The 7 Best Credit Card Processing Companies of 2020 - Investopedia

The 7 Best Credit Card Processing Companies of 2020 - Investopedia


The 7 Best Credit Card Processing Companies of 2020 - Investopedia

Posted: 15 Oct 2020 09:07 AM PDT

What Is a Credit Card Processor?

If you're a business owner who wants to accept credit cards, debit cards, or mobile payments, then you're called a merchant. Credit card processors, also called merchant service providers or acquiring service providers, administer a service so you can accept credit card payments at your business. 

Merchant providers offer software so you can view your transactions, fees, chargebacks, and more on a single dashboard. Typically, business owners can purchase or lease hardware, including devices like card terminals or mobile readers.

Any business that accepts credit cards, whether it's a restaurant or retail shop, uses a service and devices for credit card processing. Merchant services may also integrate with point of sale (POS) systems, customer relationship management (CMS) software, or accounting programs. 

Although it only takes seconds to accept a credit card payment, there's an intricate (and fast) process that involves authorization and authentication behind the scenes. Various security protocols are followed, and information is transferred to both the credit card network and the credit card's issuing bank. 

How Do Merchant Providers Work?

Merchant providers are the go-between service that connects everything behind the scenes. Providers connect to the credit card network, thousands of issuing banks, and your banking services. To ensure the utmost security, most credit card processors are PCI-compliant and use advanced encryption methods.

To select the right credit card processing services, it's essential to review your current or projected credit card payment volume and where customers pay (online, at your cash register, or via mobile devices). Then compare companies by looking at how much you'll pay for processing while assessing customer support and extra services. 

What Equipment Do I Need to Accept Credit Cards?

From a small Square phone device to a freestanding POS register, your processing equipment depends on your merchant service provider requirements, what systems you already have, and how you want to accept payments. As more stores add mobile options, you may have kiosks or mobile payment devices available in your store, along with a card terminal at your checkout counter. 

Although you don't need special devices for e-commerce payments, many credit card processors may charge different online purchase rates or require you to purchase a separate plan for online services. 

What Are the Costs of Credit Card Processing?

Merchant credit services charge various per-transaction fees and offer monthly subscription programs. The most common cost is the interchange rate. Credit cards like Visa charge this fee, and it gets passed to you. 

Most processors use an interchange-plus pricing model. This fee includes a percentage of your sale that goes to the processor and a rate per payment fee. Prices vary by company but typically have the following ranges: 

  • Monthly fees: $0 to $599 per month
  • Transaction fees: 0% to 3.5% per payment
  • Flat-rate fees: $0.05 to $0.30 per transaction

How We Chose the Best Credit Card Processing Companies

To narrow our credit processors list to only seven, we looked at dozens of reputable merchant providers. To make our top list, providers had to be PCI-compliant and accept all standard credit cards. For providers servicing high-volume accounts, 24/7 customer service was a must.

However, we know business owners need more than just one more service. Integrations with your software are key, which is why we looked at processors that offer syncing capabilities with your CMS, accounting, and POS systems. 

We narrowed our list further by assessing total cost differences between companies with subscriptions or transaction fees while balancing out the benefits of extra services or software options, like inventory management software. Furthermore, we combed through data to uncover details about processing times and ease of setup.

This Week In Credit Card News: Holiday Gift Card Sales May Double; Pandemic Has Changed Many Small Businesses - Forbes

Posted: 16 Oct 2020 11:20 AM PDT

Covid-19's Long Shadow Is Prompting a Rise in Gift Card Sales, Including Digital Cards

Payment firms are trying to work out how consumers may change holiday spending habits this year during this pandemic. A study indicates processors expect a healthy jump in e-commerce volume, including a surge for gift cards. Consumers intend to buy 10 gift cards on average during the holiday season, twice the average number in 2019. Digital gift cards appear to be enjoying strong demand as consumers can not only shop for them online but also deliver them remotely. The volume of digital cards sold on merchant sites is up 74% so far this year. [Digital Transactions]

35% of Small Businesses Would Not Have Survived the Pandemic without Ecommerce

According to the Chase Ink study, 35% of small businesses say they would have closed during the pandemic without ecommerce. This year, 19% of small businesses began selling products and services online for the first time, and 44% of online merchants saw an increase in sales during 2020. On average, ecommerce businesses have seen a 37% uptick in online sales from 2019 to 2020. Nearly two-thirds (64%) of small business owners who made changes this year say they will maintain those changes next year. [LowCards.com]

Pandemic Hammers Small Businesses Vital to Economic Recovery

The pandemic has hammered small businesses across the United States. Normally, small employers are a vital source of hiring after a recession. They account for nearly half the economy's output and an outsize portion of new jobs. Roughly one in five small businesses have closed, according to the data firm Womply. [Associated Press]

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Short-Term Interest Rates Are Close to Zero. Some Credit Cards Are Still Charging 30%

Short-term benchmark interest rates are close to zero. For mortgages, home buyers are paying less than ever. Credit card borrowers have no such luck, with some retail store cards charging APRs of nearly 30%. Last week the Federal Reserve found that the average APR for revolving credit products—that is, credit cards—jumped to 16.43% for August from an average of 15.78% in the second quarter. Among the most expensive cards out there: Retail store credit cards which charge nearly a third more, on average, than general-purpose cards. [Money]

Chase Points Are Now Worth Up to 50% More When Redeeming for Apple

Consumer spending has drastically shifted in the last seven months. And credit card companies have taken note by pivoting their benefits and redemption opportunities. Chase has been one of the most agile, shifting bonus categories and offering new ways to redeem points, particularly with travel-focused cards. Now, Chase cardholders can get up to 50% more value when purchasing eligible Apple products through Ultimate Rewards from Oct. 15, 2020 through Nov. 15, 2020. [The Points Guy]

