Stripe, Square, and PayPal Users Are Doing This To Save Serious Money

Stripe, Square, and PayPal Users Are Doing This To Save Serious Money

If you’re like most business owners using Square, PayPal, or Stripe to accept credit cards, you are likely looking for ways to grow your business while also controlling your expenses. Accepting credit cards is one of the top 5 expenses a business has regardless of the credit card processor they choose.

Overspending on credit card processing can prevent you from being able to properly invest in technology and marketing solutions that will help you grow your business.

The Advantages & Disadvantages of Stripe, Square, and PayPal

Square, Stripe, and PayPal are great credit card processing solutions. The advantage of using one of these systems is very straightforward. Their modern sleek interfaces make them easy to use, their streamlined underwriting allows you to launch within minutes, and a flat 2.9% +.30 per transaction make them easier to understand. This can be great for a new business owner that doesn’t to take a chance on working with the wrong credit card processor or if they don’t plan on sales exceeding $5,000 per month.

The downsides of working with one of these platforms are glaring for businesses exceeding $5,000 per month in sales. For businesses exceeding $5,000 in sales monthly, they will likely overspend to the tune of hundreds, if not thousands, of dollars per month depending on their size. They will pay a premium to accept credit & debit cards while still not maintaining control of their customer data or have live customer support.

A Real Example: eCommerce Merchant Using Traditional Processor w/

We recently set up an eCommerce merchant account for a local retailer using Shopify and wanted to share the results we are helping them get when it comes to controlling their payment processing expenses. As you can see below, this merchant had sales of $35,936.99 with total fees of $865.57. They also paid $41.56 for, so their true total cost of acceptance for the month was $907.13, bringing their effective rate to 2.52%.

Had this merchant been using Stripe, Square, or PayPal for their online payment processing, they would’ve paid 2.9% +.30 cents per transaction. Let’s dive deeper to see what the outcome would have been. Below you will see the true breakdown of how many transactions they processed for each card type (Visa, MasterCard, American Express, Discover, etc.).

When we compare this merchant to Stripe, Square, and PayPal pricing we see that they would’ve paid 2.9% on net sales of $35,936.99, which would have cost them $1,042.17. There would have also been a $.30 charge per transaction which would have cost them an additional $99.60, bringing their total cost to $1,141.77, an effective rate of 3.18%!

Using Square, PayPal, or Stripe would’ve cost this merchant an additional .66% or an additional $237.18 per month. The reason these platforms are more expensive for e-commerce merchants is that debit cards often cost the business less than 1%. Per the image above, this merchant accepts more debit cards than American Express credit cards and almost as much as MasterCard credit cards.

Why Debit Cards Are So Much Less Expensive

In this article, I talk about the impact of the Durbin Legislation on the cost of accepting debit cards and why businesses haven’t been able to capitalize on this major advantage. In the image below you can see the true cost of accepting debit cards and where Square, PayPal, and Stripe profit most on most of their merchants. With most debit cards having a true cost of .0005% and .22 cents per swipe, these providers earn a mark-up of 2.65% + .08 cents when you factor in other costs that must be paid to debit card issuers like Wells Fargo, US Bank, Chase, and other banks and card brands. The total interchange (fees paid to the debit card issuer) for $4,695.49 was only $17.73 or .38%. Even when the fees paid to Visa and the payment processor are factored in, their total costs for accepting Visa debit cards total $26.97 or .0057%. This is where the majority of Square, PayPal, and Stripe users can save a considerable amount of money. Being able to accept debit cards in your business for almost a half of one percent and being able to recapture one-half percent of your sales annually can help you redirect that additional capital to important areas in your business needed to grow.

Debit cards are inexpensive to process for two main reasons, the first reason is there is no risk in accepting debit cards. If the money is available, the transaction is approved. The other reason is there are no rewards attached to a debit card to incentive consumer use. Because there are no rewards attached, the interchange fees are very low. It is only expensive in an environment where your average sale is less than $15. This is where Square has traditionally lost money on its users which has caused them to add a transaction fee to their new POS solutions.

What You Can Do

Securing the right type of merchant account will allow you to streamline your credit card processing costs and will allow you to leverage your profitability to dominate other merchants that are using these payment providers.

The Square, Stripe, and PayPal merchants that are saving serious money on their credit card processing are switching to payment providers that pass through the true lower cost of accepting debit cards to them so they can run a more efficient business.

If you’d like to evaluate whether you’re using the right solution for your business, don’t hesitate to contact us on our website or request a custom quote. We may be able to save you some SERIOUS money!

Good To Great: Switching Your Payment Processing Game Up

Good To Great: Switching Your Payment Processing Game Up

If you’re like most business owners, switching payment processing is a headache for you. In fact, you probably have told people, “I’m only switching if you can save me a bunch of money!”. While saving money is important, there are a few reasons I’ve seen business owners switch, even when there wasn’t much money left to save.


This is one of the most common reasons I see businesses switching payment processing providers. Having a positive relationship with the account manager is critical when trying to get things done and can save you a great deal of time. It’s also critical when it comes to making sure your rates remain competitive. If you don’t have a quality relationship, there’s no one there to update your pricing as your business grows. There’s also no one there to helping you implement new systems as your needs change.


