Free Credit Card Processing: Types, Legality & Solutions

An EFTPOS terminal swipe or smartphone credit card swiper processes transactions by collecting data stored in the magnetic strip on the rear of the card. Whether you’re using a credit card swiper for Android or iPhone, a fixed POS terminal, or a contactless card reader, how they communicate is the same. We outlined the pros and cons of small business credit card swipe machines above, now let’s compare the pros and cons of a mobile app against physical terminals.
Stax’s base plan costs $99 per month and includes recurring invoices, ACH processing and a free terminal or mobile reader. Its midtier plan is $159 per month and includes application programming interface capabilities, enhanced reporting and Text2Pay mobile payments. Its most expensive plan is $199 per month and includes data exports and automatic updates for credit cards stored in your terminal or card reader.
However, with this program, you will always know the exact price you’re receiving for a specific good or service. Based on the table above, it’s clear that the advantage of cash discounts is that it minimizes your merchant account fees and risk of chargebacks. On the other hand, credit card surcharging allows you to recover your merchant account fees by passing it on to your customers. Credit surcharging is also subject to card network compliance. Generally speaking, we don’t recommend small businesses use “zero-fee” or “no-cost” payment processing strategies because of the poor customer experience it creates.
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Mobile credit card readers are the most affordable option, typically ranging from free to $100. These card readers connect to your phone or tablet through the headphone jack or Bluetooth and work using a credit card payment app that you’ve installed on your device. Many processors offer free magstripe card readers to their new customers, no strings attached. However, in most cases, you’ll want to upgrade to one that accepts chip cards or splurge on a model that supports all three acceptance methods – magstripe, EMV chip and NFC contactless payments. Mobile card readers are available from both full-service and mobile credit card processing companies.
Only retailers and restaurants qualify for the Zero Cost plan, though. Square also offers its full suite of hardware, software and services in Spanish for U.S. business owners. The 4.7 million Hispanic-owned businesses will now be able to access payment solutions in their own language. Additionally, Square has bolstered its contingent of Spanish-speaking customer service reps. Merchant One is a reseller of Clover POS hardware, which makes it an alternative to Square. Recently, Clover parent company Fiserv announced that it would acquire Merchant One, which will likely bring even more integration between the two systems.
If it is accepted, theprocessing service then process the payment and then charging the purchased amount to the card. If you’re a brick-and-mortar business, it’s important to note that online processing fees are usually higher than fees to accept credit cards in-store. For example, Square’s transaction fees for swiped or contactless payments start at only 2.6% plus 10 cents per transaction. You may want to consider whether or not you even need a card reader.
Processing fees paid by merchants in 2021 goods and services paid via card. We think it’s important for you to understand how we make money. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials. If you have not had a single transaction in the last 12 months, you pay a monthly inactivity fee of $3.99. This fee stops applying as soon as you take the first payment again.
Allow you to accept all major cards, including Discover and American Express, so you don’t lose sales from users of certain cards. Address Verification Service fees are usually a few cents per transaction when you use this anti-fraud tool to verify the address and ZIP code of the cardholder. Merchants have a choice of interchange-plus or tiered processing rates. It charges a per-transaction fee as part of its in-person processing rate, which makes small tickets more expensive to process. Clover has some added costs, such as a monthly platform fee and an application fee. Read Author Review Share your experience with this company With Mercury Payment Systems, merchants have a dependable POS system.
It’s important that your business will not be held responsible for losses. Reputable companies with experience in protecting sensitive data will help protect your business. With a flat-rate pricing model, the vendor charges you a fixed percentage of each sale regardless of whether the customer is using a Visa, Mastercard or any other credit card. There could also be a per-transaction fee that depends on whether the transaction was an in-person or card-not-present payment.