How to Choose the Best Mobile Payment Gateway Provider

Whether you’re a large or a small business, mobile shopping is increasingly relevant to your sales strategy. With mobile devices now glued to consumers’ hands nearly 24/7, they have become a crucial portal to connect people with family and friends—and with their favorite brands.

But to accept mobile payment seamlessly and securely, you need a mobile payment gateway. In this article, we’ll cover what you need to know to select the best mobile payment gateway for your needs.

What is a Mobile Payment Gateway Provider?

A mobile payment gateway is a functionality that allows customers to make digital payments for purchases made via mobile apps. In essence, a mobile payment gateway provider serves as the final touchpoint in the shopping journey between the customer and the online business.

Just like desktop eCommerce shopping, mobile payment gateways are responsible for ensuring that sellers can receive and process online payments securely across multiple payment methods.

Ensuring that mobile payment processing takes place quickly and seamlessly is crucial to avoiding shopping cart abandonment from your mobile application—and most importantly, ensuring that fraud protection is as strong as possible.

Learn More

Why Should a Business Consider a Mobile Payment Gateway Provider?

Now you know what a mobile gateway is, let’s look at the reasons to consider implementing it in your business.

Consumers Prefer to Shop on Mobile

The consumer preference for mobile shopping has been growing steadily. In 2022, nearly three out of every four dollars in online sales are made through a mobile device. That’s a lot of eCommence revenue now tied to mobile commerce.

Despite its popularity, the quality of the user experience on mobile continues to lag. Although 57.5% of consumers in a Heady study said that mobile apps were more convenient than other channels, 23% said that “clunky user interfaces” were their biggest dislike, while 19% say that mobile apps are “slow to complete the task at hand.”

If you’re going to win over mobile shoppers, an easy-to-navigate mobile payment gateway is essential to keep customers coming back to discover more products and services.

Maintaining payment security

No matter how many selling channels you operate, your payment solutions should offer the same level of security for payment processing.

It’s worth considering that despite consumers being savvier about shopping online, concerns about fraud detection and safety remain. Research shows that 80% of consumers are worried that their personal data, such as card information, is being exposed when shopping online.

Choosing a payment gateway integration for your mobile app that is compliant with the PCI DSS (Payment Card Industry Data Security Standard) means that both you and your customers can rest easy when it comes to mobile and in-app payments.

Offer your customers more flexibility

Customers are demanding greater levels of flexibility and choice when they shop online. Rather than fitting in with what’s convenient for the merchant, they expect brands to cater to their needs and preferences.

From multiple payment options to recurring billing and invoicing, payment gateways make it possible for merchants to integrate value-added services into the payment experience. It’s an easy way to help your brand stand out from the crowd by providing a higher level of service.

How Do Mobile Payment Gateways Work?

Mobile payment gateways form a bridge between the customer and the business they’re purchasing from, similarly to a POS and a card reader in a physical storefront:

  1. The customer fills their shopping cart and heads to the checkout inside the mobile app.
  2. At the point of sale, the customer chooses their preferred payment option and is directed to enter their card details, or through an alternative gateway (such as PayPal payments or Apple Pay).
  3. The in-app payment gateway forwards this information to the issuing bank. This may include a tokenization process as an additional feature.
  4. The issuing bank verifies the transaction and ensures that the customer has a sufficient balance in their bank account or credit card to complete the purchase.
  5. If the payment is successful, confirmation is sent back to the app via the mobile payment gateway
  6. Once the payment has been settled, it will be transferred to the business’s merchant account.

Top 4 Features To Look For When Choosing a Mobile Payment Gateway Provider

There are dozens of providers offering mobile payment gateways, but not all services are alike. So, what features/tools should you be looking for in a payments platform?

Seamless checkout across devices

With a multitude of mobile devices and screen sizes now available, it’s important that you choose a payment gateway that’s compatible with multiple options. Unresponsive checkout designs lead customers to struggle with filling out payment details or, more likely, abandon their purchase altogether.

Make sure your mobile payment gateway is compatible with both Android and iOS screen formats so your shoppers have the best payment experience possible.

Security certified checkout

Choosing a payment gateway provider with PCI compliance is vital for fraud prevention and giving customers confidence in the checkout process. According to Baymard Institute, almost one-fifth of cart abandonment occurs because consumers are concerned about security on an app or website.

Recognizable trust badges at your payment gateway are a signal that you are a safe merchant to do business with. Moreover, staying PCI compliant is the best way to protect your business in the event that a data breach or fraud does affect your customers.

Multiple payment options

Shoppers expect to choose from various payment options when shopping on a mobile device. Tapping out credit card details is a time-consuming and stressful process for customers. For this reason, mobile and e-wallets like Google Pay have gained widespread popularity.

According to Juniper Research, 2.8 billion mobile wallets were in use globally at the end of 2020, with this number forecast to jump 74% within five years. In sum, it’s vital that your gateway accepts this payment system alongside more traditional options like ACH, Visa, and Mastercard.

Easy integration with your mobile app

A fully-integrated payment gateway within your mobile app is essential to give your customers a smooth, uninterrupted shopping experience. Ideally, your gateway should require minimal involvement from developers.

Be sure to choose a payment gateway service that offers an SDK or Software Development Kit. This is a set of app development tools supporting a payment service’s open API, allowing the mobile app to share information with its payment gateway. Make sure that the SDK package is small so as not to slow down your payment processor.

How To Find and Select a Mobile Payment Provider

Once you know what features are most important for your business, it’s time to start searching out service providers that fit these criteria. But to search and select the best payment gateway for your needs, there are a few other factors to bear in mind:

How much does it cost?

Every mobile payment gateway provider will have a slightly different pricing model, so it’s important to understand what’s included and what isn’t. Some service providers will charge monthly gateway fees in addition to chargeback and transaction fees. Accepting some credit card payments, such as American Express, may incur extra charges. There may also be an additional setup fee for some services, depending on how customizable their payment gateway is.

What does the transaction flow look like?

The payment process will differ between different gateway providers. This is because the transaction flow is determined by how the gateway is integrated with your mobile app.

For example, some payment gateways are embedded directly into the checkout via an iframe, while others will redirect customers to a secure hosted page. Which option is best for your business will depend on what your existing customers are used to using and whether they might get put off by a redirect to another page.

Is a merchant account included?

A merchant account is a business bank account that allows merchants to accept electronic transactions. Some mobile payment gateways will offer a merchant account as part of your subscription, while others will require you to bring your own. It’s worth noting while getting a merchant account from your provider might be convenient, you’ll likely face longer timeframes for money transfers.

Where does their service operate?

If your business is serving an international market, your chosen gateway must provide services to all the countries you operate in. Some gateway providers will charge extra fees to process payments outside of main markets such as the United States, Australia, or Canada, or may not accept them at all.

Top Mobile Payment Gateway Providers

Unsure where is the best place to start? Check out our list of the top fintech providers to consider for your mobile payment gateway:

1. Stax

Commonly rated as the #1 eCommerce payment processing provider, Stax provides transparent monthly pricing plans tailored to both emerging and established businesses. All plans offer next-day access to funds, full PCI compliance, and 24/7 customer support.

Price: Plans start at $99 per month, custom pricing is available for businesses processing more than $500,000 annually.

Payment methods accepted: ACH, all major credit/debit cards, invoicing, digital wallets, Text2Pay.

Available in: United States

Best for: Startups, small to medium-sized businesses, enterprises, and subscription-based businesses.

2. Stripe

Stripe is a global payment gateway that supports over 135 currencies in addition to a wide range of payment options, including local payment options such as WePay and AliPay. Stripe also guarantees seven-day payouts nationwide, with two-day payouts for U.S.-based transactions.

Price: no monthly fee, 2.9% + 0.30c per card charge. Volume-based discounts are available.

Payment methods accepted: All major credit/debit cards, digital wallets, Afterpay, foreign currencies, local payment types.

Available in: 30+ countries/regions

Best for: Businesses who are selling cross-border or want more customization capabilities.

3. Braintree

Braintree is a highly flexible payment solution that offers a full suite of features, from recurring billing to real-time analytics, as well as a standalone payment gateway option at $49 per month.

Price: No monthly fee, 2.59% + $0.49 per card charge (an additional 1% charge for cards issued outside of the U.S.

Payment methods accepted: ACH, All major credit/debit cards, recurring billing, mobile wallet, foreign currencies.

Available in: United States, Canada, Australia, Europe, Singapore, Hong Kong, Malaysia, New Zealand

Best for: Businesses who only require a gateway and may want the option to expand capabilities later.

4. PayPal

One of the most well-known payment providers, PayPal’s pay-as-you-go pricing makes it easy to keep track of payment processing costs.

Price: No monthly fee, 2.59% plus $0.49 per card charge (an additional 1.50% charge for international payments)

Payment methods accepted: All major credit/debit cards, mobile wallets, cryptocurrency

Available in: 200+ countries/regions

Best for: Businesses who want a low-maintenance, quick-to-set-up payment gateway.

5. Adyen

Adyen is a good choice for businesses who want more customization options for their payment gateway. With Adyen, you can build a branded payment gateway and tailor your transaction flow to what works best for your customers. Acceptance in multiple countries increases flexibility for merchants with a global customer base.

Price: No monthly fees, $0.12 processing fee, plus a fee of 3-4% for most payment types

Payment methods accepted: ACH, All major credit/debit cards, mobile wallets, Afterpay.

Available in: 60+ countries/regions

Best for: Merchants processing at least 1000 transactions per month.

Final Words

Whether you’re a giant the size of Amazon or a small business processing a few hundred transactions a month, every business offering mobile shopping requires an appropriate payment solution to streamline the customer experience and keep track of every payment. Thanks to this guide, your business should have no problem selecting the best mobile payment gateway provider for your unique needs and keeping your mobile customers happy.

Request a Quote

How to Get a Credit Card Machine for Small Business

Are you looking to accept credit or debit card payments for your business? While the process may appear difficult, small business credit card processing is easier than it sounds.

Credit card usage has been on the rise, and this trend isn’t showing signs of slowing down. As of 2020, 79% of American consumers had at least one credit card or charge card, and experts are expecting that number to continue to grow.

Needless to say, small business owners that don’t accept credit cards are leaving a lot of money on the table. If you want to keep up with modern consumers, you need to ensure that you have the systems in place to accommodate their payment needs.

Doing that starts with evaluating different credit card processing services and selecting the right solution for your business.

Credit Card Payments and Your Business

One of the first steps to getting started with credit card processing for businesses is determining your specific needs. Ironing out your requirements will make it easy to evaluate credit card processing companies and figure out the best option for your business.

To that end, below are some helpful questions that can surface your business needs.

What Types of Credit Card Brands Do You Want to Accept?

Understanding what debit card and credit card brands to accept is very important for your business and customers. Credit cards contain their own unique set of rates and interchange fees which can be costly. As a business owner, you pay for the convenience of accepting a chosen payment method in order to accommodate the interests of your customers. Visa and Mastercard are standard, but then you also have American Express and Discover.

It’s important to note that each of these card networks have varying processing fees and policies, so be sure to consider them when deciding on the credit card types to accept.

How Will You Accept Payments?

List the methods you’ll use to accept card payments. Are you accepting in-person payments or online? Will you be accepting mobile payments or contactless payments like Apple Pay? Do you plan to take credit card payment info over the phone? What about online payments?

The answers to these questions will enable you to figure out what hardware and software you need to effectively set up and take credit card payments. For example, if you’re a large retail business that focuses on in-store transactions, then having a robust pos system that integrates with your credit card processor and credit card machines is a must.

If you’re selling online, see to it that your payment processor integrates with your e-commerce shopping cart.

There are many credit card processing solutions you can choose from. Depending on the industry, some payment types will serve as a default with additional options to expand payment collection methods from customers. Customers can make payments on your website or through a POS terminal next to the cash register.

