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These credit card payment processors offer merchant services with reasonable costs, accessibility, transparency, and good overall value.
Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law.
WRITTEN & RESEARCHED BY
Frank KehlFrank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law.
Expert Contributor
Last updated onUpdated
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
REVIEWED BY
Shannon VissersShannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
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Our content reflects the editorial opinions of our experts. While our site makes money through referral partnerships, we only partner with companies that meet our standards for quality, as outlined in our independent rating and scoring system.
Credit card processing is essential for most small businesses, as many of your customers will surely want to pay with a card or another electronic payment method. However, finding the best small business credit card processor comes down to more than just cost—industry specialization, merchant agreement terms, and customer support quality are also considerations.
In this article, we review our top recommendations for credit card processing based on our years of industry research and expertise and explain how to find the best provider for your business.
The Best Credit Card Processing For Small Business
The best payment processors for small businesses offer a combination of affordable costs, flexible contract terms, and transparent sales practices. High-quality customer support additionally sets them apart from their competitors. Here are our picks for the best credit card processors for small businesses:
Exclusive Promo: Get your first month free with Stax. Learn More
Pros
Membership pricing with a 0% per-transaction markup rate
High-volume businesses will save money
Month-to-month billing with no long-term contracts or early termination fees
Offers full-line of Clover POS hardware
Cons
Expensive for very low-volume businesses
US merchants only
Not suited for high-risk businesses
Why We Chose Stax For Best For Membership Pricing
Stax offers a type of processing called membership pricing in which you only pay a single monthly membership fee, the interchange fee, and just a few extra cents on each transaction.
Though it’s not for everyone, membership pricing is an amazing deal, as long as you process a certain amount each month—Stax estimates that as long as you process about $8,000 each month, you’ll save money with Stax.
Stax Features
Stax offers one of the most complete integrated payments platforms we’ve seen. Stax merchant accounts include advanced eCommerce capabilities, mobile processing, subscription billing, inventory management, advanced invoicing and billing, and more.
Stax offers Clover POS equipment, and various other smart terminals and mobile readers. However, a lot of eCommerce businesses also use Stax, thanks to its excellent pricing for online transactions.
Stax Pricing
Stax offers month-to-month billing with no long-term contracts or early termination fees.
Other than the monthly fee and interchange fee, which you’ll pay with any processor, Stax’s per-transaction markup is just $0.08 to $0.15, depending on whether the transaction is card-present, online, or keyed-in.
Here’s what you can expect for the monthly fee:
Process under $150/year (up to $12,500/month), and you’ll pay $99/month
Process $150K-$250K/year (up to $20,833/month), and you’ll pay $139/month
Process $250K-$500K/year (up to $41,667/month), and you’ll pay $199/month
Process over $500K/year, and you’ll need to negotiate a custom quote
Stax Is Best For ...
eCommerce businesses
Software-as-a-service platforms
Any retail business that wants to use Clover with membership pricing
Available directly or through a large network of ISOs
Cons
Long-term contract may be required
Hardware cannot be reprogrammed
Not all Clover resellers are reputable
Why We Chose Clover For Best POS Hardware
Clover’s sleek POS hardware features the latest in payments technology, including wireless connectivity, color touchscreens, and an app market that allows you to expand the capabilities of your Clover device. In addition to industry-leading processing hardware, Clover offers credit card processing services through Clover Payments, offering flat-rate processing and reasonable monthly software fees.
Note that Clover hardware cannot be reprogrammed to use with a different merchant account.
Clover Features
Clover Payments offers basic credit card processing services and support for a few alternate payment methods. Here are the highlights:
Offers flat-rate pricing (custom pricing available for high-volume businesses)
Variable processing fees (through Fiserv or Fiserv ISO)
Variable monthly and annual fees (through Fiserv or Fiserv ISO)
$0.00-$89.95/month software subscription fee (for one device; monthly fee depends on software plan)
Note that while you can also obtain Clover’s terminals and POS systems through parent company Fiserv or its vast network of resellers, pricing, and contract terms will be highly variable.
For a more detailed breakdown of Clover’s various features and pricing options, please see our complete Clover pricing guide.
