A new “online study” from Carlisle & Gallagher Consulting Group released today revealed some interesting consumer sentiment regarding mortgages.
The point of the survey was to determine consumers’ views about the home mortgage application process, and if they’d consider alternatives to the traditional bank or lender route.
The results were somewhat strange.
Of the 618 U.S. consumers surveyed, 80% said they would consider taking out a mortgage from a “non-bank,” which isn’t the surprising part.
After all, these days the big banks are seeing increasing pressure from tech-happy startups and the like, many of which don’t charge fees, or at least make banking easier and related activities less painful.
A PayPal Mortgage?
But what was particularly interesting was that 48% of consumers said they would consider a mortgage from PayPal.
Last time I checked, PayPal was simply a company that allowed individuals to transfer money to friends and family or to pay for online purchases.
Businesses can also use PayPal for their merchant needs as an alternative to standard credit card processing hardware/software.
So where does the mortgage from PayPal come in? I’m not sure, but I guess the results suggest people like the company’s service, and perhaps ease of use, which would leave them open to a PayPal mortgage.
For the record, the biggest consumer gripes regarding mortgages included slow execution during the mortgage process, difficulty communicating with lenders, inability to track said mortgages, and untrustworthy advice.
How PayPal would tackle those issues is beyond me – no matter who’s doing your mortgage, it’s going to take a while these days thanks to the crazy demand and limited supply of mortgage originators.
Fewer Interested in a Walmart Mortgage
Then there’s mega-retailer Walmart, who was also included in the survey.
When asked the same question, only one in three consumers seemed enthused by the idea of picking up a mortgage at Walmart along with their milk, eggs, and big screen TV.
Still, that 33% or so was enough to get the media buzzing about a possible Walmart mortgage in the near future.
Even before this survey, there were plenty of rumors and rumblings of a Walmart mortgage, seeing that they already do just about everything else.
There’s already the Walmart MoneyCenter, which provides pretty much every financial tool you can think of, including bill pay, check cashing, money orders, credit cards, and so on.
Walmart even gives customers the option to purchase items online and pay with cash at a local store.
And I think that last service explains why Walmart won’t provide mortgages to its customers.
Many people that shop at Walmart don’t use credit, and instead rely on all types of other forms of payment such as the always-popular cash option, debit cards, and prepaid cards.
Are these the same consumers actively searching for mortgages, or are they perhaps more debt-averse?
If so, they surely wouldn’t want a mortgage, and would more likely choose to rent.
But Walmart could certainly still enter the game, or at the very least, partner with existing lenders and take a cut of the business, similar to what Costco has done.
The question is whether they’d want to sully their reputation in the process. It’s a tricky business to get in, as newcomers like Discover are probably learning rather quickly.
At the same time, they probably have enough influence to get more shoppers to take out mortgages and ultimately buy homes, which could increase sales of household items at Walmart.
Visa and Mastercard are both card networks. Both organizations manage the payment networks through which their cards work. Visa and Mastercard are different companies, but they operate in a very similar way.
Four credit card networks tend to compete for space in consumer wallets. They are Mastercard, Visa, Discover and American Express.
According to Statista, Mastercard and Visa have had the largest market share for a while. As of 2021, they accounted for more than 87% of the market. Compare that to Amex’s 10.5% and Discover’s 2.2% and you can see that most credit cards are Mastercard or Visa.
But is one better than the other? Are there really any differences between these two major credit card networks? Find out in our guide to the difference between Mastercard and Visa below.
In This Piece
What’s the Difference Between Mastercard and Visa?
While they’re both credit card processing networks, these are unique and separate companies. They were founded at different times.
Originally known as the BankAmericard credit card program, Visa launched in 1958. Mastercard began as Master Charge: The Interbank Card when it emerged as a BankAmericard competitor in 1966.
Visa cards don’t work on the Mastercard network, and vice versa. You can’t, for example, use a Visa to pay for something in a store that only accepts Mastercard.
How Are Visa and Mastercard Similar?
There are more similarities between Visa and Mastercard than differences. As mentioned earlier, these are both card networks. They both play the middleman between payment processors and issuing banks.
Both companies operate globally, so if you alert your issuer in advance, you should be able to use your Visa or Mastercard in another country when you go on vacation. Whether you pay fees for this service depends on your card issuer and account details—not on Visa or Mastercard.
Both Visa and Mastercard have tens of millions of merchants in their networks, and both companies’ merchant fees are comparable. Both organizations are publicly traded.
What’s the Difference Between a Network and an Issuer?
The credit card network is the middleman between the payment processor and the issuer of the card. When you pay with a credit card, the information is processed through the network to the bank that issued your credit card. On the other side of the transaction, the data that supports the funds transaction is also processed through the network.
Visa and Mastercard are credit card networks. They’re responsible for the infrastructure for these transactions and for protecting the information as it passes between the payment processor and the issuer. For this service, the credit card networks charge a fee—usually paid in part via a small percentage of every transaction.
An issuer is the bank that issues the card. Examples include Chase, Citibank and Capital One. The issuer is the entity that decides whether you’re approved for a credit card and sets interest rates and fees. It’s also the lender that pays for the goods you purchase with your credit card and the entity you pay back with your payments.
How Does Payment Processing Work?
Visa and Mastercard credit card and debit card payments all go through the same payment process—albeit on different networks. The process looks like this:
Consumers swipe cards—or tap contactless cards—in physical stores or enter card details online.
Merchants send payment authorization requests to their payment processors.
Payment processors send payment requests to the appropriate card network.
Card networks “ask” issuing banks for payment authorization.
Issuing banks approve or deny the transaction.
At this point, transactions are—hopefully—authorized, but they’re not settled yet. The process must continue:
Merchants send approved payment requests to payment processors in batches.
Once again, payment processors send transaction details to Visa, Mastercard or other applicable card networks.
Card networks “ask” issuing banks for previously authorized funds.
Issuing banks release the funds, which travel to merchant banks.
Credit card processing network fees get taken out along the way.
Merchant banks transfer funds into individual merchant accounts.
At this point, the store or other merchant has been paid for the goods or services you bought with your credit card. Your next statement should also reflect the purchase.
Other Mastercard vs Visa Similarities
Visa and Mastercard issuers have a range of products to choose from. Debit cards let you spend money already in your bank account—plus your overdraft if you have one set up. Meanwhile, you must fund prepaid cards in advance.
Visa or Mastercard credit cards have the following things in common.
1. Credit Scores Matter
Card issuers make decisions based on consumers’ credit scores. If you want a card with an extra-low APR and a really high credit limit, you’ll need a top-notch credit score. Lower credit scores generally mean lower credit limits and higher interest rates.
If you’re new to credit or you need to repair your credit, look for a credit builder or credit repair card. You won’t have a very high limit to begin with, and your APR might not be very competitive, but if you make regular payments, you’ll soon qualify for a better product.
Surge Mastercard® Credit Card
All credit types welcome to apply!
Monthly reporting to the three major credit bureaus
Up to $1,000 credit limit doubles up to $2,000! (Simply make your first 6 monthly minimum payments on time)
Fast and easy application process; results in seconds
Use your card at locations everywhere that Mastercard® is accepted
Free online account access 24/7
Checking Account Required
See if you’re Pre-Qualified without impacting your credit score
2. Rewards Cards Provide Value
Mastercard and Visa both partner with issuers that offer rewards cards. Rewards include air miles, points, store-specific rewards, food and beverage rewards and cash back. If you use your rewards card in a savvy way, you can save a lot of money.
3. Fees Vary
Visa and Mastercard don’t set fees—issuing banks do. As a result, fees for Visa and Mastercard products vary widely. Make sure you’re familiar with the over-limit, balance transfer, late payment, and foreign transaction fees on each of your credit card accounts—and stay away from credit cards with unreasonable fee structures.