You can process payments on your smartphone with a mobile card reader or you can type payments into a virtual terminal. Payment preferences are continuously changing so it’s important to know how customers want to pay as well as how your business wants to charge.

Learn More

How Much Sales Volume Do You Expect to Be Credit Card Transactions?

The number and amount you process are major factors that credit card processing companies consider when setting your rates. As such, you should understand your transaction volume before hunting for a merchant account service.

Step 1: Choose the Right Payment Gateway

The first step to small business credit card processing is setting up a payment gateway account— which is different from a merchant account provider. All your transactions, no matter what type, are channeled through a payment gateway. The payment gateway’s role is simply to decline or approve a transaction. Here’s a look at how payment gateways work:

  • The customer goes through the checkout process and pays for a good or service with their credit card.
  • Next, the authorization needs to be checked. The payment gateway service sends the transaction data to the merchant bank’s processor, who then routes the transaction data to the cardholder’s bank account.
  • The transaction now needs to be verified. The cardholder’s bank will either approve or decline the transaction. Then it will pass that information back to the credit card processors. The processor then passes the information to the cardholder and the merchant.
  • For a card that was accepted, goods or services are delivered. The transaction is completed.
  • The customer’s bank sends the required funds to the credit card processor. The processor forwards the funds to the merchant’s bank. Once you research the different payment gateway options available to you, contact the one that’s right for your business to get started. Be sure to look for the following features when choosing a gateway account for your business.
  • PCI DSS compliant
  • SSL (Secure Socket Layer)
  • eCommerce integration
  • Report generation
  • Customer support

Step 2: Set Up Your Merchant Account

The second step to processing and card machines for small business is choosing a merchant account provider (your payment processor). This involves thorough research into the best credit card processor for your business. Be sure to review not only the credit card processing fees from the payment processor, but also the overall pricing structure.

Some gateway service providers also include merchant services, but you should shop around before settling on that option. You should also note that some payment processors actually have gateway services of their own or have partnerships. It is important to find the right credit card processor for your transaction needs.

You want to find a payment processor that has all the credit card processing solutions you need to make transactions, and you want the best rates for their services.

How To Get A Credit Card Machine For Small Business | Person Using Pos System

Keep These Key Features in Mind When Choosing a Payment Processing Company

Not all payment processors are created equal. To figure out the right payment processing solution for your small business, be sure to take the following factors and features into consideration when researching a credit card processing company.

  • Digital application and rapid setup time. You operate in a fast-paced environment, so it’s important to partner with a payment processor that makes account and equipment setup quick and easy.
  • Favorable pricing structure and low transaction fees. Ask about the pricing model of your payment processor. How much is their markup? What processing fees do they charge? Ideally, your processor should offer transparent pricing and clear details about their rates. Or better yet, choose a payment processing provider that doesn’t take a cut out of your sales. At Stax, you are charged a flat monthly fee for unlimited access to the direct cost of interchange rates.
  • No ancillary or hidden fees (see below). Stay away from providers that tack on additional processing fees beyond credit card processing.
  • Fraud protection. You want a provider that looks out for you and helps prevent fraudulent transactions from taking place.
  • Supports the payment processing solutions you need.  Depending on your business, this may include integration with your POS system, EMV-compliant equipment, support for your shopping cart, POS terminal, virtual terminal, mobile card reader, etc.

Processing Fees You Should Avoid

  • Termination fees
  • Customer service fees
  • Statement processing fees
  • IRS fees
  • Batch processing fees
  • Annual processing fees
  • Contract fees
  • PCI compliance fees

Step 3: Accept Credit Card Payments

Once your merchant account is set up, you’re ready to accept credit card payments. This can be as simple as logging into a software product or entering your customer’s payment information.

In some cases, you’ll need to set up your equipment (i.e., POS system, credit card readers, etc.) Whatever credit card payments solution you choose for your business, it should be simple and easy to use.

If you don’t like the payment processor or the services you’re receiving after a few months, it should be easy to switch payment processors— unless you signed into a contract. Many contracts will have a hefty termination fee you have to pay in order to cancel. Try to get the fee waived or simply choose a credit card processor that doesn’t have contracts.

Request a Quote


FAQs About Getting A Credit Card Machine

Q: What is a credit card machine, and why do I need one for my small business?

A credit card machine, also known as a point-of-sale (POS) terminal, is a device that allows your small business to accept credit and debit card payments from customers. It is essential for modern businesses as it enables easy and secure transactions, expanding your customer base and increasing sales.

Q: How can I get a credit card machine for my small business through Stax Payments?

Getting a credit card machine through Stax Payments is simple. You can visit our website and request a call from our team once you provide some basic information about your business. Once registered, you can browse through our range of credit card machines and choose the one that best suits your business needs. Our team will guide you through the application process and provide assistance every step of the way.

Q: What types of credit card machines are available for small businesses at Stax Payments?

Stax Payments offers a variety of credit card machines to cater to diverse business needs. Our selection includes traditional countertop terminals, wireless terminals for mobility, virtual terminals for online transactions, and mobile card readers for on-the-go businesses.

Q: How secure are the credit card machines offered by Stax Payments?

Security is a top priority for Stax Payments. Our credit card machines are equipped with the latest encryption and compliance measures to protect your customers’ sensitive data. Rest assured that your transactions are safe and compliant with industry standards.


Ready to Set Up Credit Card Processing for Your Small Business?

If you’re looking for the perfect payment processing solutions for your small business, you’ve come to the right place. Stax Pay offers subscription-based integrated payment processing services at a direct cost— without any markups, ancillary fees, or contracts.

How to Get Paid Faster: 6 Practical Tips for Businesses

When you’re running a small business, the last thing you want to do is chase down unpaid invoices and send late payment reminders.

Between dealing with employees, new clients, vendors, and keeping up with the latest trends in your industry, all while trying to stay on top of your to-do list…it’s no wonder many small business owners struggle to get paid on time.

The Impact of Slow Payment on Small Businesses

Not getting paid quickly can have a huge impact on your business.

According to a BESA survey, over 92% of small business owners have had to deal with late payment issues. What’s worse: 37% of them even had reduced their own salary because they were waiting for past due invoices to be paid.

And it’s not just an inconvenience—it’s an opportunity cost: you’ll lose money, vendors, and enough cash flow for other projects (like hiring new employees or buying new equipment.)

This is a huge burden, especially when you consider how much more money you could make if you were able to get paid early—just look at these Fundbox stats: fixing late payment issues could increase your revenue by $31k on average.

While it may seem like late payments are simply part of the territory of being an entrepreneur, there are actually several practical tips you can implement to get paid faster, improve cash flow, and grow your business.

Learn More

Check out our tips to start getting paid faster and more reliably:

1. Automate Invoices, Reminders, and Follow-Ups

If you’re a small business owner with limited staffing resources, automated invoices and reminders are a great investment. Industry data shows that the majority of invoices (61%) are paid on time, so simply sending invoices at the right time can help ensure you get paid quickly.

This is where automation comes in. Having a system that automatically sends invoices means your clients can receive and settle their bills in a timely manner—e.g., every first of the month or 24 hours after a service has been rendered.

It’s also worth noting that 61% of late payments are due to invoicing errors. Automation can eliminate mistakes, thus reducing delays in payments. What’s more, most invoicing solutions make it easy for clients to pay quickly, thanks to features like built-in payments, saved cards on file, etc.

In addition, invoice automation systems can  help you follow up with late-paying clients, and they work well as part of the invoicing and billing process.

Not only do they save you time, but they also make sure you can consistently communicate with your customers, as well as get regular notifications if the payment is not made by the due date.

You can also set a reminder email, or phone call payment reminders. This is another way to reach out to your clients and keep them updated on their payment’s status.

2. Provide Flexible Payment Terms

Looking to minimize the risk of being stuck with outstanding invoices and having to wait for your customers’ payments? Here’s an easy way to do it: offer flexible payment terms.

Consider these ideas:

Offer a discount for early payment. This way, your client gets some financial reward for doing business with you and pays you sooner than they would have otherwise. For example, if you run a online store, you can offer a small discount on bulk purchases or offer free shipping if someone pays within a certain timeframe (say, 10 days).

Create a customized payment plan for your clients. That way, customers can pay for their services in easy installments over time. Let’s say you run a local business that sells home goods (like furniture or accessories). You can offer your clients interest-free credit pricing plans over ten, 20, and 30 months.

Offer automatic billing with auto-pay options so that clients don’t have to worry about remembering when their next payment is due—with digital invoices, it’ll just happen automatically.

3. Incentivize Upfront and Early Payments

If you choose to implement this,  make sure your customers know exactly what’s expected of them and how much time they have to pay.

Let’s say that you’re a graphic designer who designs and prints custom t-shirts for your clients. You could typically require a 50% deposit at the time of booking, and then the remainder of the payment upon delivery of the finished product.

However, if you don’t feel comfortable asking for upfront payments from clients who aren’t familiar with your business model, another option is to offer incentives: discounts or freebies if they pay early or upfront.

4. Charge and Enforce Late Payment Fees

This could be a good solution if you’ve had issues with excessive late payments in the past. However, they can be tricky to implement. Not all states or countries will allow businesses to charge late fees, so it’s important to do your research.

Regardless of the payment method you’re offering, be sure to collect your customer’s contact information, and draft clear payment terms to protect your business in your contracts and client agreements.

Include the percentage or flat rate of the late payment fee. You can find industry-standard late payment fees or consult your state’s regulations to determine what you should charge.

5. Accept Multiple Payment Methods

One of the best things you can do to get paid faster is offer convenient payment options for your customers, so they have multiple ways to pay off their bill.

If you only accept cash and card payments, you’re missing out on a huge opportunity to increase sales and secure payment.

For example, you could use ACH payments. ACH transfers have lower transaction fees than credit card payments, so they save your business money. They’re a great alternative to check payments because of their security, and they’re simple to set up for recurring payments.

Meanwhile, digital payments such as SMS or Text2Pay can give your customers a convenient way to pay you—plus, they can do it with just a few taps.

These are just two examples of the many ways businesses can accept more payment options as a way to get paid faster. When deciding which payment types to accept, it’s best to think about your business needs alongside the shopping habits of your customers.

6. Use an integrated Payment Processing and Accounting Software

When you use accounting software and payment processing applications separately, it can be difficult to get a clear picture of your financial situation. That’s why it’s a good idea to integrate the two programs if you want to stay on top of your money—and whether or not you’re getting paid on time.

Stax integrates with the most common apps to help streamline and automate your business–and this is especially important with accounting software.

Stax helps get you paid faster. Automated invoicing, ongoing monitoring and real-time reporting are just some of the ways the company helps you streamline your business operations and increase cash flow.

Additionally, you can seamlessly track payments and know instantly which ones are complete and which ones are pending.

Final Words

Late payments aren’t just a minor inconvenience; for some businesses, not getting paid quickly can put a serious strain on cash flow. Fortunately, with the right processes and payment partners, you can reduce instances of late payments and get money flowing faster.

Learn more about how Stax can help your business get paid faster. Get in touch today.

Request a Quote

Checkout Optimization: 10 eCommerce Checkout Best Practices to Try On Your Website

Checkout Optimization: 10 eCommerce Checkout Best Practices2 to Try On Your Website

eCommerce brands spend considerable time and resource attracting visitors to their website and engaging them with great products. But there’s a lot more you need to focus on if you’re going to nurture customers into completing the checkout process.

A customer may love your brand. They might have found the ideal product that fits their needs. But unless the shopping journey and checkout are smooth and seamless, the odds of them abandoning cart is high.

According to Baymard Institute, the average cart abandonment rate in eCommerce is almost 70%, with almost 20% of consumers citing a “too long/complicated checkout process” as the main reason for cart abandonment.

This is why optimizing your eCommerce checkout holds the key to turning lookers into buyers.

What is Checkout Optimization?

