There are seemingly endless apps and services available aimed at small businesses in need of collecting payments. But business owners beware: they’re far from created equally. While a few are positioned as if they offer the same benefits, the reality is that each one carries with it different fees, payment lead times and particulars that could make a real difference in your collections and cash flow. Here’s a look at some of the leading payment providers and why one may be a better choice than another for you and your business.
How do Small Businesses Collect Payments?
Many small businesses, especially those that provide blue collar services, still accept payments via cash or checks. This can be problematic for a variety of reasons, including convenience for customers, lacking payment records, difficulty with collections and more. Because of this, many small businesses want to go digital. As they transition from manual payment management to digital, they may explore some of the most well-known providers like Square, Venmo, PayPal and Stripe. We’d also encourage them to explore our platform, Finli. To help you decide which to consider, here’s some more information and side by side price comparisons.
Finli’s New, Simplified Pricing
We recently rolled out what we like to call “no nonsense pricing,” because that’s exactly what it is — $39/month and no hidden fees. When we say flat fee, we mean it – you won’t have any hidden fees or unexpected hurdles to jump over with this plan.
When you sign up for our pro pricing, you can accept ACH payments for free (yes, really free) and card payments for 3%. You’ll also have access to all the features we’ve designed especially for services businesses like unlimited invoice issuing, digital payment collections, automated invoice follow-up and more. And you won’t need any additional merchant payment providers.
Given that many platforms charge 3%, ACH fees, monthly subscription fees just to accept payments, PCI compliance fees, etc., our simplified pricing is a welcome change for business owners who want to have predictable, affordable costs and rich functionality for their payments solution.
Is Square or Stripe Better?
So, this begs the question: What about Square or Stripe? To be frank, Square offers many of the features that Finli does but it’s better suited for online or in-person “pay here” products. View our comparison chart here.
Stripe, on the flip side, lags behind both in several capacities that smaller service businesses need. To start, they charge .5% per invoice and don’t have automated invoice follow-up, leaving you without a streamlined, respectful way to collect overdue customer payments. Even more importantly, Stripe’s funding lead time can be as much as 90 days. This just won’t work for most small businesses that are struggling with cash flow and need their customer payments now, not three months from now.
Is Venmo Good for Small Business?
Many people use Venmo for personal payments, so how does it stack up for businesses? Well, Venmo’s pricing and payment lead times are competitive, but that’s where the benefits to businesses end. The payments solution only offers invoicing and client communication tools to app users, restricting usage and flexibility. And, there’s no automatic invoice follow-up, meaning you have to chase down overdue payments yourself (or leave money on the table). So while Venmo is excellent for person-to-person transactions, it’s a far cry from excellent for business purposes.
How is PayPal as a Business Payments Platform?
Another popular choice is PayPal, but the well-known solution wasn’t built for small businesses. Its ACH and card fees are fairly steep and it doesn’t enable invoicing or payments via text and email. It can take up to 21 days to receive funds, which is far too long, and it doesn’t have client communication tools or automated invoice follow-up. Given all of these factors, PayPal is actually a poor – and costly – choice for small businesses.
What is the Most Effective Payment Method?
While Finli isn’t all things for all businesses, it’s hands-down the best payment solution for small companies that are moving from manual to digital payments. Finli is more comprehensive and cost-effective, and won’t hold you up by holding onto your money like most other options do.
Full disclosure: We’re not the best choice if you have someone paying with a card in-person, or for a “buy here” button on a website. But that’s ok – we don’t need to be. For our clients who provide valuable service to their customers, we keep costs low (and predictable), handle payment collections for them, make paying easier for their customers, eliminate the need for additional merchant payment providers and help bring their businesses into the future.
Ready to move on from hidden fees, missing features and complicated pricing? We’re here and we’re eager to show you how easy and cost-effective payments management can be. Learn more and sign-up for Finli today!