Citi Prestige Offering 5x Points on Online, Cable, and Streaming Purchases

If you have the Citi Prestige Card, you could earn big bonus rewards until the end of the year. Through Dec. 31, 2020, the card earns 5 points per $1 on online, cable, and streaming purchases, up to a maximum of 7,500 points. [The Motley Fool]

Get Up to $300 Bonus Cash Back with These Amex Blue Cash Credit Cards

For a limited time now through December 10, the Blue Cash Preferred Card from American Express is offering a $0 introductory annual fee for new card members ($95 per year thereafter) and a $300 statement credit after you spend $3,000 in purchases on your new card within the first six months after opening the account. Also, the Blue Cash Everyday Card from American Express is offering a $200 statement credit after you spend $1,000 in purchases on your new card within the first three months after opening the account. The Blue Cash Everyday never has an annual fee. [CNN]

Credit and Debit Card Market Share by Network and Issuer

82% of American adults had a debit card in 2018, the most recent year for which this data has been published; 72% had a credit card. According to the Nilson Report, the 2019 market share for the top issuers of credit cards based on outstanding balances was: Chase: 16.6%; Citi: 11.6%; American Express AXP : 11.3%; Bank of America BAC : 10.7%; Capital One COF : 10.5%; and Discover: 7.6%. [The Motley Fool]

The Resurgence of QR Codes

The pandemic has changed how customers shop. For customers, QR codes allow them to easily access menus and pay for food at restaurants, pay for a carton of milk at the grocery store or nectarines at the farmer's market and more. From a business perspective, QR codes are allowing restaurants, retailers and even small businesses to reestablish trust with customers as they reenter storefronts following the pandemic. [Mobile Payments Today]

Wells Fargo Sees Some Credit And Debit Card Gains Amid Generally Bad Q3

Wells Fargo reported that card fees rose to $912 million in the third period, up from $797 million in second quarter. The bank said that was predominantly due to increased consumer spending. Wells Fargo also saw heightened debit card usage during Q3. Debit card point-of-sale purchase volume was up 11% from a year ago. The firm also reported an uptick in digital-banking activity during the quarter. But credit card point-of-sale purchase volume fell 6% year on year. [PYMNTS]

UK Banks Plan to Hike Cost of Credit Card Borrowing

Banks are poised to increase the cost of credit card borrowing in the runup to Christmas, leading to fears that the UK's poorest households will be priced out of vital credit as the furlough scheme ends and unemployment begins to climb. A majority of lenders are also expected to restrict loan products in the fourth quarter. The worsening outlook for many consumers was emphasized by industry forecasts predicting a rise in defaults on unsecured loans and mortgages over the next three months. [The Guardian]

What's the Difference Between Credit Card Preapproval and Pre-Qualification?

When you're considering applying for a credit card, it's helpful to know beforehand whether you have a good chance of getting approved, especially if you aren't sure your credit score is high enough. Consumers can get a better sense of their odds by getting "pre-qualified" or being "preapproved" by the credit card issuer. The terms are similar, and some issuers even use them interchangeably. But there's an important distinction. [The Street]

How Credit Cards Are Accommodating Transgender Identity

Transgender and nonbinary people can face an extra level of scrutiny and risk having embarrassing confrontations when they make a purchase using a credit card or debit card that doesn't reflect their true identity. That's why credit card companies are starting to offer cards that enable transgender and nonbinary individuals to reflect their true identity. Here is a look at the cards, how they work and how to get them. [US News & World Report]

Best Business Credit Cards For Startups and New Businesses Of 2020 - Forbes

Posted: 05 Jun 2020 12:00 AM PDT

The American Express® Business Gold Card offers a unique and tailored approach for businesses to generate 4 points per dollar automatically on the expense categories that they spend the most during each billing cycle. As time goes by, expenses can evolve throughout the stages of the business and the American Express® Business Gold Card will automatically reward the two top categories with a lucrative 4 points per dollar.

Membership Rewards® points are valuable and well-regarded and offer exceptional value when booking travel by transferring to airline and hotel transferred partners.

Rewards: Earn 4 Membership Rewards® points per dollar spent on the two categories that the business had the most spend each billing cycle. The categories include: airfare purchased directly from airlines, U.S. advertising purchases in select media (online, TV, radio), purchases made directly from select U.S. technology providers of computer hardware, software, and cloud solutions, U.S. gas stations, purchases at restaurants worldwide, and shipping.

Earning 4 points per dollar applies to the first $150,000 in combined two category-purchases each calendar year, then earn 1 point per dollar thereafter. A cardmember that takes maximum advantage of the 4 points per dollar rewards-earning potential would generate an impressive 600,000 points on combined purchases on those categories alone, which is worth $6,000 at minimum.

Welcome Offer: Earn 35,000 Membership Rewards® points after you spend $5,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership. Due to the impact of COVID-19, eligible card accounts that offer a welcome offer that was approved from December 1, 2019, through May 31, 2020, will receive an extension of an additional 3 months to complete the minimum spending requirement.

Annual Fee: $295 (see rates and fees)

Benefits and Drawbacks: Cardmembers can redeem points to book flights through American Express Travel using Membership Rewards® Pay with Points and get 25% of those points back (up to 250,000 points back in a calendar year). Points can also be transferred to American Express' airline and hotel transfer partners.

However, the $295 annual fee is high compared to other business credit cards, and the 4 points per dollar two-category spend is capped at $150,000 annually. Since this is a charge card, it does not offer the opportunity to carry a balance.

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