Checkout optimization is a series of strategies used by brands to streamline the eCommerce checkout process. When the checkout is seamless and easy to navigate, it’s far easier to convert customers and foster repeat purchasing behavior.

But checkout optimization is about far more than just the checkout. Cart abandonment isn’t just caused by the checkout process itself, but moments of friction throughout the shopping journey.

In sum, the best checkout optimization strategy doesn’t start at the checkout page; it starts right from the moment a shopper enters your website.

Why is Checkout Optimization Important?

Investing the time to optimize the checkout process can pay off both in the short and long-term. Consider the following.

Reducing Cart Abandonment

It’s a known fact that cart abandonment hurts a brand’s bottom line. But the reasons behind cart abandonment are often misunderstood.

Shoppers who place items in their cart and then abandon it aren’t disinterested in your brand. They’re actually showing a strong intent to buy. The problem is that something got in the way of them completing their purchase.

By making an effort to optimize your checkout, your brand stands to recover hundreds, if not thousands, of dollars in lost revenue.

Increasing Customer Retention

Cart abandonment is just one element of online store visits going underutilized in eCommerce. It’s not enough to secure that first purchase from a customer; you also need them to shop with you again if you’re going to build a healthy business.

It’s important to remember that it’s your customer’s final impression of the shopping experience that determines whether they’ll return to your brand. They might have completed a purchase, but if they had to fight tooth and nail through a complex checkout experience, they’re unlikely to buy from you again.

In sum, checkout page optimization is directly linked to your customer retention efforts; if you want to foster repeat purchasing behavior, you need to give them a positive checkout experience.

How to Implement Checkout Optimization

Now that we’ve discussed the benefits of checkout optimization, lets take a look at the steps and tactics you can try to reduce cart abandonment and improve conversions.

1. Make Sure Your eCommerce Website is Optimized for Mobile Devices

Mobile devices are no longer just a place to browse for products, they’re increasingly a tool to make purchases. If you want to gain a share of this lucrative market, you need to make sure that your entire website offers a great user experience on mobile.

Optimizing your online store for mobile shopping has other benefits, too. Since 2019 Google has used mobile-first indexing, meaning that it’s the mobile version of your site that determines search rankings. By ensuring a seamless mobile shopping experience, your SEO will see a boost.

How? By choosing a mobile-friendly design that adjusts to different screen sizes. This removes the need for customers to zoom into different parts of the screen, which quickly leads to cart abandonment.

It’s also important to think about the placement of your CTAs. Users shouldn’t have to scroll to find the button they’re looking for, so you need to position them above the fold. Icebreaker puts two large CTAs front and center on their home page so that customers can kickstart their shopping experience:

Checkout Optimization_Website Optimization Mobile Screenshot_Body Image

2. Make Personalized Product Recommendations

Personalization is an increasingly important element of the eCommerce experience. Every shopping journey on your website is unique and customers want you to treat it that way.

According to Salesforce, 66% of consumers say they expect brands to understand their individual needs, while 70% say that how well a company understands their needs impacts their brand loyalty.

Giving shoppers recommendations for products that are complementary to their cart contents is a powerful strategy to maximize AOV via upselling and cross-selling.

Moreover, if shoppers have to hunt all over your website to find a companion item, shopping cart abandonment is more likely. By conveniently spotlighting related products, customers can make sure they have everything they need to make the most of their purchase.

Victoria’s Secret triggers a pop-up cart page whenever shoppers add a new item that spotlights possible companion products:

Checkout Optimization_Victoria’s Secret Personalized Product Recommendation_Body Image

3. Offer a Free Shipping Option

Thanks to the likes of Amazon’s two-day shipping policy, shipping costs have become one of the biggest deal-breakers when it comes to shopping online. According to Baymard Institute, “unexpected extra costs” like shipping are the biggest reason for abandoned carts, as cited by 48% of consumers.

This is why all eCommerce businesses should offer some form of free shipping, such as a minimum order threshold or membership program. Nordstrom offers free standard shipping on all orders, but customers have to pay extra for expedited shipping if they want their items faster:

Checkout Optimization Nordstrom Rack Free Shipping Option Body Image

 

Whatever you decide, it’s important to be upfront about your shipping policy, lest customers get a nasty surprise at the checkout. Be sure to detail your shipping costs on a page linked to the header and footer of your website for maximum transparency.

Learn More

4. Use Exit Popups

The average eCommerce conversion rate for online shoppers who put items in their cart is just 11.4%.

That’s right—only around 10% of customers who have strong purchasing intent will end up buying from you.

Why? Because while consumers have recognized a need, they haven’t felt that final push to commit. With the help of exit popups, you can give potential customers that urgency to purchase.

Exit popups are a form of marketing automation that tracks the mouse movements of eCommerce site visitors to identify when someone is about the close their browser. Shoppers are then shown a compelling offer via a popup and a CTA to persuade them to complete the purchase.

Exits popups can include any relevant offer or promo code that increases the odds of a purchase. J Crew’s popup offers shoppers 15% off their next purchase if they sign up to their mailing list:

Checkout Optimization_Jcrew_Website Exit Pop Up_Body Image

5. Include Customer Reviews on Your Product Pages

Shopping online can be a risky business for consumers, especially when it involves unfamiliar brands or products. If we can’t go into a store location to view an item, we’re forced to rely on other forms of information to finalize our purchasing decisions.

When there’s a litany of happy customers talking about how great a product is, consumers are much more likely to buy it. In fact, 79% of consumers trust online reviews as much as personal recommendations.

By allowing customers to leave reviews on your eCommerce store, retailers can build social proof that their brand is reliable and convenient to purchase from.

Sephora has leveraged the power of its passionate beauty community to build a comprehensive ratings and reviews tab on every product page. Customers can provide images, skin tone or hair type information, and whether they would recommend a product to others:

 

Checkout Optimization_ Sephora Product Page Customer Reviews_Body Image

6. Offer a Guest Checkout Option

Forcing customers to provide you with information before they can progress to the checkout adds friction to the shopping experience. Baymnard’s research shows that “the site wanted me to create an account” was the second-biggest reason for cart abandonment.

While getting customers to provide this information is useful for retargeting purposes, this needs to be weighed against a possible increase in your cart abandonment rate.

Allowing customers to bypass this process via a guest checkout functionality is especially important for first-time customers, who are less likely to tolerate interruptions to the checkout flow.

If you want more customers to sign up for an official account, consider offering some kind of incentive, like a discount or free shipping with their next order.

Crate & Barrel provides a great template for how to segment first-time and returning customers at the onset of the checkout process:

Checkout Optimization_ Crate&Amp;Barrel Website Guest Checkout Option_Body Image

7. Try to Keep the Checkout Process to a Single Page

Ideally, you want to keep your checkout to just one page. If customers don’t know what’s around the next corner (or the next page) this increases the odds of them abandoning cart because they may not have the right information on hand.

When customers can see the checkout process all in one place, such as form fields for shipping and billing addresses, payment information, and phone numbers, they’re far more likely to complete the process.

A multi-page checkout is worsened when customers have no idea how far through the process they are. If you can’t use a single page checkout, consider adding a progress bar so customers can monitor their checkout progress.

Flo & Frankie uses a simple checkout layout that keeps customer details all on one page, as well as providing the order summary and a field to enter any discount codes:

 

Checkout Optimization_ Floo &Amp; Frankie Single Page Checkout_Body Image

8. Use Autofill and Data Validation

Enabling an autofill function allows returning customers can add their details almost instantly, speeding up the checkout process considerably.

For first-time customers, you can add optimization features like auto-filling the customer’s city and state when they enter their zip code, or suggesting likely shipping addresses when they begin typing in the address field (shown below):

 

Checkout Optimization_Address Auto Fill And Data Validation_Body Image

You also want to avoid any errors taking place during the checkout process that could cause delays to delivery. Using data validation to approve shipping addresses is an important strategy to optimize your eCommerce checkout and ensure that fulfillment goes smoothly.

9. Offer a Variety of Payment Options

Today, customers are used to having a wide variety of payment methods to choose from, such as digital wallets and Buy Now, Pay Later plans. If your customers cannot find their preferred payment option, they might choose to shop elsewhere.

Diversity of payment options means offering your customers more choice and flexibility. Some shoppers distrust using credit cards online and instead prefer methods like ACH. Others simply want the most convenient option possible to avoid having to enter their card details manually. Taking advantage of plugins on WordPress or Shopify allow you to place express checkout buttons that speed up the process, helping you to capture more impulse purchases.

Ulta Beauty offers customers a choice between paying via credit card, PayPal, or setting up a deferred payment schedule via Afterpay:

 

Checkout Optimization_Multiple Payment And Billing Options_Body Image

10. Add an SSL Certificate

Brands need to start building trust with shoppers from the moment they enter their website. But if customers don’t feel as though your checkout is safe and secure, they aren’t going to purchase from you.

With consumers more reliant on eCommerce than ever during the pandemic, security concerns around shopping online have increased. According to a ClearSale survey, 92% of consumers say that security is important to them, while 83% said they would be more likely to shop on websites that discussed or showed their fraud prevention efforts.

This is why it’s important to optimize your checkout with an SSL certificate and security badges from key companies to bolster consumer confidence. VeriSign, Norton, or LifeLock are some of the most recognized safe checkout badges.

Cotton On uses Norton’s SSL certificate to reassure customers of a safe checkout process:

Checkout Optimization_ Norton Ssl Ecommerce Shopping Certificate_Body Image

Final Words

Checkout optimization is the result of a range of strategies designed to improve the shopping experience and make life easier for your customers. It’s important to understand that optimizing your checkout won’t happen overnight. It takes experimentation and thorough A/B testing to find the perfect formula that reduces cart abandonment. But with a bit of work, you will see your conversion rate rise over the long term and create healthy growth opportunities for your business.

You should also recognize the importance of having convenient payment methods at the checkout stage. Giving people an easy and affordable way to pay reduces friction and gets them across the finish line faster.

Stax enables you to offer a variety of payment options at checkout. From credit and debit cards to mobile payments, digital wallets, and ACH—we’ve got all your payment needs covered.

Request a Quote


FAQs about Checkout Optimization

Q: What is Checkout Optimization in eCommerce?

Checkout optimization is a set of strategies used by brands to make the eCommerce checkout process smoother and easier for customers. The main goal of checkout optimization is to enhance customer conversion rates and encourage repeat purchase behavior.

Q: Why is Checkout Optimization Important for eCommerce Businesses?

Checkout optimization is important for reducing cart abandonment rates, which directly impacts a business’s bottom line. It is also key to increasing customer retention by providing shoppers with a positive checkout experience that encourages repeat purchases.

Q: How is Cart Abandonment related to Checkout Optimization?

Cart abandonment typically happens due to a complicated or lengthy checkout process. By optimizing the checkout journey, businesses can reduce cart abandonment and recover potential lost revenue.

Q: What are some strategies to implement eCommerce checkout optimization?

Strategies include optimizing your website for mobile devices, making personalized product recommendations, offering free shipping options, using exit popups for compelling offers, including customer reviews on product pages, offering guest checkout options, simplifying the checkout process to a single page, utilizing autofill and data validation features, offering wide variety of payment options, and adding an SSL certificate for secure checkout.

Q: How can Mobile Optimization help with Checkout Optimization?

Mobile eCommerce sales are increasing and businesses need to provide a smooth, mobile-friendly shopping experience to tap into this market. A mobile-optimized site not only boosts SEO but also reduces the possibility of cart abandonment due to difficult navigation on small screens.

Q: How can Personalized Product Recommendations enhance Checkout Optimization?

Impersonal and vague product suggestions can lead to cart abandonment. By making personalized recommendations, brands can maximize their Average Order Value (AOV) through upselling and cross-selling and thus streamline the checkout process.

Q: What role does Free Shipping play in Checkout Optimization?