Why We Chose Helcim For Best Free Merchant Account
Helcim stands out from the crowd as one of the very few credit card processors in the industry to offer a full-servicemerchant account without requiring a monthly fee. It also offers numerous perks for merchants who do a lot of sales remotely, including overseas. Helcim's interchange-plus pricing rewards higher volumes of transactions, though lower-volume businesses can use Helcim as well.
Helcim distinguishes itself from many other providers by offering true month-to-month billing, exclusive interchange-plus pricing, and no monthly account fees---all of which the company fully discloses on its website.
Helcim Features
Helcim offers a robust suite of proprietary products and services to meet the needs of most retail or online businesses. The versatile Helcim Card Reader, in particular, is both affordable and can function as either a mobile card reader or countertop terminal. Helcim also provides an excellent suite of features for eCommerce, including hosted payment pages for secure online checkouts, menu embedding, and buy-now buttons.
Your Helcim account comes with a full range of essential payment processing features, including the following:
Full-service merchant account
Proprietary Helcim Card Reader or Helcim Smart Terminal for in-person payments
Month-to-month billing with no early termination fees
No monthly minimums
Offers Clover POS with interchange-plus pricing
Cons
Can be expensive for low-volume merchants
Can be expensive for high-risk merchants
Why We Chose Host Merchant Services For High-Volume Businesses
Host Merchant Services' transparent interchange-plus pricing rates will save most high-volume businesses a significant amount of money. The company fully discloses its pricing on its website, eliminating the need to negotiate these terms when setting up your account. Host also doesn't require a long-term contract or charge an expensive early termination fee to close your account.
Note that while the company also accepts high-risk merchants, your pricing and contract terms will be different (and, ultimately, more expensive) if you fall into a high-risk category. Nonetheless, it's still a great choice for high- or low-risk merchants looking for a company with honest, transparent sales practices and great customer support.
Host Merchant Services Features
Host Merchant Services offers its own proprietary payment gateway and POS system, as well as a broad range of third-party alternatives. It’s also one of the few merchant services providers that include free web hosting for eCommerce businesses as a standard account feature. Prominent third-party features include the popular Authorize.Net payment gateway and the full line of Clover terminals and POS systems.
Here are some more highlights:
Full-service merchant accounts
Accepts most high-risk industries
Full line of countertop and mobile credit card terminals
“Free” terminal available to merchants processing over $20,000/month
Offers (optional) terminal lease, which could have long-term contract
Does not accept merchants based outside of US & Canada
Why Payment Nerds Is Great For Most Businesses
Payment Nerds is a newcomer to the payments scene, but the company builds on the years of payments experience and vast processing network of its owner Electronic Merchant Services (EMS). Payment Nerds draws on these resourcesto offer an exhaustive list of payment processing services , as well as tailored solutions that can cater just about any processing need, regardless of your industry, phase of growth, or risk level.
For a provider that can accommodate just about any business (Payment Nerds boasts that it accepts 98% of businesses that apply), Payment Nerds is also refreshingly straightforward and fair, offering transparent pricing and month-to-month contracts to all of the businesses it serves--even those in high-risk industries.
Payment Nerds Features
Some of Payment Nerds best features include multicurrency support to accept global payments, numerous eCommerce integrations, a cash discount program for businesses who want to pass along processing fees to customers, robust APIs for building your own customized solution, and more.
Payment Nerds Features
Availability
Dedicated Merchant Account
PCI Compliance
High-Risk Accounts
International Accounts
Can accommodate Canadian businesses
Contactless Payments
ACH Processing
Digital Wallet Acceptance
EBT Acceptance
Virtual Terminal
Mobile POS Reader & App
No proprietary app, but integrates with popular mobile systems
Hosted Online Store
Hosted checkouts
Payment Links
Payment Gateway Integrations
Shopping Cart Integrations
POS Integrations
BNPL Integrations
API Documentation
Currency Conversion
Recurring Billing
Invoicing
Cash Discount Program
Cryptocurrency Processing
Payment Nerds Pricing
Payment Nerds’ pricing is simple and straightforward, with no monthly fee and flat-rate transaction fees:
Item
Value
Pricing Starts At
$0/month
Contract Length
Month-to-month
Processing Model
Flat-rate
Card-present Transaction Fee
1.59-2.59% + $0.03
eCommerce Transaction Fee
1.59-2.59% + $0.03
Keyed-in Transaction Fee
2.09-3.09% + $0.03
Equipment Cost
$0+
Payment Nerds transaction fees vary depending on your company’s risk level:
For low-risk businesses. This category includes businesses with stable revenue and lower chargeback rates — e.g., retail, professional services, manufacturing.
