Category: Payment Processing

Credit Card Processing Outages: Why They Happen and What You Can Do

For businesses of all sizes, credit card payments are essential. And when credit card processing outages occur, the revenue loss can be huge. Causes of payment processing breakdowns often stem from widespread power outages (often due to weather), internet service disruptions, and technology failures.

In August 2021 TSYS, a major credit card processing company serving over 80,000 retailers in the US, had an outage that caused quite a stir.

The Saturday night outage made the news when several businesses reported they were unable to process credit and debit card transactions. Though the outage only lasted for about 30 minutes, it took approximately three hours for affected businesses to announce they were fully operational again.

Payment processor outages are not only disruptive, but their cause also is not always easily understood or clearly communicated to the public. A Fiserv outage in February 2021 was reportedly caused by a power outage from a winter storm, but the TSYS blackout still leaves questions unanswered.

Using outdated payment terminals and systems can also lead to issues, which is why it’s essential to choose the best payment terminals and ensure that they are supported by your processor. Though rare, these outages could happen at any time, and reliance on outdated hardware and software puts businesses at risk of lost revenue.

In an increasingly cashless world, it is a huge problem for businesses when credit card processing outages occur. All businesses must be aware of the possibility of an outage and have a plan in place to maintain business continuity and transaction processing capabilities in such an event.

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What to Do During Credit Card Processing Outages

Disruptions in card processing are stressful for everyone involved. When an outage takes place, there are a few crucial steps the business should take to troubleshoot and communicate the issue.

Determine the cause

Since payment processing outages are infrequent, the first step for any business experiencing issues with processing payment should be determining the root cause. Checking to see if there is an issue with the internet service provider is a good first step to diagnose the disruption.

Wireless internet outages cause connectivity issues and can be easily remedied with a backup solution such as a DSL or hard-wired internet connection. Since most businesses use WiFi to operate their point-of-sale terminals, this is the best place to start when an issue occurs.

If the issue is simply the WiFi connection causing card processing errors, the problem can be easily solved and card payments can resume fairly quickly. In this case, it is important for management and staff on duty to understand how to remedy WiFi connectivity problems and to have information readily available to reconnect point-of-sale terminals to the internet. It’s worth providing your staff instructions on WiFI router troubleshooting so they can check that immediately when they cannot process credit card transactions at the card reader.

In some cases, the internet service providers experience disruption and the problem goes beyond the WiFi. Some mobile POS systems, including those offered by Stax, are able to connect to cellular data instead of WiFi. With a variety of technology available for businesses, it is important to know what type of connectivity devices have, because not all mobile devices are enabled with the ability to connect to cellular data.

If the internet is not the issue, the next thing businesses should do is check the physical terminals to ensure they are functional. Malfunctioning payment terminals are dealt with by working with the payment processor, and assuming there is a backup method or additional terminal in place to accept payments, there should be little disruption to the business.

Monitor down detector

Down Detector is a helpful resource with real-time notifications that report if an issue is widespread with an internet service provider, payment processing company, or even specific credit card companies such as Visa or Mastercard. Checking to see if the problem is isolated to ISPs, financial institutions, payment processors, or card issuers is an important part of the process when experiencing a credit card outage.

Accept alternative payment methods

Explore accepting alternative forms of payment, such as mobile payment apps (e.g., Apple Pay, Google Pay), PayPal. You can also consider peer-to-peer payments like Zelle and Venmo.

Just note that these options may require a functioning internet or mobile connection, so ensure you have a reliable network available.

Consider manual processing

They’re not ideal, but if you have access to manual credit card imprinters, consider using them to process transactions. Make sure you follow the necessary steps to imprint the card details and obtain a signature from the customer. 

If you do decide to implement manual processing, keep a log of all affected transactions during the outage, including the date, time, customer details, and transaction amounts. This record will help reconcile the transactions once the credit card processor is functioning again.

Communication is key

If the card processing issue is not caused by internet connectivity, power supply, or physical terminals, it is likely an issue with the card processing company. When this is the case, the first call should be to customer support to determine the cause and expected time for a fix.

It is also crucial for businesses to communicate with their customers when there is an outage. For this, social media announcements are a key way to reach customers.

Though businesses may be reluctant to turn to social media to announce something as unpleasant as their inability to process debit and credit card payments, proactive and transparent communication can resolve many of the customer service complaints.

Providing updates and communicating with customers during an outage goes a long way in ensuring the company is not to blame. Frustrated customers often share their experience on social media before news reports come out.

Providing transparent communication as soon as an issue is known will help alleviate some of the concern, and shows a commitment to resolving it.

Double-up on exceptional customer service

While great customer service should be present in all circumstances, it’s doubly important to provide exceptional customer support during the outage.

So, prioritize customer service and handle any inconveniences with empathy. Offer assistance, answer questions, and address concerns promptly. Keeping your customers informed and satisfied can help mitigate the impact of the outage on your business reputation.

Credit Card Alternatives–In-Store and Online

The most obvious alternative to a payment card is a cash transaction, but when that is not an option for the customer there are some options.

Provide multiple payment gateways online

Nowadays it is increasingly common to offer multiple payment gateways for eCommerce transactions. Many retailers offer multiple payment options such as PayPal, Amazon Pay, Google Pay, Apple Pay, and more.

Doing so gives options to the customer and allows them to select the method they feel is more convenient. The added benefit of offering multiple payment gateways is if one experiences an outage, there are alternative options for a customer to choose from.

The Benefits of Backup Processing for In-Person Transactions

Stax offers the ability to process transactions offline with the use of a mobile app, which can be accessed through tablets and mobile devices, even when power or internet goes down. When power and/or the internet isn’t functional, Stax has credit card machines that can connect to cellular data, allowing transactions to process normally, collecting credit card information with no interruption.

Mobile devices not only provide an option to support offline transactions, but they can also be a huge customer service enhancement during busy shopping seasons. Mobile POS systems are a great solution for large and small businesses and can easily be deployed across multiple locations.

Between the convenient checkout experience and backup processing abilities available with mobile POS, this solution is worth considering. Stax’s mobile payment solutions are easily integrated with online and stationary POS systems.

Further, integrations between POS systems and eCommerce sites allow customers to place an order online if there are issues at a physical location (and vice versa). In the event of an outage, having multiple options available may just save the day and provide a more seamless customer experience.

Choosing a payment provider that has backup processing, multiple payment options and integrations, reliable technology, and exceptional customer service allows your business to function smoothly, even when things go awry.

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FAQs about Credit Card Processing Outages

Q: What are the common causes of credit card processing outages?

Credit card processing outages can stem from widespread power outages, internet service disruptions, technology failures, and outdated payment terminals and systems.

Q: How can businesses identify the cause of a payment processing outage?

Businesses should check their internet service provider, ensure the functionality of physical terminals, and monitor Down Detector for widespread issues with ISPs, payment processors, or credit card companies.

Q: What can businesses do to maintain business continuity during credit card outages?

Businesses should have backup solutions like DSL or hard-wired internet connections, mobile POS systems with cellular data connectivity, and multiple payment gateways online.

Q: How should businesses communicate with customers during a credit card processing outage?

Businesses can use social media to provide transparent updates, reach out to customer support to determine cause and expected resolution times, and provide alternative payment solutions during the outage.

Q: What are some alternative payment methods for businesses to consider during processing outages?

