Understanding payment processing fees is crucial for businesses that want to manage costs effectively.
While Quickbooks payments offer a convenient way to accept payments, its fee structure can seem a bit complex. This guide will provide a complete breakdown of Quickbooks Payment fees, helping you understand what to expect and how to make the most of this feature.
QuickBooks Payment Fees: An Overview
Quickbooks Payments is an integrated payment processing solution that allows businesses to accept various forms of payments directly through Quickbooks. Whether you’re accepting credit card payments, ACH transfers, or other forms of payment, Quickbooks Payments offers a streamlined way to manage transactions.
However, it’s important to understand the fees involved to avoid surprises and keep your business’s financials in check.
Quickbooks Payments: Pricing Breakdown
Quickbooks Payments has different pricing plans depending on the services you need. The cost of using Quickbooks Payments includes a base subscription fee and transaction fees that vary based on the payment method and type of transaction.
Quickbooks Payments Base Fees
Depending on your Quickbooks subscription, the monthly fees are as follows:
- Simple Start: $15-$30/month
- Essentials: $30-$60/month
- Plus: $45-$90/month
- Advanced: $100-$200/month
In addition, you have the option to pay for Live Assisted Bookkeeping at $50/month or choose one of the Payroll service options:
- Payroll Core: $22.50-$45/month
- Payroll Premium: $40-$80/month
- Payroll Elite: $62.50-$125/month
These features are optional, and you only need a plan to open an account.
Quickbooks Money Plans
Tailored to managing money, these plans include:
- Quickbooks Money: $0/month (not including payments made per transaction)
- Quickbooks Simple Start: $15-$30/month
- Quickbooks Essentials: $30-$6-/month
- Quickbooks Plus: $45-$90/month
These plans combine payment management with accounting features, making them ideal if you’re focused on both payments and broader financial management.
Understanding Quickbooks Payment Processing Fees
Quickbooks charges transaction fees that vary depending on how payments are processed.
Credit Card Processing Fees
Credit card processing fees in Quickbooks Payments vary based on several factors:
- Swiped Transactions: If you physically swipe the customer’s card using a card reader, the fee is 2.5% per transaction. For example, if you charge a customer $100, you’ll pay $2.50 in processing fees.
- Invoiced Transactions: Payments received through emailed invoices incur a 2.99% fee. So, for a $200 invoice, Quickbooks would charge $5.98.
- Keyed-In Transactions: Manually entering card details usually attracts the highest fee of 3.5% per transaction. For instance, if you key in a $150 payment, you’ll be charged $5.25.
ACH (Bank Transfer Fees)
ACH payments, which involve transferring funds directly from a customer’s bank account, typically have much lower fees compared to credit card transactions. Quickbooks charges %1 for ACH payments, capped at $10 per transaction.
Other Transaction Fees
In addition to the standard fees, there may be extra charges for specific scenarios:
- Instant Deposits to an Outside Bank Account: Quickbooks charges 1.75% for instant deposits. For example, an instant deposit of $500 would cost you $8.75.
- Payments Dispute Protection: This starts at 0.99% of the transaction amount.
How Are QuickBooks Payment Fees Determined?
The rates you’re charged by QuickBooks Payments aren’t arbitrary. Several factors influence the fees:
- Transaction Type: Swiped transactions have lower fees (2.5%) than keyed-in transactions (3.5%) due to the reduced risk of fraud.
- Business Type: The nature of your business can impact your rates. Higher-risk industries may face higher fees.
- Card Type: Different cards come with different fees. For example, rewards cards often have higher processing fees.
How To Lower Your Processing Fees?
You can reduce your fees by encouraging customers to use ACH payments, negotiating rates if your transaction volume is high, or ensuring that most transactions are swiped rather than keyed in.
Should You Track Processing Fees?
Tracking processing fees is crucial for managing your business’s profitability. Unmonitored fees can eat into your profits over time, especially if you’re processing a large volume of transactions.
Importance of Tracking Fees
By keeping an eye on these fees, you can better budget for them and analyze their impact on your overall financial health. QuickBooks offers tools that help you automatically track and categorize these fees, making it easier to manage.
