Canadian small business have substantially increased with budding entrepreneurs, causing  the number of small businesses processing payments, filling invoices and selling online has increased substantially, including the number of online payment providers. Globe and Mail published a article this morning rounding up the top online payment systems for small business and here is what they found.

Recently, a Toronto-based cloud accounting provider called FreshBooks has become the latest company to join the increasingly competitive industry, leaving a substantial amount of options for small business owners.

“I think effectively we’re going from a world of oligopoly, where the banks were the only game in town, to a world where there’s more choice,” said Mike McDerment CEO of FreshBooks. “Managing your cash flow is basically the lifeblood of your business as a small business owner, so with something so mission critical, you want to choose carefully.”

With so many different payment options out there, it can be hard when choosing the right payment solution. Here we can break down the top five payment providers, their fees, and the services that they offer.

1) FreshBooks

FreshBooks

With over 5 million users in more than 120 countries, FreshBooks is the most popular cloud-based accounting solution for small business owners.

Key features: Setting up an online payment service with FreshBooks is quick and easy, especially for existing customers, says Mr. McDerment. “You can very quickly create an invoice, offer the ability to accept online payment, and send that off to your client,” he said, adding that FreshBooks is also known for its quality customer service.

Fees: 2.9 per cent flat fee

FreshBooks is ideal for services and trades. “We’re not a shopping cart, FreshBooks is not specifically focused on people who sell things,” said Mr. McDerment. “We’re very focused on service-based small business owners, tradespeople like lawyers and marketing firms and people who get paid for their time and expertise.”

2) PayFirma

 

Founded in 2011, PayFirma has quickly gone from obscurity to an industry leader with help of a strategic partnership with CIBC.

PayFirma provides multichannel payment solutions from one account at one consistent rate, including mobile email and credit card transactions. “Little companies like us are winning because we’re able to provide a solution and a service they (small business owners) can really understand and grow into,” said Michael Gokturk, CEO of Payfirma.

Fees: “Our published rate on our website is 2 per cent, but it could be more or less than 2 per cent, it really depends on our consultation with the merchants, which we do with every single one,” said Mr. Gokturk.

3) Moneris

Moneris is the largest payment processor in Canada for business of all sizes, completing approximately three billion transactions per year.

The Toronto-based payment processor provides a multichannel solution, but Angela Brown, CEO of Moneris, believes their biggest selling point is reliability. “You need to make sure you’re dealing with providers that care about security, that care about their responsibility for getting it right and are consistently available and make sure they’re there for customer service issues, when needed,” she said. “I think (small business owners) really need to look to the market leaders who are committed to the business, are in it for the long haul, can demonstrate a track record of reliability and a real responsibility to the function they’re providing.”

Fees: $19.95 per month, with an additional credit card fee of 2.75 per cent.

Moneris is ideal for small businesses looking to expand quickly. Through partnerships with companies like Sage Accounting, RBC, and BMO, Moneris is able to provide additional services such as inventory and sales tracking capabilities for small business owners managing rapid growth.

4) TD Merchant Services

Unlike other major banks, which offers solutions through partnering providers, TD Bank offers their own merchant services.

As a nation-wide banking provider with over 1,100 branches in Canada alone, TD has a physical presence unmatched by their competitors. “We think that’s the key advantage for us, because it’s essentially a one-stop-shop, customers can walk into a branch and get a bank account, a credit card, a loan, etc., and they can also get payment processing, whether that’s retail, point of sale or e-commerce,” said Jeff van Duynhoven, president of TD Merchant Services.

Fees: “We don’t have a flat fee or a posted price, we generally look at the breadth of that client’s relationship, either with TD Merchant Services or with the broader TD Bank Group and price merchants accordingly,” said van Duynhoven.

TD merchant services is ideal for small business owners already using services provided by TD Bank Group.

5) PayPal

PayPal is a leading international e-commerce platform with over 150 million customers worldwide.

PayPal provides a wide variety of solutions to its more than 200,000 Canadian small business clients. “Our most popular solution is PayPal Payment Standard, that is the one small businesses love the most, because it’s a really easy way to get online quickly,” said Nicky Mezo, the head of marketing for PayPal Canada.

Fees: Dependent on service. “For our standard solution it’s 2.9 per cent plus $.30 per transaction, but there’s also a volume discount, so if you hit monthly volumes that 2.9 per cent will go down, the lowest it can go is 1.9 per cent plus $.30,” said Ms. Mezo. “For our pro solution, where you can process American Express, Visa and MasterCard, there’s a monthly fee of $35 per month, plus the transaction fee.”

PayPal is ideal for risk-adverse entrepreneurs. As a third-party payment solutions provider, PayPal is ideal for small business owners that don’t want the added security risk of storing customer credit card information internally.

 

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