The second reason we see business owners switching payment processing providers is to update the technology they are using in their business. This might be adding new ways for customers to pay, whether that be online, gift cards, or even via ACH. We are also seeing businesses switch to speed up their deposits, enabling them to shorten the time it takes to fund their payroll account.


One of the final reasons we see business owners switching payment processing providers is to make sure they have the best security to prevent a data breach in their business. This involves making sure their PCI Compliance requirements remain current, while also implementing EMV chip technology and PCI Validated data encryption on their transactions. Having a strong data security plan in place is critical for businesses wanting to steer clear of the high costs associated with enduring a credit card data breach.

If you’re considering the idea of switching payment processing providers, but you’re not sure where to start; start with downloading our free mini-book on the credit card processing industry or request a quote from us on our website.

We are here to help!

March Madness: Building Your Cinderella Business

March Madness: Building Your Cinderella Business

The business of March Madness is here!

It’s a time where most of us fill out our brackets at work and wait to see who will win the office competition.

It’s also a time when we see the underdog win and overachieve on one of the biggest sports stages in the world.

For many early-stage entrepreneurs, we are lucky if we’ve even noticed that it’s almost over.

My first year in business has not included much time watching basketball games, that’s for sure!

The desire to provide an excellent experience, build quality relationships, while delivering it at a reasonable cost to our clients has not come with many days off.

This has caused me to think about ways that I can better improve our approach to serving our retail, restaurant, and B2B brands, while also making sure I stay in the best physical, emotional, and mental health.

As we approach our first anniversary, we are implementing several key strategies we learned from Trevor Hammond about building a better business and experience for the sake of our clients, while keeping our physical and mental health as a company important.

When we interviewed Trevor on our podcast, we discussed a few strategies he has implemented in his professional life that has allowed him to build a great business, while being able to take 155 days off from work every year!

If that’s not a major win in business, I don’t know what is!


The first principle that Trevor suggests in building a great business is creating a vision that is greater than just making money. Trevor works in the mortgage industry helping people make better financial decisions, including how their mortgage fits into the life they want to create. By him creating a vision that was focused on the positive impact he wanted to make in the lives of his clients, he was able to do work that mattered to him and the clients he serves. Creating a vision also provided Trevor with the sustained energy and focus needed to create the quality content for his clients that helped them be more successful financially.

Talking with Trevor made me think about my life’s mission and the purpose of the Northwest Advisory Group. Like Trevor, I’m not in the financial services industry because I’m so in love with the products and services we provide, but rather for the opportunity to build a great life while helping our partners and clients protect and build successful businesses. Our vision is to be a key player on a great business team, helping them overachieve against the competition.


The second principle Trevor suggests in building a great business is finding ways to differentiate yourself from the other brands in your industry. Trevor has done this by penning “Borrow Smart, Repay Smart”, A 7-Step Process For Building & Managing The Wealth In Your House, and managing numerous blogs, while also developing unique strategies for people to leverage their mortgage. By Trevor focusing on unique ways to serve his ideal clients, homeowners and other loan officers, he has positioned himself as the authority on how to make smart financial decisions and has built a great business as a result.


The third and final principle Trevor suggests in building a great business is by focusing on your unique abilities as an entrepreneur. Trevor, a student of the great Dan Sullivan, evaluated the key areas of his business that he did very well and decided to solely focus his efforts in those areas. He then hired people that were better in the areas where he wasn’t strong. As Trevor restructured his business around his unique abilities, he was able to perform at peak production levels while also being able to enjoy vacations with his family for weeks at a time, uninterrupted. 


In closing, I’d like to congratulate Trevor for, in my opinion, building a great vision, business, and career. He has built a roadmap that all entrepreneurs can gain great perspective and value from. As I continue to listen to the interview we did together, I continue to make improvements and adjustments to the message and vision of the Northwest Advisory Group.

I hope that you too are inspired by his message and take steps to grow your business to new levels of success! Make sure you check out his blog and forward it to anyone you think may find it helpful!


Has Your Credit Card Processor Failed You???

Has Your Credit Card Processor Failed You???

Yes, I’m admitting that credit card processing companies FAIL.

This is one topic your credit card processor won’t like admitting.

Unfortunately, failure happens.

I have a long list of failures as a human being and credit card processing professional.

The road to learning the payment processing industry hasn’t come without making mistakes.

  • The $20,000 adjustment I paid out of pocket to meet the savings goal I projected when working for a direct processor.
  • Not programming the credit card equipment right the first time.
  • Quoting the price of equipment, only to order it and come to realize I misquoted the price.


These are all mistakes I’ve seen made by other companies including mine. It’s an unfortunate aspect of being human.


The rapid change of technology can get the best of you, even when working with a single provider.

Working with dozens of platforms can magnify that challenge.


I wish there was an easier way to learn.

If I remember my grandmother’s insight correctly, she said “A bought lesson is better than a taught lesson”.

I suppose it’s better because with it comes the financial challenge or pain it creates, and the humility you need to grow into a better leader for the future.