Impact on Profit Margins
Processing fees, if left unchecked, can significantly impact your profit margins. For instance, if your business processes $10,000 in sales via credit cards with a 2.99% fee, you’d pay nearly $299 in fees. Regularly reviewing these fees can help you identify areas where you might need to adjust pricing or find more cost-effective payment methods.
Accepted Payment Methods Beyond Credit Cards
QuickBooks Payments doesn’t just process credit card transactions. It also supports:
- ACH Transfers: Lower fees at 1%, making this a cost-effective option for large payments.
- eChecks: Another lower-cost option compared to credit cards, often at 1%.
- Mobile Payments: Accept payments through mobile apps like Apple Pay or Google Pay, typically with fees around 2.5% to 2.99%.
Pros and Cons of Each Payment Method
- Credit Cards: Convenient but higher fees, typically between 2.5% and 3.5%.
- ACH Transfers: Low fees at 1%, but longer processing times (2-5 business days).
- eChecks: Low fees, similar to ACH, but less common.
- Mobile Payments: Convenient, with fees similar to credit cards (2.5% to 2.99%).
Comparing QuickBooks Payments to Other Payment Processors
To make an informed decision, it’s helpful to compare QuickBooks Payments to other popular payment processors like PayPal, Stripe, and Square.
- PayPal: Known for its ease of use and strong buyer protection, but often has higher fees (around 2.9% + $0.30 per transaction).
- Stripe: Offers competitive rates (2.9% + $0.30 per transaction) and robust developer tools, ideal for online businesses.
- Square: Great for small businesses with physical stores, offering a simple fee structure (2.6% + $0.10 per swipe) and free point-of-sale hardware.
QuickBooks Payments FAQs
What Is Quickbooks Payments?
QuickBooks Payments is a payment processing service integrated with QuickBooks, allowing businesses to accept various payment types, including credit cards and ACH transfers.
How Does Quickbooks Payments work?
QuickBooks Payments works by processing payments directly through QuickBooks, whether you’re invoicing customers or accepting payments in person.
How Much Does Quickbooks Charge to Accept Payments?
QuickBooks charges a variable fee for accepting payments that depends on how the customer is paying and how you are choosing to accept the payment. This charge is anywhere from 1-3.5% of the transaction amount.
How Much Does Quickbooks Charge for ACH Payments?
Yes, there is a QuickBooks ACH payment fee. When invoices or quick requests are paid using ACH bank payments, the fee is 1% of the transaction amount. For example, if you receive a $1,000 payment via ACH, QuickBooks would charge you $10.
How Much Does Quickbooks Charge for Credit Card Payments?
QuickBooks credit card fees for payments are variable depending on how the payment is processed:
- Card Reader Fees: 2.5% per transaction.
- Online Payments/Invoiced Transactions: 2.99% per transaction.
- Keyed-In Payments: 3.5% per transaction.
Therefore, you should budget for 2.5-3.5% being charged by QuickBooks for credit card payments.
Are There Any Hidden Fees?
While QuickBooks is transparent about its fees, additional costs can arise from chargebacks, international transactions, or specific card types.
How Long Does It Take to Receive Payments?
ACH payments usually take 2-5 business days to process, while credit card payments can be quicker, often within 1-2 business days.
Can I Pass Processing Fees on to My Customers?
Yes, but it’s essential to check the legalities in your jurisdiction. In some places, passing on credit card fees to customers is restricted or requires clear disclosure.
How Do I Handle Disputed Payments or Chargebacks?
QuickBooks Payments provides tools for managing disputes and chargebacks, including alerts and support for resolving issues with customers.
How Can I Access Customer Support for QuickBooks Payments?
QuickBooks offers multiple support channels, including phone, chat, and community forums, to assist with any issues you might encounter.
In Conclusion
QuickBooks Payments offers a robust solution for managing business transactions, but understanding the fees is key to maximizing its benefits. Tracking these fees and selecting the right payment methods can help you control costs and improve your bottom line. The easiest way to ensure you're making the right decisions is by consulting a QuickBooks expert.
Fyle’s accountant directory features top accounting firms specializing in QuickBooks, making it the perfect starting point to find expert guidance tailored to your needs. Start there and get the advice you need to streamline your payment processes!