Businesses can use multiple payment gateways such as PayPal, Amazon Pay, Google Pay, or Apple Pay, and deploy solutions like Stax’s mobile app for processing transactions offline using tablets and mobile devices with cellular data connectivity.

 

What’s the Best Payment Processor for Small Business?

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

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

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

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

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

Create Monster Solutions With a Unified Payment Processor Experience

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

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

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

Hidden Payment Processor Fees are a Nightmare

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

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

Interchange Plus Pricing

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

Tiered Pricing

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

Flat-Rate

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

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Subscription

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

Payment Processor Fees to watch out for:

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

They Offer Security So Good It’s SCARY

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

Their Customer Service is ALIVE

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

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

You Might Also Like: What is ACH Payment Processing?

The Top 10 Payment Processors Small Businesses Need To Know

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

1. Stax

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

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

2. Square

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

3. Shopify

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

4. Payment Depot

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

5. Stripe

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

6. PayPal

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

7. QuickBooks Payments

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

8. Clover

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

9. Dharma Merchant Services

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

10. Helcim

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

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

 

How Stax Takes The Fear Out of Payment Processing

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

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

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Reviewing the Clover Card Reader: Features, Pricing and Merchant Ratings

With seemingly endless options for point-of-sale (POS) hardware and software, it can feel like cleaning a messy room—where should you start? While this task may seem daunting, Stax is here to help share what you need to know about various popular POS systems. This post explores the various Clover card readers, including features, pricing, and merchant ratings.

TL;DR

  • There are a variety of Clover card readers, ranging from pocket-sized mobile readers to all-in-one payment terminals.
  • Clover product pricing depends on your business type and size, which will determine the hardware’s pricing.
  • Many customers state the ease of use and the well-functioning mobile checkout experience as positive aspects of Clover terminals.

Features of Clover Point of Sale Systems

Based in California, Clover Network, Inc, is owned by First Data and Fiserv and is the largest cloud-based point-of-sale company in the U.S. Clover offers a variety of options for mobile and fixed payment terminals—whether looking for a simple on-the-go card reader or a dual-screen all-in-one POS system.

Payments on the go with Clover Go and Clover Flex

At the most mobile end of the spectrum, the Clover Go reader fits in the palm of your hand and Bluetooth pairs with iPhone or Android smartphones to easily accept credit and debit cards as well as mobile wallets such as Apple Pay, Samsung Pay, Google Pay, and Android Pay. This allows merchants to process payments using the Clover Go app easily. The Clover Go has an estimated battery life of 160 dip or swipe, or 130 contactless transactions per charge.

The Clover Flex is a handheld mobile device that works especially well in restaurant and retail environments and accepts EMV chip cards, swiped cards, and near-field communication (NFC) contactless payments. This Clover device features a 5” color touchscreen and is a sleek option for a mobile point-of-sale.

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All-in-one payments with Clover Mini, Clover Solo and Duo

The Clover Mini is slightly larger than the Flex and features a 7” touch screen, and is meant to serve as a fixed POS system. The Mini operates with either an LTE cellular connection or a WiFi connection and is a sleek option for businesses.

The Clover Station Solo and Duo are similar options for a larger POS with more capabilities, such as a receipt printer and the ability to connect with a cash drawer. Both feature a 14” screen, and the Duo also includes a 7” customer-facing touchscreen.

Stax is pleased to offer our customers several Clover device options to choose from, including the Flex, Mini, Solo and Duo, with our payment processing capabilities.

Process EMV chip cards, contactless, and cardless payments with one card reader

No matter the Clover POS system you choose, all easily handle mobile wallet, debit and credit card payments. One of the top considerations many merchants have is compatibility with their devices. Clover terminals are compatible with Android and Apple devices with the Clover app. Merchants simply need to download the Clover Go app and set up a merchant account with a payment processor.

Secure payment processing

All Clover devices are PCI compliant and are compatible with Apple iOS version 10.0 and higher and Android 4.4 and higher (and it’s always a good idea to keep your iOS up to date to stay secure and compliant). Windows phones are not supported by Clover at this time. 

For merchants seeking an additional layer of protection, Clover also offers Clover Security Plus, which features data protection, rapid PCI compliance, security scores and additional customer support for an added cost.

Reporting and analytics

Like many payment processing companies, Clover also offers reporting and analytics. Depending on your payment processor choice, the dashboards will offer slightly different functionality and user experience, but the analytics and information are similar across platforms.

Clover Credit Card Reader Pricing Options

Let’s address the elephant in the room—how much does this all cost? The answer is a bit murky since it depends on where you purchase Clover devices and what payment processor you choose.

If purchased directly from Clover, the Clover Go is $49, and if using their software, there is an additional charge of $14.95 per month.

The Clover Flex mobile card reader has three pricing options, including Starter, Standard and Advanced, with monthly pricing of $35, $50, and $80 for hardware and software, respectively.

Similarly, the Clover Mini has the same options at $45, $60 and $90 per month for hardware and software for the Starter, Standard and Advanced packages.

The Clover Solo is available for $120 per month, including hardware and software, for the Retail and Services plan. For the Full-Service Dining package, the cost is $150 per month for hardware and software.

The Clover Duo is $130 monthly for hardware and software for both the Retail and Services and the Quick-Service Dining packages.

The bottom line with Clover product pricing is that the best point-of-sale terminal for you depends on your business type and size, which will determine the hardware’s pricing. Bear in mind that this is only the cost of the payment terminal and software, and credit card processing fees will vary depending on the card brand and payment processor fee structure.

Stax operates with a subscription-based model starting at $99 per month and does not add a processor markup to the processing fees. In addition, Stax connects with leading credit card terminals—including Clover devices—which means you can use Clover’s sleek terminals while still having access to more merchant-friendly rates. 

Clover Pos Reviews: Everything You Need To Know
Clover POS Reviews: Everything You Need to Know

Merchant Ratings for Clover POS Systems

Overall, ratings for Clover devices average 3.9 stars on Capterra and 3.8 stars on G2. Many customers state the ease of use and the well-functioning mobile checkout experience as positive aspects of Clover terminals. Clover terminals are also customizable, and merchants can add options for digital receipts, tipping, and accepting gift cards.

Common themes that lower the rating and are seen as a limitation include lackluster customer support and the frequent need to reboot due to freezes and software glitches. Clover devices are also only equipped to handle card and mobile wallet transactions unless you have the Clover Solo or Duo, which can be equipped with a cash drawer. Finally, their pricing is a bit opaque, and users report surprise fees such as minimum usage and termination charges. 

Compared to competitors, Clover POS terminals rank a bit lower than some top options, including Square. Depending on your business, Clover has some tough competition in the restaurant industry, where several alternatives rank well over four stars.

Clover terminals are geared towards retail and restaurants primarily. However, mobile solutions are also excellent for home and field professional services, allowing merchants to accept payment from anywhere. In short, Clover is best for small- to medium-sized businesses and offers several terminals to suit your business needs.

Final Words

Clover terminals are a solid option for businesses, especially those in the retail and restaurant industry. Stax is pleased to offer Clover terminals alongside our top-notch payment processing platform.

If your business is considering a Clover card reader, our advice is to research the fees thoroughly to ensure you’re not being overcharged by the payment processor or the device manufacturer.Ready to learn how Stax can support your business with the best in payment processing technology? Reach out to learn more.

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Top Online Payment Services in 2024

The pandemic accelerated the shift toward online payments and most consumers adopted online banking services.

