Payment Processing Business Guide

What is the difference between a payment processor and a payment gateway?

A payment gateway is the software that securely captures and encrypts card data at checkout (like Stripe or Braintree). A payment processor handles the actual movement of funds between the customer's bank and your merchant account (like First Data or TSYS). Many modern providers like Stripe and Square combine both into a single service.

How can I reduce my payment processing fees?

Key strategies: negotiate rates after reaching $50K+/month in volume, encourage debit card and ACH payments (lower interchange), implement address verification to qualify for lower rates, avoid keyed-in transactions when possible, and review your monthly statement for hidden fees like PCI non-compliance charges or batch processing fees.

Can I accept payments online without a website?

Yes. Payment links (Stripe, Square, PayPal) let you send a checkout URL via email or text. Invoice tools from most processors allow recurring billing. Social selling platforms like Instagram and Facebook Shops have built-in checkout. For the simplest setup, Square's payment links are free to create and charge standard processing fees.

Should my business accept ACH payments?

ACH costs 0.5-1% per transaction (often capped at $5-10), making it far cheaper than cards for large transactions. Settlement takes 3-5 business days vs. 1-2 for cards. It's ideal for B2B invoices, subscriptions, rent payments, and any recurring charges over $100. Stripe, Square, and most processors now support ACH alongside cards.