4. Smart Wallets Protect Information
Both Visa and Mastercard cards are compatible with smart wallets like Apple Pay and Google Pay. Smart wallets hide your card information, so they’re more secure than swiping a card or entering card details online. Every year, more and more brick-and-mortar and online retailers accept smart wallet payments.
5. Discount Programs Save You Money
Some credit cards—especially business credit cards—incorporate high-value discount programs. The Visa SavingsEdge program, for example, can save you more than 15% when you shop with qualifying merchants. Mastercard has a similar program, called Easy Savings. In both cases, you need to enroll your card to get money back.
Which Is Better: Visa or Mastercard?
What’s the difference between Mastercard and Visa? Not that much, actually. The major difference is the company that runs the network. Merchants that accept one usually tend to accept the other, and more merchants accept Visa and Mastercard than any other type of card.
Instead of considering whether you should get a Visa or a Mastercard, think about what type of card you want and which bank you want to work with. Apply for a card that offers the rewards you want and has fees that match your budget. Whichever one you choose, you’ll be able to use it around the globe and get a very similar experience from the card network.
Conventional wisdom says that people spend more when they use credit than when they use cash. But is it true? In The Money Answer Book, Dave Ramsey writes:
When you pay in cash, you can “feel” the money leaving you. This is not true with credit cards. Flipping a card up on a counter registers nothing emotionally. If you use plastic instead of cash you will spend 12 percent to 18 percent more. This is money you could have saved.
Though he fails to cite his sources, Ramsey’s right — most people do spend more when they pay with credit. The September 2008 issue of the Journal of Experimental Psychology: Applied contains research into the effect of payment type on consumer behavior [free 268kb PDF of entire article]. From the press release:
The conclusion that cash discourages spending, and credit or gift cards encourage it, arises from four studies that examined two factors in purchasing behavior: when consumers part with their money (cash versus credit) and the form of payment (cash, cash-like scrip, gift certificate or credit card). The results build on growing evidence that, as the authors [Priya Raghubir and Joydeep Srivastava] wrote, “The more transparent the payment outflow, the greater the aversion to spending, or higher the ‘pain of paying.’” Cash is viewed as the most transparent form of payment.
In July, Ari Shapiro of NPR’s Morning Edition talked with Cornell economics professor Robert Frank about why people spend more when using credit instead of cash. Frank echoes Dave Ramsey: “Parting with [cash] is just a more vivid sensation than than abstract act of signing a pledge to pay sometime later in the future.”
During their conversation, Shapiro noted, “When McDonald’s started allowing credit card purchases, the average purchase went from $4.50 up to $7.00. That’s a huge increase.”
I couldn’t find numbers to support Shapiro’s claim; however, I did locate an article that quotes an executive from the company that installed McDonald’s credit-card processing systems. “When an establishment accepts credit cards, the average ticket size goes up,” he said. “We anticipate a 40 percent increase in the average ticket size for those franchises implementing credit card processing for the first time.”
Just being aware of the tendency to overspend with credit can help you apply the brakes. Here are other methods that work:
Don’t use your credit card for luxuries. Use it only for things you need, like groceries or gasoline. I follow this rule religiously, and I believe it’s one of the reasons I’ve been able to avoid spending too much.
Use your credit card only for big expenses. Kris doesn’t use her single credit card for small, spontaneous purchases such as a nephew’s birthday gift. Instead, she saves it for big purchases, like a food processor or a dishwasher. She approaches these pre-planned expenses differently, and isn’t likely to be lulled into spending too much just because she’s using credit.
If you’re headed to a personal “trouble zone”, leave your credit card at home. Don’t take it with you to the mall, for example, if you know you’ll be tempted to use it.
Don’t just look at your total bill — pay attention to the cost of each thing you’re buying. When you pay with credit or gift certificates, it’s easy to focus on the grand total instead of the cost of individual items.
Not everyone spends more with credit, of course. Some GRS readers report the opposite experience — they are stingier with credit than with cash. Either way, it’s in your best interest to know yourself and your spending weaknesses so that you control your expenses rather than being at the mercy of your environment.
Whether you are a freelancer, side hustler, or run a full-time business, opening a separate business bank account should be your first move after starting your business.
A business bank account helps you keep your business finances and personal income and expenses separate. Having a business bank account for all your business finances makes it easy to run records and track your costs and deductions at tax time.
Business checking accounts can also help business owners establish credit, which they can use for net terms with suppliers or to take out business loans or business credit cards.
But which business checking account is best? And can you find good options with free business checking accounts?
12 Best Free Business Checking Accounts
We’ve done the legwork for you, compiling a list of the 12 best free business checking accounts available in the U.S. today.
1. Bluevine: Best Free Business Checking Account Overall
Bluevine offers one of the most comprehensive and best free business checking accounts you’ll find. It has no monthly maintenance fees, no overdraft fees, and an annual percentage yield APY of 2% on up to $250,000 of your balance if you meet monthly activity goals. To qualify, simply make $500 in debit card purchases with your Bluevine business debit or receive $2,500 per month in customer payments to your account.
Bluevine offers features that make it great for a team, including the ability to open multiple sub-accounts and even have separate logins for employees or contractors, like accountants and virtual assistants.
While some free business checking accounts have transaction limits, your Bluevine business checking account does not. Funds are backed by Coastal Community Bank, Member FDIC. Coastal Community Bank provides business banking services for Bluevine customers.
2. Capital One Business Bank Account: Best for Local Branches
If you’re looking for personalized service at local branches, consider Capital One business checking. Capital One offers two tiers of checking accounts: Basic and Enhanced. Both accounts offer unlimited digital transactions, free overdraft coverage, access to Capital One’s mobile app, no ATM fees at 70,000 Capital One, Allpoint, and MoneyPass ATMs, and low monthly fees that are easily waived when you meet minimum balance requirements.
Capital One Enhanced business checking is designed for larger businesses who can meet $25,000 average daily balance requirements needed to waive the $35 monthly service fee. Enjoy free incoming wire transfers, five free outgoing wire transfers monthly, and a remote scanner for mobile check deposits.
3. GO2bank: Best for Online Banking
GO2bank is a complete mobile banking solution with digital banking services provided by Green Dot Bank. The bank offers many features in its online business checking account that will appeal to business owners and their employees, including co-branded debit cards, optional overdraft protection, and a co-branded app for businesses. You can also get a secured business credit card through GO2bank.
Waive the monthly fees with qualifying direct deposits, and receive ACH payments up to two days early. You can also purchase eGift cards for yourself or as employee incentives and earn up to 7% cash back.
4. Found: Best for Freelancers
Hailed as the debit card for the self-employed, we rate Found as the best free business account for freelancers. It has no monthly maintenance fees, no minimum deposit or minimum balance requirements, and no credit check to open your account.
Found has a few features that can help you streamline your business. By evaluating your income and expenses, Found can calculate your tax bill, categorize tax write-offs, and even auto-save the correct amount from each deposit to cover your quarterly taxes. You can also send invoices from the app.
Found is a financial technology company, not a bank. Deposits are FDIC insured through Piermont Bank.
5. First Citizens Bank Basic Business Checking: Best for Checking Account Choices:
Most business checking accounts have one option for a business owner. First Citizens has four choices to help you choose the right business checking account with the features you need. The basic business checking account offers 100 transactions with no monthly fee, and has a minimum opening deposit of $100.
Business Banking I is free with a merchant account or a minimum daily balance of $25,000. It offers processing of up to $250 transactions per month, plus $10,000 in cash processing, including cash deposits. Business Banking II has similar features with 500 free transactions and $15,000 in cash processing, including cash deposits. There is a $50 monthly fee unless you have a merchant account or an average daily ledger balance of $50,000.