Shoppers have embraced the convenience of paying for goods and services at the touch of a button instead of hauling cash around anytime they need to get something.

If you’re reading this, you likely recognize the need to adopt online payment services, particularly if you want to keep your existing customers happy and reach all your potential buyers.

In this article, we will show you how online payment services work, what providers charge for those services, and the top online payment solutions on the market.

TL;DR

  • A payment processor helps to facilitate fund transfers between a merchant and a customer, by routing the transaction via the relevant card network to the issuing bank that approves the payment.
  • Your payment processor or digital payments company will provide you with the POS systems and digital software tools you need to accept card and digital payments from customers.
  • Major online payment services companies include Stax, Clover, Helcim, Braintree, PayPal, Amazon Pay, and many others.

What Are Online Payment Services?

Online payment services are solutions companies offer to help businesses seamlessly accept and make payments over the internet.

This can happen via an electronic (credit or debit card) or digital (smartphone, tablet, or computer) medium. 

Essentially, the service provider will give you all the tools you need to accept whatever payment method is chosen by your customer.

On the surface, the entire online payment process is seemingly completed within seconds, but a lot goes on in the backend to facilitate these transactions. 

Five entities are usually involved in the process and we will explain the role of each party below:

  • The cardholder: is the customer paying for your goods or services physically with a card at the point of sale, or digitally via shopping cart software on your eCommerce website.
  • The merchant: is the business owner accepting the electronic or digital payment from the customer. The funds will be deposited to the businesses’ merchant account if the card is valid and the transfer is approved.
  • The card network: is a company that connects the merchant with the card issuer (bank) to facilitate a fund transfer from a paying customer. The four major networks in the US include Visa, Mastercard, Discover, and American Express.
  • The issuing bank: is the financial institution or card issuer that provided the credit or debit card to the paying customer. The bank is the custodian of the customer’s funds and is responsible for confirming the buyer’s ability to pay. 
  • The payment processor or acquiring bank: is the financial institution that processes the payment on behalf of the merchant by sending information about the transaction to the issuing bank via the relevant card network. 

eCommerce business owners will also need a payment gateway to be able to accept digital payments. 

A payment gateway is basically the internet-based version of your physical POS system. Its role is to approve or decline the transaction after reviewing the validity of the financial details provided by your customer.

Basically, your payment gateway validates your customer’s means of payment, while your payment processor encrypts that financial information and then sends it to the issuing bank via the card network.

The good news is that the very best online payment services companies like Stax will provide both the payment gateway platform and payment processing services. 

Online Payment Services Person Paying Online

Payment Processing Costs

Of course, access to online payment services will cost you money. 

The cost is usually a combination of charges per transaction and a monthly subscription for use of the provider’s software to process payments and manage other aspects of your business.

The exact amount of the transaction charges varies from one payment services company to another, and they include the following fees:

  • Interchange fee: it is the largest expense per transaction and is paid to the issuing bank for taking on the risk to back the customer’s credit card. The fee is usually calculated as a percentage of the transaction amount and all providers charge this fee.
  • Assessment fee: this is a flat-rate percentage of your monthly sales that is paid monthly to credit card associations (Visa, Amex, Discover, and others). It is the second largest cost of card processing. 
  • Processor fee: it is paid to your payment processor for facilitating each transaction and can be a flat rate or a percentage of the transaction amount. The fee is usually higher for credit cards than debit cards.

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Together, these are the network fees you must pay to process online payments. The pricing structure of these fees differs from one provider to another, but they all fall under three models.

1. Flat-rate pricing

Under this model, the provider charges a flat-rate for each transaction regardless of the type of card the customer is using or the interchange rate. 

For example, PayPal uses this model and charges 2.9% of the transaction amount plus a 49¢ flat fee for card payments.

This model is ideal for small businesses that don’t have the transaction volumes to negotiate for a favorable rate since you at least always know how much is being charged for each transaction.

On the other hand, it can be more expensive for businesses that process significant transaction volumes, since it denies them the cost-savings they would have obtained from cheaper transactions like debit card payments.

2. Interchange-plus pricing

With this model, the payment services company charges you the relevant interchange rate plus a processing fee that can be a flat rate or a percentage of the transaction.

The processing fee will usually depend on the type of transaction. For example, card-present transactions are usually cheaper than card-not-present transactions.

Many of these providers may also add a markup to the official interchange rate to cover other associated costs.

The disadvantage of this model is that per transaction cost is difficult to track since it varies from one transaction to the next. 

However, this disadvantage is overwhelmed by the flexibility it provides. You can negotiate for favorable rates if you process high volumes. 

And even if your business isn’t big enough to negotiate directly with the provider, you will get lots of cost savings due to the varying charges for the different types of transactions.

3. Tiered pricing

Here interchange fees are grouped into different tiers, depending on the applicable interchange rate for transactions that fall within each bucket. The provider will then attach a processing fee to each tier.

For example, whenever a customer pays for your product by swiping their card physically through your POS system, the transaction will be classified as Tier 1, and you will pay a 0.7% interchange rate plus a 25¢ flat fee.

The beauty of this model is that it combines the advantages of both flat-rate pricing and interchange-plus pricing. You can trace what each transaction costs, and save more if most payments fall within lower-priced tiers.

The disadvantage is the ambiguity involved. The provider is the only one that determines which type of transaction falls within what tier and why. 

This can get very costly quickly, especially if many of your customers are using payment methods that fall within more expensive tiers. 

Besides, it is almost impossible to predict or control the types of payment methods your customers will be using to pay for your goods and services.

What Are the Different Types of Online Payment Services?

Knowing the different kinds of online payments will help you choose the right provider that supports payment methods popular with your customers.

  • Debit/Credit Cards: the most common payment method. It can be used for in-store payments via your POS system or online where the customer inputs the card details into your checkout page.
  • eWallets: it eliminates the need for the customer to carry credit cards or enter card details for online payments. A digital wallet lets customers link their bank accounts to their wallet, and payment is with a simple wave or taps on their phone for in-store purchases and one or two clicks for online transactions.
  • Bank transfers: provided the user is registered for net banking, the customer can easily authorize the transfer of funds from their online banking account through the use of a customer id and secret pin. 
  • Electronic checks: it lets you simply type in the customer’s routing and account number, then the money will be electronically transferred from the buyer’s checking account to your account. Electronic checks use the ACH network and are more convenient than traditional paper checks, but they are still subject to fraudulent practices because the fund transfer is not effected immediately. 
  • Mobile pay: the option is more common in developing countries, and its usage is fueled by the exponential growth in the adoption of smartphones globally. It lets users with internet access pay in-store for goods and services with a banking app, and it is similar to a digital wallet.
  • Cryptocurrency: customers with cryptocurrencies use encrypted virtual wallets based on secure, blockchain technology to send payments for goods and services. Digital currency doesn’t currently offer any discernible advantages to small businesses, but you should consider it if it’s a payment method used by your customers.

Why You Need Online Payment Services

For one, it would be impossible to run an eCommerce store without a payment gateway and processor to facilitate fund transfers from customers.

Other numerous advantages are also applicable to both brick-and-mortar and omnichannel businesses including: 

  • Convenience: your customers want simplicity and the flexibility to make payments from anywhere. Online payment service providers make that possible.
  • Wider reach: you will be able to reach more customers in your local client base since more people are choosing to shop online. You will also be able to sell internationally to the global market.
  • Greater transparency: the whole process takes a few seconds, so you will know instantly whether the customer has the funds to pay for your goods or not.
  • Security: most providers pursue PCI compliance where all their platforms and tools are built to ensure effective anti-fraud and cyber security protection.

