Learn
The real cost of built-in payments.
Payments built into your invoicing software are convenient, and they're priced for it. Here's what they typically charge, how to compare that with your own merchant account, and what to ask before you switch.
What you pay
Three numbers, and the extras.
From the rates popular invoicing software publishes (every rate, with sources).
- A percentage per card
- Typically 2.9–3.5% for a card paid online or on an invoice. Keyed-in and card-on-file payments are often priced higher.
- Every card payment
- A fixed fee per card
- Often 30¢, and as much as 49¢, on each payment. On small invoices it adds a lot: 30¢ on a $100 invoice is another 0.3 points.
- Every card payment
- A percentage per bank payment
- Typically 1%. A few cap it; most published rates don't, so it grows with the invoice: $50 on a $5,000 job.
- Every bank payment
- Extras
- Instant payouts commonly add 1% or more. Some charge more for Amex or business cards.
- When used
How to compare
Work out your effective rate first.
Take one month's payout report from your software. Divide the total fees by the total card payments. That's your effective rate, and it includes the fixed fees and the extras that a headline rate leaves out. Use the calculator.
Then compare it with your own merchant account, typically about 2.1–2.4% all in (Merchant Cost Consulting), and a flat few dollars per bank payment.
Say you take $250,000 a year in cards. Built-in payments at about 2.96% effective, against a merchant account at about 2.25%, is a gap of about 0.7 points: roughly $1,750 a year before account fees, or about $1,450 after $300 a year of them. Illustrative.
It isn't always cheaper. Below about $43,000 a year in cards, account fees can eat the difference, and a mix heavy in Amex or business cards costs more anywhere.
What to ask before you switch
- Saved cards. Cards saved through built-in payments stay with that processor and can't simply be copied. Customers save their card again the next time they pay.
- Autopay and payment plans. Recreate each schedule on the new account, then cancel the old one. Keep the old payments connected until nobody depends on them.
- Deposits already taken. A deposit paid through built-in payments is refunded through them too, so note which jobs have one before you switch.
- Payout terms. Check your software's payment terms for reserves, payout timing and notice for fee changes, so nothing surprises you while both are running.
- What changes in your software. In some software, disconnecting payments also switches off related features. Hide the old card option first; disconnect last.
FAQ
Built-in payment questions.
Why are built-in payments priced higher?
They charge one flat rate that bundles the wholesale cost of each card with their margin, and that rate has to cover the most expensive cards. Interchange, explained.
Do I lose anything by switching?
You keep your software and your invoices. Features tied to the built-in processor, like its card reader or instant payouts, stay with it. Check which ones you use before you switch.
Can I keep both while I switch?
Yes. Leave the built-in payments connected while saved cards and autopay move over, and turn them off when nobody depends on them.
Find out what yours really cost.
Send a payout report or statement. We'll price the same month on your own merchant account.