Business Banking III is best for larger enterprises who want choices and do a high volume of business. Process up to 750 transactions free each month, with $20,000 in cash deposits. You’ll need a merchant account or $75,000 in your average daily ledger balance to avoid the monthly maintenance fee.
Business Banking I, II, and III accounts also let you customize your plan with additional discounted services.
6. Novo Business Checking Account: Best for E-commerce and App Integrations
Novo is not a bank, it’s a financial technology company with deposits backed by Middlesex Federal Savings, Member FDIC. Novo is one of the most tech-forward financial institutions on our list, offering easy integration with apps like Shopify, Wise, Stripe, Square, and Quickbooks.
The Novo Business Checking account has no monthly fees, no minimum balance requirements, no cash deposit fees, and ATM fee reimbursement for out-of-network ATM use. Account holders can also get discounts on popular business software and services, including LegalZoom, Constant Contact, and Stripe.
7. Mercury Banking For Start-ups: Best for Start-ups
Bootstrapped and venture-backed startups of every size have unique needs in a business checking account. A Mercury free business checking account helps your money stretch further with no monthly fee, no minimum balance requirements, and no minimum deposit to open. You can earn 5.11% annual percentage yield APY with mutual funds invested through Mercury Treasury if you have an account balance of $250,000 or more.
Mercury free business checking offers unlimited free transactions, including no cash deposit fees, for businesses who process less than $200,000 per month. The account offers team management tools, debit cards for multiple employees, and capabilities to open multiple checking and savings accounts to manage cash flow.
Plus, your Mercury account is backed by up to $5 million worth of FDIC insurance through partner banks. Banking services are provided by Choice Financial Group and Evolve Bank & Trust, Members FDIC and deposits are held in various partner banks.
8. U.S. Bank Silver Business Checking: Best for Sign-up Bonus
If you’re looking to earn free cash to boost your business, consider a U.S. Bank Silver Business checking account with a $100 minimum deposit before June 30, 2023. You can earn a $500 bonus when you make new deposits of at least $5,000 and maintain a minimum balance of at least $5,000 until 60 days after the account opening. Increase that to $15,000 in new money deposits and maintain that balance for 60 days and earn $750 deposited into your new business checking account.
U.S. Bank offers tons of benefits for business owners, including no transaction fees for up to 125 transactions each month, 25 free cash transactions (or up to $2,500 in free cash deposits, whichever comes first), no monthly maintenance fee, and 50% off on your first check order, up to $50.
Larger businesses may prefer a Gold Business Checking Account, with no transaction fees for up to 300 transactions per month. It also has a waivable $20 monthly fee.
There is also a Platinum Checking Account Package with 500 free transactions and a $30 monthly fee. This fee is waived by meeting monthly minimum balance requirements.
9. Chase Business Complete Banking: Best for Payment Processing
For those who want to avoid online only banks and are looking for a big bank with international recognition and branches and ATMs across the U.S., Chase Business Complete Banking offers a solid solution. It comes with many ways to waive the monthly service fee.
Chase also makes it easy to accept credit and debit card payments without using a third-party payment processor. Chase QuickAccept is a built-in feature as part of Chase Business Complete Banking. You don’t need to apply for a separate merchant account, and the transaction fees are competitive with other credit card processing companies.
QuickAccept also allows you to access money faster with same-day deposits with no added fees. If you need a merchant payment processing provider that works in synch with your bank account, Chase Business Complete Banking could be the best choice for you.
Right now through August 3, 2023, businesses can earn a bonus up to $500 when they open a Chase Business Complete Checking account and meet requirements, which including total deposits of $15,000 or more. Deposit just $2,000 or more and snag an easy $300 for your new business checking account.
10. Huntington Business Checking 100 (Midwest): Best for Community Banking
Huntington National Bank, headquartered in Columbus, Ohio, since 1866, offers three business checking accounts, including a business interest checking account, Unlimited Plus Business Checking.
The top-tier account includes unlimited transactions, plus cash deposits of up to $25,000. Waive the $40 monthly fee with up to $50,000 in total deposit relationship balances across business accounts. Designed for larger businesses, the Unlimited Plus Business Checking allows you to choose two bonus services such as a fraud tool, waived returned deposited items fees on up to 25 items per month, or two free incoming domestic wires monthly.
The Unlimited Business Checking account offers similar features, with unlimited transactions, free cash deposits on up to $10,000 per month, and a choice of one bonus service. Waive the $20 monthly fee by maintaining a minimum balance of at least $10,000. A Business Checking 100 account offers up to 100 transactions per month, and up to $5,000 in cash transactions with no monthly fee.
Huntington is devoted to the local communities it serves and spotlights small business owners on its website. It also specializes in SBA loans and offers a linked business money market account to earn interest on savings with no monthly maintenance fee if you maintain an average daily balance of $10,000+.
11. Relay Business Checking: Best for Money Management
Relay online banking offers up to 20 primary business checking accounts for members of your team or for different business expenses, plus 50 virtual or physical Visa debit cards. Designed to assist with cash flow and money management, your Relay online banking account allows automated transfers into the various checking accounts based on percentage of income or flat-rate dollar figures.
Your Relay online and mobile banking account also includes up to two business savings accounts with APYs of 1% to 3%. Best of all, unlike many free business checking accounts that are only free if you meet transaction or balance requirements, Relay has no monthly maintenance fee, no transaction fees, no overdraft fees, no ATM fees, and no minimum balance requirements.
12. Axos Basic Business Checking Account: Best for No Fees
Axos Bank has been voted best online bank by Money Magazine and its business offering stands out for small business owners as a straightforward business checking account with no transaction fees, no monthly maintenance fee, and no minimum opening deposit. You also don’t have to worry about balance requirements or ATM fees. You’ll even receive unlimited reimbursements for using out-of-network ATMs within the U.S.
You will need to maintain a minimum balance of at least $5,000 for the first five statement cycles to earn a $100 account opening bonus. You will receive $25 into your business account each month you maintain the minimum requirements. However, if you close the account within 120 days, you might have to pay a $100 early closure fee.
What to Consider When Choosing the Best Free Business Checking Account
The best free business checking account for your business depends on the volume of cash deposits, number of transactions, the size of your company and your general banking needs.
It’s important for a business of any size, including a sole proprietor or 1099 contractor, to open a business checking account to keep business funds separate from your personal checking account and other personal finances. This is especially important at tax time.
Many of the business bank accounts on our list of best free business checking accounts make it easy for you to track your business finances. They offer end-of-month or quarterly reports or integrate with QuickBooks or other accounting software to make money management easy. This, along with costs, quality of customer service, mobile apps, and more should factor into your decision when you choose a small business checking account.
Monthly Maintenance Fee
Account fees have long been a fact of life for individuals and business owners, but they no longer have to be with so many free checking accounts available today. Some of the banks on this list, including Axos and Relay, offer no monthly fee of any kind. Others make it easy to waive the monthly fee by meeting balance requirements.
See if there are any balance requirements, direct deposit requirements, or minimum debit card purchases to avoid the monthly service fee, and if you will be able to meet those minimums easily each month.
Easy-to-use Online and Mobile Banking
Even basic business checking today should have a robust app and mobile banking solutions, including mobile check deposits, capability to turn your debit cards on or off, and to monitor spending in a user-friendly app.
You may think online-only banks have better mobile capabilities, but that’s not always the case. All the best business checking accounts on our list have intuitive, user-friendly mobile apps.
