interchangeable in meaning and work by moving funds from one bank to another through a centralized system (the Automated Clearing House). This payment method saves time and money for the business and customer, and is ideal for many types of payments, including but not limited to recurring and scheduled transactions.

Take control of getting paid and say goodbye to the stress of late payments with ACH Debit. Automate collection and reconciliation, saving time usually spent on financial admin.

Related Content: 5 Benefits of ACH Payments Over Check Payments

What Are Ach Transactions? Man Looking At Laptop Screen.

ACH Payment vs Credit Card Payment

Credit card payments are straightforward and well known. The card number, expiration date and CVV security code are required to process a payment or send a refund. The average credit card processing fee varies, but is typically between 1.4-3.5%, excluding other monthly fees to the merchant services provider and other costs of equipment.

Credit and debit card transactions may be costly for merchants but are a mainstay of business operations. Digital wallets linked to credit and debit cards are also gaining traction in small and large businesses. These offer a convenient solution for the customer, with fees similar to those of a typical swiped card transaction.

How Much Does it Cost to Process ACH Payments?

ACH payments are done directly through a bank account, requiring the name of the bank, type of account (checking or savings), and the routing and account number. ACH transfers usually take one to three business days to complete and can be a lower-cost option for businesses (the average cost of a transaction is about $.29).

These payments are commonly used for direct deposit payroll, recurring bill payments, large business-to-supplier transactions, and payments and refunds to and from the IRS.

ACH Payments vs. Wire Transfers vs. EFT Payments

The main difference between an electronic funds transfer (EFT) and ACH payments is that EFT is a term for all types of digital payments, but ACH is a specific type of digital payment—so ACH is a type of EFT payment.

Whereas, wire transfers may seem similar to ACH payments on the surface but they have a few key differences. Wire transfers are more costly, with an average charge of $10-$35 per transaction, and operate like an electronic cashier’s check. This means that when sending a wire transfer, the funds are immediately pulled from the sender’s account and cannot usually be reversed.

Processing time is faster with wire transfers and usually cleared within the same business day. Wire transfers also have a level of risk associated with them because once sent, they are difficult to cancel. Wire transfers can be done internationally, which is both a benefit and a risk. Verifying the recipient is imperative to protect against fraud and users should be careful when sending a payment via wire transfer.

ACH Credit Transfers (ACH Push Payments)

ACH payments are usually divided into push payments and pull payments. Push payments send money, and pull payments collect it. Though they are similar, they work in slightly different ways. Push payments (also known as ACH credit transfers) are transactions, where the payer instructs their bank to send money from their account to another account, vs a pull payment where you provide bank account information to the payee and the amount is then withdrawn.

ACH Transfer Transaction Limits

According to the National Automated Clearing House Association (NACHA), which manages ACH payments, ACH transfer limits, as of March 18, 2022, the Same Day ACH dollar limit has increased to $1 million per payment.

However, ACH transfer limits are subject to other rules on how much money can be moved. These limits can be per day, per single transaction or per single month depending on the bank. And it is likely that your incoming ACH transfer limits may still average around $25,000.

Benefits of ACH Payments

Now that we’ve covered the fundamentals of ACH payments, let’s look at some of the benefits of this payment type.

Less expensive than other methods of payment

One of the main benefits of ACH payments is the cost savings for large transactions. ACH transfers cost 1% of the transaction amount, with a cap of $10, so they’re less expensive than wire transfers or credit card payments.

Great for recurring transactions

Recurring payments are convenient via the use of ACH transfers and are already in use for many consumers for transactions like automatic bill pay. An added benefit for the consumer and businesses using ACH transfers is not being inconvenienced by expiring credit and debit cards, as bank account numbers do not change unless an account is closed or compromised.

While most payments are made either electronically or through ACH transfers, checks are still in use for many. The convenience factor for ACH deposits is a big draw to move away from paper check payments. For a customer using checks, they have to remember to make the payment, write out and mail the check and then wait for the postal service to deliver and payment to be processed. This adds days to the process and leaves a lot of opportunity for human error.

Using an ACH payment means the customer does not need to remember to pay the bill, the processing time is sped up, and the business doesn’t need to physically deposit a check and wait for it to clear.

Safe and secure

ACH is also a safer option for customers since they only need to share their banking information once with the business, reducing the risk of lost or stolen checks or exposing credit card information online. Since ACH payments are not immediate, they are able to be reversed which makes it harder for a bad actor to compromise banking information.

More convenient for your customers

Since ACH transactions can be a safer payment option for customers, and reduce fees that a merchant may pass on, this means that an ACH payment is often the preferred option for your customers.

How to Accept ACH Payments

Many businesses already offer a variety of secure payment options to their customers. Giving customers the ability to choose what suits their payment preferences can encourage purchases and increase business; and companies benefit by being able to accept payment in multiple forms, eliminating a potential barrier to purchase.

If you’re planning to accept ACH payments and enable ACH transactions between your business and your customers, here are some steps you can take to get started.

1. Determine the role of ACH payments in your business

As with any business decision, it’s important to determine how ACH payment adoption fits into your strategy. Before implementing it, be sure to have a clear business case for ACH transactions.

Do you have customers who are requesting the ability to work with ACH direct deposits? Will ACH streamline processes, improve the customer experience, and ensure that you actually get paid? The answers to these questions will help you figure out if there truly is a need for ACH payments, and if so, how to implement them properly.

2. Choose the right payments processor

The next step is to sign up with a payments processor that supports ACH payments. It’s best to choose a provider that supports multiple payment options (i.e., credit cards, ACH, invoicing, etc.) from one solution. Doing so streamlines payment processing, and it also makes reporting and analysis easier, since you’ll be able to see the status of various payments under one platform.

For instance, if you want to monitor and manage settlement and funding status for ACH payments alongside your credit card transactions, you can do so if all your payments are handled through a single solution.

Stax is an all-in-one payment platform that allows for merchants to collect all manner of payments with transparent pricing, and no contracts or hidden fees. Implementing this solution can increase convenience for the customer and lower costs for the merchant.

With Stax, businesses can accept payment through swiped cards, manually keyed payments, text-to-pay, mobile payment integrations – and of course, ACH transfers. Payments are made simple, and the platform also provides data and analytics and financial reporting to better understand sales trends. These capabilities make Stax an affordable and convenient solution to accept all payment types without having to manage multiple payment systems.

Stax charges a monthly membership fee instead of pay by transaction model, making it ideal for high-volume transactions. The monthly membership fees depend on the capabilities a business enables and offer predictability in monthly costs and transparent pricing.

3. Figure out the logistics of ACH transfers in your business

You should also iron the steps you need to take to enable ACH payments. You have a number of options here, including:

  • Using a virtual terminal. You can enter your customers’ account information into your virtual terminal, similar to how you would deal with keyed-in credit card transactions. This option is best used when taking payments over the phone or via mail order.
  • Setting up online payments with an option to pay using ACH. If you’re conducting business online, you can add an option to take payments via ACH and ask customers to enter their account details. The specifics of this process will depend on the payment gateway you’re using, so check with your provider on how to enable ACH payments online.

Also Read: What is an ACH Return and What Should You Do About It?

ACH Transactions: Key takeaways

ACH transfers are a safe and convenient way to pay and offer significant cost savings for large transactions and recurring payments – especially when compared to credit cards and wire transfer fees. With many options to choose from, deciding on the payment processing merchant is an important decision for any size business.

Considerations for the type of business, amount, type, and volume of transactions, and customer demographics will determine the best fit. Many providers offer several solutions, and finding the best fit for the business helps to manage costs and provides a streamlined and convenient experience for customers.

As technology advances, savvy consumers expect options to suit their needs. Offering a variety of payment options, including ACH transfers is a safe and convenient way to better serve customers and grow business.

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FAQs about ACH Payment

Q: What is an ACH Payment?

An ACH (Automated Clearing House) payment is an electronic transfer of funds between banks or credit unions across an ACH network. This payment system allows for the efficient transfer of money without the use of paper checks or credit card networks. ACH payments are often used for direct deposit payroll, recurring bill payments, large business-to-supplier transactions, and payments to and from the IRS.

