You might have known that QuickBooks offers a possibility for businesses to accept credit card payments. This feature, available across various QuickBooks solutions, provides convenience in receiving and accounting for customer payments under the same roof. However, this convenience comes with the cost of credit card fees for payment processing, which you should factor in.
Let’s figure out how accepting payments works in QuickBooks and how much it might cost you.
A look at QuickBooks Payments (part of QuickBooks Merchant Services)
Before we get to the costs, let’s look at how you accept payments at QuickBooks.
QuickBooks utilizes its proprietary payment processing solution called QuickBooks Payments. This integrated system allows businesses to accept various forms of payment, including credit cards, directly within the QuickBooks platform.
QuickBooks Payments is part of QuickBooks Merchant Services, which offers a variety of payment processing solutions. QuickBooks Payments focuses on integrated payment processing within QuickBooks Online. QuickBooks Merchant Services encompasses a broader range of options, including point-of-sale systems, mobile payments, and ecommerce solutions, catering to diverse business needs.
Looking to automate your QuickBooks accounting? Let Synder work its magic and bring all your sales channels and payment processors together, and provide you with a breakdown of processing fees per each connected channel.
Get hands-on experience of using Synder during a 15-day free trial and book a seat at our Weekly Public Demo for a guided tour by our support team.
Check out the full list of integrations for QuickBooks Online and QuickBooks Desktop here and make smart data-based business decisions with Synder.
How does QuickBooks Payments work?
QuickBooks Payments essentially works as a payment gateway integrated directly within the QuickBooks platform. When a customer makes a payment, the transaction is processed securely through QuickBooks Payments.
Here’s how a credit card payment looks, simply put.
- You generate an invoice or sales receipt within QuickBooks Online for the goods or services provided to the customer.
- QuickBooks Payments allows you to include a Pay Now button or payment link on the invoice or sales receipt sent to the customer. It makes it a convenient way for customers to make payments online.
- The customer clicks the button or link and enters their credit card details through the QuickBooks Payments interface.
- QuickBooks Payments securely processes the credit card transaction in real time, communicating with the customer’s bank and the credit card network to authorize and complete the payment.
- Once the transaction is approved, the funds are transferred from the customer’s credit card account to the merchant’s bank account. QuickBooks automatically records the payment and updates the user’s (in this case, yours) financial records accordingly.
- The user and the customer receive payment confirmation, and the invoice or sales receipt is marked as paid within QuickBooks Online.
As you can see, it’s very similar to how other payment gateways work processing payments. As mentioned, but worth repeating, payments made through QuickBooks Payments are automatically recorded in QuickBooks Online. This integration simplifies the accounting process for you as a business, as it eliminates manual entry of payment records, saving time and granting you more accuracy in your books.
How else can customers pay: methods QuickBooks Payments accepts
Another thing to mention before we go to the credit card processing fees is what payment methods you can offer your customers with QuickBooks Payments.
QuickBooks Payments offers flexible solutions for accepting payments online and on-site.
Online payments
For online payments, QuickBooks Payments enables businesses to send instantly payable invoices directly to their customers (see the example above). Customers can conveniently pay online using credit cards, debit cards, ACH bank payments, and popular digital wallets such as Apple Pay, PayPal, or Venmo. It allows customers to make payments securely using their preferred payment method. Businesses benefit from faster receivables and simplified invoicing procedures.
On-site payments
Besides, QuickBooks Payments provides options for on-site payments, utilizing the QuickBooks GoPayment mobile app and card reader to accept credit or debit card payments in person through tap, dip, or swipe. Customers can also make payments using their digital wallets directly on their mobile devices, further enhancing convenience and flexibility for both parties involved.
Find out how to add classes in QuickBooks and automatically apply them to your sales and how to categorize expenses in QuickBooks automatically with Synder.
Done with that, without much further ado, let’s go look at those payment processing fees at QuickBooks.
Credit card payment fees at QuickBooks: what will payment processing cost you?
QuickBooks charges variable credit card fees based on payment processing methods. So, how much does QuickBooks charge for credit card payments?
Let’s find out right away.
- For invoiced payments made using Visa, Mastercard, Discover, American Express, Apple Pay, PayPal, and Venmo, a fee of 2.99% applies.
