Credit Card Processors,
Fees, & Which To Choose
PCI Compliance, Lower Fees, High Risk Needs
We all are aware of PayPal, Square, and Stripe for credit card processing. As a marketing agency, we see these all of the time. These credit card processing services are excellent for those starting and earning less than $10,000/month in transactions. Once your business has moved beyond that threshold, you will pay more processing fees than you should. By moving to a better credit card processor, you will be able to increase your profits.
We work with multiple processors on our client's behalf. When you move from higher per-transaction costs, there are equally cons. The pros far outweigh the cons. If your marketing agency is doing its job correctly for your business, they would already be doing those items to protect your business's reputation online. We'll cover the cons and the pros, remove all the technobabble we hear all the time, and what they mean in terms you can understand.
Receive your payments at the end of the day and have them deposited most days the next business day.
Save money on processing fees.
Detailed reporting of all transactions.
Each vendor we work with makes certain that you adhere to the latest industry standards so that your business and your customer data is stored safely.
PCI Compliance - The biggest one we see anyone not doing your annual PCI compliance. With an actual credit card processor, you will need to do one.
If you have a full-service marketing agency, like Fawkes Digital Marketing, you will have PCI compliance testing done monthly. Your full-service marketing agency should be doing PCI compliance testing annually, whether you are with PayPal, Square, Stripe, or an actual credit card processing company. At Fawkes Digital Marketing, we perform a monthly PCI compliance test for every care plan customer and keep them in compliance.
Your full-service marketing agency should help you do this as they should have their "skin in the game" when protecting your digital asset online, including your PCI compliance. As the business owner, you are ultimately responsible for this. With your web designer equally involved, they will be more aware of the technology to help protect you and your customers.
The PCI compliance audit will typically take 1-2 hours to complete. The PCI compliance verification often takes less than an hour to complete. The first assessment will take longer as the questions you might not immediately have an answer. Your marketing agency with you the first time as they should be aware of every question asked.
Point of Sale systems - Point of Sale systems, or POS systems, most businesses run. These systems are integrated to keep track of your products, inventory, and more. Often they are "given" to the company for free or at a significantly cheap cost. The low cost to a business owner is they will often lock you into their credit card processing, where they get a cut of the sales. When it is a closed system, you will not be able to switch credit card processors and save money.
CBD - Not every provider will work with you if you sell CBD products. Thankfully, the providers have solutions so that you can sell CBD products and save money. With Square, Stripe, and PayPal, you are in violation of their terms, and if they find out (catch you), they can, and will, red flag you if you are caught selling it. Even if it is legal in the state, you are in.
We'll start where everyone wants. Lower Fees will typically be associated with using a dedicated processor. Don't think this will be an instant "win fall" where you make a fortune. The numbers will be small. Where you will typically save are:
Note: There are ways to make PayPal, Square, and Stripe work with your accounting software.
Before a processor gives you a custom rate, they consider several factors. They will analyze your type of industry, your credit history, business track record, and your sales record (whether it's established or a projection).
Some of the flat fees you can expect to receive from a payment processor include:
A critical point to note about flat fees is that you should review them before you sign a contract with a processor. If you fail to do so, you might end up with a substantial financial hit when your merchant statement comes in.
Processing fees are calculated per transaction and make up the bulk of what you will pay the processor.
Monthly minimum fees A credit card processor will, at times, charge you a fee when a specific action takes place. Examples of such event-related payments include:
To get the most out of a processor, you can seek discounts on negotiable situational fees while limiting the number of events that happen per month to trigger them.
Selecting the right credit card processor can be a tricky affair if you don't know how to benchmark the vendors. Let's take a closer look at the sticking points against which you must weigh each potential processor.
Credit card processors classify merchants they serve according to their risk level. As such, some processors serve high and low-risk segments with little overlap between them.
When determining a merchant's risk profile, a processor tends to look at:
A retail business that accepts most of its customer purchases in person will experience fewer instances of fraud. It will be hard for a malicious actor to use stolen credit cards, for example, if they have to pay at the till in person.
The numbers for each processor will vary depending on the (1) card type used, (2) whether it was swiped in-person or typed in, and (3) the amount of the transaction. The numbers below are averages we have seen to help you make a proper decision.
Description | Fawkes | PayPal | Square | Stripe |
Amount Recommended To Use | $2,500+ | $0 to $10,000 | $0 to $10,000 | $0 to $10,000 |
Monthly Charge | $0 to $20 | $0 to $50 | $0 to $50 | $0 to $50 |
Percentage Rates | 2.75% to 3.5% | 2.9% to 3.9% | 2.9% to 3.9% | 2.9% to 3.9% |
No Fee Card Processing / Can Pass Fees To Customer | Yes | No | No | No |
Reports | Yes | Yes | Yes | Yes |
Custom Reports | Yes | Limited | Limited | Limited |
Export to Accounting Solutions | Yes | Third-Party | Third-Party | Third-Party |
PCI Compliant | Yes, Annual Assement | Not Required | Not Required | Not Required |
Local Customer Support | Yes | No | No | No |
CDB Options Available | Yes | No | No | No |
eCommerce Ready | Yes | Yes | Yes | Yes |
Cash Discount | Yes | No | No | No |
Credit card companies and processors have a many terms. Some are common that we all grasp. Others will be new. Over the years we have created a list of commonly used words that we have consolidated into a simple set of frequently asked questions (FAQ) to help educate you on the terminology you will hear.
Our philosophy has always been honesty (this is our rule #1) and transparency in our services. There's no reason to hide costs unless you have something to hide. We've found that those who hide fees charge more successful businesses more money because they can. We do not feel this is the way America was meant to be. We believe in offering a fair price to everyone for the work that is done.
We also believe that once you sign on with us, you trust us, and as our thank you to you, we "price lock" our services for the plan(s) you signed up for at that time. This means while you are on those services, the price will always be the same. As business owners, we appreciate this as it allows us to budget our business expenses better.