Choosing the right payment processor for your small business is a huge decision that can literally make or break the dynamic of your online and in-person sales.
In reality, regardless of whether you’re running an eCommerce store, offering services, or selling in person, each scenario demands a payment solution that is fast, reliable, and affordable.
If you are a small business owner, margins can sometimes be thinner than you would like, so that you remain competitive. That means you have to deploy your A-Game when choosing a payment processor that does what you need it to do, but without eating into your profits.
The default option for many in this scenario is to look at a business PayPal account to give you what you want. Before you settle for that, it’s a great idea to shop around and check out the competition. Here’s a look at what PayPal offers, and some competing payment processors who are particularly geared up to handle the demands of small business owners.
1. PayPal Business.
If you want to enjoy a quick setup and easy integration, PayPal Business does what it says on the tin and generally delivers on its promises.
PayPal Business is widely recognized and trusted by consumers. This is a big selling point if you are a small business, as this recognition and level of trust can boost conversion rates.
On top of that, it’s easy to integrate into most websites and allows customers to pay via PayPal balance, credit/debit card, or even financing options.
Its standard fees are around 2.99% + $0.49 per online transaction. These fees are higher than some competitors, but, on-balance, PayPal Business is a viable option.
2. Stripe.
This payment processor is worth thinking about if you are a developer or this your first online business, and want some customization options.
Stripe tends to power many startups because of its flexible APIs and powerful tools. In a global marketplace, it’s good to know that Stripe supports a wide range of currencies, and payment methods. It also handles recurring billing well, making it ideal for SaaS or subscription-based businesses.
Average fees are around 2.9% + $0.30 per transaction, although there is custom pricing for high volume. Stripe is highly customizable, and supports mobile wallets. It should also be noted that you will need a certain level of technical know-how to set up fully.
3. Square.
Arguably, Square really comes into its own if you are running a brick-and-mortar business, or you are a service provider.
Square is best known for its point-of-sale hardware and ease of use. In a nutshell, it’s great for small retail stores, food trucks, or pop-ups. The app includes inventory tracking, appointment booking, and analytics.
Plus points include access to a free POS app, affordable hardware, and no monthly fees.
4. Shopify Payments.
As you might expect, Shopify Payments really comes into its own when you are an online retailer using Shopify.
Quite simply, their built-in payment processor is great for streamlining everything. Another positive is that you can avoid third-party transaction fees and manage payments directly through the Shopify dashboard.
Fees are around 2.9% + $0.30 online, for the basic plan. However, you should note that this processing facility is only available to Shopify users. Bottom line, if you switch platforms, you lose it.
5. Stax.
This payment processor has designed its model to be attractive to high-volume businesses looking to save on fees. If you are intending on scaling up your small business, Stax could come into its own when you meet the right threshold and start saving on transaction costs.
What you need to know is that Stax is a subscription-based processor offering unlimited transactions for a flat monthly fee. This could be attractive for a growing business with steady volume.
Expect to pay upward of $99 in fees. Costs are lower when you start doing £10K+ each month.
As you can see, each payment processor has its pros and cons. A good tip would be to pick the one that aligns with all your needs, rather than being persuaded by the lowest fees.