The Top 7 Best Online Payment Services

For each company listed below, we have reviewed them and we are sure that they each offer robust online payment services, so we focused on highlighting the unique strengths of each provider.

1. Stax Payments 

Stax offers a membership-style, interchange-plus pricing model without any markup on the interchange rate.

The monthly membership subscription fee gives you access to the Stax platform with its many features, including inventory management, CRM, invoicing, analytics tools, and support for a large number of third-party apps. 

You also get all the hardware you need to accept both in-store and on-the-go payments. 

Interchange-plus pricing includes the applicable interchange rate plus 8¢ to 15¢ in transaction fees depending on the payment method. 

Since there are no markups or hidden fees, all the associated costs and platform services are covered by your fixed monthly subscription fee. 

And this is why Stax is such a great solution for most businesses, especially those that process at least $5000 in transactions each month. The more you process funds, the more cost savings you will get.

2. Helcim 

It is a full-service merchant provider that supports both in-person and digital payments. The company provides a mobile card reader and thermal printer for in-store payments, while its online payment gateway is notable for its low cost.

What truly sets Helcim apart are the volume discounts it offers to users that handle large volumes of transactions each month. The company operates a tiered pricing model.

3. Authorize.net 

The company lets users choose between an all-in-one plan (merchant account and payment gateway) or a gateway-only plan.

Customers subscribing to the gateway-only plan will have to obtain a merchant account from another provider. 

Fees are predictable and the all-in-one plan costs 2.9% + $0.30 per transaction processing fee and a $25 per month gateway fee, while the other plan costs $0.10 per transaction (excluding the fee charged by your merchant account provider), a $0.10 daily batch fee, and the $25 per month gateway fee.

4. Square 

What’s notable about Square is how easy it is for new users to set up and start processing payments.

The POS software is free, it doesn’t charge any subscription fees, and there is suitable POS hardware for each budget type. 

It also uses a flat-rate pricing model, which further buttresses the argument that it is ideal for new businesses with low transaction volumes that want to start receiving online payments without spending too much. 

5. Due

This company built its name as a provider of productivity apps like time tracking and invoicing tools to freelancers and professional service companies. 

It got on this list because it now includes payment processing among its services. 

Users get access to productivity tools as well as a digital wallet for sending and receiving payments to anyone in the world. Its flat 2.7% processing fee is just perfect for its freelancer user base.  

6. PayPal

PayPal is probably the most popular payment gateway-only provider on this list among both consumers and small businesses. 

There is no monthly subscription fee, and it charges a flat rate depending on your transaction type.

The company ensures users can make and receive payments with ease, and it’s more likely than not that visitors to your eCommerce site already own a PayPal account. 

7. Stripe

Just like PayPal, Stripe is a payment gateway-only provider and it also uses a flat-rate pricing model.

 What sets it apart is the range of API customization options available to users. 

The provider’s payment platform is flexible enough to be customized to meet the needs of any eCommerce business. It also integrates well with a wide range of popular business software apps.

Conclusion

You are now equipped with the knowledge you need to select the right online services provider for your small business. 

Your choice will play a great role in the success of your business, and that’s why you are better off signing up with a market leader like Stax. 

The company will handle all your payment processing needs and provide you with a robust software platform for a subscription fee that is tailored to the size of your business without roping you into any binding long-term contract.

Request a Quote

 

How to Choose a Credit Card Reader for Your Business

Whether you are trying to launch a new business or expand your existing operation, it’s critical to have a credit card reader by your side. Apart from helping you accept credit card and debit card payments, this solution also lets you cater to a larger audience segment by providing more payment options. But even when you make up your mind about getting a card reader for your business, choosing between different providers to take credit card payments can be nothing short of a challenge for small business owners.

With various options at your disposal and each one promising better services than the last, selecting a provider can be quite tricky.

With that being said, making an informed decision is not impossible. As long as you know the necessary information about card readers, their functions, and their pricing models, you can easily find something that fits your requirements.

Here is a guide on choosing the best credit card reader for your business.

The Credit Card Reader Process

As you start your journey of finding the ideal card reader for your operations, it’s essential to learn how the solution accepts card transactions in the first place. Simply put, the term “card reader” refers to a device built to accept credit card and debit card payments. With the emergence of new card acceptance methods, modern card readers can process customer’s card informations in more than one way and accept them via applicable mobile devices like those by iOs.

These methods of gathering card information include:

  • Card Swiping. This method involves the classic mechanism of swiping a magnetic stripe (magstripe) card through the reader device itself.
  • Card Dipping. This process refers to the cardholder inserting a credit card or debit card into the chip reader machine. This method is used with EMV Chip cards, which are more secure than magstripe cards and considered a more modern payment card solution.
  • Card Tapping. This mechanism allows the card reader to accept payments by simply tapping a payment card against it. This method is being adopted by different solutions for contactless payments.
  • Mobile Payments. This method also uses the tap-to-pay mechanism but with mobile devices. The respective mobile devices need to be NFC-enabled and have to be powered by a payment provider. Common mobile wallets include Apple Pay (which only works on iOS devices like iPhones and iPads), and Google Pay.

Depending upon the type of credit card reader you get, it can either be powered by itself or might need a mobile device to become functional. For mobile credit card readers, you should check that it can support your operating system, whether that’s iOS or Android. Some card readers may also connect to the device via Bluetooth.

Standalone card readers come in different specifications and may or may not have their screen. These devices are often built to be wireless, mainly to offer more convenience and differ from a traditional or countertop point of sale (POS) setup. (POS systems do much more than simply process payments. They’re all-in-one systems that include functionality like inventory management. It should be noted that many systems now offer POS apps to take payments on your mobile devices.) These card readers will need to connect to wi-fi, so it’s crucial to make sure that you have an internet connection wherever you take card transactions in-person.

On the other hand, card readers that connect to a mobile device are often deployed without a screen interface. Instead, they are operated through a corresponding app that is installed on the respective mobile device.

These readers are also designed to be wireless and are not tied to a physical location so you can take payments anywhere in the store or on the go throughout your business day. Usually they are touchscreen and include their own barcode scanner. (Some now scan QR codes, as well.).

Depending on your needs (particularly if you have an eCommerce business), you can easily choose between different credit card reader solutions that cater to your specifications. If you want to operate a card reader that can function independently, going with standalone solutions is a good idea. Suppose you don’t have any qualms about connecting the card reader to your mobile device, then be sure to move forward with such options.

RELATED: List of Best Credit Card Readers

Credit Card Reader: The Parties Involved

A single credit card reader has multiple parties behind its functions. When put together, their services allow the card reader device to accept payment cards without any issues.
This typically includes the following parties.

Equipment Manufacturer

This refers to the party that manufactures card reader hardware. A manufacturer typically doesn’t have anything to do with ongoing transaction services and only charges for their equipment fee. But there are a few manufacturers that also power transaction solutions and apply the corresponding charges on an ongoing basis.

Payment Network

This is the payment processing network that lets you accept the corresponding payments through the card reader. These payment networks include but are not limited to Visa, MasterCard, AmericanExpress, and Discover.

By default, each payment network accepts its corresponding payment card. But multiple payment methods can easily be integrated into the same card reader hardware.
For instance, with the right solutions, a card reader that accepts Visa credit cards can also accept MasterCard debit cards and vice versa.

