Top 5 Online Payment Services for Small Businesses and Freelancers

The anonymity and ease of carrying $5 in cash to tip the barista or buy a pack of gum doesn’t translate well on the internet. But as more people get comfortable with online payments, new micropayment services are popping up to try and accommodate everything from an office pool for a coworker’s gift to an invoice from a freelancer. Here are five of those services, ranked in order of simplicity.

1. UPside Card

Plastyc teamed up with eBillme on a cheap way for freelancers to send invoices to their clients without a credit card reader, personal or merchant bank account, cell phone or software of any kind. The merchant only needs a social security number and the client’s e-mail address to send an invoice, and the clients can pay online with their own bank accounts. The money goes onto a VISA debit card within two days and merchants can also use their UPside accounts to write checks.

Fees: $2.99 per month, with a $1.70 fee for ATM withdrawals.

2. Square

Square is a mobile application for swiping credit cards in person and sending receipts electronically. The point-of-sale terminal is the size of an ice cube and plugs into the iPhone, iPad or Android. The company will immediately deposit up to $1000 per week into the merchant’s bank account and any remaining balance in 30 days.

Fees: The cost per transaction is 2.75% of the total, plus a 15-cent flat fee for swiped transactions. For manual or keyed entry, it’s 3.5% plus a 15-cent flat fee.

3. Paypal

Paypal is good for accepting payments on a website, with profit and loss statements, inventory tracking, and a variety of “pay now” buttons to install, and the buyer doesn’t need a Paypal account to make a payment. If both parties have a Paypal account, merchants can also send a bill to the client’s e-mail address. Etsy and eBay both use Paypal.

Fees: No monthly fee for a Website Payments Standard package or $30 per month for a Website Payments Pro package, with 2.9% plus $0.30 per transaction up to $3,000, 2.5% plus $0.30 up to $10,000, 2.2% plus $0.30 for transactions over $10,000. Recurring payments, like subscriptions, are an additional $19.99 per month.

4. Amazon Payments

Amazon offers a checkout and payments service for e-commerce retailers that enables customers to pay on the merchant’s e-commerce or mobile website using their Amazon accounts. For virtual goods and services, there is also a simple payment option for one-time payments, subscriptions, marketplace payments and donations. This is the service that Kickstarter uses to take pledges from project backers.

Fees: Transactions under $10 cost $0.05 plus 5%. All other transactions are $0.30, plus 2.9% for transactions under $3,000, 2.5% for transactions up t0 $10,000, 2.2% up to $100,000 and 1.9% beyond that.

5. GoPayment (Intuit)

Intuit’s GoPayment is a mobile payment service similar to Square. It’s more expensive, but the advantage is that merchants can sync their payment data with Quickbooks Pro or Premier. The money goes into an Intuit merchant account in 2-3 days.

Fees: $12.95 per month, plus $0.30 per transaction and 1.7% for swiped transactions, 2.7% for manual transactions, and 3.7% for non-qualified transactions. The point of sale terminal is $179.99.