Processing decides more than the software does.
Integrated payments are convenient and usually required. They are also the biggest lever on your total cost, and the one vendors talk about least.
Integrated versus independent
Most modern POS vendors either require their own processing or price the software sharply higher if you bring your own. Integrated processing simplifies reconciliation and support. Independent processing lets you negotiate rates and switch providers without changing software. Neither is wrong; the mistake is not knowing which one you are buying.
Flat rate, interchange-plus and tiered
Flat-rate pricing is simple and fine at low volume. Interchange-plus is usually cheaper above a few hundred thousand dollars a year and is transparent about what the processor keeps. Tiered pricing is the hardest to audit and the most common home of hidden markups.
Questions to ask
- What is my effective rate on last year's actual card mix?
- Can I use another processor, and what does the software cost if I do?
- What are the terms on fund holds, chargebacks and reserves?
- Are there monthly minimums, PCI fees, statement fees or early-termination fees?
- Do invoices, deposits and terms-based payments run through the same account?
Processing flexibility
Editorial rating of how much control the buyer has over processing, 1 to 5
Reading the rating
Higher means more freedom to choose or negotiate your processor. It is not a rating of rates, which depend on your volume and card mix.
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