For medium-risk businesses. This category includes businesses moderate chargeback rates or operate in sectors with some regulatory complexities — e.g., auto parts, beauty products, subscription services.
For high-risk businesses. This includes businesses with elevated chargeback risks and regulatory hurdles — e.g., crypto traders, debt collectors, adult entertainers.
For startup businesses. This includes newer businesses that don’t have a lengthy track record to show revenue history, and businesses applying for first-time merchant accounts.
Transaction fees are higher in certain situations:
Payment Nerds Extra Costs
Price
Manually Entered Cards
+0.5% per transaction
International Cards
+1% per transaction
Currency Conversion
+1.5% per transaction
Payment Nerds Is Best For ...
High-risk businesses and startups
Enterprise businesses in need of customizable payment solutions
Integrating multiple sales channels
Low-risk businesses in retail, restaurant, & service industries
“Free” credit card terminal requires a long-term contract
High chargeback fees
Not cost-effective for high-volume businesses
Why We Chose Chase Payment Solutions As Best For Healthcare Practices
Merchant services from large banks and direct processors often end up being very poor deals for small businesses due to high processing rates, numerous additional fees, and long-term contracts. Chase Payments Solutions, however, is a notable exception. The company offers all the same small business-friendly features as our other top choices, including month-to-month billing, flat-rate pricing, and very low fees.
Chase Payments Solutions offers small business owners a surprisingly good deal on credit card processing. If you sign up for the company’s standard plan, you’ll receive a full-service merchant account with flat-rate pricing and an array of products and services to run your business. If you buy your hardware outright, you’ll enjoy a month-to-month contract with no long-term commitment and no early termination fee. However, if you want to accept online payments, you’ll need to pay a monthly fee:
$0 monthly fee for standard account
$9.95+/month for eCommerce
2.6% + $0.10/card-present transaction
2.9% + $0.25/online transaction
3.5% + $0.10/keyed-in transaction
Custom pricing also available
No PCI compliance fee
No gateway fee
$99 Chase Card Reader
$499 Chase POS Terminal
$10/chargeback
Chase Is Best For ...
Businesses that like Square’s pricing & services but want a full-service merchant account
Low-risk, low-volume startups
Businesses that bank with Chase
Businesses that need mobile processing & eCommerce
Get a free card swiper from Square at no cost when you create a free account. Claim your card reader.
Pros
No monthly fees
Predictable flat-rate pricing
Ideal for low-volume merchants
All-in-one payments system
Cons
Account stability issues
Does not accept most high-risk industries
Why We Chose Square For Retail & Restaurant Startups
Square's ultra-simple online signup process and general lack of recurring fees or long-term contractual commitments make it the easiest and most affordable option for new business owners to begin accepting credit card payments. And since Square's flat-rate pricing system can actually be more expensive than a full-service merchant account at higher processing volumes, the system works best for startups with low sales volumes.
Square's product lineup covers all the bases for retail and restaurant businesses, although some features aren't as customizable or advanced as you can find elsewhere.
Square Features
Square has evolved from a basic, mobile-only processing solution to a full-featured payments ecosystem and now includes the following major features:
Aggregated account for credit and debit card processing
Mobile card reader (magstripe-only) included with each account
Basic Square Invoices feature included at no extra cost
Analytics and reporting available through Square Dashboard
Square Pricing
Square charges various fees on various plans, but its core processing services are free. Here are some things to know about Square pricing:
No setup or application fees
$0/month for Square Free account ($29+/month for Square Plus accounts)
2.6% + $0.10/card-present transaction
2.9% + $0.30/online transaction
3.5% + $0.15/manually keyed-in transaction
3.3% + $0.30/invoice (on free plan)
1%/ACH transaction (minimum $1 charge)
No ACH reject or chargeback fees
Square Contactless & Chip Reader — $59 each
Square Terminal — $299 (or $27/month for 12 months)
Square Register — $799 (or $39/month for 24 months)
Note that Square keeps costs low by aggregating accounts together rather than issuing each user a unique Merchant ID number. Because of this, you won’t get a true full-service merchant account, but you will likely be quicklyapproved for an account. The trade-off is that there’s a higher chance that your account will be frozen or terminated without notice if fraud is suspected.