- For in-person payments, a fee of 2.5% is charged for transactions made with Visa, Mastercard, Discover, American Express, and digital wallets like Apple Pay, Google Pay, and Samsung Pay using a card reader.
- For payments processed by manually entering customer card information, the fee is 3.5%.
It’s also worth mentioning that the fee of 1% applies to ACH bank payments.
What are credit card processing fees?
Your credit card processing rate is the price you pay for all the services involved in a transaction. This includes the fees charged by your merchant service provider, processor, issuing bank, and card association. The interchange fee is fixed and cannot be negotiated but there may be opportunities to reduce your communications and processing fees. For instance, merchants who process more than $7,500 a month can expect a 40% transaction discount with QuickBooks. This could be beneficial if you’re processing large amounts of payments. It’s important to compare rates as this could potentially save you money in the long run. Additionally, make sure that you do your research to find out which processor is best for your business. Ensure that the processor has all the features you need such as fraud prevention and online payment processing. By understanding the different types of payment processing fees, you can ensure that you get the best rate for your credit card processing rate.
How are QuickBooks credit card processing fees decided?
When a merchant processes a payment with a credit card, there are three distinct entities involved: the credit card issuer, the credit card network, and the payments processor. For the ability to process a card, the credit card issuer charges the seller a certain commission or fee. This fee is usually calculated as a percentage of the transaction and a flat fee. The most common credit card issuers are Chase, Citi, and Capital One, who partner with internationally recognized networks such as Visa and Mastercard. Lastly, payment processors also charge a portion of the transaction as well as a flat fee per transaction and their responsibility is to facilitate the secure exchange of information and funds.
By understanding how credit cards are processed, merchants have more control over their finances and can make informed decisions about which payment methods they choose to accept. Furthermore, this knowledge also helps merchants budget for processing fees since they now have an idea how much each transaction will cost them. Whether it be through digital payment platforms or physical cards, merchants should take advantage of this useful information to better manage their business expenses while improving customer satisfaction.
What goes into QuickBooks credit card processing fees?
When it comes to credit card processing fees, QuickBooks Payments offers a variety of options for businesses. They take into account a variety of factors such as PCI-compliance fees, chargeback fees, assessment fees, interchange fees, and annual account fees. It’s important to note that QuickBooks Payments does not charge any monthly fees or setup fees. The transaction fees are dependent upon the method used when processing payments; swiped, invoiced or keyed, plus there’s a flat fee per transaction. This makes it convenient for businesses who are seeking an affordable payment solution that is tailored to their specific needs.
What merchants like about QuickBooks Payments is their instant or next-day deposits. This helps business owners have more control over their cash flow and gives them peace of mind knowing they can access funds quickly. Furthermore, it helps business owners stay on top of their finances since they have access to real-time updates and data on all their payments. This allows them to make educated decisions to help improve their bottom line and maximize the return on their investments.
How to save money on QuickBooks credit card processing fees
Now that you understand what QuickBooks credit card processing fees are and how much they cost, let’s take a look at how you can save money on these fees.
The first step is to shop around for the best payment processing service for your business. Different payment processing services have different fees, so make sure you compare different services to find the one that offers the lowest fees for your business.
In addition to shopping around for the best payment processing service, you can also save money on QuickBooks credit card processing fees by using the right payment methods. For example, if you want to accept payments via PayPal, you can save money by using the PayPal Express Checkout feature, which charges a lower fee than the standard PayPal processing fee. Similarly, if you want to accept payments via ACH, you can save money by using the ACH Direct feature, which also charges a lower fee.
Finally, you can also save money on QuickBooks credit card processing fees by taking advantage of the payment processing services that QuickBooks offers. For example, if you are processing invoices or recurring payments, you can save money by taking advantage of the specialized services that QuickBooks offers for these types of payments.
Conclusion
The fees you pay when you accept credit cards are the single largest expense associated with running a business, second only to payroll. Because of this, it’s important for merchants to be aware of how credit card processing rates are calculated and what you can do to save money. If you accept payments online, you’ll need to make sure that your business is properly set up for credit card processing.
We hope that after reading this small guide you’ve got a better understanding of QuickBooks credit card fees and can make informed decisions about your business.
Want to read more about QuickBooks basics? Check out our articles on QuickBooks accounts receivable, QuickBooks trial balance.
