FreshBooks Payments 101: The Complete Guide To Using FreshBooks’ Credit Card Processing Service

Small business owners, now more than ever, need accounting software that can automate and optimize their operations. Business software suites like FreshBooks are cloud-based solutions that can automate both accounting as well as invoicing and other related needs. For businesses looking for affordable software that simplifies crucial processes, FreshBooks may be an attractive option.

FreshBooks offers a unique and tough-to-find blend of invoicing and accounting capabilities, and FreshBooks’ fees come at a reasonable price. But are FreshBooks’ credit card processing tools and flexible accounting functionality ideal for your business? This quick review is for business owners who are ready to decide whether the cloud-based software solution’s payment features are right for them.

What Is FreshBooks Payments?

FreshBooks Payments is a cloud-based payment processing solution that lets merchants accept payments online. With FreshBooks Payments, business owners also make it simple for their clients to pay invoices online and ultimately improve their cash flow.

FreshBooks’ payment processing solution gives customers easy access to invoices online that they can pay directly, and it automatically records each payment that is deposited to a merchant’s account. Merchants can easily and securely accept online payments and integrate FreshBooks Payments with the larger suite of FreshBooks’ services. Use FreshBooks Payments to set up online payments in a single click to start accepting credit card and ACH payments within minutes.

How Does FreshBooks Payments Work?

FreshBooks Payments lets businesses do much more than just set up online invoices. With FreshBooks, business owners can automate invoicing and accounting tasks, organize their expenses, and track project time and follow up with clients — all in just a few clicks stored securely on the cloud. FreshBooks Payments allows users to accept all major credit cards, as well as ACH payments that it connects to most major banks in the United States. You can post your checkout links on your website, social media channels, or anywhere else online to enable simple click-and-pay transactions.

Considering that it allows for multiple payment types, it’s unsurprising that FreshBooks also offers a credit card reader. Currently, the company offers a single credit card reader that uses a magstripe and EMV headphone jack reader. FreshBooks Payments is also able to accommodate certain NFC technologies like Apple Pay and AMEX, which other software solutions like Square accept with their countertop EMV/NFC readers.

Once you process a payment with FreshBooks, you can look forward to getting paid fast. Payments are processed after fees are applied and merchants typically receive payments within two standard business days. Backend payment processor service WePay makes these quick payments possible and FreshBooks advertises that their signup process lets you start accepting payments in minutes.

How Much Does FreshBooks Payments Cost?

FreshBooks processes online payments on a pay-as-you-go basis with the assistance of WePay which, while convenient, means it also applies certain transaction fees. The following fees apply to FreshBooks users based in North America:

• 2.9% + $0.30 for payments made with Visa, Discover, Mastercard, and American Express credit, debit, and prepaid cards
• 1% for payments made with bank transfer (ACH) payments
• 15% chargeback fee on all payments processed

Overall, FreshBooks offers strong value compared to other competitors in its industry and offers relatively low starting prices for its different tiered pricing plans.

4 Ways FreshBooks’ Processing Will Simplify Your Business

FreshBooks Payments offers an abundance of features, but we’ve chosen four main advantages that can permanently simplify the way you do business:

• Integrated online payments seamlessly link with FreshBooks’ software. Your customers can pay you directly through the invoices you send them, and then FreshBooks automatically records each payment you receive straight to your account. Adhering to PCI compliance guidelines, FreshBooks redirects your customers to a secure site where they can complete their transactions in a simple and timely manner.
• Multiple payment options that come with no hidden fees provide your customers with different ways to pay their invoices. This way you get paid faster and always know just how much money to expect.
• Checkout links on your website and other digital channels facilitate fast online payments. Skip the creation process when it comes to sending invoices and instead let your customers click and pay as they go. FreshBooks accepts credit cards and ACH payments through its checkout links and automatically sends receipts of purchases to your customers when they finish their transactions.
• Online payments can be set up with one click. FreshBooks lets users begin accepting credit card payments right on the invoices they receive with a single click. From there, you just need to let FreshBooks deposit your funds straight into your account.