Q: How does an ACH Payment Work?

Funds are moved from one bank account to another through the Automated Clearing House, a centralized system. The ACH network processes payments for nearly 24 hours each business day and settles transactions in four batches during the business hours of the Federal Reserve. There are two types of ACH transfers: ACH debit transactions, which usually take 1-3 business days to process, and ACH credit transactions, which typically take one day.

Q: What differentiates ACH Payments from other payment methods?

Unlike credit card payments or wire transfers, ACH payments are usually less expensive, particularly for larger transactions. Moreover, ACH transactions are often favored for recurring and scheduled transactions, such as monthly bills or payroll, due to the reduction in human error and delays caused by processing paper checks.

Q: What are same-day ACH transfers?

Initiated in 2016 by NACHA, same-day processing of ACH transfers has been made available. To qualify for same-day processing, there are two submission deadlines for the originating depository financial institution (ODFI) to submit the transaction to the ACH Operators. If met, the receiving depository financial institution (RDFI) will have the funds available on the same day.

Q: Are there limitations to ACH Transfers?

Yes, ACH transfers are subject to limits that can be per day, per transaction, or per month, depending upon the bank’s rules. As per the National Automated Clearing House Association (NACHA), the Same Day ACH dollar limit is increased to $1 million per payment as of March 18, 2022.

Q: How does one accept ACH Payments?

To accept ACH Payments in your business, consider the role of ACH payments in your business, and choose the right payments processor that supports ACH payments. Then, figure out the logistics of ACH transfers in your business, with options including using a virtual terminal or setting up online payments with an option to pay using ACH.

Q: What are the differences between ACH Payments, Wire Transfers, and EFT Payments?

An Electronic Funds Transfer (EFT) refers to all types of digital payments, while ACH is a specific type of EFT. Wire transfers, on the other hand, are more costly and operate like electronic cashier’s checks, with funds being immediately withdrawn from the sender’s account. Wire transfers get cleared within the same day, can be done internationally, and are difficult to cancel once sent.

Q: What are the benefits of ACH Payments?

ACH Payments offer several advantages. They are generally less expensive than other payment methods, particularly for large transactions. They are highly convenient for recurring transactions and are safer than other methods since customers only need to share their banking information once. Also, they increase convenience for customers, likely making it a preferred option.


 

11 Easy Ways Businesses are Accepting Payments Online

When the world wide web became available to the public in the early ’90s, the growth of eCommerce and online shopping wasn’t far behind. With triple-digit growth seen annually since its emergence in the mid-1990s, online shopping now accounts for 13% of all U.S. retail sales.  Clearly, accepting online payments is no longer an option for your business—it’s a must.

One of the major benefits of accepting payments online is the ability to get paid faster and in some scenarios, expand your revenue outside your local area of business. For professional service businesses such as legal consultations or therapeutic services online invoicing lets customers and clients the ability to pay for your products and services from anywhere at any time.

Whether you’re currently transitioning your company to a digital format or you are interested in finding a more convenient approach to get paid faster, here are 11 ways your business can accept payments online.

Accepting Online Payments using Credit and Debit Cards

As a business owner processing payments using a credit card or debit card is most common. The process uses an ACH transfer (Automated Clearing House transfer) or the transfer of money electronically from the customer’s bank account through the ACH network to the merchant’s bank account.

These transfers don’t require a payment gateway to be processed (although you do need a merchant account). ACH payment transaction fees are usually lower than credit card processing fees and are charged either per transaction or at a flat rate. For scenarios where the card isn’t present, you can use its details to perform contactless payments via online or digital payment gateways.

Mobile Payment Processing

As payment technology continues to advance financial institutions are increasingly providing customers with the ability to use mobile phones for banking transactions. This increases your customer’s ability to pay for just about anything from anywhere. Accepting mobile payments saves time by allowing you to collect compensation right from your phone or tablet.

With additional payment processing methods such as Apple and Google Pay on the rise, cloud-based payments have become a necessity. Most credit card processors use cloud-based technology, so your data, as well as your customer’s information, is secure. In other words, mobile payments are secure, fast, and convenient.

eChecks Through ACH Process

An eCheck is simply a form of online payment. Money is withdrawn from the payer’s checking account through an electronic funds transfer (EFT). Funds are electronically withdrawn from your customer’s account, sent via the ACH network to the payee’s banking institution, and then electronically deposited into the payee’s account.

eChecks are one of the most popular types of recurring payments. Funds are verified within 24 to 48 hours of the transaction being initiated. Should the payer have the funds available in their checking/bank account, the transaction is cleared within 3 to 5 business days and the funds are moved from the payer’s account to the payee’s account.

Click to Pay Email Invoicing

Email invoicing is the exchange of the invoice document between a business and a customer in an integrated electronic format. Traditional invoicing is manual and tedious, often prone to human error resulting in increased costs and payment processing lifecycles for your business.

Email invoicing or electronic invoicing is an easy and safe way for businesses to send out online payment requests. With a simple click, your customers can open the invoice via email, input their preferred payment information, and pay you instantly.

With email invoicing, you’re also able to schedule payment reminders and recurring payment options for long-term customers.

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Recurring Billing

Also known as auto-pay, recurring billing means the customer has authorized the merchant to deduct payments for recurring goods and services each month from their bank account. Payments can also be made with a securely saved debit or credit card. Recurring billing and payments prevent late fees by processing payments on or before their due date.

Recurring billing is effective for a wide range of businesses. Not only does it decrease late or missed payments, but it also improves your cash flow and assists your business with long-term financial planning.

SMS Text Payment Requests

SMS payments (sometimes referred to as text to pay) allow businesses to request payments and for customers to pay for goods, services, or products via a text message sent from a mobile phone. With the SMS payment system, purchasers send a text message to pay for an item or service.

With a 95% open rate over email invoicing, sending customers SMS text payment requests minimize your turnaround time of getting paid and optimize the opportunity for your customers to pay using digital payment options directly from their smartphone.

Related Article: What is Text To Pay And How Can You Leverage It For Your Business

Contactless Payment Options

Industry data shows that global contactless card purchases are forecasted to hit over $10 trillion by 2027. 

This payment method is clearly here to stay, so if you currently don’t accept contactless payments, now is the time to upgrade your system. 

Offering contactless payment methods provides safe and efficient payment options for your customers. Outside of mobile payment solutions, there are various types of contactless payments, including touch-to-pay credit and debit cards, Apple Pay, Android Pay, Google Pay, Fitbit Pay that can be used via smartphone or smartwatch, as well as other contact-free devices.

Virtual Terminal

A Virtual Terminal is a web-based payment application that assists your business with sending invoices, scheduling future & recurring payments, and it securely saves payment information for customers with recurring charges. Fit for businesses that primarily operate over the phone, require online invoicing, or have recurring monthly memberships, virtual terminals incorporate your entire payment experience into one easy-to-use platform.

Built into your integrated payment platform a virtual terminal allows your business to accept a variety of online payment types including debit, credit, and ACH bank payments all from your dashboard.

Peer-to-peer (P2P) Payments

Peer-to-peer (P2P) payments refer to the transfer of funds between individuals or entities without the involvement of traditional financial intermediaries such as banks. These transactions are typically facilitated through digital platforms or mobile applications (like Zelle and Venmo) which connect users directly to initiate the transfer.

P2P payments offer a convenient and efficient way to send and receive money, eliminating the need for physical cash or checks. They are often used for various purposes, such as splitting bills, repaying friends or family, or making purchases from individuals or small businesses.

eCommerce Shopping Cart

eCommerce refers to internet-based stores selling goods and or services to customers. This online shopping network allows people to do business without the constraint of distance and time.

Simply put, once a customer has added items or services to their online shopping cart, they can go directly to the checkout page. There, they can pay with a credit or debit card, processing their payment digitally. This process allows your customers to complete their entire purchase without ever having to leave the business’s website.