Low Minimum Opening Deposit Requirements
Most of the free checking accounts on our list have low minimum opening deposit requirements. Some may have higher minimums to earn a bonus on your business checking account. Make sure to read the fine print and know the minimum deposit requirements if you want to earn that sign-up bonus.
Reasonable Fees
While it’s possible to find a business checking account with no monthly service fee, your bank may have some fees. Read the fine print so you know exactly what you’re getting for your money. It should be easy to avoid ATM fees, overdraft fees, and even monthly fees.
However, you may have to pay for wire transfers, out-of-network ATMs, and other transactions. Unlike personal accounts, it’s common for business bank accounts to have fees if you deposit cash. Sometimes, a certain number of cash transactions is included in your monthly fee.
Customer Service
It’s important to research the bank’s customer service before you commit to a business checking account. Online only banks, especially, may have limited ways to reach customer support. Find out if they offer 24/7 service. Many people prefer online banking for the convenience and low account fees. But if you experience a problem, you want to make sure you can get help promptly.
Positive Customer Reviews
When you’re looking for the best business checking account, it pays to research the opinions of other business owners like you. Customer reviews can give you a feel for the level of customer service, ATM fees, monthly fees, fraud protection, and more.
Practical Transaction and Cash Deposit Limits
Many of the best business checking accounts offer unlimited transactions and reasonable monthly limits to deposit cash. Many banks offer different tiers of business checking accounts, so you can pay a set monthly fee for the level of service you need.
Linked Business Savings Account or Business Interest Checking Account
If you want to earn interest on your cash reserves, look for a checking account that pays interest or for a bank with a high interest savings account. Pay attention to account fees, withdrawal limits, and
Consider the Need for a Bank With Physical Locations
Online banking offers lower monthly fees and convenience. But if your business needs to deposit cash regularly or you just want personalized service and relationship banking, you might prefer a bank account at a financial institution with brick-and-mortar locations.
Questions to Ask Before Deciding on a Business Checking Account
When you’re shopping around for a free business checking account, consider your needs, the number of transactions you conduct daily, your account balance, and whether you prefer a traditional bank or are willing to consider online only banks for your business checking needs. Ask yourself the following questions so you can compare your options.
Will you be making regular cash deposits?
Many business checking accounts charge a fee if you want to deposit cash. Sometimes, a number of cash deposits will be included in your monthly fee. Make sure to pick an account with the capabilities you need.
Do you prefer a bank or credit union?
You might prefer the personalized service of a credit union instead of choosing a large bank or an online bank. When you’re evaluating credit unions, compare all the features and fees the same as you would evaluate business bank accounts.
Do you need to process customer transactions?
Banks like Chase offer credit card processing as an add-on feature to their services. If you are using an online bank, you might want one that integrates with Stripe, Square, or other payment processors. The capability to process customer transactions is one element that sets a business bank apart from a personal checking account.
Do you want to earn interest on your balance?
Several banks on our list offer high yield savings accounts, which is a benefit for small businesses, start-ups, and any business that wants to earn free money from their balance. You might also consider an interest earning business checking account like Bluevine, which pays interest on your checking account balance.
Business Checking vs. Money Market Account
A money market account is a special savings account designed to hold money that you may need to access in the short term. Some money market accounts offer higher APYs than other savings accounts. A money market account often has limits on the number of fee-free withdrawals per month.
Most business owners will want to open a free business checking account and link it to a money market account to earn interest on cash reserves.
What You Need to Open a Small Business Checking Account
You may not need an Employer Identification Number or Tax ID number to open a business checking account. If you have one, you should open the account using that number instead of your Social Security number to help keep your business and personal funds separate.
But if you are a freelancer and file taxes as a sole proprietor/self-employed, you can open your business checking account with your SSN. However, if your business has a DBA (doing business as) you will need a certificate or paperwork showing that name.
Likewise, if you are an LLC, you’ll need your business registration along with your EIN. If you have a partnership, you’ll need your partnership agreement and paperwork showing the business name.
Beyond that, you can open a business checking account with your business address, a phone number, email address and the minimum deposit (if required). Visit a branch for personalized service or open your free business checking account online.
FAQs
See what people are asking about free business checking accounts.
Do you need to pay account or transaction fees?
Some business checking accounts have monthly fees that you can waive by meeting specific requirements. You may also pay ATM fees, fees for cash deposits, and fees for wire transfers or international transactions.
Read the fine print or speak to a personal banker to choose the account that’s right for you.
Can you open a business checking account with no credit check?
Most banks and credit unions will allow you to open a business checking account with no credit check. By maintaining a positive balance in your account, you can build your business credit. A credit check may be required for business loans, lines of credit, or “net” terms with vendors.
What are the most important features of business checking accounts?
Most business owners are looking for business checking with no ATM fees and no monthly fee or easy ways to waive the monthly fee. Beyond that, consider the type and number of transactions you complete monthly, whether you need payment processing capabilities, and if you want a linked savings account to earn interest.
What banks offer free business checking accounts?
Many online and traditional banks offer free business checking or easy ways to waive the monthly fee. The list above describes 12 of our favorite options in free business checking.
The gig economy was just beginning to blossom pre-pandemic. Between 2010 and 2020, the number of gig workers or side hustlers increased by 15%. Unlike many aspects of life, which stagnated during the pandemic, freelancing only grew. Statista reported that 73.3 million people work as freelancers in the U.S. right now, an increase from 57.3 million pre-pandemic.
Freelancing has tremendous benefits for many people. Freelancing or gig work can provide:
Flexibility
A better work-life balance
Increased income potential
But it can come with some financial complications, too.
As a freelancer, you’ll need to manage cash flow so that you’ll have money in your account to pay your bills. You’ll be responsible for paying your own taxes. And, with that in mind, you’ll want to track expenses carefully so that you can deduct the costs of running your freelance business from your bottom line.
That’s where having a business bank account can come in handy.
Why You Need a Bank Account If You Have a Side Hustle
According to tax laws, you don’t have to have a business bank account to run a side hustle or a freelance business. You can file your taxes using your Social Security number and receive a 1099 form as a sole proprietor.
But as your business grows, you may want to incorporate under a tax ID number. You may choose to register as a corporation like an S-Corp or, more commonly, a limited liability corporation or LLC. This can get confusing, so it’s important to speak to a tax account before you take this step.
If you incorporate your business, you’ll need a business checking account to keep your personal finances separate from your business expenses. You would pay yourself a salary out of your business account and use your personal bank account to pay for your daily living expenses, entertainment, and anything that isn’t considered a business expense.
Benefits of Business Accounts
Most small business owners, freelancers and side hustlers prefer to open a business account even if they aren’t incorporated. Having a dedicated business checking account makes it easier to track your business income and expenses, which makes filing taxes – and making quarterly estimated tax payments – easier. If you ever get audited, you’ll have a clear record of your personal and business finances.
Plus, if you do any sales and marketing for your freelance business, your business debit card can often pique people’s interest. You’d be surprised how having a debit card with your business name on it can help you generate leads in odd places, whether you’re at your favorite bar or paying for groceries.
If you’re ready to open a separate business account, it’s important to find one that will meet your needs.
Freelancer vs. Side Hustler vs. Entrepreneur
Before you choose a business account, you may be wondering about the differences between entrepreneurs, freelancers, and side hustlers. Which category do you fit in?
These are all loose terms to describe anyone who owns their own business or is self-employed. Self-employed is a tax designation, which means you are a 1099 contractor for other companies. This term would apply to most freelancers and side hustlers.
On the other hand, if you start your own business, you might consider yourself an entrepreneur. The dictionary defines an entrepreneur as someone who starts a business and is willing to take a financial risk in hopes of great success.
A freelancer may also take financial risks, including leaving a steady paying job. In a lot of cases, whether you describe yourself as an entrepreneur, small business owner, freelancer or side hustler is up to you.