Unexpected extra costs like shipping fees are a main reason for cart abandonment. Offering free shipping can entice customers to complete their purchases.

Q: Why should an eCommerce Website Include Customer Reviews in Checkout Optimization?

Visible customer reviews add to the credibility of a product and can compel visitors to make a purchase. They offer social proof that the brand is reliable and convenient to shop from.

Q: How can offering a variety of payment methods contribute to checkout optimization?

Providing multiple payment options enhances the convenience for consumers who prefer using different payment methods. Chances of potential customers dropping off at the payment stage can be significantly reduced when their preferred payment methods are offered.

Q: How does an SSL Certificate play a role in Checkout Optimization?

An SSL Certificate ensures the security of a customer’s confidential information during the checkout process, enhancing customer trust and reducing the chance of cart abandonment due to security concerns.


 

Your Complete Guide to eCommerce Credit Card Processing

eCommerce has been growing rapidly over the few years and it’s not showing any signs of slowing down. According to Insider Intelligence, U.S. online sales are set to grow by 16.1%, reaching $1.06 trillion in 2022.

Even if growth has tapered off slightly since its peak in 2020, it’s clear that eCommerce will continue to take a larger share of total retail sales.

This makes streamlined credit card processing by brands more important than ever to reduce cart abandonment and build customer loyalty. Doing all of that starts with choosing the right payment processor.

In this guide, we’re going to explore everything that your business needs to know about eCommerce credit card processing, including:

  • Why seamless eCommerce credit card processing is important
  • How credit card processing works
  • How to navigate credit card processing fees
  • How to get started with credit card processing
  • Top eCommerce credit card processing companies

Why do Merchants Need to Understand eCommerce Credit Card Processing?

First things first. Why do you need a good eCommerce credit card processing solution? Consider the following.

Customers expect to pay online seamlessly using multiple payment methods

To meet customer expectations for convenient and effective card transactions, retailers and anyone selling onlineneed to be able to offer streamlined card payment processing solutions for all types of payments.

In addition to standalone credit card cards, eCommerce stores also need to accept payments from sources such as mobile wallets, which can hold multiple credit or debit cards. Mobile wallets such as PayPal and Apple Pay are now in widespread use, making up 29% of all eCommerce payments in 2021.

Preventing eCommerce fraud

Payment fraud is a widespread problem in eCommerce—and it’s only getting worse. TransUnion recently cited a 25% increase in online fraud attempts in the U.S. within the first four months of 2021, compared to the last four months of 2020.

Higher volumes of card not present transactions, combined with a lack of fraud prevention technology, have left many businesses unprepared for data breaches. It’s essential that online stores can handle fraud attempts effectively, and it all starts with your credit card processor.

Knowing how to navigate credit card processing fees

Investing in credit card processing services is essential for retailers, but it comes at a price.

From setup fees with merchant service providers to steep transaction fees from major credit card companies like Visa and Mastercard, there are all kinds of costs to be aware of.

Merchant fees are unavoidable in online shopping, especially as credit cards continue to be the favored payment option. But if brands pick the wrong payment solution, they can end up paying unnecessarily higher fees.

By comparing payment processing services and pricing models, you can avoid extra costs and pick the best value solution for your business.

How Does eCommerce Credit Card Processing Work?

To understand how credit card processing works, we need to define a few key terms:

The acquiring bank. The bank that enables the merchant to accept credit and debit cards and deposit the money from online transactions into their account.

The issuing bank. The bank that issues the credit card the customer is using to make an online purchase.

Merchant account. The bank account an eCommerce business holds with the acquiring bank to accept credit card payments.

Payment Gateway. Works like a virtual card reader on an eCommerce platform to transfer card data from the point of sale to the payment processor.

Payment processor. Sends the transaction details to the relevant credit card network and awaits approval for money to be moved from the customer’s bank to the merchant’s account.

Learn More

Steps of eCommerce Credit Card Processing

  1. The transaction is initiated by the customer presenting their card details at the checkout to pay for the items in their shopping cart.
  2. The merchant uses their payment gateway to encrypt this data and send it to the payment processor.
  3. The payment processor reaches out to the credit card network, where it is routed to the issuing bank for authorization if the necessary funds are available.
  4. The issuing bank will either approve or decline the transaction. If approved, the payment processor notifies the issuing bank to send funds to the merchant’s acquiring bank.

What Credit Card Processing Fees are Involved?

There are a variety of hidden fees involved with credit card processing, depending on whether your small business has a merchant account or uses a third-party payment processor. Fees are charged either as a flat rate or as a percentage, depending on the nature of the fees.

Monthly fees. If you are using a third-party payment processor or payment gateway, there will be a subscription fee to access the service.

PCI Compliance fees. Businesses must stay PCI compliant if they are accepting credit card payments from customers. If your payment processor is managing this on your behalf, they may bill this as an additional service.

Transaction fees. A transaction fee is charged every time a credit card payment is made at the point of sale (in this case, your eCommerce website). Because card not present transactions involve more risk than in-person transactions, online payments generally entail higher fees. Transaction fees will be either charged as a percentage or as a dollar amount.

Interchange fees. This is the fee charged by the credit card company for any transaction made using one of their cards. Interchange fees are non-negotiable and will vary between credit card networks.

Verification fees. You may be charged a verification fee to verify a customer’s billing address or identity, especially if they are paying by check.

Termination fees. Some payment processors will charge businesses a termination fee if they choose to end their contract early. This makes it costly to switch providers if you aren’t happy with the service. Consider looking for a virtual terminal that doesn’t enforce a cancellation fee.

How Merchants Can Get Started with eCommerce Credit Card Processing

Now that we’ve established the fundamentals of eCommerce credit card processing, let’s look at the steps you should stake to set up the system in your business.

Decide which payment processor to use

The first step is to set up an account with a payment processor who can facilitate eCommerce transactions. This step requires a bit of research as you need to determine which processor is right for your business.

Here are some questions to ask when considering an eCommerce credit card processor:

  • What is their pricing structure and how much are their fees?
  • Do they integrate with the business tools you’re using?
  • What modes of payment do they support?
  • What are their customer support offerings?

The answers to these questions will help you evaluate different payment processors and make the right decision for your business.

Think about what other payment services you may need

When looking for a payment processor, it’s important to think about other functionalities your business needs to coordinate a smooth payment process. Some payment processors are designed for accepting payments and little else, while others provide wraparound support.

If you’re a new business or are looking to expand to new markets, it’s a good idea to look for a full-fledged payment solution that provides other capabilities. For example, in addition to credit card processing, Stax also offers subscription billing capabilities and customizable invoicing.

Integrate your system with your website

Once your system is online, you need to make sure that it integrates seamlessly with your eCommerce platform for smooth payment processing. Most payment processors offer pre-built integrations with popular platforms and business management tools for an easy set-up.

Alternatively, you can take advantage of their open API to build your own integration, though this requires some in-house experience with software development. It’s also worth noting that some eCommerce platforms, such as Shopify, will charge you extra fees for bringing in an external payment processor.

Perform a test transaction using your system

Before you accept any real-world transactions, you need to make sure that your payment processing system is working correctly.

There are multiple ways of doing this, depending on the credit card processing system your business is using. Some providers offer what is known as bogus payment gateway, where you can process a test transaction to check that your settings are working. Otherwise, you can process a small transaction using a business credit card and refund the purchase, though you will have to pay credit card processing fees.

Top eCommerce Credit Card Processing Companies to Consider

Need help deciding on the right eCommerce payment processor? Here are the leading players in the market.

Stax

Bringing together favorable pricing with streamlined payment processing, there’s a reason why Stax is a top-rated credit card processing platform.

Stax offers a unique eCommerce payment solution that gives merchants wholesale pricing with 0% markup on interchange rates, rather than charging a percentage of each transaction. This results in processing fees that are as much as 40% lower than traditional payment processing models.

Best suited for: Businesses processing at least $5,000 in credit card transactions.

Key features:

  • Same-day deposits
  • No contract or termination fee
  • Integrations with Xero, Wave, Zoho, Mailchimp, and Hubspot
  • Advanced reporting and analytics

Payment options: eCommerce credit card processing, in-person payments, invoices, gift cards, ACH, mobile payments

Pricing: Starts at $99 per month

Stripe

Stripe was one of the earliest eCommerce payment processors on market, and they remain one of the strongest offerings. Stripe accepts a wide range of credit cards, including Visa, Mastercard, American Express, and Discover. But to take advantage of Stripe’s open API, you will need some in-house development capabilities.

Best suited for: International merchants/merchants accepting a variety of payment methods

Key features:

  • Fully customizable checkout flows
  • Accepts payments in over 135 currencies
  • Deposits in 1-2 business days after a transaction (same-day deposits for an additional fee)
  • 24/7 customer support

Payment options: Credit/debit cards, mobile wallets, ACH, Buy Now, Pay Later plans

Pricing: Pay as you go pricing (2.9% + $0.30 per transaction).

Shopify Payments

As well as being a selling platform, Shopify also offers its own payment service. Shopify merchants can sign up for Shopify Payments as soon as they set up their online store, making it a convenient option. However, this service is only available in 17 countries at present.

Best suited for: Shopify merchants

Key features:

  • Seamless integration with all Shopify plugins
  • Deposits in 2 business days
  • Accelerated checkout for returning customers
  • Not available to high-risk industries

Payment options: Credit/debit cards, mobile wallets, Google Pay, Amazon Pay

Pricing: Starts at $9 per month, additional 2.9% + $0.30 per transaction

Final Words

Payment processing might not be the most exciting part of running an eCommerce store, but it’s essential to offering a seamless shopping experience that fosters customer loyalty and trust. By investing in a powerful eCommerce credit card processing solution like Stax Pay, you can ensure that your online store is ready to handle everything from chargebacks to recurring payments—and pay some of the lowest fees on the market.

Request a Quote


FAQs about eCommerce Credit Card Processing

Q: What is eCommerce credit card processing?

eCommerce credit card processing enables online businesses to accept and process credit and debit card payments from customers. It involves a series of steps that includes the customer initiating the transaction, the merchant encrypting the data and sending it to the payment processor, and the issuing bank approving or declining the transaction.

Q: Why is seamless eCommerce credit card processing important?

Seamless eCommerce credit card processing is vital to meet customer expectations for convenient and effective card transactions. It helps reduce cart abandonment, build customer loyalty, and handle fraud attempts effectively.

Q: How does eCommerce credit card processing work?

eCommerce credit card processing involves several steps. The customer initiates the transaction by presenting their card details at checkout. The merchant then encrypts this data and sends it to the payment processor, which then contacts the credit card network. If the necessary funds are available, the issuing bank approves the transaction and notifies the payment processor to transfer funds to the merchant’s acquiring bank.

Q: What are the various credit card processing fees involved?

Credit card processing fees can include monthly fees, PCI compliance fees, transaction fees, interchange fees, verification fees, and termination fees. The nature of these fees can vary depending on whether your business uses a merchant account or a third-party payment processor.

Q: How can merchants get started with eCommerce credit card processing?

To get started, merchants need to set up an account with a payment processor that can facilitate eCommerce transactions. This involves researching different processors to find the one that is right for their business. They also need to consider what other payment services they may need, integrate the system with their website, and perform test transactions to ensure the system is working correctly.

Q: Which companies are considered top eCommerce credit card processing providers?

Some of the leading players in the market include Stax, Stripe, and Shopify Payments. These companies offer various features like favorable pricing, seamless payment processing, customizable checkout flows, and wide acceptance of different credit cards.

Q: What is the role of a payment gateway in eCommerce credit card processing?

A payment gateway acts as a virtual card reader on an eCommerce platform, transferring card data from the point of sale to the payment processor. It plays a crucial role in ensuring the secure transmission of sensitive card data during the transaction process.

Q: What factors should be considered when choosing an eCommerce credit card processor?

