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Why QuickBooks Payments Costs Your Business Too Much Money

Why QuickBooks Payments Costs Your Business Too Much Money

QuickBooks has become a staple when it comes to accounting software. But what about its new Payment option? Find out why it might cost your business more than you should pay.

Intuit QuickBooks’ accounting software has been a godsend for countless small and medium-sized businesses for decades. They have taken a complicated and stressful situation and simplified it through automation, special features, and other tools.

On the whole, QuickBooks has been a smashing success. 

But can the same be said for QuickBook Payments? It might surprise you to learn that savvy business people are avoiding it. Why? 

Read on to find out why your business should consider avoiding QuickBooks Payments.

What is QuickBooks Payments

To complement Intuit QuickBooks’ accounting software, QuickBooks Payments is a credit card processing system that lets users generate customizable invoices that can be paid with a credit card or bank account.

Not only that, but payments can also be accepted via mobile apps and card readers linked to smartphones for businesses on the go. Along with these mobile features, Intuit also offers point-of-sale (POS) terminals that can be used to accept payments in a more traditional manner in person.

By now, you might be thinking that these flexible features would be perfect for any small or medium sized business. Read on, though, to discover the problems behind QuickBooks Payments.

How much does QuickBooks Payments charge for payment processing?

As the saying goes, ‘the devil is in the details’. And the details behind QuickBooks Payments reveal an ugly scenario for any business hoping for affordable payment processing costs. 

As you may have learned in our understanding credit card processing pricing structures blog, Interchange Plus pricing is by far the best pricing structure for businesses doing several thousands of dollars or more per month. And among the worst pricing structures for these same businesses is flat rate pricing.

You have probably guessed where this is leading by now: QuickBooks Payments uses a flat rate pricing structure. These rates are 2.4% plus 25 cents for each in-store transaction with a card present, 3.4% +25 cents for keyed transactions, and 2.9% plus 25 cents for online transactions or invoice payments. 

Other payment options are less expensive, but still not cheap. For example, Automated Clearing House payments (ACH) incur a 1% fee to transfer funds with a maximum of $10. 

On top of that, any chargebacks will cost $25 per occurrence, which is higher than average. Add all of these to the minimum $25 monthly fee for the service itself, and it’s certainly not looking good for businesses looking to maximize profits as they grow. Why is that so? We’ll cover that next.

What is the problem with QuickBooks Payments?

As mentioned in the previous section, one of the biggest problems with QuickBooks Payments is simply their cost structure–which goes back to the fact that they use flat rate pricing. 

Why is flat rate pricing so expensive? Actually, if you’re just starting out or you only make modest amounts of money with a side business, flare rate pricing is not a bad way to process payments.

However, once a business begins making several thousands of dollars or more, flat processing rates end up costing you much more compared to the rate offered from your own merchant account with an Interchange Plus pricing structure.

This is because Interchange Plus pricing structure is only the cost the card companies like Visa or Mastercard charge, plus the cost of the processor (the “plus” in Interchange Plus). 

While there is no standard rate that processors charge for Interchange Plus processing, it is still often far less than the 2.4-3.4% + 25¢ that QuickBooks Processing charges.

What does this mean for your business? Using QuickBooks Processing will likely end up costing you hundreds if not thousands more in processing fees per month if you are doing a fair amount of credit card transactions.

However, the costs and complications don’t end at just pricing structures. There is another inherent problem with QuickBooks Processing: the software complications it presents.

Third-party software complications

Not only are you likely to pay more with QuickBooks Payments, they are also going to make certain aspects of running your business more difficult. This can be traced back to their software and what it doesn’t allow you to do.

While there are some software integrations with QuickBooks Payments, they’re not direct integrations. This can make things far more complicated for your business. 

The fact is, QuickBooks’ application programming interface (API) isn’t openly available to software programers. In other words, it’s not an open API.

That means if you want to connect QuickBooks with other tools now or later, it’s either impossible or it’s far more work by requiring different third-party software. This is indeed another downside for your business, as financial technology and tools continue to be developed that are designed to make everything payment-related easier and more efficient.

What to use instead of QuickBooks Payments

Not surprisingly, there are a myriad of alternatives to QuickBooks Payments that will allow your business the flexibility of an open API. 

One we might suggest is FreshBooks for smaller-sized businesses or startups. It’s not only more affordable, but its open API allows for a world of possibilities when it comes to financial tools and integrations available.

If you have a more established enterprise, then Oracle Netsuite will offer even more features and capabilities while still allowing for the opportunities that come with an open API.


Even though QuickBooks has become the go-to software for business accounting, it shouldn’t be blindly trusted. QuickBooks Payments has some of the worst rates offered to businesses that want to grow due to their flat rate pricing structure and other high fees.

Not only that, but they don’t offer an open API, meaning your business will be missing out on so many payment tools and other options to save you money and make life easier.

Ready to team up with a payment processor that is guaranteed to save you money? Then contact Progressive Payment Solutions today. With the industry’s lowest rates, it’s a no-brainer when it comes to saving your business money.  

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