If you plan on selling your handmade items, you’ll need to be able to accept payments. When selling through an online marketplace (like Etsy or Artfire), the marketplace collects the payment from the customer on your behalf. The marketplace then takes a portion of the sale (their processing fees) and deposits the rest into your account. But, if you are selling in person, you’ll need a method of collecting payments. Here are your options:
1) Cash or checks. Cash or checks are the easiest way to collect funds from local customers. Remember to allow checks to clear before giving the customer their item.
2) Credit card readers. There are a number of small business credit card readers available. The credit card readers hook into your smartphone or tablet and process the customer payment on your behalf. The company then takes a portion of the sale for processing the payment and deposits the remaining funds into your account. The needs of each small business vary, so compare your options to figure out which reader suits your small business best. For example, if you primarily take orders over the phone, make sure you choose a credit card reader with lower fees for keyed in transactions. To help you decide which will work best for your needs, I’ve summarized some main points about each in the chart below. Links to each credit card reader can be found at the end of the article.
Information below updated 4/11/16.
|Reader||Cost||Fees||Deposit Availability||Other Notes|
|Square||Free. Order online. $10 in office or electronic stores that is credited back to your account after use.||Swiped: 2.75%, Keyed in: 3.5% + $0.15||1 business day, includes all business processed before 8pm ET the preceding day.||Additional features likes a register app, Square store, and more available. Email only customer service.|
|PayAnywhere||Free. Order online. $15 in office or electronic stores that can be credited back to your account after use.||Swiped: 2.69%, Keyed: 3.49% + $0.19||1 business day, includes all business processed before 5pm ET the preceding day.||Storefronts available for larger vendors. Rates for storefronts from 1.69% (and up) per swipe.|
GoPayment by Intuit
|Free. Order online.||Two plans available. 1) $0 monthly, Swiped: 2.40% + $0.25, Keyed in: 3.40% + $0.25 2) $19.95 monthly, Swiped: 1.75% + $0.25, Keyed in: 3.15% + $0.25||2-3 business days||Automatically imports information into Quickbooks for easy accounting.|
|Etsy Card Reader||Free. Order online.||Swiped: 2.75%, Keyed in: 3% + $0.25||Money goes to your Etsy shop account and is deposited each Monday. Earlier deposits are available.||No Etsy transaction fees from items listed in your shop and paid via the card reader. No listing fees for items sold via the Quick Listing (not listed in your Etsy shop).|
|Paypal Here by Paypal||Free. Order online.||Swiped: 2.7%, Keyed in: 3.5% + $0.15||Money goes to your Paypal account for you to transfer to your bank when ready. Money is instantly available with the Paypal debit card.||Can also accept payment from your customer’s Paypal account.|
No longer accepting customers.
|Flint||No reader needed. App is free from Google Play or App Store.||Processes through Stripe. 2.9% + $0.30.||Within 2 business days.||Simply take a photo of the card and it is securely processed. Image is not stored on your device. Optional integration with Quickbooks. Mixed reviews online.|
Update 10/26/15: The USA has recently switched to EMV credit card readers. Learn more about them in this post.
A quick (but important) note for newer sellers: Always collect payment before you begin working on any item for any customer. No seller ever wants to put the supplies and time into an item, especially a custom item that you might not be able to resell, and then have the customer not follow through with the sale.
Having customers pay in person is great for fairs and local sales, but what if you need to collect payment for items that you aren’t selling through an online marketplace, and the customer is not local? Online invoicing is a great way to easily do so. Read on to part two of this article, which covers online invoicing.
Links to credit card reader websites
Disclosure: I received no compensation from any of the companies mentioned in this article. I was not asked by any company to write this post, nor have I informed them of this comparison post.