When choosing a credit card processor, consider factors such as their pricing structure, the types of payment they support, their integration capabilities with the business tools you’re using, and the quality of their customer support.

Q: Why is it important to stay PCI compliant when accepting credit card payments?

Staying PCI compliant is important as it ensures businesses follow the necessary security standards when processing credit card transactions. This helps protect sensitive cardholder data and reduces the risk of data breaches and fraud.

Q: What are the risks associated with eCommerce credit card processing?

Risks associated with eCommerce credit card processing include payment fraud, data breaches, and the potential for higher transaction fees for online payments due to increased risk. It’s therefore crucial for businesses to implement robust security measures and choose a reliable payment processor.


 

The Real Deal About No Fee Credit Card Processing: What You Need to Know

It’s worth stating that hardly anything in business (and in life) really comes for free. When you’re presented with a “no cost” option, know that someone, somewhere is paying for it. Nevertheless, it’s pretty tough to turn away when we see a free service or solution and it’s only natural to want to learn more.

No fee credit card processing, sometimes known as free credit card processing has this kind of appeal. There are obviously costs attached to processing credit card transactions—including interchange fees and processor markups, among other things. But the “no fee” promise always gets the attention of merchants.

Small businesses, in particular, tend to gravitate to the idea of zero-cost processing. So, we want to unpack the concept. Free credit card processing is possible, but there is a lot that business owners should know before diving straight in.

What is Free Credit Card Processing?

The free credit card processing offer goes by a few different but similar names. Whether you see “no-fee,” “free,” or “zero-fee” processing, it’s all the same. And in the fine print, you will see that it’s all actually “surcharging.”

Credit card surcharges aren’t new or unique. Most major credit card processors offer a surcharging solution (where it’s legal to do so). What is more recent, though, is the packaging of this solution as “no-fee.”

Surcharging versus Zero Fee Credit Card Processing

Financial institutions don’t allow anyone to avoid interchange rates and fees, and no credit card processor can stay on the market long without any payments from their clients.

As such, all “free” credit card processing offers are really just surcharging the customer paying at the terminal.

Surcharging is a credit card processing solution that allows merchants to pass the credit card processing fees onto their customers. Almost every merchant services provider can set this up for their clients. Many simply don’t advertise it, for reasons we will discuss more below.

So is there a difference between surcharging and zero-fee credit card processing? Not really.

No fee credit card processing is simply a spin on the standard surcharging solution. What’s unique is that some companies specialize exclusively in this processing program, setting up their business entirely around “no-cost” or “free” processing. By doing this, they sell the solution as a whole package. In that package is the setup of surcharging, including programming terminals and notifying the card brands, such as Visa and Mastercard.

CardX is the surcharging arm of Stax, and the market leader in PCI compliant surcharging.

Learn More

How Do No-Fee Credit Card Payments Work?

When setting up a credit card processing solution, all terminals need to be programmed with certain rules to process the payments. For no-cost payment processing, the programming rule is set so that all credit card transactions get a markup to cover the credit card processing fees.

Across the US, there is a limit on how much can be added as a surcharge. Most states have a 4% limit. In Colorado, merchants can surcharge at 2% or pass along their full processing costs to the customer.

A fashion retailer, for example, may have a customer come in to buy some jeans. The jeans are $50. The cashier would scan the tag and tell the customer their payment options: cash or card? The customer says they want to use a credit card as their payment method. The cashier puts this in their system, and the total amount automatically comes up with an additional fee on top of the $50 to cover the credit card processing fees. Fifty dollars could end up somewhere between $51 (2%) and $52 (4%).

The result? The merchant avoids the fees, as those costs are passed automatically to the customer.

Let’s talk about the other credit card processing costs

Credit card transaction fees are but one of the costs incurred when processing credit card transactions. Some “no-fee” processing companies may allow you to bundle those additional fees into the customer’s surcharge. But many will still require additional monthly fees to cover services fees, PCI compliance, chargebacks, convenience fees, and more. If you need equipment, you’ll also have to pay for that.

And here’s a kicker: debit card transactions cannot be surcharged. In the whole “no-fee” solution, credit cards are the only payment method that merchants can pass the processing costs back to.

Legal Issues Around Zero-Fee Processing

Zero-fee processing comes with some controversy. There have been numerous legal cases for and against merchants vs. banks. Merchants argue that they should be able to pass fees onto the customer. Banks say that they shouldn’t.

The argument is this: if merchants can put the surcharge onto the cardholder, the cardholder is more likely to choose another payment method. Banks don’t love this idea. Merchants, naturally, want to be able to steer customers away from cards that come with high processing costs. With the prohibition of surcharging, the merchants’ ability to do this is limited.

At the time of publication, there are two states where surcharging is prohibited:

  • Connecticut
  • Massachusetts;

On top of this, there are a number of other states with anomalous surcharging rules still in place. Merchants should check the situation in these states before signing up with no-fee payment processors:

  • California;
  • Florida;
  • Kansas;
  • Maine;
  • New York; and
  • Texas

What to Look Out For in a Free Credit Card Processor

Surcharging offers great benefits to merchants that don’t have the sales volume or cash flow to cover the processing rates of interchange-plus pricing. Although there is a lot of caution around the no-fee pricing model, it’s well worth considering. Here’s what to look out for to find the best solution:

Pricing and credit card processing fees

No payment processing solution can be completely free. Although you’re passing the processing fees onto your customers, you’re probably still going to be charged additional fees. Read the fine print and look out for:

  • PCI compliance fees
  • Service fees
  • Convenience fees
  • Equipment fees.

Remember that some fees are inevitable (debit card processing fees, for example). Be careful to calculate exactly how those extra fees cost, as they may add up. Compare them with other payment processors to make sure you select the best deal.

Point of Sale (POS) system requirements

Part of the no-fee deal is often the setup of equipment, dealing with banks, and all the burdensome steps of setting up surcharging. This does save a lot of time, but it may get you stuck leasing equipment.

Beware of claims that promote pre-programmed equipment. Of course, it’s convenient to avoid reprogramming existing card readers, but pre-programmed equipment will likely be proprietary hardware. You could get stuck in a long-term contract, or you could have to buy new equipment if you wanted to change your provider.

Setting up credit card surcharging

To set up surcharging, the physical and virtual terminal has to be reprogrammed. Surcharges need to be listed as a separate line item on the customer’s receipt. The terminal can’t charge more than the maximum amount (2% or 4%), and it has to recognize a debit vs. credit card so that it only charges the surcharge on the credit cards.

Whether you go for surcharging with a traditional credit card payment processor or one that’s specifically offering no-fee, it will be the processor’s responsibility to program the terminal.

The no-fee companies may be appealing because they do all the other stuff you would usually have to do yourself.

All you have to do is put up signage in your store (or at the checkout of your eCommerce site) that lets customers know you charge a surcharge for credit card payments.

The main difference, then, between traditional companies and no-fee companies is the elimination of your paperwork burden.

Which Type of Business Works Well With No Fee Merchant Services?

No fee credit card processing isn’t for everyone. Here are the types of businesses that may benefit from this type of offering.

High-risk merchants

If you’re a high-risk merchant (i.e., are in a risky industry or have irregular sales volumes), you may need every bit of cash that comes in so that you can invest it back into your business. For these situations, no-fee processing can be a great solution.

Small business

Customers tend to understand costs being passed on when they’re dealing with independent small businesses. Small cafes, retailers, market sellers, and independent merchants are some common types of businesses that may not need extra merchant services. No-fee processing is perfect if the debit card transactions rates are reasonable.

On the other hand, the larger you get, the less forgiving your customers become. Adding surcharges may turn them towards competitors, and the rates from debit card transactions will probably end up too high to justify this type of solution.

Enterprise-level customers will have more need for software and added merchant services that help with business operations. These services wrapped into your card processing solution will often work out better value than just going with a no-fee credit card processor.

Enterprise-level business

If your business falls under the enterprise banner, surcharging is a viable option to counter the collective costs that come with processing a high volume of credit cards. As a result, there is a significant amount in fees that can be reduced, especially when it comes to business credit cards – which tend to carry some of the highest interchange rates.

Other Ways to Reduce Credit Card Fees

If you’re in a state where surcharging is illegal, or you don’t want to put the costs onto your customers, cash discount programs could be a great alternative solution. The method is simple. You can give customers the usual card payment options (tap, swipe or insert their EMV chip) or pay in cash for a discount on the total price. You could also offer ACH payments if you’re happy to wait for it to process.

Yes, you may want to add a little extra to your prices so that the discounts don’t harm your bottom line. But this is the normal practice for businesses trying to balance their credit card fees anyway.

Signing Up For Surcharging

If you’re an established business wanting to eliminate your credit card processing fees and get competitive pricing on everything else, get in contact with the team at Stax. We provide several solutions to give you the best of both worlds: fee-free credit card transactions, low-cost debit card transactions, and high-value merchant services.

Request a Quote


FAQs about Free Credit Card Processing

Q: What is free credit card processing?

No-fee or free credit card processing, also called zero percent fee processing or surcharging, is a solution where the processing fees of the credit card transactions are passed on to the customers.

Q: How does no fee credit card processing work?

With free credit card processing, payment terminals get programmed so that all transactions receive a markup to cover the processing fees. The markup rate varies by state in the US, with limits typically at 3%. The added fee automatically appears on top of the original cost, which gets passed on to the customer. Merchants generally pay a monthly membership fee for this capability.

Q: Is there a difference between surcharging and zero percent fee credit card processing?

There is no significant difference. No-fee credit card processing is simply a form of surcharging.

Q: Are there any additional costs involved in no fee credit card processing?

Yes. Despite the “no-fee” processing companies allowing you to transfer transaction fees to the customer, they may still require additional charges for service or membership fees, PCI compliance, chargebacks, convenience fees, and equipment.

Q: What limitations exist when implementing no fee credit card processing?

Legal issues exist around zero-fee processing and the practice of surcharging is prohibited or carries strict regulations in certain states. Also, debit card transactions cannot be surcharged which is a limitation to this form of processing.

Q: What type of business benefits from no-fee merchant services?

Businesses that may benefit from this type of offering include high-risk merchants with irregular sales volumes, individual small businesses like cafes, retailers and market sellers, as well as enterprise-level businesses dealing with high volumes of credit card transactions.

Q: Are there any alternatives to reduce credit card fees?

Alternatives include cash discount programs where customers get discounts on paying in cash, or offering ACH (Automated Clearing House) payments. For established businesses, negotiating for competitive pricing or opting for low-cost debit card transactions along with high-value merchant services can also be considered.

Q: Where should I sign up for surcharging?

It is recommended to contact service providers like Stax and others who specialize in providing various solutions to reduce your credit card processing fees.

Q: What are the potential downsides of no fee credit card processing?

The larger a business gets, the less forgiving customers may become. Adding surcharges after years of no surcharges may make them reconsider competitors. Additionally, the rates from debit card transactions might end up too high to justify this type of solution for larger businesses who take a large quantity of debit cards.. Also, getting tied up to proprietary hardware due to pre-programmed equipment or contracts could be a downside.

Q: How can one set up credit card surcharging?

For setting up surcharging, both physical and virtual terminals need to be reprogrammed. Surcharges need to be listed as a separate item on the customer’s receipt, and it is best practice to notify customers prior to being charged this cost. The programmed terminal should not charge beyond the maximum amount, and it needs to differentiate between a debit and a credit card to apply the surcharge solely on credit card transactions. Reach out to our team to learn about your options.


 

Chargebacks: 7 Issues to Watch Out for and Avoid

Chargebacks are costly and frustrating, for parties on both sides of the transaction. After all, no one wants to deal with disputed charges and chargeback fees. But they do happen.

Any customer today can request a chargeback from their computer or over the phone in the event of an unrecognized charge. Designed to protect consumers, chargebacks give some assurance that their transactions are protected. Unfortunately, merchants have little control to stop chargebacks from taking place.

