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How SMBs can easily accept electronic payments

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Financial Post | By Danny Bradbury | July 10, 2017

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Setting up with a credit card processor can be costly and time consuming. There are other options, such as PayPal and Square.

Are you missing a trick by not taking online or mobile payments? PayPal Canada recently surveyed 1,000 Canadian small business owners, and found that more than 80 per cent didn’t accept payments either online or on the go. A little more than 70 per cent said they would never consider selling online. It’s a confusing world, and concerns over paperwork, technology and security worries can be daunting.

Signing up for a credit card merchant account can be difficult enough, involving background checks and legal contracts that can put small businesses off. For several years now, though, fintech companies have been offering alternatives for those wanting to accept credit cards online, or in person, or both.

U.S.-based Square is one example, providing a low-friction option to get up and running with in-store or mobile point of sale solutions. It lets merchants sign up quickly for an account and will sell them a mobile reader that plugs into a mobile device. Canadian merchants can swipe or tap their customers’ cards for a 2.65 per cent transaction fee. Entering digits as part of a cardholder-not-present transaction costs 3.4 per cent plus 15¢.

Those fees may be close to those paid by Canadian merchants dealing directly with credit card processors, who vowed in 2014 to keep their rates at 1.5 per cent for five years. However, merchants are paying Square for easy-onboarding and extra services such as retail analytics, said a spokesperson for the firm.

See: Fintech Regulation: Achieving the right balance to foster innovation

Whereas Square comes from the PoS world, PayPal cut its teeth in online electronic payments, allowing businesses to take payments from credit cards or other PayPal accounts over the internet from customers here or out of the country.

PayPal tried to squeeze into PoS services in Canada before, launching its PayPal Here competitor to Square in 2012. This clearly didn’t catch on, as the firm acknowledges that it doesn’t offer the service north of the border today. Paul Parisi, president of PayPal Canada, says the company is concentrating on ecommerce services for now.

As other payment options gain market traction, PayPal is also working to add value for ecommerce merchants through partnerships with other organizations, including Canada Post.

“Accepting payments online is just one aspect of a what a small business is,” he says. “When you think about how they get their product to the door of their customer, the shipping solutions required to do that in an efficient way are complex for a small business.”

In June, PayPal launched an integrated payment and shipping solution in conjunction with Canada Post. The service allows small businesses selling online to track their orders, print shipping labels automatically, and pay for shipping via their PayPal account.

See: PayPal launches Slack bot for peer-to-peer payments

The system then keeps both seller and customer automatically updated with tracking information and delivery confirmation after the label has been printed.

The biggest advantage for Canadian businesses, though, will be the pricing. If they have a Canada Post Solutions for Small Business account, they will save “up to” 36 per cent on domestic shipments, and 47 per cent on international ones.

PayPal also launched its Return Shipping on Us service in Canada last year, which refunds return shipping costs on eligible online purchases for Canadian businesses.

PayPal may have the branding, but there are other options for businesses wanting to experiment with different payment methods. Interac Online lets Canadian businesses accept payments made via Canadian financial institutions (and also enables in-person debit payments at far lower costs than credit cards), while several fintech firms have made the payments process smoother.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at

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