Payment Gateway Plug-Ins

A payment gateway plug-in authorizes credit cards or direct payment processing for e-businesses, online retailers, or traditional brick-and-mortar stores with an online presence. Adding a payment gateway plug-in to your business website allows you to seamlessly process payments directly from your web store.

Adding a payment gateway plug-in is an ideal solution for businesses interested in selling goods and services online via an eCommerce store. Doing so makes purchasing quick and easy for customers and expands your client reach, expanding your business’s ability to generate revenue exceeding your local area.

How Can Stax Help Your Business With Accepting Payments Online?

Online payment solutions are crucial to modern business. Without them, you are unable to accept payment methods that are becoming an industry standard.

While card-not-present rates tend to be higher, with Stax you save more on the costs. Not only will your business have access to the wholesale card-not-present rates, but you’ll also gain access to the Stax Platform. This helps your business easily streamline payments, increasing flexibility in how you receive payments between in-store and online.

Whether it’s invoicing, recurring billing, pay by phone, contactless payments, or being able to receive payments through your website, Stax offers multiple online payment options that can help your business succeed.

10 Ways Businesses Are Accepting Payments Online

How to Accept Payments Online: 3 Simple Steps

Every business operating in this current day and age—whether brick-and-mortar or eCommerce—must do so in an efficient and effective manner. A core component of this new era is the speed and convenience of payments. Further, it is crucial for small business owners to be able to accept payments online.

Not only is it a requirement for being up to date with the latest payment processing technology, but it is also a matter of meeting customers’ demands and fulfilling their expectations.

That is why the total transaction value of digital payments in 2023 is projected to reach a whopping $9.46 trillion. With more and more integrated payment platform solutions coming to the forefront, this figure is likely to grow at an exponential pace.

If you have just started your business or want to set up virtual terminals for credit card processing for an older entity, the process may seem a bit daunting. But even if it sounds stressful, it isn’t impossible to understand.

If you use the right kind of merchant services, you can begin to collect payments online in no time. Here’s how you can collect online payments and run your online store.

Step 1: Find an Integrated Payment Solution

To start taking payments online without any hassles, your best bet is to turn towards an integrated payment platform as your payment service provider. This will give you the ability to process and automatically sync major credit cards (e.g. Mastercard, Visa, Discover, American Express), debit cards, automatic clearing house bank transfers of ACH payments, and e-check transactions.

Thankfully, specialized entities provide these integrated payment platform solutions and make the process simple.

Built with scalability in mind, these virtual terminals for payment card processing can help you with accepting credit card payments online in no time using an easy-to-use payment gateway. But they do not stop there. Depending on the kind of payment technology you select, you can also accept an array of other digital payments.

These include but are not limited to digital wallets (like PayPal, Venmo, Apple Pay, Google Pay, etc.), recurring billing, email invoicing, text2Pay, and bank account payments.

If you select an integrated payment method, you can also set up your point of sale (POS) terminal at your brick-and-mortar store with it. This way, you can see all your revenues and incoming credit card transactions in one place.

With Stax, you can offer a variety of payment options to your customers including credit and debit card payments, mobile payments, ACH transfers, eChecks, and contactless payments. You can even create customizable, professional invoices for your customers or send them a checkout link via text or email to get paid faster.

Step 2: Making Payment Provider Comparisons

You may have seen it firsthand.

It’s common (and widely expected) for your customers to shop around for details at other payment service providers before going with what you have to offer.

Similarly, you need to make proper comparisons between integrated payment platform services before selecting one for your online business.

Here, you will need to keep some key factors in mind. These aspects include but are not limited to:

  • Functionality. Check what kind of features and integrations the solution offers. Does it help you keep your customers’ information safe by ensuring PCI compliance? Does it allow you to integrate your most commonly used business apps with its APIs?
  • Ease of use. Evaluate how easy it is going to be for your employees to learn and use the solution.
  • Variability. Check if the payment service provider is only offering virtual terminals for payment card processing or if you can accept multiple payment methods.
  • Cost. Compare processing fees and costs between other payment service providers to make sure you are paying competitive prices. While there’s no way to accept online payments for free (because of the non-negotiable interchange fees set by card networks), look for a merchant account provider that doesn’t charge a host of additional fees or markups. Typically, they would pass on the costs of interchange and their markup in the form of monthly fees or transaction fees. As such, providers like Stax which offer membership-based pricing with no hidden fees or markups, are the most cost-effective for growing businesses.
  • Customer support. Evaluate the level of customer support offered by each provider to ensure that you receive prompt assistance when needed. Look for providers that offer 24/7 customer support through multiple channels such as phone, email, or live chat. Read reviews and testimonials from existing customers to get an idea of their satisfaction with the provider’s support services.

Step 3: Setting Up Your Payment Solution

Now that you have made your decision about which online payment service provider to go with, it’s time to set it all up.

Some integrated payment platform providers make the onboarding process as smooth as possible. Make sure that you choose a solution that not only provides you with an easy setup but also goes on to offer long-term ease of use.

As a general rule, always keep in touch with the payment service provider while setting up payment gateways or virtual terminals for payment card processing. This allows you to ask questions and get relevant answers during and after the setup phase to avoid any potential issues.

The Bottom Line

At Stax, we make it quick and easy for businesses to accept credit cards in-person, online, and on the go. Through our best-in-class, integrated solutions, Stax gives your business the ability to accept payments anytime, anywhere across Apple or Android applications.

Our smart all-in-one platform is perfect for businesses that need online payment services or take payments over the phone. With simple invoicing, recurring charges, and online bill pay, you’ll get paid faster with Stax.

If you are currently in the process of finding an online payment processing software, reach out to Stax today. Our Payment Consultants will be glad to answer any questions you may have and help you find a solution that’s a perfect fit for you.

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FAQs about Accepting Online Payments

Q: What are some ways businesses can accept payments online?

Businesses can accept online payments through various methods such as credit and debit cards, mobile payment processing, eChecks, email invoicing, recurring billing, SMS text payment requests, contactless payment options, virtual terminals, peer-to-peer (P2P) payments, eCommerce shopping carts, and payment gateway plug-ins.

Q: Why are online payments important for businesses?

Online payments are crucial for modern businesses as they facilitate transactions without the constraints of time and distance. They also provide faster payment processing, thereby improving cash flow. In an increasingly digital world, not accepting online payment methods may limit a business’s customer base and revenue prospects.

Q: Can businesses accept payments via mobile devices?

Yes, with the advancing technology, businesses can now accept payments via mobile devices. This method is convenient, fast, and secure, allowing customers to pay from anywhere, anytime.

Q: What are eChecks and how do they work?

eChecks are a form of online payment where money is withdrawn electronically from the payer’s checking account and deposited into the payee’s account via an electronic funds transfer (EFT). eChecks are popular for processing recurring payments and typically clear within 3 to 5 business days.

Q: What is Email invoicing?

Email invoicing is the digital exchange of invoice documents between a business and a customer. It enables businesses to send out payment requests to their customers online. Customers can then open the invoice via email, enter their desired payment information, and make instant payments.

Q: How does SMS Text Payment Requests work?

SMS payments allow businesses to request payments via a text message sent from a mobile phone. With a high open rate, SMS payment requests offer a quick turnaround time for receiving payments and allow customers to use digital payment options directly from their smartphones.

Q: What are contactless payment options?

Contactless payment methods allow customers to make payments without physically touching payment hardware. These methods include touch-to-pay credit and debit cards, Apple Pay, Android Pay, Google Pay, and Fitbit Pay. They can be used via a smartphone, smartwatch, or other contact-free devices.

Q: How can Peer-to-peer (P2P) Payments benefit businesses?

Peer-to-peer (P2P) payments allow the transfer of funds between individuals or entities without the need for traditional financial intermediaries. They offer a convenient and efficient way to send and receive funds, eliminating the need for physical cash or checks.

Q: What is an eCommerce shopping cart in the context of online payments?

An eCommerce shopping cart is a software application that allows customers to select and store items for purchase while browsing an online store. Upon checkout, customers can pay for these items using their desired online payment method.