While most chargeback requests or disputed charges are valid, bad actors do exist, and businesses need to be vigilant of how chargebacks commonly occur and what to do to avoid them.

Learn More

7 Most Common Reasons for Chargebacks

Chargeback claims range from intentionally fraudulent to innocent human error. Understanding the most common reasons for disputed charges allows businesses to take preventative action. Not all chargebacks will be avoidable, but they can be significantly reduced with the right precautions in place.

1. Friendly Fraud

Friendly fraud takes place when a customer makes a legitimate purchase using their credit card, only to dispute it later on. While it can sometimes be unintended (due to genuine confusion on the part of the consumer), friendly fraud is more often than not an intentional manipulation of the chargeback system.

There are many scenarios that could qualify as friendly fraud. The most common is an intentional action from the consumer to lie and cheat the system, by purchasing a product and then filing a chargeback to try and get the item for free. In many instances, those who engage in friendly fraud may do it under the pretense of committing an honest mistake, hence the term “friendly.”

In the grey area, there may be customers that are unhappy with the service or product, developing a false belief that the transaction was illegitimate and reporting it as fraudulent.

How to avoid friendly fraud

Unfortunately, friendly fraud is tough to prevent.  As a business, it’s hard for you to know consumers’ intentions, and those who set out to intentionally manipulate the system are going to do so. The best defense is the offense.

Merchants in a friendly fraud situation should blacklist the customer and dispute the chargeback through the proper channels. Reporting the customer to a blacklist with their card information, billing address, and IP will help prevent them from doing this again. Merchants can then supply evidence to the bank to show the illegitimacy of the chargeback in order to get the chargeback reversed.

2. Misaligned Product Expectations

Chargebacks can also take place because of a misalignment of expectations regarding the purchased product or service.

This happens when a customer makes a legitimate purchase but files a chargeback because the product they received fails to meet their expectations.

How to avoid misaligned product expectations

Customers in this situation typically make a dispute because they are disgruntled and feel wronged in the transaction. The best way to avoid this is to take preventative measures that ensure your advertising and product descriptions are clear.

Expectation management is important whether selling products or services in person or online. Overselling a product or service verbally or on paper/online can lead to a mismatch of product expectations, which can result in chargeback requests.

Let’s say you’re an online D2C brand selling facial moisturizers designed to reduce wrinkles. Rather than touting your product as a miracle cure for everyone, make it abundantly clear who the product is for—and who it isn’t for. Is it made for people over 40? Is it best for those with oily skin? It also helps to set expectations for when people can expect results. Will they see results in a month? Three months? A year of consistent use? Iron out these details and communicate them with your customers.

All in all—clear advertising claims, straightforward product descriptions, and detailed guides are all helpful to ensure customers understand what it is they are purchasing.

3. Merchant Error

Many scenarios can fall within the realm of merchant error. Issues with fulfillment, delivery, policies, and product quality can all fall under this category. Under these situations, no one is committing fraud, but merchants do have both the responsibility and ability to reduce these scenarios.

How to avoid merchant error

There is a lot that can be done to minimize mistakes that may result in a chargeback.

Start by analyzing the chargebacks that have occurred. Review the chargeback codes and understand if the customers believe the product did not match its promise or whether there are delivery or policy issues.

Some of the most common ones include:

  • Did not receive merchandise. If this is a common problem, you may want to reevaluate your order fulfillment practices.
  • Product not as described / defective. Enforcing strict quality control is a must to prevent this issue.
  • Customer service issues. When customers don’t get the help they need from your support team, they may resort to disputing a purchase or charge.

The best course of action will depend on the situations you commonly face in your company.

In any case, placing tighter controls across the business can help to make sure that products go out in quality condition, leaving fewer gaps for error.

Beyond process and quality control, customer service is the best barrier to chargebacks. The majority of shoppers will contact customer service before they dispute a charge. Strong customer service departments and training of customer support employees can ensure that errors are picked up and resolved before a chargeback happens.

4. Unclear Return and Refund Policies

Unclear return and refund policies can also lead to chargebacks. In these cases, a customer may be unaware that returns or refunds are not possible or the time available to request one is shorter than expected.

During such situations, customers who are unable to return an item may end up disputing the charge so they can get their money back. In the case of service providers, clients may dispute a charge if they’re unhappy or are unable to use the service rendered. Maybe you provided graphic design services and the client decided not to use your work. In this scenario, they may decide to dispute the charge.

How to avoid unclear return and refund policies

Strict returns and refund policies are not very attractive, and as such, merchants may not want to highlight them before customers make a purchase. But clear terms are key to reducing chargebacks.

Customers need to know their responsibilities when returning or refunding a product. Clarify the amount of time they have to return an item or the limitations of the policy (e.g., the item cannot be used, worn, etc.,).

For services, you may want to add a clause stating that clients may not request a refund if the service has already been provided.

(Pro tip: You can soften this policy by giving clients the ability to request do-overs instead of refunds.)

When all these things are clear-cut, shoppers are less likely to dispute the charge.

Put it simply, issues around returns and refunds can be reduced by providing clear, easily accessible terms upfront. This helps customers make better-informed purchase decisions and act according to the company’s return and refund policy.

5. Delivery Issues

Online shopping is a normal part of life for many customers across the United States. By 2023 eCommerce revenue is expected to reach $740 billion. People are more comfortable with online shopping than they’ve ever been, but delivery issues make customers uneasy and quick to worry that the items won’t arrive.

Delivery issues, such as delays or problems with parcel tracking, may spike customers’ anxiety. With news of scams all over the internet, delivery problems—perceived or real—can make customers trigger happy and quick to dispute charges at the slightest sign of delay.

How to avoid delivery issues

Delivery risks come with the territory of running an online business. Once a product is with a courier, it’s often out of the merchant’s control. Delays can and will happen on occasion.

Merchants have to just control what they can and make transparency a priority. Quick action to process and ship orders at the merchant level will help get them out in a timely manner, and email updates at each stage of the process will keep customers calm.

Regular delivery communication—i.e., letting customers know when the order is received, when it has been handed off to the courier and how to track it—will minimize chargebacks related to delivery issues.

6. Defective Products

Defective products can result from manufacturing, packing, or issues with delivery. Sometimes products don’t work, they’re faulty, or they get damaged somewhere in the process.

Most merchants will forecast a level of chargebacks related to product defects. Like delivery issues, these problems are bound to come up on occasion. But they can still be minimized to a point.

How to avoid defective products

Quality control is an important step that merchants should take at various stages in acquiring and selling products. If ordered from a third-party vendor, products should be checked as thoroughly as possible before accepting them.

Once in the merchant’s possession, practices should be put in place to store products in appropriate conditions. And finally, you and your staff must stay on top of product care and maintenance to ensure it stays in good condition before leaving your store.

In cases where defective products slip through quality control efforts, strong customer service and returns policies can help to encourage customers to send the product back and receive a new one.

7. Canceled Recurring Transactions

Misunderstandings about canceled recurring transactions are very common with the growth of subscription-based services in the market. In some cases, merchants may make mistakes and charge a customer after they have canceled their agreement. Sometimes, the customer signs up for recurring payments without realizing it. And quite often, the customer just forgot to cancel, realized after the charge, and wanted to get out of it.

How to avoid issues with canceled recurring transactions

As most subscription models are automatic, automated processes can be put in place to control and minimize cancelation issues. The best method is communication. Sending out automatic emails a few days prior to processing the recurring charge allows the customer to:

  • Remember the subscription, so they don’t find it odd when it comes up on the statement
  • Realize that there has been an issue with their cancelation
  • Remember to cancel

It’s also important to educate customers on how to cancel their subscriptions. Showing people how to cancel may seem like bad business, but chargebacks are worse, and simple email communication can go a long way in reducing these occurrences.

Final Words

Chargebacks are most often the result of concerned customers worried they have been taken advantage of by dishonest merchants. Strong customer relationships are the best way to build confidence and minimize chargeback trouble. Offer great transparency on terms and product descriptions, keep a well-trained customer service department and communicate at every stage of the delivery process.

If you’re facing more chargebacks than you believe is reasonable, look at your chargeback code, identify your primary issues and work through the processes of those areas to create an airtight plan for customer service and communication.

And in the case of bad actors, Stax helps minimize chargeback fraud by constantly monitoring your accounts and offering robust security tools.

Request a Quote

The Best Mobile Credit Card Readers for Small Businesses

Going cashless is becoming the norm for consumers. People are not carrying cash like they used to. And the evolution of mobile credit card processing technology means consumers have more choices when it comes to how they pay. So what does that mean for small businesses, especially businesses on the go?

Mobile credit card readers are the perfect solution for on-the-go payments. You can accept both EMV and magstripe cards, while some readers also accept NFC apps like iOS’ Apple Pay for contactless payments. Whether you’re using a mobile card reader with your phone or a terminal, mobile readers for small businesses can streamline the entire payment process. Here are some factors to consider while looking for a mobile reader:

Is Your Point of Sale Mobile?

To utilize a mobile credit card reader, your POS system must be able to function on a mobile device. These days, there are many options for mobile POSs, but whether you’re completely functioning on iPads everywhere or a desktop POS in store and an android phone on the go, you’ll need a mobile device to use a mobile card reader. 

Can You Accept EMV and NFC?

A good mobile credit card reader should have the ability to accept both EMV chip cards and NFC credit card payments. This means in addition to a classic magstripe reader, the reader needs to have dip or tap functionality. Customers have more options when it comes to how they pay. Mobile payments like Google Pay, Samsung Pay, and Apple Pay have grown in popularity recently. 26% of people worldwide now use mobile wallet payments (in addition to using classic options like debit cards or magnetic stripe Visas, Mastercards, etc). Accepting payment besides cash increases your business’ cash flow. Mobile swipers like the Chipper 2X BT connect via Bluetooth, so you can accept and manage payments from a mobilen app. These readers are great if you often work outside of a typical brick-and-mortar store.

RELATED: An Ultimate Breakdown of Credit Card Readers

Are Mobile Credit Card Readers Reliable?

Mobile readers need to be secure and reliable. All businesses that handle cardholder data must be PCI compliant and your mobile payments need to be compliant as well. Non-compliance results in fines anywhere starting from $5,000 up to $100,000 a month. If you use a mobile payment app with your mobile credit card reader, it must be PCI compliant. Stax uses tokenization and encryption all the way to settlement. Whether you key-in information or use a card reader, your data is secure.

Can You Connect Over 5G and WiFi?

Poor connectivity and technical issues slow down check out and cause long lines. Connecting your reader multiple ways can be an insurance policy against those issues. The Dejavoo Z1 and Z9 are both wireless, so you can take them on the go and connect over WiFi or 5G to prevent long lines from forming. They’re a perfect payment processing solution for busy times of day at stores, or if you have a pop-up stand event.

Are There Extra Features Without Extra Costs?

Extra features on your mobile reader shouldn’t cost an arm and a leg while giving flexibility to how you do business. The Dejavoo Z1 reader can email customers their receipt, while the Dejavoo Z9 offers a built-in receipt printer. The Chipper mobile swipers connect via Bluetooth for mobile payments. A good mobile reader should offer useful features to make mobile payments easier.

Choosing the best mobile credit card readers for small businesses boils down to capabilities and functionality. Along with those features, your credit card processor must support mobile payments.

Some other considerations as you consider mobile card readers:

  • What transaction fees , processing fees, or monthly fees does the merchant services provider you’re looking at charge?
  • Does it work with Android devices or just Apple ones, like iPhone?
  • Does it integrate with your eCommerce software (like Shopify)?

Stax’s mobile payment processing solutions are fully integrated. Business owners can track, manage, and accept in-person and online payments from wherever you are. And as a Level 1 PCI compliant service provider, with the highest level of compliance available, you can be confident that your data is secure. Stax’ transparent pricing means you don’t pay extra to process payments—without a contract. And our unbeatable customer support will be there to ensure your success.