Square Is Best For ...
Low-volume businesses in retail or eCommerce
Food service businesses with small average ticket size
Why We Chose Stripe For eCommerce & Omnichannel Businesses
Stripe is a dominant player in the world of eCommerce payment providers and now offers retail processing through Stripe Terminal as well. Stripe's advanced and exhaustive list of features seems to grow every year, providing everything that US-based and international businesses need to accept virtually any type of payment. There are no long-term contracts and the company's website lays out all fees, so there should be no surprises.
As with any PSP, you won't have a full-service merchant account, potentially leading to account stability issues in some cases. Nonetheless, Stripe offers one of the most advanced, customizable solutions for eCommerce and omnichannel retail merchants we've found anywhere---without charging a premium price for it.
Stripe Features
Stripe offers an extensive variety of standard and optional features, including one of the most customizable APIs in the industry. Here are the major features that Stripe has to offer:
Stripe Payments integrated payments platform
Stripe Virtual Terminal
Stripe Radar anti-fraud protection
Stripe Terminal API & card readers for card-present transactions
ACH processing included with every account
Extensive library of APIs and developer tools
Broad support for international payments and local payment methods
Many ancillary services for establishing and running your business
Stripe Pricing
Like other payment service providers (PSPs), Stripe uses a pay-as-you-go billing model with flat-rate pricing and a general lack of monthly account fees for basic services.
Stripe’s pricing details are as follows:
No monthly fees for a basic account
2.9% + $0.30/online credit/debit transaction (+0.5% for manually entered transactions)
2.7% + $0.05/in-person credit/debit transaction via Stripe Terminal
+1.5% for international cards
+1% for currency conversion (if required)
0.8%/ACH direct debit transaction ($5.00 maximum)
1.2%/ACH direct debit transaction (two-day settlement)
Get a free Clover Go card reader from National Processing when you sign up. Claim your card reader.
Pros
Offers flat-rate pricing
Low-cost ACH & echeck processing available
No long-term contract if equipment purchased outright
Excellent online reputation
Cons
“Free” processing equipment may require a long-term contract
May charge an early termination fee for “free” equipment
Why We Chose National Processing For Flat-Rate Pricing
National Processing provides extensive pricing disclosures on its website, making it easy for merchants to calculate their costs in advance. The company currently offers three basic and advanced plans for small businesses that utilize flat-rate pricing. For merchants processing over $30,000/month, a custom pricing option is also available. National Processing also has a great reputation for customer service, a rarity in the payments industry.
National Processing Features
National Processing offers great service and pricing to small businesses. Key features include the following:
Offers full-service merchant accounts
“Free” credit card reader or terminal available
Offers ACH and eCheck processing as an add-on
Offers flat-rate pricing (or custom pricing for merchants processing over $30,000/month)
Offers a variety of Clover and PAX terminals and POS systems
No long-term contract if processing hardware is purchased outright
Choice of proprietary National Processing Gateway or Authorize.Net
One point of caution with National Processing is that the “free” equipment offered with some of these plans also comes with long-term contract obligations, so make sure you know what you’re getting into if you decide to go that route. Fortunately, the company offers many exceptions to its early termination penalties if you promptly return any “free” equipment. You usually won’t have to worry about getting hit with an ETF if you close or sell your business. In fact, National Processing will usually only charge you an ETF if you cancel service to switch to a competitor.