Q: What is a Payment Gateway Plug-In?

A payment gateway plug-in authorizes credit cards or direct payment processing for e-businesses and online retailers. This plug-in allows businesses to seamlessly process payments directly from their e-commerce store.

Q: How can businesses set up an online payment solution?

Businesses need to select an integrated payment platform that can process major credit cards, debit cards, ACH payments, and e-check transactions. Comparison of different providers, considering functionality, ease of use, payment methods supported, cost, and customer support is crucial in making an informed decision. After selecting the provider, businesses can set up the solution with the help of customer support from the provider.


 

You Can Now Offer PayPal, Venmo, and Buy Now Pay Later with Stax

Staying competitive in today’s consumer landscape requires flexibility—particularly when it comes to payments. That’s why we’re thrilled to announce that Stax merchants can now add PayPal buttons on their websites, enabling them to accept PayPal, Venmo, and Pay Later payment options. 

Give your customers a choice to pay how they want, on any device. With PayPal and Stax, you can accept PayPal, Venmo, and Pay Later, as well as credit cards and debit cards—all within a seamless checkout experience designed to boost conversion. 

There are no hidden fees. No monthly commitment. And it comes with instant access to funds, fraud detection, Seller Protection on eligible purchases*, and the built-in compliance standards PayPal is known for. 

Learn More

It’s one of the most trusted global brands1, and simply offering PayPal can give you instant credibility with millions of PayPal users, worldwide. 

Paypal Stax Logos

What this means for you

Our partnership with PayPal helps you speed up the checkout process, improve the customer experience, and ultimately drive more sales. Let’s take a closer look at the benefits of offering PayPal in your business. 

Grow your sales and revenue. Having PayPal as a payment option has been proven to increase sales. Research from Nielsen, commissioned by PayPal2, found that consumers are nearly three times more likely to complete their purchase when PayPal is available at checkout. 

In addition, giving customers the option to pay over time using PayPal Pay Later can help increase order values and conversions – at no additional cost to you.  According to PayPal’s internal data, businesses with pay-over-time messaging on their site saw a 39% increase in overall cart sizes.* 

Implement faster checkout. You can speed up checkout by adding PayPal, Venmo, and Pay Later to your website, invoices, or payment links. PayPal users can pay for their purchases with just a few clicks—whether online or on their mobile device—so they’re able to complete the checkout process with as little friction as possible. 

These benefits create a smoother shopping experience, improving customer retention and ultimately increasing your bottom line. 

Paypal Checkout

Your next steps 

If you’re using Stax, take advantage of our PayPal integration today, so you can start offering PayPal, Venmo, and Pay Later to your clients and customers. 

Still looking for a payment processor? Get in touch with Stax today. Our platform enables you to accept multiple payment types—including credit and debit cards, ACH, Tex2Pay, recurring payments, and more. Plus, Stax’s membership model allows you to maximize your revenue and accept payments in the most cost-effective way possible. 

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– 

*Available on eligible purchases. Limits apply

1 Morning Consult – The 15 Most Trusted Brands Globally. March 2021. Morning Consult surveyed over 330,000 consumers across 10 international markets to provide a global view on the current state of consumer trust across brands. 

2 Nielsen, Commissioned by PayPal. A study to understand and measure the impact that PayPal has for US-based LE merchants across different verticals (e.g., health & beauty, travel, fashion) by Nielsen Behavioral Panel of desktop transactions from 15,144 US consumers between July 2020 to September 2020. 

3 Businesses with pay-over-time messaging on their site saw a 56% increase in overall PayPal AOV. Average lift in overall PayPal AOV for merchants with PayPal Credit messaging vs. those without, 2019 PayPal internal data. 

4 51% of BNPL users have abandoned a purchase due to not seeing a BNPL option. An online study commissioned by PayPal and conducted by Netfluential in November 2020, involving 1,000 US online shoppers ages 18-39 (among BNPL users, n=357). 

Toast POS System: Reviews, Features, Pricing, and More

Running a restaurant or food business is a massive undertaking that requires a high level of coordination between your storefront, staffing management, payment processing, and back-end kitchen activities. If just one of these areas is out of balance with the rest of your operation, it would seriously impact profitability and the customer experience. This is why a full-fledged point-of-sale (POS) and restaurant management system is one of the most important technology investments a restaurant owner can make.

Toast POS is a powerful all-in-one restaurant management system that offers a robust plan for every type of food business. In this blog, we’re going to explore the features of Toast POS system—its pricing system, hardware options, and integrations. No matter whether you’re a new restaurant owner looking for the right POS or simply considering a switch to a more high-powered system, this guide covers everything you need to know.

TL;DR

  • Toast POS is an all-in-one restaurant management system designed for food outlets, offering menu management, order tracking, staff management, customer relationship management, analytics, and reporting features.
  • Toast’s purpose-built hardware is designed specifically for kitchen environments, and their pricing plans offer comprehensive solutions to every type of food business, from new restaurant openings to fast food outlets.
  • Toast integrates with a variety of third-party apps and software within the restaurant industry and beyond, and offers a range of online resources for training and troubleshooting, as well as 24/7 technical support via phone, email, and web messaging for every service plan.

Toast POS System Overview

The Toast POS system is a cloud-based restaurant point of sale and online ordering system designed for food outlets such as eateries, cafes, and food trucks. Toast offers large and small businesses a range of functionalities to streamline restaurant management. This includes POS hardware options, menu management, payment processing, and advanced reporting features.

One of the biggest benefits of Toast’s restaurant POS system is that it’s purpose-built exclusively for restaurant operations. This differs from more well-known POS systems that market certain POS software plans as being suitable for restaurants.

For example, Toast hardware is designed specifically for kitchen environments, with spill-resistant surfaces and a hardwired connection. Multiple payment plans offer a comprehensive solution to every type of food business, from new restaurant openings to fast food outlets.

Learn More

Features and Benefits of the Toast POS System

The Toast platform offers businesses a range of restaurant-specific and general retail management features. These include:

Customizable menu management

Toast’s cloud-based POS system allows restaurant owners to easily update and customize their menus across locations in real-time. This includes adding/removing menu items, adjusting pricing, and modifying descriptions. The scheduling tool also allows restaurants to set up multiple separate menus for different days or different times of day, such as weekdays/weekends or breakfast, lunch, and dinner. This flexibility makes on-the-spot changes or promotions easy to action from a single device.

Order management and tracking

The Toast POS system offers a robust order management system so that kitchen staff can accept orders and notify serving staff when meals are ready to be delivered tableside. Orders can be accepted via multiple channels, including self-service kiosks, online ordering, and the Toast Takeout app (their version of Doordash).

Staff management and scheduling

Toast has an integrated system for payroll, scheduling, and staff onboarding as an optional add-on. This is a good option for large restaurant businesses with multiple locations, as features include access management (for reporting or updating orders) shift monitoring, and cost management.

Customer relationship management

Toast’s CRM database feature allows restaurants to collect and store customer information in one convenient place. Toast also offers email and loyalty program management, both within plans and as separate add-ons:

Loyalty program management: Set up custom rewards programs with a simple, point-based structure for activities like sign-up bonuses, birthday rewards, and more. Loyalty members can link their profile with their credit card for swipe-based earning and redemption.

Email marketing: Use Toast’s CRM to build custom mailing lists for different customer profiles, such as loyalty members or inactive customers. The tool is fully integrated into the Toast system, meaning there’s no need for a third-party email management platform.

Analytics and reporting

Reporting features are included within every Toast plan and allow real-time access to data across multiple locations. The Location Overview feature makes it easy to monitor and compare net sales, sales growth, and labor cost at different outlets both on Android and iOS. Toast will also automate sending over key metrics daily via email so businesses can keep track of daily fluctuations.

Pricing and Plans

Toast’s pricing can be divided into three main costs: The software plan, hardware, and payment processing fees.