Also Check Out: Ways to Save on Credit Card Reader Machines

Ready to see what Stax mobile solutions can do for you? Contact us today.

Request a Quote

Square Card Reader Review: How It Works and What Merchants are Saying

Credit card processing is a necessary component of doing business, and finding a good merchant account provider with reasonable costs, accessibility, and support is crucial.

Having a cost-effective and reliable way to accept chip cards and contactless payments is essential given that 80% of shoppers use eWallets and credit cards as their preferred method of payment.

You need a secure way to get banking information from your customer’s credit or debit card to process payments, and credit card readers simplify that process. Your customer simply swipes or dips their card, and the device will extract the relevant banking information to be transmitted to your payment processor, and back to you to finish the sale.

There are multiple providers that offer card readers and other payment processing services, but this article will focus on Square — specifically the Square card reader.

You will discover how it works and the applicable Square card reader fees.

What is the Square Card Reader?

Square was the first payment processing company to introduce card readers that let cell phones accept card readers. It is for good reason that the company’s highly portable card readers are found at small businesses across the country.

The Square Reader for Magstripe is free and you can either use it with a headphone jack for Android or a Lightning connector for iPhone. When plugged into your phone, it connects with the Square Point of Sale (POS) app to start accepting swipe cards.

However, the Square Reader for Magstripe has limited protection from fraudulent swipe card purchases and it’s only suitable when you process payments sporadically.

You are better off with the Square Reader for Contactless and Chip. It is compatible with EMV-enabled cards, and accepts both chip cards and tap-to-pay cards with an embedded NFC chip. NFC support includes Apple Pay, Google Pay, Samsung Pay, and others.

The Square Reader for Contactless and Chip is competitively priced at just $49, and the company offers a 30-day money-back guarantee on all hardware purchases.

It is a pretty versatile card reader. Not only does it support NFC cards, there is also a slot for chip and PIN cards to be inserted for physical transactions. You can either use it as a stand-alone mobile processing device or as an extension of your iPad Square Stand.

A key limitation of the Square Reader for Contactless and Chip is that it does not support magstripe credit card payments. This is not a big issue since EMV chip cards are now the standard method of accepting credit and debit card payments across the country.  If you really need a magstripe card to take payments, you can get the Square Reader for Magstripe for free.

Square Card Reader Fees

Square uses a flat-rate pricing structure where you pay a set percentage plus a few cents for each transaction, regardless of the type of credit card used. Rates will vary depending on whether it is an in-person transaction or a keyed-in transaction. In-person transactions have much lower fees than keyed-in transactions.

Your transaction costs will really be determined by the type of Square POS app you are using:

  • Square POS: 2.6% + $0.10 per swipe, dip, or tap
  • Square for Restaurants: 6% + $0.10 per swipe, dip or tap
  • Square for Retail: 2.6% + $0.10 per swipe or dip, and tap (3.5% + $0.15 for keyed-in transactions)
  • Square Appointments For Teams: 2.5% + $0.10 per swipe, dip, or tap
  • Square Appointments for Individuals: 2.6% + $0.10 per swipe, dip, or tap (3.5% + $0.15 for keyed-in or Card on File transactions)

Square’s rates are comparable to that of other payment processors including PayPal and Stripe, but businesses with a high volume of transactions prefer a payment processor that offers a lower interchange-plus pricing and lower credit card processing fees. Also, Square doesn’t offer discounts for high-volume businesses except they have annual sales of $250,000 or more and average transactions over $15.

The company doesn’t have any chargeback fees, and rates are low enough to make it very attractive for low-volume and new businesses.

Learn More

How to Get a Square Card Reader

The straightforward way to get your Square reader is to order it from the company’s website. Follow the few steps below and you get your card reader delivered to your doorstep within five to seven days:

Step 1: Create your Square account. Hit the get started button on the company’s website, add your email, password, and follow the prompts to agree to the e-sign consent form and privacy policy.

Step 2: Answer questions about your business. Here, Square will ask a few questions about the nature of your business (brick-and-mortar, online, etc.), and how you plan to receive payments. They will also ask for your personal and business information including your Taxpayer Identification Number (TIN), bank account information, social security number, and more.

Step 3: Identity verification. The company will ask for your address to verify who you are. The verification process will only take a few seconds.

Step 4: Choose your Square Card Reader. Select from either the Square Reader for Contactless and Chip or the Square Reader for Magstripe. You must also choose either the headset jack (Android) or Lightning connector (iPhone). You can opt to wait for five business days to receive the devices, or if you can’t wait that long, get the card reader from large retailers like Amazon, Walmart, and Best Buy.

Step 5: Set up your credit card reader. Plug your card reader into your mobile device and open the Square POS app on your phone.

Go to the settings menu on the app, scroll to “Card Readers”, and press the “Connect a Card Reader” tab. The app will ask what kind of Square reader you are using, select the relevant reader, and follow the on-screen instructions to pair your reader to the app.

Press and hold the power button until you see the four lights flash orange to approve the pairing request. Then, follow the prompts on the screen of the card reader to approve the request.

After a successful pairing, the app will download all relevant updates, and notify you that the Square reader is ready for use.

You can now start collecting payments from customers.  You swipe the card straight through in a swift, smooth motion, and the reader will capture your customer’s information.

Square says the card reader is designed for all-day use, but some users have complained about the reader’s battery life, and you should consider buying a charging dock.

Also Check Out: The Best Mobile Credit Card Readers for Small Businesses

Using a Square Credit Card Reader in Your Store

Like we mentioned above, the Square Point of Sale app is crucial to unlocking your card reader. You can download it via the Apple (iOS) and Google app stores.

The app and the reader work well for most small businesses and the only notable issue is that the Square Reader for Contactless and Chip doesn’t work offline. To process offline payments, you will need the Square magstripe reader.

The Square card reader will work with all the other Square POS apps including Square for Retail, Square for Restaurants, and Square for Appointments.

The Square app offers numerous features including:

  • Product Library: add items, item categories, photos, prices, barcodes, and more to individual products.
  • Payment Methods: Square accepts Mastercard, Visa, American Express, and more. Apart from physical cards, you can also type in card details manually. You can send invoices and print receipts to be sent via email or text message.
  • Payment Protection: fraud protection services are built-in and all payment information is encrypted. The company also automatically takes care of PCI compliance requirements for you.
  • Offline Mode: the Square POS app works offline and transactions will be pending for 72 hours to ensure the payment will be processed as soon as you are online.
  • Reporting: the Square dashboard lets you view all transactions and payouts at a glance. You can generate reports and payment analytics on best-selling products, average customer spend, and more.

Customer Complaints

Many users are happy with Square’s card readers but they aren’t perfect, and here are some issues we have discovered:

Funding holds and terminated accounts. The bulk of customer complaints is about having their funds placed on hold suddenly or even having their accounts deactivated without any notice.  No one wants to have their cash tied up without notice or lose their accounts with little to no warning.

Faulty Bluetooth connection with mobile devices. Some customers reported problems with maintaining the Bluetooth connection between the card reader and their mobile device.

Flawed customer support. Square’s customer support can be difficult to reach to the frustration of many users. The company focuses on offering a good enough product at a low cost and this may explain the relatively poor quality of its customer service.

Should You Get the Square Card Reader?

Square’s card readers are excellent for new or micro-businesses that don’t process a lot of credit cards. They work seamlessly with its free POS app, and are available for free or at a relatively low price point. Also, the flat-rate pricing model for payment processing makes it an acceptable option for small businesses that process low volumes of transactions.

However, it is not the only processing option out there, and other merchant providers like Stax can offer you a more affordable service when you outgrow the relative advantages of Square’s pricing model.

Stax’s pricing model lets you pay a monthly fee to access wholesale interchange rates. Businesses that process large volumes of transactions will find the monthly subscription model attractive since it can provide lower per-transaction costs.

If you’d like to learn more about our payment processing solutions (including hardware like card readers) fill out the form below or contact the Stax team directly.

Request a Quote


FAQs about Square Card Reader

Q: What is the Square Card Reader?

The Square Card Reader is a device designed by Square, the payment processing company, to enable businesses to accept card payments. The company provides two types of card readers: The Square Reader for Magstripe and the Square Reader for Contactless and Chip. The former is suitable for businesses that sporadically process payments, while the latter accepts both chip cards and tap-to-pay cards with an embedded NFC chip, which includes Apple Pay, Google Pay, Samsung Pay, and others.

Q: How does the Square Card Reader work?

The Square Card Reader works by connecting it to your mobile device via a headphone jack for Android or a Lightning connector for iPhone. When connected, it interacts with the Square Point of Sale (POS) app to start accepting card payments. The customer simply swipes or dips their card, and the reader extracts the relevant banking information, which is then transmitted to your payment processor and back to you to complete the sale.

Q: What are the Square Card Reader fees?

Square uses a flat-rate pricing structure, where businesses pay a set percentage plus a few cents for each transaction, regardless of the type of credit card used. The rates vary depending on whether it’s an in-person transaction or a keyed-in transaction, and also the type of Square POS app you are using. For example, with the standard Square POS app, you pay 2.6% + $0.10 per swipe, dip, or tap.

Q: How can I get a Square Card Reader?

You can order a Square Card Reader directly from the company’s website. After creating your Square account and providing the necessary information about your business, you can select the type of reader you want, either the Square Reader for Contactless and Chip or the Square Reader for Magstripe. You can also choose either the headset jack (Android) or Lightning connector (iPhone).

Q: What are some common complaints about the Square Card Reader?

Some users have reported issues such as sudden fund holds or account deactivation, faulty Bluetooth connection, and inadequate customer support. However, it’s important to note that many users are satisfied with Square’s card readers and the issues reported do not represent the experience of all users.

Q: Is the Square Card Reader suitable for all businesses?

Square’s card readers are excellent for new or micro-businesses that don’t process a lot of credit cards. The flat-rate pricing model for payment processing makes it an acceptable option for small businesses that process low volumes of transactions. However, businesses with a high volume of transactions may prefer a payment processor that offers a lower interchange-plus pricing and lower credit card processing fees, such as Stax.

Q: Can I use the Square Card Reader offline?

The Square Reader for Contactless and Chip does not work offline. To process offline payments, you will need the Square Magstripe Reader, which works with the Square POS app offline and transactions will be pending for 72 hours to ensure the payment will be processed as soon as you are online.

Q: What features does the Square POS app offer?

The Square POS app offers features such as a product library to add items, payment methods including Mastercard, Visa, American Express, and more, payment protection with built-in fraud protection services, and reporting capabilities to view all transactions and payouts at a glance. It also provides payment analytics on best-selling products, average customer spend, and more.


 

Vantiv Worldpay Merchant Services by FIS

Originally launched in 1971, Worldpay Inc. operated as a payment processing firm for financial institutions and financial service providers. After nearly four decades of maintaining its separate brand among other financial institutions, the company was acquired by Fidelity National Information Services (FIS) in June 2019. Following the acquisition, Worldpay Inc. was merged into FIS where its infrastructure continues to serve the financial services sector.

The Vantiv Worldpay merger adds more revenue sources to Fidelity National Information Services (FIS), a company that is present on the New York Stock Exchange. As a company that is listed on the New York Stock Exchange, FIS must make the right decisions in regard to increasing revenue through acquisitions and customer acquisition.

Over the course of its operations, the Worldpay Inc. brand went through a few rebranding decisions. While Worldpay Inc. services more or less remained the same, the change of name did have an effect on its public or marketing image throughout these years.

If you know Worldpay Inc. by the name of Vantiv or Fifth Third Processing Solutions, it’s important to understand the company’s history in the financial services sector before you learn more about its active solutions.

Worldpay (Formerly Vantiv) Branding Changes

The payment processing firm was first established in Cincinnati, Ohio as Midwest Payment Systems (MPS), with the company sticking to the name for over three decades.