National Processing Pricing
$9.95 or $19/month account fee (Basic In-Person, Basic eCommerce, or Advanced plans)
$0.00/month for cash discounting program (optional)
2.5% + $0.10/in-person transaction (2.41% + $0.10 on Advanced Plan)
Not recommended for businesses processing less than $10,000/month
Not available to high-risk industries
Why We Chose Dharma Merchant Services For Nonprofits & Charitable Giving
We chose Dharma Merchant Services as one of our top small-business processors primarily for the significant pricing discounts the company offers to nonprofit organizations. However, Dharma is also an excellent choice for any low-risk small to medium-sized business that's looking for interchange-plus pricing and Clover hardware. Like our other top choices, you'll also enjoy month-to-month billing with no long-term contracts or early termination fees (although a fully disclosed $49 account closure fee is required if you close your account).
Be aware, however, that the company doesn't recommend its services to businesses processing less than $10,000/month and doesn't accept high-risk merchants.
Dharma Merchant Services Features
In addition to being one of the most ethical and transparent providers in the processing industry, Dharma Merchant Services offers a complete line of services for small and large businesses. Here are the highlights:
Full-service merchant accounts through Fiserv or TSYS
MX Merchant integrated payment platform
Choice of Authorize.Net or MX Merchant payment gateways
QuickPay virtual terminal
Full line of credit card terminals, including Verifone Engage V200c, Fiserv FD-150, Ingenico Desk/5000, Dejavoo Z11, and other models
Exclusive Promo: PaymentCloud will give you $200 if they can't beat your current rate. Get Your Quote
Pros
High-risk specialists
Few public complaints
No account setup fee
No monthly minimums
Cons
No publicly disclosed pricing
Low-risk merchants can probably find a better deal
Why We Chose PaymentCloud For High-Risk Businesses
High-risk businesses can be hard to place, but PaymentCloud puts extra effort into helping you get approved for an account with one of its backend processors---without charging any account setup or application fees. Pricing is highly variable and customized for each business, but you'll generally pay less overall with PaymentCloud than you would with most other high-risk providers.
The company enjoys a great reputation in the industry, and other providers, such as Dharma Merchant Services, refer their high-risk applicants to PaymentCloud.
PaymentCloud Features
PaymentCloud is primarily a high-risk specialist, but offers a full range of services to low-risk businesses as well. Highlights include the following:
Mobile processing solution available
Virtual terminal included
Authorize.Net, NMI, or USAePay payment gateways are available
ACH and eCheck processing are available
Paysley QR-code payment service available
PaymentCloud Pricing
Like most high-risk specialists, the company doesn’t disclose any standardized processing rates. You’ll have to get a quote from the sales team and do a little negotiating to see how the company’s offer stacks up against other providers. Here is what you need to know about PaymentCloud’s pricing:
No account setup fee
No monthly minimum (low-risk accounts)
Interchange + 0.05%-0.30% + $0.08-$0.10 per transaction (low-risk accounts)
Processing rates vary by acquiring bank/back-end processors (high-risk accounts)
$15/month account fee (low-risk accounts)
Account fees vary by the acquiring bank/back-end processor (high-risk accounts)
Month-to-month billing with no early termination fees
Free payment gateway and virtual terminal
Cons
Only available to US-based merchants
Some high-risk industries may not qualify (including CBD and cannabis products)
Why We Chose CDGcommerce For eCommerce Startups
CDGcommerce, which focuses on eCommerce processing, offers some of the most transparent, flexible pricing of any merchant account provider we've found. Depending on your monthly processing volume, you can choose between flat-rate pricing with no monthly fee, interchange-plus pricing, or four membership pricing options.
The company also uses an online application process that can get you onboarded very quickly, which can be very handy for a new startup. (Note that if you're in one of the high-risk industries that CDGcommerce accepts, you'll want to undergo the more lengthy traditional underwriting process to avoid suddenly having your account shut down later.)
CDGcommerce Features
While the company’s services are geared more toward eCommerce businesses, it also provides a full range of offerings for retail merchants. The company also offers top-notch customer service and support. Key services include the following:
Offers full-service merchant accounts
A hybrid risk structure lowers the chance of a held transaction
High-risk processing (some industries)
Free terminal with each account (requires $79 annual maintenance fee)
Offers proprietary Quantum payment gateway or Authorize.Net
PastePay Cloud POS software
Includes virtual terminal
CDGcommerce Pricing
All of CDGcommerce’s pricing plans come with month-to-month contracts. There’s no long-term commitment and no early termination penalty for closing your account. CDGcommerce does not charge account setup fees, PCI compliance fees, or a monthly minimum. Here are some more details of CDGcommerce’s pricing:
$0.00 monthly fee (Simple, One Rate plan)
2.90% + $0.30/in-person transaction (Simple, One Rate plan)
3.50% + $0.30/online transaction (Simple, One Rate plan)
Promo: Earn up to $1,000 in statement credits over 3 months when you open a new U.S. Bank Payment Solutions account and complete qualifying activities. Member FDIC.