Merchant Services Provider

This is the solution that bundles the services of different payment networks and lets you accept their corresponding credit cards and debit cards. When you integrate these solutions into an applicable credit card reader, you can accept any associated payment card with ease.

In turn, you need to pay a service fee to these merchant services providers that come on a per-transaction basis. Some service providers may also charge a monthly subscription fee on top.

Internet Provider

Modern card readers (and POS systems) require an internet connection to accept credit card payments. You will need a good internet connection at your retail store. If you’re a mobile business, you will need wi-fi on your device to utilize mobile card readers.

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Comparing Credit Card Reader Companies

Once you understand the essential functions behind a credit card reader, it is time to comprehend how different card reader companies carry out their operations.

In most cases, a company that offers credit card reader services may not be the actual manufacturer of the hardware and could only be sourcing the equipment for its solutions. In other scenarios, the company could be both the manufacturer and the service provider for a particular card reader.

But in both situations, your card reader works the same way. It accepts payment cards according to its specifications and deposits the funds to your merchant account for you to use later.

The main difference between various credit card reader companies comes in the form of cost or transaction fees. The other distinct contrast is visible in terms of its experience, services, and reputation.

Before you select a credit card reader company, you need to check the following aspects:

  • Credibility. The company should have a pristine reputation with no scandals in place.
  • Features. The provider should offer modern features such as accessibility, ease of use, and an intuitive interface.
  • User Reviews. The solution should have positive reviews in place regarding its services. These reviews provide a wealth of information on FAQs, such as the company’s customer support capabilities.
  • Pricing. The company should provide you with competitive pricing that isn’t above average market costs.

ALSO READ: The Ultimate Breakdown: Comparing Mobile Credit Card Readers

Credit Card Reader Costs and Service Fees

As mentioned above, different credit card readers come with their specific costs. These charges usually include your setup fee and your ongoing transaction fee. They can also carry additional charges in place.

To give you an idea about possible costs, here are a few standard charges that are associated with credit card readers.

  • Hardware Cost. This one-time fee is charged by most card reader providers and comes directly from the manufacturer. The hardware generally includes some combination of a card terminal or reader and receipt printer. Often, if you purchase a POS system, these things will come included in an all-in-one countertop package.
  • Equipment Cost. This one-time fee is charged by most card reader providers and comes directly from the manufacturer.
  • Setup Cost. This charge may come in addition to the equipment fee. But it is not a common practice.
  • Transaction Cost. This per-transaction fee is constant for all card reader companies. No matter the type of solution you select, it always charges you processing fees for each transaction that is processed through its service.
  • Subscription Cost. A few providers apply this fee. But it is not always applicable to every card reader.
  • Other Assorted One-off or Monthly Fees. Many payment processing solutions charge fees for their service on a monthly basis, such as an invoicing fee. It’s worth reading customer reviews of a solution to determine if you’re likely to discover hidden fees on your bills.

While many credit card reader companies often deliver equipment costs upfront, several of these firms offer their setup, transaction, and subscription pricing upon request.

This makes it tricky for you to choose a solution for your specific requirements. However, by sending requests for quotes and doing a side-by-side comparison of costs afterward, you can see how much a certain provider charges for their services and how they offer fares against the market average. You can then compare this pricing with other factors such as reputation, user reviews, and service features before making a decision.

Stax knows that credit card processing and sale generation is a priority for your business, and we are there to help with anything related to the process. Learn how we can help increase your sales capabilities and process more transactions today. Request a Custom Savings Quote.

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What is the Best Portable Credit Card Machine for Your Business?

Payment processing isn’t an optional part of running a business. No matter what products or services you sell, you need a way to collect payments quickly and easily from your customers.

According to Nilson, consumer and commercial credit and debit cards generated $9.773 trillion in 2021, up 22.5% from 2020. By 2026, this is expected to reach $14.075 trillion.

To meet this rising demand, businesses require a reliable Portable Card Machine (PCM). But with so many PCM options available on the market, it can be overwhelming for businesses to decide which provider is best for their needs.

In this blog, we’re going to explore what types of PCMs are available, and offer a round-up of the best PCMs for different business needs.

TL;DR

  • Portable Card Machines (PCMs) are used by merchants to process in-person payments, as well as virtual and Card Not Present payments. Unlike a Point of Sale system (POS) which offers additional business management tools, a PCM’s primary purpose is to accept payments.
  • Merchants have a choice between countertop, wireless, and mobile card machines. Countertop machines offer better security than wireless or mobile readers, but are less convenient as they can’t be moved around as easily.
  • The best Portable Card Machine for your business will depend on your budget, payment options, and how much portability you want within your storefront.

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What is a Portable Card Machine Used For?

Portable card machines (PCM) more commonly known as credit card readers or credit card terminals, allow retailers and small businesses to accept in-person payments.

Common payment methods include credit and debit cards such as Visa and Mastercard (via either EMV chip or magnetic stripe). Some PCMs also take contactless NFC payment options, such as Apple Pay.

Like a traditional POS (Point of sale) system, PCMs enable business owners to manage payment processing quickly and conveniently. However, POS systems typically offer a wider range of merchant services than a card reader, which is only designed to process credit card payments.

Other differences include:

  • POS systems often feature additional hardware i.e. a cash drawer, touchscreen, receipt printer, and barcode scanner.
  • A POS deals with other critical business functions, such as inventory management, sales reporting, employee time clocks, and more.
  • A POS accepts a wider range of payment solutions, such as gift cards and checks.

Types of Portable Card Machines For Credit Card Processing

Not all Portable Card Machines are designed to the same specifications and features. The most appropriate PCM for your business will depend on a variety of factors, including processing fees, what sorts of payments you want to accept e.g. American Express, and the set-up of your storefront.

Countertop credit card machines

A countertop credit card terminal is common within brick-and-mortar storefronts, where it’s usually situated at the checkout for customer support staff to ring up purchases. Countertop terminals, such as Ingenico or Verifone, are capable of processing a variety of payment types, from chip cards to mobile devices, and also feature a pin pad and swipe slot for magstripe payments.

Because they are often wired in to receive an internet connection, the terminal cannot be conveniently moved around from place to place. Most readers can also be used as virtual terminals to process eCommerce and Card Not Present transactions.

Wireless credit card machines

A wireless credit card terminal relies on BlueTooth or wifi to process card payments. Because they are more streamlined and don’t require a wired connection, wireless terminals can be easily used by staff on the go within a storefront or outside at external events, unlike a countertop reader.

Businesses will pay either a flat fee or a monthly fee to rent the card reader and the payment processing software that comes with it. However, wireless readers are less secure because there is a risk that payment information can be intercepted during a transaction.

Mobile credit card readers

Similarly to wireless readers, mobile terminals are highly portable and can be carried around the shop floor by store associates, rather than forcing customers to queue at checkout. Mobile readers take the form of a device that attaches to an iPhone or iPad. Usually, the provider will charge a one-off fee to purchase the reader, making them a cost-effective option for small businesses.

Best Portable Card Machines for Credit Card Processing in 2023

Stax – Best unified payment option

Offering a suite of payment solutions, Stax offers businesses far more than just a card reader. Thanks to its unified payment ecosystem, merchants using Stax can seamlessly manage a full spectrum of payment types, from mobile to contactless or in-store.