Compare the Best Freelancer Checking Accounts
In most cases, business owners, freelancers and side hustlers can all benefit from a good business bank account. Read on as we compare the best business checking accounts for freelancers, gig workers, and entrepreneurs.
1. Lili Bank: Overall Best Bank for Freelancers
Lili calls itself “the one-stop shop for all your small business financial needs.” An online financial services company that provides business banking, accounting for freelancers, invoicing, and tax support, Lili is backed by Choice Financial Group Inc.
As a US-based bank, Choice is a member FDIC, which means your funds deposited in Lili are protected by the federal government up to $250,000 per account.
What sets Lili apart as one of the best bank accounts for freelancers?
In addition to all the other services it offers to business owners, Lili has no minimum balance requirements, no monthly fees for basic checking, and a network of 38,000+ fee-free ATMs nationwide. You can also open a business savings account and earn 1.50% APY at Lili.
Lili’s basic business checking account has no monthly fee, expense categorization for your purchases, and the ability to generate quarterly expense reports.
Alternatively, for $9 per month, you can earn 1.5% on savings, get a Visa business debit card with cashback rewards, overdraft protection up to $200 and tax, invoicing software, and accounting support.
Lili integrates with third-party services that gig workers may use, including Etsy, Shopify, Venmo, QuickBooks, and your PayPal business account.
When you compare the prices of other invoicing and online accounting services, you may find that Lili offers tremendous value for the money as one of the overall best banks for gig workers you can find.
Bluevine: Best for Business Interest Checking Account
Like Lili, Bluevine is a financial technology company. It is backed by Coastal Community Bank, Member FDIC to protect your deposits. The Bluevine business checking account offers 2.0% interest, which sets it apart from competitors.
To take advantage of the interest, you’ll need to either spend $500 per month with your Bluevine Business Debit Mastercard or receive $2,500 per month in customer payments to your Bluevine business checking account.
There are no monthly fees or minimum balance requirements and you can make unlimited transactions with no fees. Like Lili, Bluevine also offers other services for business owners.
If you are looking for a business interest checking account with value-added services, consider Bluevine. Your account integrates easily with QuickBooks, with no fees involved. Plus, you can set up sub-accounts to easily manage your money, add authorized users, and pay bills via ACH or wire transfer from your Bluevine account.
While many credit providers offer business credit cards, Bluevine is one of only a few business checking accounts that offers a business line of credit. You may qualify for a credit line of up to $250,000, with a rate as low as 6.2% interest. This interest rate is much lower than the national average of 20.46% for business credit cards right now, as reported by The Balance. Plus, you could get approved in as fast as five minutes, according to the Bluevine website.
For entrepreneurs seeking to purchase tools or resources, or freelancers in need of business equipment, Bluevine’s line of credit could provide you with the financial security you need to grow. Take note that you’ll need a credit score of 625 or more to qualify and $40,000 in monthly revenue. This is probably not a service for a gig worker, but for a seasoned entrepreneur.
Even so, it’s never too early to get started with a business checking account, especially one with no monthly fees.
Amex: Best for Debit Card Rewards and Bonus Offer
American Express is a renowned name in business and consumer rewards credit cards. But you might not be aware that the company also offers a business checking account with 1.30% APY on balances up to $500,000.
American Express also has no monthly maintenance fees, no fees on domestic ACH payments, and no fees at MoneyPass ATMs. The American Express Business Blueprint app makes it easy to manage your account.
Amex stays true to its credit card rewards roots with a rewards business debit card. Earn 1 Membership Reward point for every $2 on eligible purchases. You can combine points earned with Membership Rewards points accrued with other Amex cards, and use those points for travel, gift cards, or cash back. You can also convert those points into cash deposits directly into your new business checking account.
Amex’s bonus offer stands out to us. Earn 30,000 Membership Rewards points after you deposit $5,000 or more within the first 30 days of account opening, maintain that balance for the next 60 days, and make five or more qualifying transactions within those first 60 days.
NBKC Business Checking: Best for No Fees
If finding a business bank account with no fees is most important to you, a nbkc Business Checking account might fit the bill. The bank offers unlimited transactions with no fee, no minimum balance requirements, no monthly fees, and no opening deposit requirements either. You can also have out-of-network atm fees reimbursed for up to $12 per month.
If you are a freelancer just getting started or just looking to supplement your full-time income with a side hustle, you’ll find nbkc bank a low-cost and convenient option among free business checking accounts.
NBKC lacks some of the bells and whistles of the top choices on our list. You won’t get integrations with common business software or invoicing and accounting support. But a nbkc business checking account is free with your personal account and provides an easy way to keep your business and personal funds separate.
Novo: Best for Payment and P2P Money Transfer App Integration
Novo is another choice with no monthly maintenance fee, no monthly fee, free ACH transfers, and no minimum balance needed. Like many of the business bank accounts on this list, Novo is a financial technology company. It’s backed by Middlesex Savings bank, a Member FDIC, which means your money is protected up to $250,000 per account.
Novo is the best for business owners looking for an easy way to process payments or transfer funds. You’ll get free ACH transfers from another checking or savings account and refunds on all out-of-network ATM fees.
Novo integrates with many P2P payment apps, including Square, Shopify, and Stripe, as well as Etsy, eBay, Amazon and more.
When you use Novo Boost, you can get paid 95% faster through Stripe, or two business days before the funds would ordinarily appear in your account.
Plus, it’s quick and easy to open an account online, with approval as fast as 10 minutes – rather than days with some other online bank accounts.
Axos Bank: Best for New or Scaling Businesses
Many freelancers don’t think about opening a business account until they have incorporated their company to make that transition from self-employed to entrepreneur. If this sounds like you, Axos Bank could have the best bank accounts for you. The online bank is offering business owners who incorporated after June 2020 an extra $200 in their new business bank account.
If you aren’t newly incorporated, you can earn a $100 bonus.
Like many of the best business accounts on this list, Axos has no monthly fee, no minimum monthly average balance to hold, ATM fee reimbursements for all domestic transactions, and no minimum opening deposit. The bank accepts cash deposits or you can transfer money from other checking accounts via ACH.
Unlike many online banks, Axos offers business owners a dedicated relationship manager to help point you to the products and services that are best for your growing business.
Chase Business Complete Banking: Best for Credit Card Processing
As the largest U.S. bank, with assets of $3.31 trillion, Chase is a traditional bank that offers all the convenience of online banks. This includes personalized service, stellar fraud protection, and a host of other features and benefits we’ve come to expect from any financial institution.
The Chase Business Complete Banking account is ideal for entrepreneurs, offering unlimited transactions and no monthly fee (if you meet certain requirements). These requirements are relatively easy to meet with a $2,000 minimum balance, $2,000 in purchases on your Chase Ink Business credit card, a link to a Chase Private Client Checking account, or $2,000 in deposits from QuickAccept or Chase eligible merchant services.
The best aspect of Chase Business Complete Banking is the ability to process credit card transactions and receive funds the same day through Chase QuickAccept. (Additional fees apply.)
You can open an account with no minimum deposit to get started.
Wave Money Business Banking: Best for Free Business Banking
Wave Money integrates a free checking account with easy bookkeeping for freelancers and solopreneurs. Wave is best for those who want to improve cash flow with instant pay and want bookkeeping tools to make tax prep easier.
Wave has no monthly fee or transaction fees, so you keep more of what you earn. You can use the mobile check deposit feature for convenience, and make ACH transfers easily. There are no transaction limits with Wave, and you can also connect third party payment processors.
Wave is another fintech company, with banking provided by Community Federal Savings Bank, Member FDIC. That means your funds are insured for up to $250,000 per account.