Toast offers three monthly plans:

  • Quick Start Bundle ($0)
  • Core ($65)
  • Growth ($165)

Toast also offers a custom pricing option for larger businesses. The paid plans progressively offer additional value-added services and functionalities. Businesses can also elect to add individual services for an additional monthly fee. Toast has tailored plans for specific restaurant types, such as their Restaurant Basics plan, which starts at $110 and bundles together POS and payroll services.

Restaurants using Toast have a variety of hardware options available, from card readers and POS handheld devices to its Toast Flex checkout terminal, as well as self-service kiosks. Toast hardware can either be purchased upfront when a business subscribes, or included within the monthly fee if they opt for the Starter Kit plan with pay-as-you-go pricing.

Restaurants using Toast must also pay a fee per transaction they process. One of the drawbacks of Toast’s pricing is that it doesn’t publicly disclose its card-present (CP) and card-not-present (CNP) payment processing fees online, other than to say that rates are custom calculated for each business. Navigating deeper into the website and its bundled software/hardware plans reveals different per-transaction rates depending on the type of hardware selected. For example, their Toast Go starter plan offers a rate of 2.49% + 15c when the hardware is purchased upfront, and 2.99% + 15c for the pay-as-you-go plan.

Toast Pos System In A Restaurant

Comparison with competitors

Square – Square’s all-in-one POS system offers five different plans for restaurant settings, from quick service to ghost kitchens. Plans start at $60 per month with processing fees of 2.6% + 10¢ per transaction, though custom pricing applies for businesses processing more than $250,000 per year.

Clover – Clover offers both a full-service dining and quick-service dining plan to restaurant businesses. Their pricing model is slightly different than Toast, as all plans bundle software and hardware together. Hardware is more expensive, starting at $799 for a mini touchscreen POS. However, their transaction fees are lower, at 2.3% + 10¢ for in-person transactions.

Lightspeed – Lightspeed’s restaurant POS system starts at $79 per month and includes one register in each of their plans. Processing fees are competitive at 2.6% plus 10 cents per in-person transaction. However, services such as online ordering, inventory management, and accepting gift cards do come at an extra cost.

Touchbistro – Touchbistro is an all-in-one restaurant management system with menu management and online order management that closely competes with Toast. Starting at $69 per month with a variety of add-on services. Payment processing is managed by one of Touchbistro’s partners, which includes Square and Chase, so processing fees will vary.

A note about payment processing

While some POS systems (like Square) have their own built-in payment processing solutions, other platforms provide the flexibility to integrate with different payment vendors. This option is ideal for most merchants as it allows you to choose a payments partner that aligns with your specific needs and budget. 

One example is the integration between Clover and Stax. Clover POS can be seamlessly integrated with Stax, enabling merchants to leverage the capabilities of Clover’s POS system while benefiting from Stax’s cost-effective payment structure.  

In the realm of payment processing for multi-faceted businesses, Stax emerges as a reliable and versatile option that caters to various industries, including retail, restaurants, ecommerce, or a combination of these. With its comprehensive range of features and competitive pricing, Stax offers a seamless payment processing experience that benefits businesses of all types.  

So whether your business operates online, offline, or a combination of both, Stax has you covered. I 

Integrations and Add-ons

Integrations are an important feature in POS software because the point of sale goes hand in hand with parts of business management such as accounting, inventory management, loyalty, marketing, and more. Instead of maintaining all of these platforms separately, open API integrations enable businesses to share data effectively and view the same information across interfaces.

Toast integrates with a variety of third-party apps and software within the restaurant industry and beyond, including but not limited to Grubhub, Doordash, OpenTable, LevelUp, Lunchbox, and more. Toast also boasts a selection of add-on services which are available for an extra fee, including takeout and delivery services, inventory and supplier management, and invoicing.

Customer Support and Training

One of Toast’s biggest strengths is the number of online resources it offers for training staff or troubleshooting issues, which helps businesses to take a self-service approach:

Knowledge Base. The Toast knowledge base is a comprehensive platform with articles, videos, ebooks, and templates that address FAQs on how to use the system and run a successful restaurant. Categories covered include Marketing, Technology, Management, Staffing, and more.

Toast Community. Toast Community is an online forum and in-person event series where restaurant owners and staff using Toast can connect with other users, join each other on an in-website chat forum, and earn money for referring new users.

Toast Classroom. Toast Classroom offers live and on-demand training for their POS hardware and software, as well as a range of areas related to restaurant management such as team management and customer service.

In addition to the self-service resources, Toast also provides 24/7 technical support via phone, email, and web messaging for every service plan.

Merchant Ratings and Toast POS Reviews

The Toast POS system garners generally positive feedback from merchants, as shown by this roundup from popular review sites:

  • 4.35 out of 5 (g2.com)
  • 4.2 out of 5 (capterra.com)
  • 3.8 out of 5 (trustpilot.com)

The areas where Toast commonly receives high praise include its user-friendly interface, the ability to manage menus and staffing remotely on mobile or iPad, and the variety of third-party integrations available. However, Toast has received repeated criticism from merchants who have experienced difficulty accessing customer service for complex issues, finding they are often referred back to online resources that don’t address their concerns. Several merchants have also noted that Toast hardware breaks down quickly, despite being marketed as restaurant-grade.

Merchant reviews about Toast POS

“I have been using restaurant POS for over 20 years and Toast has shown itself to be one of the best on the market. It is so user-friendly and easy to work in, including the handhelds, that it’s amazing. In training new teams they offer a great program and support team. The layout is ideal for high-volume. Reporting is excellent. I refer Toast to most of our clients.”

“Customer Support is hit or miss. I always get an answer, it’s just a matter of when I get it. After hours and on weekends, I feel like their staffing is very limited which leads to delays in getting immediate help.”

“Toast is by far the best POS and payroll system I have ever worked with. Not having to toggle between and punch system, sales reporting, tip outs and payroll software. Everything is integrated and communicates well. I learn every day the many capabilities Toast offers and very much enjoy working with the system.”

Overall, the Toast point-of-sale system offers a powerful tool to restaurant owners and managers who want an industry-specific solution with flexibility and good ease of use. With its wide range of features and user-friendly interface, it’s a popular choice for many businesses in the hospitality and food service industries. With multiple pricing plans available, restaurant businesses large and small can benefit from Toast and find a combination of services that works for their precise needs. If you’re looking for a streamlined and easy-to-use restaurant management system, Toast POS should be on your list to explore.

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FAQs About Toast POS System

Q: What types of businesses is Toast suitable for?

Toast POS is a versatile and scalable solution for various types of food and hospitality businesses, including restaurants, cafes, bars, food trucks, and catering services. It offers customizable features to cater to different business sizes, types, and needs. 

Whether you are a small business owner or running multiple outlets, Toast POS provides flexible pricing plans and hardware options, including pay-as-you-go, self-service kiosks, and handheld devices.  

Q: Can Toast integrate with third-party apps?

Yes, Toast POS system integrates with a range of third-party apps and software within and beyond the food and hospitality industry, including Grubhub, DoorDash, LevelUp, OpenTable, and more. 

Toast also offers a selection of add-on services, such as takeout and delivery services, inventory and supplier management, and invoicing.   

Q: What level of technical knowledge is required to use the Toast POS system?

The Toast POS system is designed to be user-friendly and accessible to businesses with different levels of technical knowledge. The system uses cloud-based software that enables real-time updates and customizations across multiple locations. 

Toast also provides a range of online resources, such as a knowledge base, community forum, and live and on-demand training, to help businesses train their staff and troubleshoot issues.  

Q: How long does it take to set up the Toast POS system?

The time it takes to set up Toast varies depending on the size and complexity of the business. However, Toast offers a range of resources and support to help businesses get started quickly and efficiently. For instance, businesses can order Toast hardware online and receive it within a few days. 

Once the hardware is installed, businesses can use Toast’s cloud-based software to customize their menus, configure settings, and train their staff.


 

What’s the Best Payment Processor for Small Business?

As a business owner, the number of executive decisions that need to be made on a day-to-day basis can be scary at times. Hunting for a payment processor provider for your business shouldn’t be one of those things. When digging through the thousands of solutions that are meant to help you accept payments, finding the right tools is a priority but it’s not everything.

Knowing what to look for and what to avoid can help take the fear out of finding the right payment processor, making the decision a lot easier. We want to help prevent you from making a decision that will haunt you so we’ve put together a list of options to consider when looking for the right payment processor.

Make Sure The Payment Processor Technology isn’t Dead and Buried

A payment processor is only as good as their customer service and their payment technology. If the terminals and tools they are offering provide more problems than solutions, it’s time to find a better processing services provider. Standard payment solutions nowadays must include mobile and touch-free options.

RELATED: Non-profit Payment Processing: How Chrimata Drives Effortless Digital Donations Through Stax Connect

Create Monster Solutions With a Unified Payment Processor Experience

As the eCommerce market continues to expand and customers have multiple choices regarding how, where, and when to shop, providing additional payment becomes a must. 

That said,finding a simple way for your business to increasingly expand its payment offerings to support new customers is an ongoing challenge. Implementing a Unified Payments Platform is a future-proof solution that provides access to multiple payment methods through a single streamlined integration.

Stax’ integrated payment platform sets a new standard in payment technology. We offer the most streamlined payment platform experience, revolutionizing online payments to support small to medium-sized businesses all across the U.S. Our all-in-one API allows you to accept card present and card not present transactions, and you’ll have access to the best apps and tools in our app marketplace. Most importantly, because all of the payment methods run through a single platform, all of your data is accessible in a single place, making it easy to quickly understand the health of your business.

Hidden Payment Processor Fees are a Nightmare

When you’re trying to grow your business the last thing you need is an endless stream of extra payment processing fees killing your revenue generation. Don’t let hidden payment processing fees be the death of you.

One way to make sure you’re not being price gouged is by shopping around for the best rates and making sure you ask specifically about extra fees not included in the base rates. Too many processors bundle and hide fees within other charges including everything from PCI compliance to setting up your account. Average credit card processing fees range from 1.7% for swiped card payments up to 3.5% for keyed-in transactions.

Interchange Plus Pricing

A small fixed fee (between $0.10 and $0.50), plus a percentage of each purchase (between 1% and 3%) on top of the interchange fees charged by the card issuers.

Tiered Pricing

A tiered model puts credit card transactions into several categories—qualified, mid-qualified, and non-qualified. Qualified rates come from when a customer meets a processor’s criteria for the easiest, most secure transaction (swiping/inserting a card in-person). The other tiers come from having to key in the card’s details, or when a customer pays online. Tiers can also vary by card type, making this the most confusing and least transparent pricing structure.

Flat-Rate

Each card type has the same rate, typically 2.9% plus a transaction fee between 10 and 30 cents. While this seems like it may be the most straightforward at face value, it can be a very expensive pricing structure as you will pay the same rate to accept a debit card as a premium rewards credit card. The actual cost to accept a debit card is around 1%, whereas a premium rewards credit card can easily be 2.5%, but in a flat rate structure, you’ll pay the same (typically 2.9%) for both, resulting in a significant markup on many card types. So while it may be simple, it typically results in higher overall processing costs for most established businesses.

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Subscription

This model uses a flat monthly membership fee, which then gets the business access to the direct wholesale cost of credit processing from Visa and Mastercard. After the monthly membership, the business only pays the wholesale cost (interchange) set by the card issuers so that the business is never overpaying for processing. This is the pricing structure that we use at Stax and established businesses that process over $7,000 per month typically see significant savings compared to the other traditional pricing structures.

Payment Processor Fees to watch out for:

  • Credit Card Terminal Fees
  • Setup Fees
  • Early Termination Fees
  • Reprogramming Fees
  • PCI Compliance Fees
  • Address Verification Fees
  • Chargeback and Retrieval Fees
  • Payment Gateway Fees
  • Statement Fees
  • Batch Fees

They Offer Security So Good It’s SCARY

There can potentially be a lot of risks involved when accepting payments today. Providing the highest level of security with complete encryption and various layers of fraud prevention tools provides an additional layer of comfort to your customers. Card information is encrypted on all of our processing devices and never stored after the transaction is completed. Stax’ state-of-the-art cloud architecture is constantly tested for vulnerabilities to ensure the safety and security of that sensitive data.

Their Customer Service is ALIVE

Talking to a physical person when you have an issue or a question is slowly dying due to the implementation of automated systems in the early 1980s. When issues arise the last thing you want is to fumble through automated options hoping to get in touch with someone who can actually help you. Time is money, especially in this case.

Stax offers in-house customer service. When you call during business hours, you will speak with someone who knows our product and is always happy to help. From training to troubleshooting, we are the company to choose if you appreciate a human touch to your customer service needs.

You Might Also Like: What is ACH Payment Processing?

The Top 10 Payment Processors Small Businesses Need To Know

Now that you know what to look for, here are the best credit card processing companies that small business owners should consider as they look for the right solution for their business needs. (All processors on the list not only accept traditional payments from things like American Express, Mastercard, and Discover cards, but also mobile payments.)

1. Stax

We’ve already talked a lot about Stax, but to sum it all up: Stax offers a fairly unusual subscription pricing model, rather than the standard per transaction model. This pricing model makes us an ideal payment processing company for high-volume businesses. We sell our own payment processing terminals, but Stax also seamlessly integrates with other payment terminals and many point-of-sale solutions. And as we noted, we offer top-notch customer support and the highest level of PCI-compliance in the industry.

Don’t take it from us, though. Take it from all of our happy customers. We’ve got a 95% customer satisfaction score, a 73 NPS score, and a 9.2 rating on Trustpilot. Henry on Trustpilot put it best: “We have been doing business with this processing company for many years. We love to give them our business because they are very responsive.” Plus we’ve got a bunch of rave reviews for our customer support team on Trustpilot. 

2. Square

Square is best known for their iconic white square credit card readers that plugged into the headphone jacks of mobile devices. Around 2014, the Square Reader took off amongst small merchants trying to take credit card payments because the mobile card reader is free and it required no contract to use the processor or virtual terminal. Square made it possible to start taking in-person transactions same day. Its pricing structure is also a very straightforward flat-rate, with no PCI-compliance fees. And while it still serves primarily the small business or low-volume market, its functionality as a merchant services provider has grown to support mid-size businesses.

3. Shopify

Shopify is a behemoth in the eCommerce space.  In fact, it’s the most popular eCommerce platform. And now, Shopify Payments can power both online transactions and in-person sales. For online stores already running Shopify online, using Payments in-store is an easy way to get started taking credit card payments in-person. The Shopify universe includes not just eCommerce software, but a POS system as well. While it will integrate seamlessly with a Shopify store, the in-person payment processing system is still fairly new and not as robust as other solutions on this list. 

4. Payment Depot

Like Stax, Payment Depot runs on a monthly subscription pricing model. They offer 24/7 customer support, no long-term contracts, no PCI-compliance fees, and an online dashboard to manage payments. It integrates with Clover’s POS solution for in-person sales and Authorize.net for online sales. (If you’ve already got hardware other than Clover, Payment Depot’s team will work to create the integration you need.) Payment Depot is not only well-priced, it has excellent customer support.

5. Stripe

Stripe is one of the more well-known payment processors because it’s very easy to get started taking payments on it. However, Stripe truly shines in the fact that it’s extremely developer-friendly. For businesses looking to create totally unique integrations with their payments systems, Stripe is an ideal solution. Of the payment processors, it was also one of the earliest to take mobile wallet payments like Apple Pay and Google Pay. All this tech-savviness can be a real downside, though. For small businesses looking for a straight-forward payment processing solution, the sheer volume of stuff Stripe can do can be very overwhelming and confusing once you’re in the dashboard system.

6. PayPal

Originally a peer-to-peer payment platform, PayPal has grown into an absolute powerhouse in the payments world – offering merchant accounts as well as customer accounts. They offer a flat-rate pricing structure. Because the system is extremely well known at the consumer level, the name also inspires trust with customers. They now also offer POS hardware through its subsidiary, Zettle. The first card reader you purchase comes at a steep $50 discount. PayPal IS known for its hidden fees and poor customer service – so that should be something that you are prepared for.

