QuickBooks Credit Card Processing You do not have to use QuickBooks Payments to take cards in QuickBooks
Most QuickBooks users assume that if they want to take card payments on their invoices, they have to use QuickBooks Payments and pay whatever it charges. They do not. QuickBooks Online and QuickBooks Desktop both connect to outside processors, so you can pick any processor you want, and many of those integrations let you choose your own payment gateway as well. That gateway choice controls most of what you pay.
Written by Robert Day, just under 30 years in credit card processing, including more than a decade as an executive at Fifth Third Processing Solutions, later Vantiv and Worldpay, now part of Global Payments.
Why QuickBooks Payments is the default
QuickBooks Payments is built in. It takes a few clicks to turn on, the pay button appears on every invoice, and payments post themselves. For a lot of businesses that convenience settles the question before anyone looks at the cost.
The catch is the pricing structure. QuickBooks Payments charges published percentage rates by payment type, which bundles interchange and markup into one number. When a business customer pays with a corporate or purchasing card that should qualify for a lower interchange rate, you do not see that saving on a bundled rate. Before you decide anything, see what QuickBooks Payments fees actually cost and read our QuickBooks Payments review.
Your other options inside QuickBooks
QuickBooks Online
Third-party payment apps in Intuit’s app marketplace connect QuickBooks Online to outside merchant accounts and gateways, and post payments back against the invoice so your books stay in sync.
QuickBooks Desktop
QuickBooks Desktop also connects to outside processors and gateways through third-party integrations, so Desktop users are not tied to QuickBooks Payments either.
Two QuickBooks-focused payment companies we have reviewed are EBizCharge and Century Business Solutions. We list them as examples, not endorsements. The right setup depends on your card mix, your volume and what your current statement shows.
Comparing platforms? See how this works across QuickBooks, Sage, NetSuite, Acumatica, Microsoft Dynamics and Prophet 21 in our guide to ERP payment processing.
Why the gateway matters more than the processor
Your processing bill has two layers. Interchange is the wholesale cost set by Visa and Mastercard and paid to the bank that issued your customer’s card. It typically makes up 80 to 90 percent of the total cost of processing. The processor’s markup is everything on top of it. Most businesses only ever negotiate the markup, which means they are fighting over the smallest part of the bill.
The processor sets the markup
A better processor on interchange-plus pricing stops the overbilling on that layer. It is worth doing.
The gateway decides your interchange rate
Business, corporate and purchasing cards qualify for far lower interchange when the transaction carries enhanced data: invoice number, tax amount and line items, known as Level 2 and Level 3 data (Visa now calls its version Product 3). QuickBooks invoices already hold much of that detail. The question is whether your payment setup passes it to the card networks. Your gateway is what sends that data to the card networks, or fails to.
The short version
Getting a better credit card processor is important. Getting a better gateway is very important.
The $80,000 gateway upgrade that unlocked $1.8 million
A US animal health and pharmaceutical manufacturer processed about $425 million a year in card payments, almost all business to business. Its markup was competitive and its statement was clean. But its gateway could not send the data that qualified its transactions for the lowest interchange rates. We recommended a gateway that cost about $80,300 more a year. It recovered about $1.84 million a year in interchange and took the effective rate from 2.87 percent to 2.31 percent.
For the details on enhanced data, read our guide to Level 3 credit card processing.
What to check before you switch anything
- Find out what you pay today. Pull a few months of QuickBooks Payments activity and work out your effective rate: total fees divided by total volume.
- Confirm the workflow survives. Pay-by-link invoices, stored customer cards and automatic posting back to QuickBooks should all carry over to any replacement.
- Check whether your gateway sends enhanced data. Look on your statement for commercial card lines such as VI-US BUS TR5 PRD 3 or MC Business Level 3 Data Rate II. If your customers pay with business cards and those lines are missing, your gateway is costing you money.
- Check your pricing model. If you are not on interchange-plus pricing, your processor can keep the savings a better gateway creates.
- Look for fees you pay twice. Payment add-ons often charge their own per-transaction or monthly fees on top of the processor’s. Count both.
Before you switch, ask whether switching is even the right move. Sometimes the answer is a better deal with the processor you already have. Our statement decoder explains every line, and our free audit tells you exactly what your current setup is costing.
We do the work. You get the savings.
weAudit is America’s #1 Credit Card Processing Auditing Firm. We audit your statement, check what your gateway is and is not sending, and then fix it, whether that means restructuring the deal with the processor you have or moving to a different processor or gateway. You keep your software either way.
- The first audit is free, so you can see the numbers before you decide anything.
- Our fee is flat and never a percentage of your savings, so the savings stay with your company.
- We are month to month, with no contract, so we have to earn your business every month.
- We never take a revenue share from any credit card processor, so the advice is not for sale.
Frequently asked questions
Can I use a different credit card processor with QuickBooks?
Yes. QuickBooks Online and QuickBooks Desktop both connect to outside processors and gateways through third-party integrations. QuickBooks Payments is the default, not a requirement.
Will I lose invoice syncing if I leave QuickBooks Payments?
Not with a proper integration. Good QuickBooks payment integrations post payments back against the invoice automatically. Confirm that before you switch.
What is the difference between a processor and a gateway?
The gateway carries the transaction and its data from QuickBooks to the card networks. The processor moves the money and charges a markup on top of interchange. Interchange is 80 to 90 percent of the total cost, and the gateway decides which interchange rate you qualify for.
How do I know if I am overpaying on QuickBooks credit card processing?
Work out your effective rate from your QuickBooks Payments activity, then compare it with what your card mix should cost. Or send us your statements and we will audit them free.
Find out what your QuickBooks payments are really costing you
Send us a recent processing statement. We will tell you whether your processor, your gateway or both are costing you money, and what to do about it.
Or call 800-672-1292
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