TIAA Bank: Best for Business Investments
Besides checking accounts, TIAA Bank offers a variety of banking products for entrepreneurs and gig workers that sets it apart.
If you’re considering business savings accounts, TIAA offers CDs and money market accounts to earn interest at a rate higher than you may get with another account. Currently, TIAA’s one-year business CD offers an APY of 3.75%.
TIAA’s checking accounts offer easy online banking and mobile check deposit, along with personalized service from a business solutions specialist.
LendingClub Bank Tailored Checking: Best for Earning Checking Account Rewards
The LendingClub Bank tailored checking account for freelancers is one of the few banks on our list where you can earn interest on your checking balance, plus 1% cash back rewards when you use your debit card.
Account holders earn 1.5% APY on balances up to $100,000 and 0.10% APY on the portion of your balance that exceeds $100,000.
LendingClub Bank reimburses fees if you use an out-of-network ATM. The bank also supports QuickBooks, Quicken and Mint for budgeting and bookkeeping. You can also send digital invoices and get paid directly to your LendingClub account, making LendingClub Bank Tailored Checking one of the more robust and affordable online banks for freelancers.
Just make sure to maintain an average daily balance of at least $500 to have the monthly fee waived.
How to Choose the Best Bank Account for Your Business
When you’re evaluating business bank accounts, you’ll want to consider your needs and the features that are most important to you.
It should go without saying that you want an account with no monthly fees or no monthly fees. Unless you’re an established business owner, you may also want no minimum balance requirements. You don’t want to get saddled with fees if your business runs into cash flow problems or you have a down month.
If you run a high-volume business, look for a bank account with no transaction limits, no in-network ATM fees, and unlimited ATM fee rebates.
Need a way to manage contracts, collect invoices, and help with taxes?
Your business bank can represent much more than just a place to deposit cash and a means to pay your bills. Many of the best bank accounts on this list also offer freelancer invoicing, tax assistance, and ways to manage contracts.
Budgeting and Savings Features to Look For
When you’re a freelancer, it’s convenient to have an easy way to track your expenses and budget for not just expected costs, but surprise opportunities or financial emergencies.
Just as you should have a personal bank account established with emergency savings, you want a business savings account. In fact, you may want multiple business savings accounts or the ability to divide money into various buckets for known costs – like taxes – and unexpected expenses, such as car repairs or a new phone.
Some budgeting and savings features are nice to have, such as an interest-earning checking account and cash back on debit card purchases.
Why We Chose Lili as the Best Business Bank Account
Lili graces the top of our list because the fintech company offers so many value-added services for entrepreneurs that it’s virtually a one-stop shop for freelancers. However, the other banks on our list for best business accounts have their own benefits you might want to consider.
Should You Use Different Banks for Personal and Business Finance?
If you already have a separate bank account for your personal finance, there is something to be said for opening a business account through the same bank. You may get extra perks and benefits or waived fees. Best of all, it’s easier to use one app to manage all your personal and business banking.
But if you opt for an online financial services company, instead, it is typically easy to transfer funds between accounts. Also, companies like Lili and Bluevine specialize exclusive in business accounts, which means they have services tailored specifically to your needs.
Bottom Line
A lot of factors go into choosing the best bank account for your business checking needs. Knowing your must-haves, nice-t0-haves, and those features that don’t really matter to you can help make the decision easier.
FAQs
What is a business bank account?
A business bank account is a dedicated account separate from your personal accounts that you use to deposit cash, checks, or other customer payments earned through your business. You should also use your business checking account to pay for business expenses.
Do You Need a Business Bank Account if You’re a Freelancer?
Freelancers are not required by law to have a separate business banking account. But if your business is incorporated as an S-corp, C-corp, or LLC, you are required to keep your business and personal accounts separate.
Should You Have a Separate Bank Account If You’re a Freelancer?
Even though it’s not required by law, it’s a good idea to have an account separate from your personal checking account to help you keep track of business income and expenses.
What Makes a Business Bank Account Ideal for Freelancers?
Business bank accounts often have many of the same features as some of the best personal bank accounts. That would include low or no minimum balance requirements, no monthly maintenance fee, no transaction fees, and no hidden fees.
You may also look for features like mobile check deposit, unlimited electronic deposits, and low wire transfer fees if you have a lot of customers, clients, or vendors outside the U.S.
Methodology: How We Select the Best Bank Accounts for Freelancers and Side Hustlers
We evaluated the best bank accounts for freelancers based on the ability to earn interest, monthly maintenance fees, minimum balance requirements, the ease of making cash deposits, customer service, and more.
Some banks are better for freelancers who don’t maintain a high balance or only have a few transactions per month. Entrepreneurs with fast-growing businesses looking to scale may prefer a business checking account with unlimited transactions and the ability to accept credit card payments through the same bank.
Some business owners may want to be able to integrate their Quickbooks accounting system through their bank.
We have banks on this list designed for small business owners, freelancers and side hustlers at every stage of business growth.
The OG payment app has been around since 1998 and still manages to offer an excellent jack-of-all-trades experience. You can send money to friends, handle payments as a business, and even earn 5% back on PayPal purchases through certain rewards cards.
But 24 years is a long time to let competitors catch up. And while none have managed to topple the titan, contenders like Venmo, Wise, Payoneer, Zelle, and Cash App have gained serious ground by offering a better experience for certain users. Some let freelancers get paid with fewer fees. Others let you pay your friends overseas in their currency of choice. And one is perfect for sending payments to people who don’t have any payment apps installed (e.g., your parents or grandparents).
So which payment app is best for what? And most importantly, which is best for you?
Let’s investigate the 10 best alternatives to PayPal.
What’s Ahead:
PayPal alternatives overview
Venmo: Best for paying friends
Wise: Best for international transfers and currency conversions
Google Pay: Best for sending money through Gmail
Payoneer: Best for receiving online payments as a freelancer
Square: Best for receiving in-person payments as a freelancer/small business owner
Stripe: Best for receiving online payments as a small business owner
ProPay: Best for receiving offline payments as a freelancer/small business owner
Zelle: Best for sending money to people who don’t use payment apps
Cash App: Best for converting received payments into hard cash
Apple Pay: Best for sending, receiving, and paying at the register for iPhones and Apple Watches
Venmo
Fees for personal use: 3% credit card processing fee
Fees for business use: 9% merchant fee plus 10 cents per transaction; Venmo tax applies to all transactions marked “goods and services”
Venmo is so widespread these days that “Do you have Venmo?” has become the new “Cash is king.”
Even though Venmo is technically a subsidiary of PayPal, the numbers show that the former is now nearly as popular as its big brother. PayPal handled a total of $330 billion in transactions in 2021, while Venmo handled $230 billion — up a staggering 44% from the previous year.
And there’s a reason why so many people use Venmo as their go-to payment app: it’s simple, safe, and reliable. Transfers are free, payments to friends and family are free, and the app even has a built-in “newsfeed” showing who among your friends is paying whom for what. There was even a time when Venmo showed you the precise amounts they were paying for rent, food, and more, but naturally that TMI feature was retired.
While popular, Venmo isn’t perfect. It takes between one and three days to withdraw your Venmo funds to your bank account, or you can pay a 1% instant transfer fee. Plus, if you use it to invoice clients, there’s no “tip” option on their end — they have to manually initiate a separate payment.
There are also a few default settings I’d strongly recommend you change if you download Venmo.
Settings > PIN code and biometric lock. Set a 4-digit PIN so that if someone borrows or steals your phone, they can’t Venmo themselves the maximum $3,000 (happens more often than you’d think).
Settings > Privacy > Private. Unless you really want your entire friends list to see who you’re paying and for what, I see no reason to broadcast this sensitive data. Turn it off.