How Does FreshBooks Payments Compare To Other Options?

When it comes to cloud accounting, it’s almost impossible to ignore FreshBooks. FreshBooks’ flexible pricing structure and robust set of features make it a smart choice for many businesses. There are, however, a few other industry competitors worth considering. This section can help you decide whether FreshBooks Payments is right for you — or if you should try something else instead.

FreshBooks Payments VS Square Payments

In 2016, FreshBooks introduced its smartphone credit card reader that came into direct competition with Square’s card reader. Both solutions let customers manage their payments and financial information, but how do they compare against one another? When it comes to the equipment itself, there’s no doubt that Square has the edge; Square provides three different card readers compared to FreshBooks’ single option for a card reader.

Additionally, Square has the edge over FreshBooks when it comes to costs for accepting cards. Square’s standard processing fee is 2.6% + $0.10 for contactless payments, swiped and inserted chips, and swiped magstripe cards, compared to FreshBooks’ fee of 2.9% + $0.30. Where FreshBooks shines, though, is in its wide range of features and ease of use. FreshBooks’ card reader is more user-friendly and offers screens that help users navigate the process of accepting a card. FreshBooks’ app also opens with a user menu that lets you choose what to do next, whereas Square drops you directly into its payment entry screen.

FreshBooks Payments VS Wave Payments

FreshBooks and Wave are both sensible options for freelancers and small business owners, and while both offer an impressive range of features, FreshBooks edges out Wave in terms of its sheer number of capabilities. While there are plenty of similarities in the features between FreshBooks and Wave, FreshBooks offers features Wave does not, such as the ability to bill on retainer, a project tracking capability, and the option to mark expenses as billable that can be charged to a customer.

Ease of use is a big selling point that’s associated with FreshBooks Payments, as is Wave with its intuitive use of navigation screens that guide users around its application. Both applications offer intuitive system navigation complete with vertical menu bars and access to integrations and settings. Where Wave establishes itself as superior, though is in its pricing options. Wave software is free to use, although it still applies per-transaction fees of 2.9% + $.30 in the same vein as FreshBooks.

FreshBooks Payments VS QuickBooks

FreshBooks Payments, like QuickBooks, lets merchants accept and make payments with an invoicing panel. Unlike QuickBooks, though, FreshBooks’ panel only includes two tabs – “from me” and “to me” – whereas QuickBooks’ panel lets merchants specify payment methods, customer locations, and payment terms. Both solutions support credit card and ACH payments as well as payment reminders for specific clients to whom you may submit recurring invoices.

FreshBooks Payments and QuickBooks each offer automation options for recurring invoices you need to be paid out from clients on a monthly or recurring basis. Both solutions offer online, click-to-pay options for recurring clients to pay you, although QuickBooks has a slight edge in that it also offers support for the management and assignment of vendor payments to 1099 contractors.

With QuickBooks Online, users pay a per-transaction fee on swiped and online card payments that are both slightly lower than those FreshBooks’ — 2.4% + $0.25 and 2.9% +$0.25 for swiped and online payments, respectively. QuickBooks Desktop users pay a nearly identical fee to the one QB Online users pay for swiped card payments – 2.9% + $0.30 – but pay a relatively higher 3.5% +$0.30 fee when processing online card payments. QuickBooks’ ACH transfer fees are the same as FreshBooks’: 1% on all payments made with a bank transfer.

Should You Use FreshBooks Payments?

FreshBooks Payments is definitely a good payment processing solution for businesses that already use FreshBooks. It’s a cloud-based solution that is secure and easy to use, even for users who need to process multiple online payments and invoices every month.

If you’re in search of accounting software that allows for automation and customization of both one-off and recurring online payments, FreshBooks Payments may be the perfect solution for you. A time-tested product that robust functionality at reasonable costs and with transparent pricing plans, it’s no wonder that FreshBooks is still one of the most well-respected software solutions in 2021.

Interested in learning more about software that’s similar to FreshBooks? Check out our list of the best alternatives to FreshBooks that small business owners like yourself may want to consider!