Offer:
- Open, and be approved for, a new U.S. Bank Payment Solutions Merchant Account (MID) by June 30, 2025.
- Keep the approved account in an open status and be actively accepting and settling card payments at the time the statement credit is issued.
- Get merchant fees refunded up to $1,000 over three months Claim this offer
Pros
Large bank network with many in-person branches
Full range of products and services
Month-to-month contracts with flat-rate pricing
Same-day funding for U.S. Bank business account holders
Cons
Backend processor (Elavon) has mixed reviews
Why We Chose U.S. Bank Merchant Services For Best Bank Merchant Account
U.S. Bank is a rare large bank that offers products and services specifically aimed at the needs of small businesses. Similar to Square, U.S. Bank Merchant Services offers flat-rate pricing, mobile processing, and month-to-month contracts with a quick, online signup process. But unlike Square, U.S. Bank gives you the stability of a full-service merchant account and the ability to visit an in-person branch.
U.S. Bank Features
Using talech as its POS and eCommerce provider, U.S. Bank’s features are quite comprehensive, and best suited for small, mobile or brick-and-mortar businesses that may or may not have some online component, such as an online ordering website.
Some key features include:
Dedicated merchant account
24/7/365 customer support
Free mobile credit card reader
Affordable POS hardware and software
Online ordering website
Virtual terminal with shopping cart integrations for eCommerce
Hardware pricing starts at $0 with a free mobile reader, or if you need something a little more robust, you will pay $15/month for the talech smart terminal.
Fortunately, renting the smart terminal does not obligate you to use the service for any period of time, and you can close your account at any time without incurring a penalty. You can also purchase or rent full POS systems.
Here are some other important facts about U.S. Bank Merchant Services Pricing:
Free mobile plan with free card reader
No PCI compliance fees
No early termination fee
No account closure fee
U.S. Bank Is Best For ...
Businesses that use U.S. Bank for their business banking
Small restaurants, retailers, or service providers that need a lightweight, mobile POS backed by a full-service merchant account
Newer, lower-volume businesses that want a merchant account with no long-term contract
Merchant Maverick has been researching the payment processing industry since 2009. Our writers have reviewed hundreds of credit card processors, merchant account services, and mobile payment apps, evaluating each provider carefully on several different metrics.
Weighted Rating Breakdown
Fees & Rates 35%
Contract 20%
Products & Services 15%
Sales & Advertising Transparency 15%
Customer Service 10%
User Reviews 5%
When comparing different payment processing companies and applications to one another, we consider numerous data points. Our experts start by comparing credit card processing rates, the presence of additional fees, contract length, sales practices, and the presence or absence of additional features and services, like point of sale software. Each provider is judged on its own merits and how well it stacks up to industry standards; then it is weighed against the other providers on the list.
We spend an average of 10-15 hours researching and updating each one of our lists, making sure every company or application included meets our internal standards for quality and reputation. Any list of recommended payment processors on our site might contain a mix of standard merchant accounts, third-party payment processors, mobile payment devices, and high-risk payment processors, depending on what our expert feels is the best fit for certain scenarios or business types.
For additional details about Merchant Maverick’s review and rating processes, please refer to any or all of the following methodology pages:
Credit card processing—also commonly called “payment processing”—refers to the sequence of steps for approving and processing credit and debit card transactions. Merchants can accept payments in person, online, or by manually entering a customer’s card information. The credit card processing network checks for indicators of possible fraud and ensures that merchants get paid for approved transactions.
In today’s complex and competitive payments environment, almost all providers offer a variety of services in addition to basic credit card processing. These include a payment gateway for eCommerce transactions, a virtual terminal for manually keying in payments, and support for alternative payment methods such as digital wallets or QR codes.