7. QuickBooks Payments

For merchants who love QuickBooks, Intuit now offers a payment processing service. It’s a combo of subscription and flat-rate pricing structures. That is, you have to have a QuickBooks Online subscription to use Payments and then the actual pricing of Payments is a flat-rate per transaction model. It should be noted that QuickBooks Payments doesn’t offer phone support. It does, however, offer instant transfers for no additional fee when you have a QuickBooks Cash account. Overall, for those who want to live in the QuickBooks universe, Payments is an easy and obvious add-on. 

8. Clover

Much like Square, Clover is a credit card processor that offers native hardware options with integrated flat-rate payment processing. This makes them an ideal solution for very small businesses who need an easy all-in-one POS software and payment processing system. (You may also have noticed them earlier on the list. Unlike Square, you can utilize their POS hardware integrated with a variety of other payment processors if you prefer.) However, unlike a number of other solutions on this list, Clover’s payment processing will take at least a few days to get up and running. You have to get the solution through a sales rep. As a result, it also lacks pricing transparency on it’s site.

9. Dharma Merchant Services

Dharma Merchant Services is best known for providing great discounts to nonprofit organizations. (And for donating a large portion of their profits to charity.) However, they are also well-enough priced that other small businesses may enjoy them. They have interchange-plus pricing, with no long-term contracts. Dharma also can be used on Clover hardware. It should be noted that in addition to a $25 chargeback fee, Dharma also charges a $5 retrieval fee when a customer disputes a transaction. Additionally, they do not charge an early termination fee, but they DO charge a $49 account closure or cancellation fee.

10. Helcim

Helcim provides full-service merchant accounts without a monthly fee. They instead operate on interchange plus pricing. This makes it an ideal transition for growing small businesses from simple payment processing to merchant accounts. Helcim also offers robust inventory management integrations, making it an ideal solution for those merchants who put their inventory system at the heart of their operations.

It should be noted that Helcim has a larger than usual list of prohibited customer-types, which generally include only high-risk merchants. Businesses like psychics and consumer bankruptcy law firms, for instance, appear on the list.

 

How Stax Takes The Fear Out of Payment Processing

With top-rated customer support, optimized payment technology, and the highest level of PCI compliance, Stax takes the fright out of finding the right payment processing solution. We offer you subscription-based credit card processing at a direct cost. This means zero markups, zero hidden fees, and no contract.

To learn more about Stax payment processing services reach out to a payment consultant for a consultation today. We will be glad to answer any questions you may have and help you make use of our state-of-the-art integrated payment solutions right away.

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The Difference Between Square Fees and Stax Fees

From collecting payments in-store to offering virtual, contactless options, choosing the right payment processor with the best cost is critical for the success of your business.

There are many aspects to consider when it comes to choosing a payment processor to conduct transaction-related activity for a business. For instance, it is necessary to account for payment processing fees, how it will work with a business bank account, and how it works with credit card fees. One might be concerned with credit card fees, payment type options, and linked bank account features.

With hundreds of credit card processors and merchant services providers in the U.S., it’s easy for small businesses to get overwhelmed with the expanse of options, offerings, and pricing for payments.

To help simplify the process, we’ve gone ahead and compared Stax’s products and services with that of one of our industry’s well-known competitors: Square.
Both Stax and Square offer top-rated payment options, but which one is the better fit for your business? Let’s break down the numbers when it comes to Stax fees vs. Square fees.

To help simplify the process, we’ve gone ahead and compared Stax’s products and services with that of one of our industry’s well-known competitors, Square Payments.

Both Stax and Square offer top-rated payment options, but which one is the better fit for your business? Let’s break down the numbers when it comes to Stax fees vs. Square fees.

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What Does Square Have to Offer?

Launched in 2010 with the Square Reader, Square offers a software platform best suited for start-ups and micro-businesses. The company does work with Visa, MasterCard, Discover, and American Express.

It offers a Square terminal, a Square card reader, a Square contactless and chip reader, and other Square Point of Sale options.

The company also offers eCommerce options so that you can process card-not-present transactions, and pay nominal card processing fees based on the transaction amount.

The company has continued to expand its easy-to-use payment products and software as they look to remain competitive in the marketplace and help scale small businesses. As a result, they offer a variety of plans and products, including an array of flat-rate pricing.

From its Square chip reader and general Square readers to other products, these innovative aspects are why a business may choose the company to handle its payment processing needs.

Square allows you to quickly pick a starting point to immediately open a free account. It is important to note that Square is simply a third-party payment processor and does not offer a traditional merchant services account.

That means that while they do have restrictions for certain business types in using their services, they are not a traditional merchant services provider and have no risk review or underwriting process for businesses to go through to open an account.

RELATED: What Square Payments New Pricing Means for Your Small Business?

How Much Are Square’s Fees?

While opening an account and starting to process payments is free, there are several Square fees that also come into play as your business starts to need additional options and services.

Square charges a flat rate on each transaction a small business processes regardless of whether it’s a debit or credit card.

For transactions that are processed using an in-person POS or card reader when a customer has swiped, dipped, or tapped their card they charge 2.6% + $.10 per swipe.

However, this does not account for the rates they offer when using specific Square products, as the flat rate will vary based on how you collect your customer’s payment.

Additionally, Square offers other transaction rate options based on what Square product you’re using. For example:

  • 2.5% + $0.15 per swiped, dipped, or tapped transaction using a Square Register
  • 2.6% + $0.15 per swiped, dipped, or tapped transaction using a Square Terminal
  • 2.6% + $0.10 per swiped, dipped, or tapped transaction using Square Appointments (or 2.5% + $0.10 for Teams)

That is not to mention their different rates for certain card-not-present transactions where you need to charge online payments, collect payments by phone, or virtually through an online invoice. In these cases, the rate can jump up to 3.5% + $0.15 per transaction. These are factors to consider when thinking about fees paid per transfer or transaction.

Now that you know what Square’s fees are on paper, let’s look at some examples of how much you would pay when processing credit card transactions with Square. We’ll also compare these figures with Stax’s pricing.

Stax vs Square Credit Card Processing Fees Scenario 1: Card Present

Let’s say your business processes $18,000 CP payments per month with four $150 sales purchased using a rewards debit card per day for thirty days. Here’s how much each pricing model’s credit card processing costs could affect you:

Stax Fees* Square Fees
$306.60 $480

Stax vs Square Credit Card Processing Fees Scenario 2: Card-not-Present

Now, let’s say you take payments through online invoices or over the phone. Your business keys in four $150 sales per day for a total of $18,000 per month in CNP processing. Here’s how much this can cost your business:

Stax Fees* Square Fees
$405 $648

As you can see, with per-transaction costs that can go as high as 3.5% + $0.15, you could be paying up to 60% more in Square CNP transaction fees per month than if you processed with Stax.

While most of Square’s merchant services offerings are very similar to Stax, their additional fees and status as a third-party payment processing provider can quickly make them a more expensive and somewhat riskier option over time, especially as your business begins to grow.

*Interchange is set by the card associations like Visa and Mastercard and is a required cost for taking credit cards. The exact interchange rate for each transaction is affected by dozens of factors. Interchange can be less than 1% for certain in-person debit cards and over 2.7% for some keyed-in rewards credit cards. For these examples, we averaged a number of common interchange rates and applied 1.65% for card-present transactions and 2.15% for card-not-present purchases to showcase.

Are There Any Other Square Fees I Need to Know?

While your business may start off with just the basics, over time the need for more robust software solutions will start to rise and will certainly increase your monthly costs.

This is especially true if you fall in the retail, restaurant, and professional services space as Square offers specialized plans for those industries starting at $50-$60 per month.

If your business begins to use additional registers, another $20-$40 monthly fee per additional device is added to the service.

Additionally, their limited chargeback protection policy can cost your business, in the long run, the more you transact.

