Wave Payments 101: Everything You Need To Know About Using Wave’s Credit Card Processing Service
There’s no shortage of payment processing options for sole proprietors and contractors. When you’re running a business by yourself, however, you’re probably going to be looking for labor-saving conveniences whenever you can get them. Wave, a popular accounting tool for freelancers, now offers integrated credit card processing with its (almost) free-to-use software.
Below, we’ll take a closer look at Wave’s payment system, what it has to offer small businesses, and how it stacks up against its competitors.
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What Is Wave Payments?
Wave Payments is a credit card processing service offered by Wave, a brand traditionally associated with accounting software for freelancers and contractors.
Wave Payments allows you to — as you might have guessed — take payments through Wave.
How Does Wave Pay Work?
Wave’s merchant services are provided through Vantiv, but Wave will be your point of contact for the service, which uses Wave’s pricing model. Payments by Wave allows you to accept the following types of payments:
- American Express
- ACH transactions
Wave Payments allows clients that you invoice — and you can set up recurring invoices — to pay you online through any of the aforementioned methods. You can also accept payments through your website or social media account by pasting a checkout link provided by Wave.
You can access the feature under the Sales sidebar heading and clicking on “Payments.” Funds can clear as fast as two business days.
If you’re already using Wave, turning payments on is as simple as clicking on the “Turn on Payments” button and telling Wave where to send your money.
How Much Does Payments By Wave Cost?
Wave uses a flat-rate pricing model similar to what you’d find with Square, Stripe, or PayPal. That means card payments are processed at the same rate, regardless of interchange fees, type of transaction, transaction size, or volume. In general, flat-rate is the most beneficial to smaller businesses that don’t process a large volume of transactions but expensive for higher volume businesses.
Wave’s credit card fees are as follows:
- Visa, Mastercard, Or Discover: 2.9% + $0.30 per transaction
- American Express: 3.4% + $0.30 per transaction
- ACH Bank Transactions: 1% per transaction ($1 minimum)
Wave has no monthly fee unless you’re using its payroll feature.
4 Ways Wave Credit Card Processing Will Simplify Your Business
Why should you consider adding credit card processing to your freelancing or contracting operations?
1) More Payment Methods Means More On-Time Payments
Nobody likes sitting on unpaid invoices. While there’s no guaranteed way to go about getting your customers to pay on time, reducing the friction and inconvenience of making a payment can go a long way. The more ways there are to pay you, the more likely one of those ways will align with how your customer prefers to make their payments.
2) Broader Market Reach
If you’re in a competitive market, you don’t want to give your customers any reasons to look at your competitors. If you and a competitor look nearly identical on paper, but one of you is easier to pay, guess who probably gets the business?
3) Easy eCommerce
It isn’t easy to do business online without processing credit/debit cards or ACH payments. If you want to do business outside your local market, you’ll probably need to accept cards.
4) It’s Integrated Into Wave
If you’re already using Wave to organize your sole proprietorship, having an integrated payment processing solution is a huge convenience. You’ll be able to invoice clients right from Wave, set up recurring payments, or add a transaction link to your website or social media account.
How Does Wave Pay Compare To Other Options?
Wave’s credit card processing services are part of the larger Wave platform. How Wave stacks up to other services will be highly dependent on how valuable the platform as a whole is to your business. We’re encouraged to see that Wave credit card processing reviews are often positive and that the company responds to complaints made on the Better Business Bureau website.
Wave Payments VS Square Payments
While Wave Payments and Square Payments offer a very similar fee for card-not-present transactions, Square’s processing services are far more robust.
For one, Square allows you to process American Express at the same rate as credit cards (2.9% + $0.30). And that’s the card-not-present rate. If you’re taking the card in person, it will only cost you 2.6% + $0.10.
Square’s ecosystem is considerably larger than Wave’s, with software suites aimed at different types of business. That said, Wave does offer tools specifically designed for contractors/freelancers, so if you’re already using Wave for that purpose and don’t do in-person transactions, a lot of Square’s advantages may be moot. Still, Square’s ability to deliver perks such as instant deposits may make it a strong contender.
Wave Payments VS PayPal
Like Wave Payments, PayPal’s business accounts use a flat-rate payment plan for transactions. Both services charge 2.9% + $0.30 for card-not-present transactions. PayPal does offer no-frills card-present transaction support through a mobile POS system for the (quite good for small transactions) rate of 2.7%. As is the case with Square, American Express is processed at the same rate as Visa, Mastercard, or Discover.
PayPal has one of the most well-developed infrastructures where online transactions are concerned and is particularly strong when it comes to international transactions and supporting multiple currencies.
However, PayPal tends to lean heavily on integrations where accounting is concerned, while Wave is first and foremost an accounting platform. If you prioritize those, Wave may be the better choice. If you prioritize payment processing, consider PayPal.
Wave Payments VS QuickBooks
When you’re talking about accounting software, there’s a good chance the name QuickBooks will come to mind. It turns out that QuickBooks also does payment processing through Intuit’s QuickBooks Payments brand.
To say there’s a lot going on with QuickBooks Payments is an understatement. The service comes with multiple plans ranging from free to $20/month, each with its own processing rates and model.
How QuickBooks compares to Wave depends greatly on whether you’re paying for a QuickBooks subscription. If you are, the QuickBooks Online Payments plan blows Wave’s pricing out of the water, with a swiped rate of 2.4% + $0.25 for card-present and 2.9% + $0.25 for card-not-present transactions. Transfers through Wave’s ACH payments services cost 1%. Not only that, but you can process PayPal transactions!
On the other hand, if you’re using Wave, that’s probably because Wave is a lot cheaper than QuickBooks. Additionally, QuickBooks’s other pay-as-you-go plans have significantly higher fees than both QuickBooks Online Payments and Wave and without PayPal support. So unless you’re looking to switch to QuickBooks for your accounting needs, there’s not much incentive to choose it over Wave.
Should You Use Wave Payments?
When it comes to using Wave Payments, a better question is whether you should use Wave in general. There are more competitive flat-rate payment systems for low-volume businesses (Square, Stripe, PayPal), assuming that payment services are what you’re most concerned about. On the other hand, if you’re an existing Wave user or a freelancer/sole proprietor who makes use of Wave’s accounting tools, Wave’s payment processing services should be good enough to meet your modest transaction needs without signing up for a whole new service.
New to Wave and curious about how it works? Check out the following features: