The best online payment methods for small businesses
Online payments are an emerging technology that can help you gain more customers, cut expensive costs, and simplify accounting processes. But it’s smart to compare the best online payment methods for small businesses to find the right solution for your needs.
A few major players dominate the credit card processing industry. But many providers can help your company process payments online, and they’re all structured differently.
There are five features you’ll want to look out for when comparing the best online payment providers.
- Price: How is the pricing set up? Which transactions are assessed a fee, and at what rate?
- Features: What unique offering does the provider bring to the table?
- Flexibility: Can customers choose whether to pay by credit, debit, or bank transfer?
- Functionality: How does the payment processing software integrate with your business?
- Security: Does the provider offer fraud protection? Are payments secure?
Let’s compare several online payment processors for small businesses. You can see how some of the most popular choices stack up against each other and who they’re best for.
PayPal
PayPal is one of the biggest names in online payments, with over 346 million customers. Its big reputation has earned businesses’ and consumers’ trust for security and risk management.
Who is it for?
This option is best for e-commerce businesses looking for standard payment processing. PayPal offers a fast, simple way to start accepting payments. But you’ll need to check with your shopping cart provider or e-commerce platform to confirm whether PayPal checkout is compatible with your site.
What types of payments does it accept?
PayPal users can pay using their PayPal account balance, PayPal CREDIT, a debit or credit card, or a bank account.
What does it cost?
If you’re selling goods or services through an online transaction in the U.S., you’ll pay a merchant fee of 2.9% of the transaction amount and a 30¢ fixed fee. Micropayments under $10 are subject to a fee of 5% of the transaction amount, plus a fixed fee based on the currency.
Depending on the size of your transactions, this payment method could be expensive for your small business.
Venmo
Venmo is known for processing peer-to-peer (P2P) payments, but the app also has a business side. Their social commerce platform can help build brand awareness because users can see, like, and comment on each other’s purchases.
Who is it for?
Venmo can be a good choice for street vendors who need a way to accept cashless payments. Users can quickly scan a QR code linked to your business account and send money to complete a sale. These payments come with instant confirmation of funds. You can also integrate Venmo as a checkout option on your app or website.
What types of payments does it accept?
To pay with Venmo, users must link their bank accounts or debit cards. Credit cards are subject to an additional charge. This payment method could deter customers who want to pay off purchases over time.
What does it cost?
There are no setup fees or monthly subscription costs, and payments are free to receive. However, there is a fee for electronic withdrawals using the Instant Transfer feature. If you want immediate access to your money, you will pay a fee of 1% (minimum 25¢, maximum $10).
QuickBooks Payments
QuickBooks Payments is one of the most dynamic online payment methods for small businesses. It’s capable of streamlining a variety of accounting processes to save you time.
Who is it for?
QuickBooks Payments offers a solution for small businesses in every industry, including online and brick-and-mortar retailers.
If your small business operates an e-commerce website, QuickBooks integrates seamlessly with platforms like Shopify, BigCommerce, and similar web stores. When you complete a sale, QuickBooks calculates sales tax, processes the payment, creates a sales receipt, and records the transaction. You can also enjoy more peace of mind with security fraud protection and secure 128-bit encryption.
Additionally, QuickBooks offers a simple way to accept payments from anywhere using their mobile app. If you need to take credit card payments over the phone, you can use their virtual credit card terminal. Own a brick-and-mortar store? Accept payments using the QuickBooks card reader, capable of complete POS integration. You can also send invoices with an optional “Pay Now” option for built-in payment processing. QuickBooks Payments also features Get Paid Upfront invoice financing, which helps you access funds from invoices upfront for just 3% per financed invoice. This feature can help you access the cash you need from your outstanding invoices, without the wait.
QuickBooks Payments connects seamlessly to QuickBooks Online and QuickBooks Checking, so you can manage your business money from one place.
What types of payments does it accept?
Customers can pay with a credit, debit card, or ACH transfer. And you can choose how customers pay. For example, if you’d like to receive a bank transfer for an invoice of $500, simply turn off the card option.
What does it cost?
QuickBooks is one of the best payment options for small businesses because they charge one simple rate when using the card reader. QuickBooks charges 2.4% and 25¢ per swipe, dip, or tap for Visa, Mastercard, American Express, and Discover. ACH bank transfers cost 1% and have a maximum of $10. Funds arrive in your bank account the next business day, ensuring you get paid quickly.
If you’re selling online, you can pay as you go for $0 per month with a 2.4% swipe qualified rate, 3.5% keyed qualified rate, and 30¢ transaction fee. Or you can enjoy discounted fees with a $20 monthly subscription, charged at 1.6%, 3.3%, and 30¢, respectively. Virtual credit card and eCheck processing rates for QuickBooks customers are 2.4% swiped, 2.9% invoiced, or 3.4% keyed, plus 25¢ per transaction.
Most importantly, there are never any upfront expenses, hidden costs, or termination fees.