Why the Lack of Underwriting Can Lead to Problems

While Square does not charge any chargeback fees, their lack of an underwriting process means your Square account has an increased risk of sudden account holds and terminations. Any sudden changes in patterns or large spikes in transaction amounts may be seen as suspicious, resulting in a freeze while they review your account. This is something businesses can ill afford at any point in time.

The essential points that you must think about when it comes to additional Square fees are the need for software, auxiliary equipment, and the level of protection present within the process.

Remember that each of these points is critical when you are starting and growing your business. It is best to choose a service that can process different payment types for your business without adding more stress to your shoulders as you scale up.

This is a crucial point when it comes to chargeback protection, underwriting, and potential issues with your funds. It can be a challenge to market and bring customers to your business and accept their various card payments.

But it can be even more difficult to manage your business and cashflows if you are not sure if the funds you receive are definite or subject to be frozen due to external checks and issues.

Remember to think about these aspects as you move forward.

Here’s a Quick Summary of Square’s Benefits and Limitations:

The Pros of Choosing Square

  • Quick to start and easy to use payment processing
  • Fraud and security protection tools
  • Online and mobile dashboard
  • Modern payments technology to process transactions
  • Immediate Access

The Cons of Choosing Square

  • Limited to no ACH payment processing
  • No PCI Compliance Support or assistance
  • Primarily email customer service
  • Limited terminal and POS options
  • Varied flat-rate transaction fees as high as 3.5% + $0.15 per transaction

An important note here is that limited or no ACH payment processing support can be a problem if you are trying to minimize your interaction with more third-party providers when it comes to fund transfers.

The more parties involved in your payment types and card payments, the more likely you will obtain fewer funds from your sales due to processing rates.

The next critical point is that PCI compliance support and assistance matters to businesses in an era where everything is going digital and information is critical. That means that payment data and credit card information storage are as important as processing rates and hardware.

Companies that seek to help you with this PCI compliance for free understand that each component of payment processing matters and that it is not about surface-level processing only that provides value in your transaction-oriented business.

Square and Stax Merchant Reviews

Both Square and Stax have generally favorable reviews on merchant websites. Square has a 5-star rating on Merchant Maverick and GetApp gives it a rating of 4.7 stars.

Merchants that use Square appreciate the software’s clean user interface and ease of use. However, there have been a few complaints about poor customer service and Square shutting down accounts with little to no explanation.

“This company embarrassed me in front of customers after processing one transaction with their software… they canceled my account without explanation after multiple attempts to contact them.” – Gary P

Meanwhile, Stax also has a 5-star rating on Merchant Maveric and 4.8 rating from GetApp.

Businesses that use Stax love the merchant-friendly pricing structure and friendly customer support reps.

“Flat rate pricing! Oh man, this is a breath of fresh air. After using Stripe and Square to process payments we have absolutely loved the simplified pricing structure that [Stax] uses. Only paying interchange fees and a fixed monthly rate saves us $100’s each month.” – Matt M.

Stax, the Way Payment Processing Should Be

While Square claims other bank and payment processors are unable to include similar offerings, this couldn’t be further from the truth.

Ranked as one of the best merchant services companies nationally, Stax is a subscription-based merchant service provider with total transparency built into its model. All merchants have access to direct cost payment processing with 0% markups, no contracts, and no hidden fees.

Stax treats our members like family. Whenever you call in with a question, issue, or just to chat – a real person answers the phone every time (no automated calls). This is the perk of working with a more customer-centric company.

With Stax, someone is ready to answer the phone every time. We eat, sleep, and breathe payments – so you can rest easy knowing that you’re getting the kind of white-glove customer service you deserve.

Here’s a quick summary of Stax processing fees and why we are the best merchant services provider for your business:

  • No contract
  • 0% markup
  • No hidden fees
  • Quick setup
  • Recurring billing
  • Easy to read statements
  • 24/7 live customer service
  • Flat monthly subscription (save up to 40% versus traditional processors)
  • Next day funding for approved businesses
  • POS, eCommerce, mobile, and virtual terminal solutions
  • Can integrate with most already established POS systems

Each business is unique, and it pays to understand exactly what will work best for you as you explore your options. At Stax, we provide easy-to-use yet highly effective payment solutions to businesses of all sizes.

We pride ourselves on knowing what our business partners need in every aspect of payment processing. That is why many of our partners choose to stick around for quite a while.

We structure our payment processing fees a little differently than others in the market and acknowledge the differences we have between our credit card processing solutions.

By offering comprehensive knowledge on payment card processing brands and options,, we can provide you with everything you need to make the best decisions possible and enable the best transaction flow with ease.

You Might Also Like: Stax Contactless Solutions vs. Contactless Square Payments

Find out how we continue to serve as a premier solution for various business types in credit card payments and other payment types. Stax makes it our mission to ensure that you can take in payments and process them accordingly so that you can focus on your core business aspects.

Whether you need a credit card reader or a magstripe reader or want to ensure that you can deal with several credit card companies, remember that Stax is here for you.

To learn more about our top-ranked merchant services and how they can help grow your business, feel free to reach out to us today. We will be happy to answer any questions you have and help you obtain the right payment processing solution for your needs.

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FAQs about Differences between Square and Stax Fees

Q: What are the main differences between Square and Stax fees?

Square charges a flat rate on every transaction a small business processes, regardless of whether it’s a debit or credit card. The rate varies based on how you collect your customer’s payment. Square’s fees can also increase with the need for more robust software solutions or additional registers. Stax, on the other hand, offers subscription-based payment processing with a 0% markup. The cost of Stax’s services can be less than that of Square’s, depending on the type of transactions processed.

Q: What payment options do Square and Stax offer?

Both Square and Stax offer comprehensive credit card processing solutions. Square provides an easy-to-use platform for start-ups and micro-businesses and supports Visa, MasterCard, Discover, and American Express payments. Features include the Square terminal and reader, contactless and chip reader, and other Point of Sale options. Similarly, Stax provides direct cost payment processing, recurring billing, POS, eCommerce, mobile, and virtual terminal solutions. It can integrate with most already established POS systems.

Q: How does the fee structure differ between Square and Stax?

Square charges a varying flat fee per transaction, processed using different methods such as in-person POS or card reader, Square Register, Square Terminal, or online invoices. These rates range from 2.5% + $0.10 to 3.5% + $0.15 per transaction, depending on the transaction method. Meanwhile, Stax follows a subscription-based pricing model with a 0% markup.

Q: What are some potential drawbacks of using Square as a payment processor?

One concern with Square is its fee structure, which can lead to varying costs that can increase as the business grows and requires additional services. Square also has limited ACH payment processing capabilities and lacks PCI Compliance Support, which may be vital for businesses in a digital era. Additionally, despite its quick startup process, Square’s lack of an underwriting process can risk sudden account holds and terminations, affecting the business’s cash flow.

Q: Are there any additional costs to be aware of with Square?

Square might charge additional costs as a business grows and requires more services. These could include costs for using additional software solutions, auxiliary equipment, or more registers. Additionally, limited chargeback protection could also lead to potential costs.

Q: What makes Stax different from other payment processors?

Stax differentiates itself by offering transparency in its pricing model, in addition to its direct cost payment processing and 0% markups. Furthermore, Stax prides itself on personalized customer service.

Q: Which providers are known for better customer service, Square or Stax?

Merchant reviews generally reflect favorably on both companies, but some Square users have noted poor customer service experiences and unexplained account shutdowns. Stax, on the other hand, has received praise for its merchant-friendly pricing structure and receptive customer support.

Q: Why is underwriting important in payment processing?

Underwriting is a precautionary step payment processors take to guard against fraudulent or risky transactions. In Square’s case, their lack of underwriting may lead to an increased risk of sudden account holds and terminations, negatively impacting your business operations and cash flow.

Q: Does Stax offer savings on processing fees compared to Square?

Yes, Stax promises that small and medium businesses (SMBs) can save up to 40% on credit card processing fees compared to Square.

Q: Does Stax offer a quick setup like Square?

Yes, similar to Square’s quick startup, Stax also provides a quick setup process. The difference lies in the services, and the fee structure offered post-setup.