In 2003, the firm found a new name in the form of Fifth Third Processing Solutions. It was a direct reference to Fifth Third Bank, which was its parent organization at the time.

But that name didn’t stay for long and changed to Vantiv in 2011. After operating under that label for a period of nearly 7 years until 2018, Vantiv acquired a U.K. payment processing firm Worldpay. After the Vantiv and Worldpay merger, Vantiv assumed the title of its newly acquired asset, with Worldpay merchant services remaining the firm’s final branding decision until its merger with FIS.

At the time of writing, the Worldpay brand is fully absorbed into FIS. All the services that the company once used to provide through its U.S. and U.K. offices are now offered under the FIS banner in addition to other solutions. This is good news for those financial services providers who relied on Worldpay credit card processing to conduct their operations and serve their clients.

The larger firm would embrace the results of the leaders of Worldpay like Charles Drucker and Philip Jansen and provide value to Worldpay merchants. It would continue to operate Vantiv merchant services as well as Vantiv credit card processing to bring about more value to the processing ecosystem.

Let’s learn more about the Worldpay brand and how it has progressed after the Worldpay acquisition.

Vantiv Worldpay Payment Processing Costs and Other Fees

Like many payment processors, Worldpay doesn’t publicly disclose its fees. According to Merchant Maverick, the company typically uses a tiered pricing structure when setting its rates, though you may be able to negotiate an interchange-plus pricing structure.
If you’re looking for ballpark figures, research from Verisave uncovered the following rates:

  • Signature debit cards: 0.99% + $0.20
  • Standard credit cards: 1.99% + $0.20
  • Rewards credit cards: 2.60% + $0.20

Corporate, travel cards, and keyed-in transactions: 3.30% + $0.20

It’s also important to note that Worldpay offers a three-year standard contract, and you’ll be subjected to an early termination fee if you choose to cancel early. Worldpay’s customer agreement (as cited by Merchant Maverick) lists the following fees when you opt out of the contract:

  • $295.00 per location if such Early Termination occurs on or prior to the first anniversary of the Agreement,
  • $195.00 per location if such Early Termination occurs after the first anniversary of the Agreement and before the second anniversary of the Agreement, or
  • $95.00 per location if such Early Termination occurs on or after the second anniversary of the Agreement and before the third anniversary of the Agreement

What Kind of Services Does Worldpay by FIS Provide?

With its focus on merchant services, Worldpay by FIS has become one of the flagship divisions of the financial services firm. These merchant services include both in-person and digital payments that offer access to no less than 126 currencies.

It’s because of this approach to the deployment and design of these services that Worldpay by FIS processes a whopping 110 million transactions on a regular day. It also does so with a vast network that’s spread across 146 countries.

The solution has become known for its robust operations for large-scale entities, where its payment services are used by 80 percent of the world’s most significant retail, airline, and internet firms.

This is all possible due to the wide range of solutions offered by the firm, which are spread across brick-and-mortar stores to digital businesses alike.

This includes but is not limited to the following solutions.

  • Traditional and Wireless POS Terminal Services.
  • Mobile Payment Services.
  • Internet Payment Gateways.
  • Virtual Terminals.
  • eCommerce Payment Solutions
  • Digital Wallet Solutions.
  • Multichannel Payment Options.
  • B2B Payment Solutions.

Through these services, Worldpay by FIS makes it easier for different entities to access its payment system and find an optimal fit for their needs. This makes the company stand out in terms of usability by large-scale enterprises as well as with small and medium-sized businesses (SMBs).

Learn More

What Kind of Product Features and Functionalities Does Worldpay by FIS Brings to the Table?

Worldpay by FIS mainly stands apart due to its vast network and brand recognition. But it does bring many other features to its users that make it a beneficial merchant services provider.

These features and functionalities include but are not limited to the following aspects:

POS Integrations and Devices

Worldpay by FIS offers a slew of POS integrations and devices. Through the company’s network, you can connect to over 1,000 POS systems. If you want a multi-payment solution in one device, you can also go with the company’s SmartPay series which bundles various services into a single piece of equipment.

Whether you just need an in-store system or want something that also works wirelessly, this helps you find a solution that caters to your needs. At the same time, it allows you to accept all major payment types and cards, including tap-to-pay services, MasterCard, and Visa. This provides you with extensive flexibility in selecting a POS system that works for your brick-and-mortar or hybrid business. In case some specific features are needed, it can be covered by software product development.

Faster Cash Flow

Worldpay by FIS also provides you with faster cash flow, where you can get your card payments deposited to your accounts within a few hours of a transaction. This cuts back the typical time for completing such transactions, which usually spans a few days.

The Titled FastAccess Funding feature is one of the most prominent advantages of the company. The service is also available on business days, such as the holiday season. With funds transfer completed in as quickly as 30 minutes, this also makes it a sought-after benefit for many organizations who want to minimize the time between their sales and the actual receipt of their amount.

Ability to Scale

Worldpay by FIS also comes with the certain advantage of offering ideal scalability. With various products in its tow, the company allows you to switch between different traditional and digital solutions according to your growing needs. This lets you expand your business without worrying about its infrastructural requirements.

From virtual terminals such as Omniflex to devices that turn your phone into a POS terminal, you can easily find services that can fit your growing business needs. While the pricing for these solutions can vary, they can often accommodate your budgetary needs or at least fulfill your expectations regarding value for money.

Digital Payments and Mobile Wallets

Apart from accepting payment solutions across POS terminals, virtual terminals, and internet payment gateways, Worldpay by FIS also allows you to process transactions through digital wallets and mobile payments. Depending on your needs, you can integrate these solutions into your payment system to provide customers with an easy way to complete their transactions.

This works wonders to bring next-generation payment options to your customers, especially if you want your company to move forward with a futuristic approach to its operations. It is also an ideal payment method for online businesses.

Optimal Payment Security Solutions

Being a recognized brand, Worldpay by FIS excels at payment security solutions. Through full compliance with the Payment Card Industry (PCI) Data Security Standard, the company ensures that your customers’ card data remains safe at all times. With it, it also offers fraud protection and risk management for relevant payment mechanisms.

Worldpay by FIS also offers services such as Omnishield Assure that decrease your fraud liability. It also delivers point-to-point encryption that ensures your customers’ card data is protected through optimal security. This provides you with the peace of mind you need while moving forward with electronic payments.

Worldpay APIs

Worldpay has a number of API solutions for developers that want to create custom integrations. There’s Access Worldpay, an integration that lets you leverage the company’s suite of RESTful APIs so you can accept and manage online payments globally.

Worldpay also has an Integrated Payment Server, which is an API that can support numerous devices and operating systems for point-of-sale payments.

FIS Offers a Slew of Services to Its Clients

Established in 1968, FIS is a financial services company that completed its acquisition and merger of Worldpay Group PLC in the sector’s biggest deal. That $35 billion transaction brought FIS front and center in the financial sector and made it the largest firm in the global payments industry. It is present in many countries as a payments provider processing large payment volumes through services such as its many commerce channels. In case some specific features are needed, it can be covered by software product development.
Some of the most prominent services offered by FIS include but are not limited to:

  • Point of Sale (POS) Network.
  • Digital Payments Network.
  • Global Payments Network.
  • Back Office Solutions.
  • Legal and Outreach Solutions.
  • Credit and Collection Solutions.
  • Treasury Solutions.
  • Financial Software Solutions.

Through a network of ISOs, FIS serves large-scale and enterprise businesses alike. With the adaptability of its offered solutions, the company has become integral to the operations of businesses all over the world. Stax is one of FIS’s largest distributors providing third-party payment processing solutions to small and medium-sized businesses.

FIS is a Financial Industry Behemoth

With over 20,000 clients, 75 billion processed transactions, and $9 trillion worth of annual global transactions, FIS has cemented its reputation in the financial services industry.
The company has achieved this feat through multiple business divisions that cater to a distinct sector in the financial industry.
These departments include:

  • Merchant Solutions.
  • Banking Solutions
  • Capital Market Solutions.
  • Corporate Solutions.

All of these divisions hold an important aspect in the financial services sector. However, when it comes to using Worldpay’s infrastructure and its former brand name, FIS utilizes those properties most prominently through its merchant services solutions distributed through ISOs. Stax handles the day-to-day activities of a merchant account including setting up the account, providing the payment technology and support, and assisting with the unique processing needs of the merchant.

The Company Provides Excellent Financial Services to Those Who Can Afford It

Vantiv Worldpay by FIS offers its quotes upon request, which means that they can depend upon your business’s specific needs and overall requirements. However, the company provides its solutions through higher price points than many other providers.

This pricing is justified due in part to its brand name and expansive outreach. But it can go beyond the affordability of small startups or sole proprietorships that are just taking off with their services. If you can look beyond this particular aspect, Worldpay by FIS can prove to be the perfect fit for you.

Stax is an ISO partnered with Worldpay and is proud to deliver the best technology solutions for every business type including incredible savings, and real customer support for every member.

Request a Quote


Quick FAQs about Worldpay Merchant Services

Q: What is Vantiv Worldpay Merchant Services by FIS?

Vantiv Worldpay Merchant Services by FIS is a payment processing service that provides solutions for financial institutions and financial service providers. It is a division of Fidelity National Information Services (FIS) after the acquisition and merger of Worldpay Inc., a company that has gone through a series of branding changes since 1971.

Q: What kind of services does Worldpay by FIS provide?

Worldpay by FIS offers a range of merchant services for both in-person and digital payments, supporting over 126 currencies. Their solutions include Traditional and Wireless POS Terminal Services, Mobile Payment Services, Internet Payment Gateways, Virtual Terminals, eCommerce Payment Solutions, Digital Wallet Solutions, Multichannel Payment Options, and B2B Payment Solutions.

Q: What are the payment processing costs and other fees associated with Worldpay by FIS?

Worldpay does not publicly disclose its fees. However, according to research from Verisave, the rates are as follows:

  • Signature debit cards: 0.99% + $0.20
  • Standard credit cards: 1.99% + $0.20
  • Rewards credit cards: 2.60% + $0.20
  • Corporate, travel cards, and keyed-in transactions: 3.30% + $0.20

Additionally, Worldpay offers a three-year standard contract and charges early termination fees if you choose to cancel early.

Q: How does Worldpay by FIS ensure payment security?

Worldpay by FIS is fully compliant with the Payment Card Industry (PCI) Data Security Standard to ensure the safety of customer card data. They also offer fraud protection, risk management, Omnishield Assure to decrease fraud liability, and point-to-point encryption for optimal security.

Q: What kind of product features and functionalities does Worldpay by FIS bring to the table?

Worldpay by FIS has various features and functionalities such as POS Integrations and Devices, Faster Cash Flow through their FastAccess Funding feature, the Ability to Scale with different products and solutions, Digital Payments and Mobile Wallets support, and Worldpay APIs for developers to create custom integrations.

Q: What are some of the other services offered by FIS?

FIS, a global financial services company, offers a wide range of services such as Point of Sale (POS) Network, Digital Payments Network, Global Payments Network, Back Office Solutions, Legal and Outreach Solutions, Credit and Collection Solutions, Treasury Solutions, and Financial Software Solutions.

Q: What is the scope and division of FIS in the financial services sector?

FIS serves over 20,000 clients and processes 75 billion transactions worth $9 trillion in annual global transactions. They have various departments including Merchant Solutions, Banking Solutions, Capital Market Solutions, and Corporate Solutions to cover different aspects of the financial services sector.

Q: How does the pricing for Vantiv Worldpay by FIS compare to other providers?

Vantiv Worldpay by FIS pricing is typically higher than many other providers due to its brand name, expansive outreach, and the range of services it offers. The quotes are given upon request, depending on your business needs and requirements. While this may not be affordable for small startups or sole proprietorships, Worldpay by FIS can be an ideal solution for those who can afford it.