Pros and cons aside, Venmo is so popular that someone’s bound to ask you to use it. Luckily, once you succumb to peer pressure, you have a rock-solid PayPal alternative waiting for you.
Get Venmo for iOS or Android.
Wise
Fees for personal use: Sending rates from 0.41%; conversion rates from 0.41%
Fees for business use: Same as personal, plus a $31 account setup fee
There are plenty of apps to help you split the cost of a pizza with your buddies, but what about your international friends? Wise, formerly TransferWise, helps with that. You can send money to consumers in 51 countries, with new currencies added on an ongoing basis.
Wise is custom-built for any international payment or money transfer you want to make. I just have to enter how much I want to send in USD, then choose the currency of the receiving party. Right there, it shows how much I’ll pay for a monthly fee. There are bank fees and Wise fees, but they are minimal.
To send $100 USD to Europe using Wise’s personal account, I’d pay $0.16 in bank/debit card fees, plus a $0.96 Wise fee. Compare that to $5 per transaction fee for a personal international bank transfer with PayPal payments. That alone makes this perhaps the best PayPal alternative around.
Wise business members pay a fixed fee of $1.40 to send money. PayPal, in contrast, charges a 1.50% international business payments fee in addition to the standard fee (2.89% and up).
I’ve only been a Wise payment recipient, so I had to check out how paying someone works. It’s pretty simple – well, as simple as paying internationally ever is. You’ll need the email address, full legal name, and mailing address of the person. You’ll also need the International Bank Account Number (IBAN) of the recipient, as well as the type of account it is and the name and address of that bank.
The business side of Wise has some advanced features, including invoicing and compatibility with Stripe. You’ll also pay a one-time $31 fee to set up your account for international banking.
Get Wise for iOS or Android.
Google Pay
Fees for personal use: 9% credit card processing fee
Fees for business use: 9% merchant fee plus $0.30 per transaction for transactions under $3,000. Rate drops to 2.5% for transactions above $3,000; 2.2% for $10,000+; and 1.9% for $100,000+.
Google Pay allows you to send money from your bank account or GoogleWallet through Gmail for free. Just look for the $ symbol when you’re composing an email and input the amount of money you want to send. If you’re like me, you already do most of your communication through Gmail, so this may boost Google Pay to the top of your list.
Signing up for Google Pay is easy if you use your Google account for most of your business interactions. You just have to download the app and add your phone number. Google automatically pulls in all your frequent contacts.
The interface with Google Pay is not all too different from Venmo’s. You just choose a name from your contacts and input the amount you want to pay. You can also add a note.
One feature I like with Google Pay is that you can easily split payments with friends. Just tap on “Split with Friends” from the Pay screen and choose the friends from your contacts. There’s also a Scan QR Code feature that will make it easy to pay a business that accepts Google Pay.
Speaking of business use, Google Pay has the same weakness Venmo does when it comes to paying vendors. You’ll have to figure out the tip and add it to what you’re paying. But these apps are designed to keep things as simple as possible, so that’s one unfortunate by-product.
Get Google Pay for iOS or Android.
Payoneer
Fees for personal use: N/A
Fees for business use: $0 for payments from other Payoneer customers; 3% credit card processing fee; 1% ACH debit fee; marketplace fees (Network, Fiverr, et al) vary by marketplace; 0% to 1% receiving account fee
Payoneer is an online payment system and peer-to-peer payment solution that allows you to transfer money to anyone anywhere in the world, in addition to making purchases. It provides you with a pre-paid Mastercard that you can use anywhere Mastercard is accepted.
As a freelancer, I’m familiar with Payoneer through sites like Upwork. The service is useful, but if you’re not a freelancer, there are better options. Professionally, what I like about it is that you can send payment requests to clients and they can pay you directly through the app.
Payoneer is another great option for freelancers who are crossing international borders with their work. You’ll pay no fees on the money your clients send to you, and if you send money, there are no fees as long as the recipient is a Payoneer member. Otherwise, you’ll pay 3% for a credit card payment and 1% on ACH transfers.
But, chances are, if you’re using Payoneer, you’ve encountered it on one of the many platforms that use it. Upwork is where I’ve seen it, but it’s also a payment option on Fiverr, Wish, and Airbnb, among many others. If you pay for products and services on sites like that, a Payoneer account for personal use could come in handy, but otherwise, it’s mostly for freelancers and small business owners.
Get Payoneer for iOS or Android.
Square
Fees for personal use: N/A
Fees for business use: First card reader is free; 2.6% credit card processing fee plus $0.10 per transaction; 3.5% plus $0.15 fee for payments that are manually keyed in
Not every in-person business operates in a storefront with a cash register. Square helps with that, equipping small business owners and freelancers with a way to easily swipe a card. The reader attaches to a phone or tablet, allowing you to accept payments anywhere.
I made the mistake of not using Square when I had an in-person event where I needed to accept cards a few years ago. I used the PayPal reader because I figured I already had an account so it would be easier. The swiper didn’t work, so I had to manually enter every single credit card. It was a pain.
For the next event, I ordered a Square reader and never looked back. It works every time, which comes in handy when you have a line of customers holding credit cards. Fees vary from 2.6% + $0.10 for swiped cards to 3.5% + $0.15 for manually keyed transactions, so while it might come in handy to be able to swipe your buddy’s credit card to pay you back for dinner, one of the apps built for personal payments will likely be better for that.
But Square isn’t just for taking in-person payments on the go. You can use it as a one-stop shop for all your business’s sales. You can send invoices directly from the dashboard, set up gift cards that you sell directly through their site, and even take sales on your website using their platform.
What I like about Square, though, is that you can see, at a glance, your total daily sales. If you’re regularly collecting money from customers — in person or online — having this easy access to your progress comes in handy.
Is it for personal use? Not really. You could swipe your friends’ cards using the reader, but the fees will cut into whatever you’re taking.
Get Square for iOS or Android.
Stripe
Fees for personal use: N/A
Fees for business use: First card reader is $59; 2.9% credit card processing fee plus $0.30 per transaction; 3.4% plus $0.30 fee for payments that are manually keyed in; 0.8% fee for ACH transfers
Another option geared toward the needs of small businesses is Stripe. The payment platform can be integrated with your online store or used separately by directing customers to pay you there.
Stripe is for business. You could use it to send money to friends, but the fees make it cost-prohibitive. Fees start at 2.9% + $0.30 for each successful card charge. You can also accept international transactions, with an additional 1% fee added to each transaction.
Compared to its direct competitor Square, Stripe has higher fees but better tools for online integration. If you’re swiping customer credit cards in-person, use Square. If you accept most payments online and want to offer options like recurring billing and subscriptions, use Stripe.
I’ve used Stripe to accept payments from clients, and I loved the easy sign-up process. They do require identity verification, but all I had to do was snap a photo of my driver’s license and set up two-factor authentication to start accepting payments.
What I like most about Stripe is the dashboard. When you log in, you can see, at a glance, how much you’ve made today, as well as your financial activity over the past seven days. You can also see any disputes customers have filed on previous charges.
Yes, you can send invoices using Stripe, and that’s how I get paid for what I do. But where Stripe really shines is in its API. You can easily add Stripe to your website to start taking payments, and, in fact, if you use one of the top web hosting services, you probably see Stripe as an option when you’re setting up your e-commerce store.
Stripe also has terminals and mobile payment options. You don’t need a card reader to accept in-person payments — simply hold the card in front of your phone and the camera will capture the information you need. If you regularly take payments on the go, it’s worth considering.
Get Stripe for iOS or Android.