With Stax, merchants have two PCM options available: Mobile payments via a Bluetooth card reader and the Stax Mobile app, or a cloud-based countertop terminal that offers advanced data analytics. Both options are PCI compliant and accept swipe, chip, and tap card transactions, making it easy to manage in-person payments. As part of the monthly fee, businesses can also access a fully virtual terminal via payment options such as payment links and Text2Pay.

Stax is the most cost-effective option for businesses with either a large monthly sales volume or who need to scale quickly. Thanks to the 0% markup on interchange fees charged by credit card companies, this fee quickly pays for itself.

Payments accepted: Magstripe, contactless, and chip reader card payments, Apple Pay, Google Pay, payment links, Text2Pay, and recurring billing.

Pricing: Starts at $99 per month, free terminal or mobile card reader included.

Card-present transaction: Interchange fee + $0.08

Card-not-present transaction: Interchange fee + $0.15

SumUp – Top mobile card reader

Primarily a mobile credit card processing option, SumUp offers several card reader options, in addition to a free app for both iOS and Android. As well as accepting in-person card payments, SumUp also allows businesses to process payments via invoices and payment links. This offers a lot of flexibility for businesses with multiple sales channels. SumUp requires no monthly fees or contracts, meaning you aren’t tied into using the service for a fixed amount of time.

But unlike more complete mobile POS systems, there are a lot of key features that SumUp lacks, especially for US-based merchants. This includes processing eCommerce transactions, adding discounts, or any form of recurring billing. SumUp is not well-suited for CNP transactions, as merchants require approval to use their card reader as a virtual terminal.

Payments accepted: Magstripe and chip reader card payments, QR codes, Apple Pay, Google Pay.

Pricing:

SumUp Plus reader: $35 per unit

SumUp Solo reader: $99 per unit

In-person payments (swipe, chip, and contactless payments): 2.75% per transaction.

Remote payments (via phone or payment links): 3.25% + $0.15 per transaction.

Invoicing: 2.90% + $0.15 per transaction (once invoices are paid).

Custom rates are available for businesses with over $10,000 in monthly revenue.

Clover Go – Combined card reader / POS system

Clover Go offers a convenient mobile terminal option for brick-and-mortar businesses via its card reader and free mobile app. It’s a logical choice for businesses who are already using Clover as their POS system in-store, as this ensures that your inventory and sales data will sync up seamlessly. It’s also a good option for businesses that host a lot of pop-up or sales events or want to reduce queues at the checkout.

Clover Go does come with an associated merchant account, unlike third-party options such as Square or PayPal. However, this does mean that it takes a bit of extra time to set up and be ready to accept payments.

It’s worth noting that Clover’s free plan only offers basic payment processing and sales tracking. For additional features such as inventory management and tax reporting, businesses will have to upgrade to their Clover Essentials plan, which costs an extra $15 per month. This can prove expensive for merchants with small sales volumes. If you’re a small business wanting additional functionalities, there may be better value options out there.

Payments accepted: Magstripe and chip reader card payments, Apple Pay, Samsung Pay.

Pricing: $49 for hardware, 2.6% + $0.10 processing fee per transaction.

Square – Good for new businesses

Because it’s easy to set up and provides next-business-day deposits, Square has become a firm favorite with startups and small businesses who want a low-maintenance payment solution. Square offers a free Square reader to accept Magstripe payments via its mobile POS system, where merchants only have to pay transaction fees. To access in-person and online contactless payments, merchants need to upgrade to the full Square terminal for $49.

However, Square POS lacks 24/7 customer support service for those who aren’t on a paid plan. As a third-party processor, merchants should be aware that Square reserves the right to freeze or terminate accounts if it spots an issue. This may present a problem for brands selling high-risk goods.

Payments accepted: Magstripe and contactless credit cards, Apple Pay, Samsung Pay, Google Pay, Cash App, gift cards

Pricing: $49 for hardware.

In-person transaction fee: 2.6% + $0.10 per transaction

Online transaction fee: 2.9% + $0.30 per transaction

Keyed-in transaction fee: 3.5% + $0.15 per transaction

Shopify Payments – Best for predominantly online and Shopify merchants

Shopify offers merchants an integrated payment option for both in-store and online sales as part of any Shopify plan. Shopify terminals can accept swipe, chip, and contactless payments, and come in the form of either a mobile reader or a full wireless terminal. The cost of accepting payments will depend on what plan you have, with higher-tier plans charging the lowest transaction fees.

If you already have a Shopify plan, accepting payments is easy to set up and requires no integration. But businesses who want to accept payments via another provider other than Shopify will be charged an alternative gateway fee in addition to transaction fees. This makes Shopify payments the best option for merchants who want to run all of their eCommerce services via the Shopify system. Note that Shopify Payments is not available in all countries.

Payments accepted: Magstripe, chip, and contactless card payments, gift cards, PayPal, Apple Pay, and Amazon Pay.

Pricing: $49 for hardware

2.4%, 2.6%, or 2.9% + $0.30 for online payments for Advanced, Shopify, or Basic plans, respectively.

2.4%, 2.5%, or 2.7% for in-person payments for Advanced, Shopify, or Basic plans, respectively.

PayPal Zettle – EMV and contactless payments

In addition to the better-known online payments arm of the business, PayPal now offers in-person payment capabilities following its acquisition of the Swedish payment startup iZettle. PayPal Zettle is a mobile card reader that accepts a variety of card payments, in addition to its own PayPal and Venmo services. Card Not Present payments can also be processed using Zettle but incur a higher transaction fee. Magstripe payments are not accepted.

The Zettle app offers a variety of extra features, including sales tracking, inventory management, and discounting. This makes PayPal a good choice for new businesses that want a low-cost payment processing solution. Businesses also have the option to upgrade in the future to Zettle’s full portable card terminal, which doesn’t require a mobile device. However, businesses will require a PayPal account to receive funds, as they cannot nominate a bank account of their choosing.

Payments accepted: Contactless debit/credit cards, Apple Pay, Google Pay, Cash App, gift cards, PayPal, and Venmo.

Pricing: $29 for hardware, $79 for additional readers

Card Present transactions: 2.29% + 9 cents per transaction.

Manual Card Entry Transactions: 3.49% + $0.09 per transaction.

QR code Transactions 2.29% + $0.09 per transaction.

Final Words

This blog has provided a neat round-up of the top PCM options for emerging and established businesses. Before you commit to any of the above providers, make sure that you have a thorough understanding of what your business needs from your credit card terminal and how this may evolve/change over time. Selecting an easily scalable PCM solution like Stax ensures that your business can continue meeting customer expectations for seamless service.

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The Difference Between Square Fees and Stax Fees

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

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

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

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

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

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

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What Does Square Have to Offer?

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

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

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

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

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

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

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

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

How Much Are Square’s Fees?

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

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

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

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

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

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

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

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

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

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

Stax Fees* Square Fees
$306.60 $480

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

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

Stax Fees* Square Fees
$405 $648

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

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

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

Are There Any Other Square Fees I Need to Know?

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

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

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

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

Why the Lack of Underwriting Can Lead to Problems

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

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

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

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

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

Remember to think about these aspects as you move forward.

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

The Pros of Choosing Square

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

The Cons of Choosing Square

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

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

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

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

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

Square and Stax Merchant Reviews

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

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

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

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

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

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

Stax, the Way Payment Processing Should Be

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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FAQs about Differences between Square and Stax Fees

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

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

Q: What payment options do Square and Stax offer?

