Is there a no-fee way for Americans to send electronic payments to American small businesses?

Question

I currently have a registered business with a client that pays me every two weeks. Normally I send an invoice, and he sends a check via snail mail. We would like to move this to something online. We tried PayPal, but I unexpectedly got hit with a 3.0% fee as soon as he paid the invoice.

Is there an online site or someway online we could transfer funds without paying a fee? I am fine with using a personal PayPal account or something similar (last attempt I used a business PayPal account, and just hit the "request money" option), but his account would remain a business account. I'm not sure if that's free or not.

And we're looking at the amount of around $1000-1500 dollars worth of transfers a month.

Answer 1

I think something you might want to look at is a service called Dwolla.

They charge $0.25 per transaction, and are free for transactions under $10.

Answer 2

The easiest and cheapest way I can think of is the online bill pay service that most banks use. It's free for both of you; regardless of what the bank has to go through to get the payment to its destination, they generally eat the costs. You can use this to pay anyone from your rent to your electric company to your cousin Vinnie. However, I do not think that a business checking account has this feature. Instead, most corporate cash accounts typically have an ACH service attached to them, where for some small, fixed fee like 25 to 50 cents per transaction, they will accept transfer requests in an ACH format. This is how your electric company does auto-debit (if you let them), and how banks do online bill pay to most corporate payees; they, and their bank account numbers, would be verified by and kept on file with each bank that moved a substantial volume of money to this payee.

Answer 3

PayPal offers a service called "PayPal Business Payments". Instead of charging a percentage, they charge a flat fee.

For US-to-US payments, the fee is fifty cents per transaction.

For Canada-to-Canada payments, the fee is five dollars per transaction. You need to use a third-party invoicing service and choose the "PayPal Business Payments" option. FreshBooks or Zoho Invoice might work.