We tend to learn better by the 2X4 to the head instead of by the metaphor to the ear.

We recently absorbed the cost of a payment solution for a customer due to the unforeseen costs associated with implementation, and it caused us to postpone a software license were eager to launch.


I want to sleep well and night, and sometimes that means doing whatever we can to make sure the customer is taken care of at the end of the day.

The true testament of your payment processing relationship is not whether or not they make mistakes.

It’s how they handle the mistakes that determines their value.

When we talk with business owners about their experience with credit card processing providers, they share with us all the problems they’ve had.

The challenges they experience working with credit card processing companies are often met with, unreturned phone calls, lack of responsiveness, and a commitment to blame-shifting.

We believe in facing challenges head-on while ensuring the same mistakes are not repeated.

As you shop for the perfect credit card processing relationship, make sure you look for one that admits when they are wrong and are committed to doing what’s right as a response to their own failure.

Remember this one thing.

It’s okay to fail, but it’s never okay to shirk your responsibility or intentionally harm someone’s business.

If you suspect that your credit card processor may be shirking their responsibilities to you, it may be time to have a conversation.

We won’t promise you perfection, even though that’s the likely result, but we will eternally do the right thing.

If you’d like to learn more about how credit card processing providers get paid, download a copy of our unbiased report on credit card processing.

Do Payment Processing Agents Promote Fake News?? Here’s 3 Stories They Tell.

Do Payment Processing Agents Promote Fake News?? Here’s 3 Stories They Tell.

If you’re the person responsible for making sure you’re getting a good deal and service on your payment processing, you”ve probably wondered if the company you’re working with is being truthful. I’ve been around lots of payment processing companies and agents in my career, working for the largest firms in the industry, and I want to set a few things straight so you don’t have to worry if your credit card processing is with a good company.

Payment processing is no fun to talk about, but since it’s a necessary component to our businesses, we might as well know the truth about it.

Can I get an Amen? Hallelujah? Roger That? Shonuff?

The training in the payment processing industry is paltry to say the least and there isn’t much of a barrier to entry, which is why you get so many phone calls from people pressuring you to see your statements. This lack of professional training has lead to a proliferation of untruths designed to persuade merchants to make decisions that aren’t always in their best interest. Here are 3 untruths that you will likely hear when meeting with a merchant services agent trying to persuade you to work with him or her:

We Give You A Better Deal Because We Are A Direct Processor

When I worked for one of the largest direct payment processors in the United States, the sales training primarily focused on how working with a direct payment processor was the most efficient from a cost perspective. It makes sense right? Well, that’s what I believed too. The reality is, over 80% of your fees are being controlled by Visa, MasterCard, Discover, & American Express. The direct payment processor or it’s resellers have zero control over what you pay to these card brands.

The only portion of your bill payment processors have control over is what they earn on your account. What a payment processor, or resellers’, goals are as it relates to profit are different for every organization and can vary regardless of whether they are a direct payment processor or not. There are dozens of businesses I’ve met with over the past several years that were paying less than the businesses working with direct payment processors. What you pay depends on what your account manager sets your business up with and the integrity of the company you and your account manager rely on to honor that pricing.

We Have Better Security Because We Are A Direct Processor

Agents working for direct payment processors like to tell merchants that many of the data breaches seen on the news are the result of working with a reseller instead of a direct credit card processor. This is misleading as resellers are typically only deploying services on behalf of a direct processor and often rely on the direct processor to handle the encryption of the devices, leaving the security component to the direct processor. In fact, the largest breach in the history of the payment processing industry happened with a direct processor, so it’s a myth that working with a direct processor will ensure you won’t be breached.

Most of the direct processors have a data encryption solution that will protect your business from having a data breach. You should be able to have this deployed regardless of whether you are working with a direct payment processor or a reseller, also referred to as an Independent Sales Organization. If you’re wondering if your provider has this technology available, you can contact us or search for their solution via the PCI Security Standards Council.

You Get A Better Price When You Bundle Our Payroll Service or Point-Of-Sale

As the payment processing industry continues to evolve, more credit card processors will focus on offering more services to increase margins and compete in the hypercompetitive environment. This has lead to payment processors offering payroll, and recently, acquiring point-of-sale solutions. This can be considered a good thing for your business, but remember, more services delivered by the same hand isn’t always better.

I previously worked for a direct payment processor, and they offered payroll, gift cards, loyalty programs, loans, point-of-sale solutions, and I.T. managed services. The challenge we had with providing multiple services, was that they weren’t considered one of the best in their specific category and the payroll people calling on my accounts were required to charge as much as they could earn, not provide the best deal because they were already using the credit card processing. What I found was it was better to refer my clients to a local payroll or point of sale provider that was an ethical expert rather than offering an “average” add-on.

At the Northwest Advisory Group, we interview, screen, and select the best business solutions for you so you not only secure excellent pricing on your payment processing, but also help you secure time saving solutions for your business that are best in class; instead of mediocre.

I hope this article was beneficial to you. If you’re curious about whether your account manager made the right choice in setting you up with your merchant account or point-of-sale, feel free to download our mini-book on how to get the best merchant account for your business or contact us on our website.