Cloud Accounting Comparison – Payment Processing
Most businesses need to offer methods other than cash or checks to accept payment, which is where payment processing comes in. A struggle that users often have is having an integrated system where their payment processor is in sync with their
Cloud Accounting Payment Processing
The payment processing comparison points include:
- Process using PayPal: PayPal is the leading online payment processor. Does the software have the ability to accept this type of payment?
- Process using other third-party payment processors: There are many, many payment processors, so can the software work third-party payment processors?
- Process using in-house payment processor: Does the software have the ability to process payments in-house without using a third-party payment processor?
- Rate for in-house payment processor: What’s the rate for in-house payment processing?
- Automatically enter payment into your software: Can the software record these payments into the software for you (to either enter them as a new income or to receive payment for an invoice)?
- Accept payments in person: Not all customers want to make a payment via the Internet, does the payment processor allow for in-person payments?
- Accept payments over the phone: Does the payment processor allow for the manual entry of credit card numbers so that a customer’s payment information can be received over the phone?
- Accept credit card payments: Are credit card payments accepted?
- Accept bank payments: Are bank payments accepted?
I have to start this section by stating that I have not tested the payment services from the majority of the software reviewed, because it was either impossible due to country restrictions or impractical to set up the merchant accounts. This is also one of the only sections where I include third-party capabilities as part of the review, since a lot of the payment processing capability is done in this way.
QuickBooks Online has the most flexibility and options when it comes to payment processing, whether it be accepting payments, by bank / credit card, online, in-person (desktop or mobile), or by phone.
From what I can see from my limited testing, the payment processors with other accounting software are completely fine, but who you choose may matter on how much flexibility you need in processing payments. For example, If you want to accept only bank payments (because of the low fees), and don’t want to accept credit cards (because of the high fees), your payment processing options become limited.
Xero
Xero adds a “Pay Now” button on online invoices where customers are able to enter their payment information and pay. Xero doesn’t do payment processing in-house, so you have to sign up with a third-party payment processor to enable the service.
For all payment processors, except PayPal, Xero will record the invoice payment for you. However, it doesn’t handle the entry of payment processor fees.
Now while Xero doesn’t enter PayPal payment transactions for you, because Xero can link up to your PayPal account and import transactions, the process of entering payments is not so bad.
QuickBooks Online US
QuickBooks Online options for Payment processing are quite numerous and complex, so I won’t dive into a complete review of all options. Basically, you can get set up to receive payments through Intuit PaymentNetwork, Intuit Merchant Services, or through a third-party provider, such as PayPal. For the purpose of this comparison, I’ve used the rates for the Intuit PaymentNetwork. In-house, QuickBooks Online can pretty much handle any type of payment. While you can use a third-party provider, such as PayPal, the integration isn’t as deep as it’s in-house solutions.
Kashoo
There’s no payment processing capability with Kashoo (although technically you could use Kashoo’s integration with FreshBooks to gain such functionality).
Wave
Wave Payments (which is a built-in payment processing integration using Stripe), allows you to accept credit card payments for invoices via a “pay now” link. The services is straight-forward. Easy setup, no monthly charge, no setup fees, easy to cancel, and the rate is fixed at $.30 per transaction plus 2.9% of the transaction total. This is a pretty ideal setup for small businesses. On top of that, the payments are automatically applied to invoices within Wave.
FreeAgent
FreeAgent can accept payments through an integration with PayPal, or depending on where you live, services like GoCardless and Dwolla (which allow you to accept bank payments). If you use PayPal, the payments will automatically be applied to invoices.
FreshBooks
FreshBooks can accept payments via PayPal or a multitude of third-party payment providers (the most I’ve seen out of all the accounting software). So, your ability to accept payments online is very flexible. I gave FreshBooks some extra credit in the score department, since they have so many options for payment processors.
For a complete list of the articles in this series - Cloud Accounting Introduction
Category: Cloud Accounting, Expert's Corner, Greg's Cloud Acounting