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

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

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

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

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

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

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

Q: What makes Stax different from other payment processors?

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

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

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

Q: Why is underwriting important in payment processing?

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

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

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

Q: Does Stax offer a quick setup like Square?

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

 

How To Get Paid On Time: 8 Tips For Field Service Professionals

Running an operation is not an easy task for field service professionals. Even when you do stellar work and perform the tasks as expected, you often have to chase your clients to get paid for a job well done.

But as tricky as the process might seem, it is still not without its workarounds. By following tips such as turning to merchant account providers and tweaking your invoicing practices, you can shorten the gap between completing your work and getting paid for it.

Here are 8 of the best ways in field service management (FSM) to get paid on time and to help you navigate this uncertain yet manageable world of payments.

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Turn to Mobile Payment Solutions

More often than not in FSM, clients delay making payments due to an absence of cash. Sometimes, they don’t have funds readily available. At other moments, it may be due to friction in the process such as lack of time or other issues that may prevent them from paying on time.

In these situations, you can turn to mobile merchant payment solutions to help you fix these issues. By making use of mobile transaction terminals, your field service team can provide your customers with a more convenient way to quickly process a credit card payment right at the job site. This improves your customer experience and thus increases your customer satisfaction.

In addition to that, you can also make use of modern mobile app payment solutions, which let you turn any mobile device into a payment terminal. By using dedicated apps from your merchant account providers, you can even use your Apple or Android device to accept payments with ease. If you use a payments solution that integrates with your field service management software, you’ll be able to seamlessly manage your work orders from beginning to end.

Perhaps the best part of having your field workers accept mobile credit card payments? You get paid in real-time!

Know Who to Contact For Field Service Professionals

Even when you know the company or individual you have rendered your services to, it doesn’t mean that you know the actual person who is providing payment for the bills.

To get paid on time, you must know this information. Whether you are using online payment methods or mobile payment solutions, knowing exactly who to send the invoice to helps you steer clear of gatekeepers and potential delays.

This simple practice helps you get your payments processed promptly and keeps your company account from depleting when it shouldn’t have to. Store this contact’s information in your CRM portion of your field service management solution to keep it on file.

Digitize Your Invoices

Paper invoices sent by snail mail are a thing of the past. Send invoices digitally via your payment solution instead. Customers find this much more convenient. Some payment service providers may even be able to create self-service customer portals for easy, safe payments. This sort of optimization empowers you to focus on your field operations and service workers.

Keep the Invoice Simple

While it is essential to know who to contact for your payments, it is also imperative to learn how to reach out to them.

Here, it is best to keep your invoice as concise as possible. Keep things clear in terms of billable hours and rendered services. But make sure that you do not overcomplicate by adding in any unnecessary details. This applies equally to any type of payment request, whether you are using traditional merchant services or mobile merchant payment solutions.

It’s because the more details you give to your clients, the more time they will take to understand them. The simpler your invoice is, the faster it will get processed.

Don’t Feel Ashamed in Asking for Quick Payments

Regardless of the kind of services you provide, you offer them in exchange for a set compensation. You know that if you do not receive your payment on time, it can affect your business operations. Keeping this in mind, don’t hesitate to ask for your funds when you deliver the services.

As long as you keep your tone professional and courteous when asking for payment, it shouldn’t affect your relationship with a client. Find out their preferred method to pay and honestly recommend the quickest way for them, and for you, to process their payment.

When you have delivered quality work, your client won’t hesitate to turn to your preferred mobile app payment solutions to transfer payments quickly.

Keep Communication Open

One simple yet effective tip after sending the invoice is to keep yourself available for any questions or clarifications. Mentioning your availability when invoicing, along with your hours of operation, is always a good practice.

This way, your clients know that they can quickly reach out to you to get any questions answered.

Automate Your Invoices

For clients that you service on a regular basis, you can set your invoices up to go to them automatically. Not only does this streamline your back-office workflows by removing a routine chore for you, but it ensures that the invoice gets to your client in time every time. If your invoicing solution is integrated with your field service software you may also be able to set it to send the invoice at the time that your field service technicians close out a work order.

Follow Up On Unpaid Invoices

Don’t be afraid to reach out to customers who haven’t paid yet. Depending on your payments solution, you may even be able to automate notifications to their email or SMS to remind them to pay an invoice. Consider leveraging late fees, as well, when a payment is delayed past a certain date.

When coupled with a capable mobile merchant payment solutions provider that integrates with your FSM software, these tactics can help your field service operations business get your invoices processed quickly and easily, while meeting customer expectations for a modern business (particularly one with a mobile workforce). At Stax, we specialize in integrating our conventional and mobile payment services to operations of any scale, greatly increasing operational efficiency with our software solutions. A digital transformation might be just the thing you need to reinvigorate your customer lifecycle. To learn more about how Stax can help you get paid on time, reach out for a custom pricing quote today.

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How Businesses Can Go Mobile and Increase Sales

The evolution of modern markets and customer expectations have changed the conventional business payments model entirely. In today’s environment, it is now the norm to see a credit card processing terminal at every other vendor. Further, as customers become more engaged with an ever-increasing number of online and mobile options, doorstep delivery for all kinds of products and services is becoming a commonplace preference. But while offering credit card merchant services only needs some simple changes at your end, offering doorstep delivery can be a bit more complicated.

Traditional methods make it challenging to gather and process payment information outside of your existing business and Point-of-Sale systems. However, thanks to modern integrated payment platform services, you can now expand your options to meet today’s customer expectations. By turning to cloud-connected mobile payments you can easily take payments right at their doorstep.

How Modern Credit Card Processing Can Help You Deliver Mobile Services

Today, modern credit card payment vendors have added new ways to help you process your payments efficiently. In addition to traditional on-site payment methods, these integrated payment platform services now offer ways for business owners to use modern devices such as Apple or Android smartphones to accept in-person or online payments.

This way, your employees or delivery services no longer have to depend upon traditional equipment for payment processing. All they need is their phone, with your payment processor app and business’ information. Any payments that they accept are instantly transferred to your merchant account, all without going into the hands of a third party.

As a result, you can deliver your services anywhere you want, anytime you want.

Do you deal with retail products or food delivery? Home improvement services or consultancy? Regardless of the type of business, this method of credit card processing can help you scale it right according to your expectations.

How Mobile Payment Processing Help You Increase Sales

The super-easy way of processing payments at the doorstep is a significant factor in attracting customers to your business. But there’s more to it than meets the eye.

It Offers Clients Peace of Mind

If you offer mobile merchant services as a prominent factor in your solution, you become more approachable and accessible. Customers will ultimately feel more comfortable contacting you for product or service delivery.

It’s because they know that they have the option to make the payment right at their doorstep, after the delivery of their services. This aspect is in contrast to having to pay upfront and risk failure of getting the product and service.

It Promises Additional Security

These integrated payment platform solutions are designed with new security measures. Even being mobile, these payment processing methods are payment card industry (PCI) data security standard (DSS) compliant.

And it protects businesses and their customers against the risks that come with taking their personal and financial information for the payment.

It Encourages Repeat Business

These credit card processing features come together to make your business the go-to choice for your target market. As a result, you can create repeat customers out of what would otherwise be one-time patrons.

This also goes a long way in helping you increase your long-term sales and enables you to scale your business efficiently.