ProPay
Fees for personal use: N/A
Fees for business use: $39.95 signup fee; $39.95 annual renewal fee; 2.60% credit card processing fee; 3.55% fee for payments that are manually keyed in; $0.35 bank transfer fee
ProPay offers payment processing tools for businesses of all kinds. Whether your business is small, on the road, or global, they can work with you.
ProPay is for the business that’s serious about accepting payments on the go. You can swipe cards using the ProPay JAK™ card reader. If you aren’t near your card reader, you can manually input the information. You can also opt to securely save a customer’s payment information to make things go more quickly the next time they buy from you.
One thing I love about ProPay is that it works even if you are offline. I’ve sold items at libraries, book fairs, craft fairs, and even in the parking lot after an event. You aren’t guaranteed to have Wi-Fi or even cellular connectivity at all times, and this app comes in handy for that. The transaction is logged the next time you go online.
For personal payments, this is another app that won’t really help you much. But if you’re a freelancer or work in direct marketing, this is a great app for processing payments.
As for fees, they depend on the type of card being used and the account you have. Rates start at 2.40% for swiped transactions. The complete rate chart is posted here.
Get ProPay for iOS or Android.
Zelle
Fees for personal use: None
Fees for business use: None (though there are no business-specific features)
You may already know Zelle as “the payment app my bank wants me to use.”
That’s because while competitors like PayPal and Vemno were marketing themselves to businesses and individuals respectively, Zelle was chatting up the banks. As a result of all that relationship-building, Zelle now interfaces with over 1,000 banks and banking apps worldwide, making it extremely easy to send and receive money directly through your banking dashboard.
The other benefit of using Zelle is it makes it way easier to send money to people who don’t use payment apps at all. For example, let’s say I wanted to send $200 to my grandparents to help them pay for a new fridge. If I said to them, “Do you have Venmo or Cash App?” they’d probably look at me like I was speaking a foreign language.
I don’t want to stress them out with the prospect of downloading an app (or buying a smartphone), so I’ll just send it via Zelle. They’ll receive an email from Zelle that shows them step-by-step instructions on how to enroll and put the money in their account, no apps required.
The other benefit to Zelle is simplicity. You simply send and receive money with no fees ever. That’s it. There are no newsfeeds, social features, nada. And frankly, the only reason I don’t recommend Zelle over Venmo is because the latter is just more recognizable.
Get Zelle for iOS or Android.
Cash App
Fees for personal use: 3% credit card processing fee; 0.5% to 1.75% instant transfer fee ($0.25 minimum); $2 ATM withdrawal fee with Cash Card
Fees for business use: 2.75% transaction fee
Like Venmo, Cash App is another one of those payment apps that everyone’s heard of, and everyone uses. It’s extremely simple, with a no-frills dashboard and no fees for personal use, and for better or worse it lacks the social features of Venmo.
At first glance, Cash App seems to be the Paris Hilton of payment apps: popular just because it’s popular. There’s no option to tip contractors, not much to appeal to business owners, and until you verify your personal information, you’re capped at sending $1,000 every 30 days.
Pretty soon, Cash App’s initial value proposition — barebones simplicity — may start to feel limiting when you see competitors offering compelling features like bank dashboard integration, currency conversions, and free credit card readers.
Thankfully, Cash App starts making way more sense when you learn about the Cash Card. The Cash Card is a debit card linked to your Cash App balance that lets you withdraw your funds from any ATM for a $2 fee.
That’s a big deal for folks who want their cash instantly, since the alternative is to:
Initiate an instant transfer for a fee ranging from 1% to 3%
Find an in-network ATM, or pay out-of-network ATM fees of ~2.5%
Let’s say you receive a $300 payment and want to convert it into cash. With Cash App, the total fee would be $2 or 0.67%. With another app, you could pay up to 5.5% or $18.33 in fees alone, plus having to wait up to 30 minutes for the “instant” transfer to your bank account.
True to its name, Cash App is the best payment app for converting received payments you receive into cold, hard cash.
Get Cash App for iOS or Android.
Apple Pay
Fees for personal use: 5% instant transfer fee (min. $0.25, max $15)
Fees for business use: No additional fees for merchants (though standard credit card issuer fees may apply)
Apple Pay offers more than just another way to send and receive money from friends. The app will also let you securely store all your credit and debit cards in a neat-looking virtual stack. Then, when you reach the register, you can just pull up the card you want to use, hover your phone near the payment terminal, and wait for payment to clear. No need to fiddle with your wallet or let your card out of your sight!
Apple Pay also works with Apple Watch, so you can simply pull up your card there and hold your wrist over the payment terminal until payment clears, signaled by a gentle tap from your watch.
For online stores and in-app purchases, you’ve probably noticed that Apple Pay isn’t quite as widely accepted as PayPal, but it’s getting there. Apple boasts that as of late 2022, over 85% of U.S.-based retailers accept Apple Pay — even vending machines and taxis.
As you might expect, Apple Pay is a perk reserved for iOS users only. In fact, it’s one of the apps that comes factory-installed on Apple devices. At least Android users like me still get Google Pay.
Get Apple Pay for iOS.
Benefits of online payment apps
First, it can help to take a look at the overall features of online payment apps. Online payment apps make it easy for a business of any size to collect money from customers. Peer-to-peer payment apps make it easy to transfer money to your friends.
Here are some benefits to consider:
Easily pay friends and family members
Transfer funds from your bank account to someone else’s with a few clicks
Set up recurring payments to friends or family members
Avoid carrying cash around with you
Skip the trip to the ATM before you go out with friends
Accept secure payments for products or services on your small business website
Set up a Point Of Sale system in a brick-and-mortar business using a tablet
Accept payments on the go using a card swiper
Provide an alternative to personal checks, which can be risky
Some of these won’t appeal to you, while others will. By looking through all the various features that are available, you can start to narrow down what you’re looking for in a payment app.
Features to look for in a payment app
As you’re researching payment apps, there are some features to consider. You may not even realize you can do some of these things using a payment app until you see one offering it.
Fees. Of course, we’d all love for everything to be fee free, but we know there’s a cost associated with some financial transactions. I look for an app that at least has a “friends” option, letting me send money without fees to people I know personally. Often you’ll have to link up a checking account to do this, though, as credit card-based transfers will typically incur a fee.
Social feeds. This isn’t something I look for, but with peer-to-peer payments, some find social updates valuable. When you pay your buddy for your half of those summer concert tickets, this lets all your other friends know about it.
Security. Yes, the verification process can be a pain with some of these apps, but I like it. It means that the platform takes security very seriously, which boosts my confidence that my financial data is safe with them.
Send to email. Some peer-to-peer payment platforms let you send email to someone else using an email address or information from your contacts list. You can even send money within some email and messenger apps with just a tap on the screen. I found this comes in handy when you’re interacting with someone about upcoming plans. You can submit your share of the funds within the same message string to make sure the other person sees it.
All-in-one functionality. Some apps combine the best of peer-to-peer and online payments, letting you pay using the same app. You’ll need to identify which businesses accept payment that way, but it can be a handy way to manage your budget.
Expand payment options. Businesses face the ongoing issue of keeping things as convenient as possible for customers. The more payment options you can offer, the less likely you’ll lose customers who are limited in how they can pay.
International payments. The internet has opened businesses up to reach out to an international customer base. Being able to accept payments across multiple currencies with minimal fees is a huge bonus if you want to go global.
If your business uses financial software, check for integrations. Being able to import information about your transactions can help you stay on top of things while reducing your own workload.
Summary
The beauty of payment apps is that you don’t have to choose just one. You can have a half dozen installed on your phone, so long as you protect yourself with extra layers of security like PIN codes and biometric logins.
And knowing which payment app to use in which scenarios can save you time, stress, and hundreds on fees.
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