At Stax, we specialize in offering highly secure, efficient, and reliable mobile payment services for businesses of all scales. No matter the size of your operation, Stax can help you accept mobile payments for your services through your preferred Apple or Android devices.

Learn more about Stax services and see how we can help you increase your sales.

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Which POS Terminal Type Is Best For Your Business?

As a business owner, one of your many priorities is sure to deliver an excellent customer experience. To that end, it’s worth noting that aside from your products and services, a smooth and efficient checkout is also a meaningful part of the customer journey. 

Choosing the right point-of-sale (POS) system for your business is one of several touchpoints to create the customer experience outcomes that matter most to your business, so it’s important to carefully consider this choice. This article discusses everything you to know to choose the best POS terminal for your business. 

TL;DR

  • Choosing a modern, convenient, and secure POS that is right-sized for your business is an important choice. Options for POS terminals include on-site, self-service, cloud computing, and mobile devices.
  • When choosing your POS setup, there are some options better suited to certain kinds of businesses. Carefully weigh your options and evaluate which is best for your business and customer needs.
  • The biggest decision your business needs to make is choosing your payment processing provider. Your payment processor may supply the POS hardware and software and handles the heavy lifting of transaction processing—so choosing the right partner is key for cost and service.

What is a Point-of-Sale Terminal?

A point-of-sale system is most simply explained as a software and hardware combination that allows businesses to process debit and credit card transactions, contactless payments, and mobile wallets such as Apple Pay or Android Pay. 

The actual payment terminal for a POS system is the hardware. The accompanying POS software allows businesses to conduct eCommerce transactions and is also often equipped with functions such as analytics, inventory management, and integrations to other business tools. 

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4 Types of POS Systems

Choosing a modern, convenient and secure point of sale that is right-sized for your business is an important choice. Depending on your business model, some options may be a non-starter, but it’s important to understand the various POS hardware and software options available.

On-site POS terminal

An on-site POS terminal consists of the tablet or computer and card reader needed to process payments. A modern POS terminal will have a touchscreen where the transaction is built, and a payment terminal to accept credit and debit card transactions and other forms of payment, such as NFC-enabled cards and mobile wallets. An on-site POS terminal is often connected to a cash drawer and receipt printer and located in a static location in the store or restaurant. These work well in high-volume sales environments such as mid to large-size retailers and restaurants. 

  • Benefits of on-site POS terminals include having a modern system that quickly and securely processes payments. Most customers are accustomed to making debit and credit card payments at a POS terminal, meaning the level of comfort is already established, which can be a barrier for some of the other point-of-sale options such as self-service kiosks or mobile POS devices. 
  • The downsides of on-site POS terminals are rather limited as these are a mainstay of retail, service, and restaurant industries. That said, on-site POS terminals require allocating space for all the necessary components and the mostly immovable nature of on-site terminals could be considered a downside.

Self-service POS terminal

This POS system is a self-service kiosk unit where customers can scan and pay for their merchandise without the assistance of a cashier or salesperson. These include a barcode scanner, card reader, and touchscreen user interface. Most frequently, self-service POS terminals are found in grocery stores, convenience stores, and fast food restaurants.

  • Benefits of a self-service POS terminal include a quick and efficient checkout experience and reduced staffing needs. These are ideal for high-volume, low-touch shopping experiences and can lead to cost savings and a speedier customer checkout.
  • The downsides of self-service POS systems include security issues from having largely unattended checkouts, which could result in increased theft or scanning errors that contribute to inventory management and inaccuracy issues. Self-service POS terminals also experience increased wear and tear, can be more expensive to maintain, and take up a larger footprint in the store.

Cloud computing POS terminals

Cloud computing POS terminals are a widely used solution for retailers. With this type of POS terminal, the data and card processing software is hosted on the POS system’s server, meaning the business doesn’t need to host an on-site server for data storage. 

  • The benefits of cloud computing POS terminals include offsite data storage, meaning there is no need to house expensive servers or risk physical damage. Further, this is an ideal solution for retailers with multiple locations because the transaction information can easily be consolidated. Cloud technology is advanced and secure, which should give business owners peace of mind that their data is managed by a trusted partner.
  • The downsides of cloud computing POS terminals are primarily cost, and the risk of cyber attacks that could compromise customer and company data. However, with proper cybersecurity measures and practices in place, this risk is minimized. One other factor that could potentially be considered a downside is the need for internet access for the cloud-based POS system to work. While internet access is ubiquitous in today’s world to run a business, internet outages can limit the ability to do business during that time.

Mobile POS terminals (mPOS)

Mobile POS devices are run on smartphones or tablets through a WiFi connection and enable the user to process transactions outside of the typical cash register area. 

There are several mobile payment systems, including specialized handheld devices that work on an internet connection, include a barcode scanner, and can accept EMV chip cards, swiped magnetic stripe cards, and contactless payments. One popular example Stax offers that fits this bill is the Clover Flex. Another popular option for mPOS is using an existing smartphone or tablet with a plug-in card reader paired with a payment processing application. 

Mobile POS systems are gaining popularity in restaurants, allowing servers to more efficiently close out tabs without needing to take the customer’s card away to a POS terminal to process the transaction. With these terminals, businesses are able to serve their customers by bringing credit card readers to them—increasing cardholder security since their card is never out of sight.

  • The benefits of mPOS include the ability to process transactions where the customer is, making the point of sale speedier in busy retail or restaurant environments. Mobile POS terminals are fairly simple to implement and user-friendly. An mPOS system tends to work well for small businesses, restaurants, and even large retailers that process a large number of transactions.
  • Some downsides of mPOS terminals include the need to set up areas for checkout so the cashier can access items like bags, sensor removers, a cash drawer, and a receipt printer. There is also a potential risk of device theft for some mPOS systems since they are lightweight and easily concealed. In a retail environment, using a mobile device to process large transactions with many items can be cumbersome, so depending on the purchasing patterns in your business, mPOS could prove to be an inefficient checkout method.

Point of Sale FAQs: Q&As on POS terminal types

Whether you’re a restaurant, retail business, or service provider, the point-of-sale experience is an important part of the customer journey. Here, we’ll answer a few of the most commonly frequently asked POS questions.

What is the difference between a terminal type and a transaction type?

The terminal type refers to the POS hardware, all of which are listed above. The transaction type refers to the method of payment, including cash, check, EMV, or swipe credit cards, contactless cards, debit cards with PIN, gift cards, and mobile wallets. It is worth noting that depending on the transaction type or card brand, there will be varying processing fees. For example, a Visa debit card will have a lower fee than an American Express reward card. 

For more information on the various processing fees associated with card processing, check out this blog post.

How to choose the best POS terminal?

Choosing the best POS terminal for your business starts with choosing your payment processor. Payment processing service providers will have a variety of equipment to choose from, and the specs will be listed for you to evaluate the options. When considering what type of terminal (or terminals) to choose, it is important to consider customer demographics, traffic patterns, average sales volume, and industry trends for payments, just to name a few. Carefully review the specs of the terminal options your payment processor provides and consult with your provider to decide what options would suit your best. 

How does a POS system work?

A POS system works in conjunction with your payment processing provider to complete transactions and store the related data, either with an on-site server or (more commonly) a cloud-based server. Since most businesses rely on card transactions, it’s also important to understand the ins and outs of payment processing. For more in-depth information on credit card processing, check out this blog.

Ready to learn about how Stax can support all of your point-of-sale needs, including best-in-class POS terminals and award-winning customer support? 

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