How To Choose The Best Credit Card Payment Processing Company
Determining the best credit card processing company for your business involves evaluating many factors to narrow your search down as much as possible before reaching out to a provider’s sales department. Learn about the top things to look for in a merchant account:
Account Stability & Type Of Merchant Services
The first (and perhaps most important) factor to consider will be whether your business needs a full-service merchant account for payment processing or if you’d be better served by signing up with a payment service provider (PSP), such as Square. For very small or newly launched businesses, PSPs offer an easy and affordable way to begin accepting credit cards without the confusing pricing and extensive onboarding requirements of a full-service merchant account. At the same time, account stability can be a concern, as you’re more likely to experience sudden account issues. You will want to avoid merchant account holds, freezes, and terminations.
Full-service merchant accounts are more stable and offer many additional features, but they tend to be more expensive and take longer to set up. Your monthly processing volume will be the main factor in choosing between these two options. Generally, PSPs are a better choice if your processing volume is less than $5,000 per month. However, this “tipping point” can be anywhere from $1,500/month to $10,000/month, depending on the nature of your business and the processing rates your merchant account provider offers.
Fees & Pricing For Credit Card Processing
The credit card processing industry is notorious for charging merchants a bewildering variety of rates and fees for their services, often making it nearly impossible to estimate your costs in advance. Payment service providers eliminate much of this confusion by offering a combination of predictable flat-rate pricing and no monthly fees for basic services.
Merchant account providers, on the other hand, may use either tiered pricing, interchange-plus, or membership pricing. They also usually charge several recurring and incidental fees that can come as an unpleasant surprise if you haven’t thoroughly reviewed your contract in advance.
Tokenization & Card-Not-Present Processing Rates
eCommerce sales have surged in recent years, and incidents of fraud have surged with them. One critically important way to protect yourself is to implement credit card tokenization as a security feature on your website. You’ll reduce your chances of letting a fraudulent transaction slip through, and interchange rates and fees for tokenized payments are significantly lower than for other card-not-present transactions. Tokenization also works with card-present transactions, but requires a payment gateway to implement.
Speed & Flexibility Of Account Setup
New merchants are frequently frustrated with the length of time needed to get their merchant accounts approved and set up. Onboarding can take as long as several weeks, during which you’ll be unable to process any credit or debit card transactions. Technology and automation have improved this process dramatically in recent years, and in some cases, you can apply online and have your account approved overnight.
Payment service providers typically offer the quickest approval time, but they usually only accept low-risk businesses. Fast approval also increases the risk of account instability, as the detailed underwriting process is deferred until you start processing transactions. At the other end of the spectrum, high-risk merchant accounts can take as long as two or more weeks to approve and require much more information about you and your business.
Funding & Deposit Times
Getting the funds from your credit card sales deposited into your bank account quickly is important to any business — particularly if you’re dependent on a steady, day-to-day cash flow coming in. While the standard deposit time in the payments industry is two to four business days, many providers now offer next-day (or even same-day) funding. There’s usually an additional fee, so you’ll want to carefully evaluate whether you really need it before signing up for this service.
Selling Online & In Person
While most businesses have traditionally been either retail-only or eCommerce-only, today, it’s more common for a business to have both in-person and online sales channels. Regardless of how you make your sales, you’ll want the appropriate hardware and software to process transactions, provide analytical data, and help you run your day-to-day business operations.
While some small businesses can still get by with just a payment gateway or countertop credit card terminal, processing companies are increasingly offering integrated payment platforms that support in-person and online sales. These systems offer enhanced security, additional features such as scheduling and inventory management, and the ability to manage your business remotely from any internet-connected device with a browser.
How To Negotiate A Good Credit Card Processing Agreement
After you’ve chosen a credit card processor, the next step is to negotiate a good processing agreement with your provider. While you may not necessarily be able to negotiate lower processing fees—especially if you have a low sales volume or belong to a high-risk industry—you can still take certain precautions such as calculating your effective rate to ensure you negotiate a fair deal.
Start Accepting Credit Card Payments At Your Small Business
Once you’ve selected a processor and negotiated a fair merchant services contract, you are almost ready to start accepting credit card payments. But before you take your first sale, you will need to decide which channels you want to sell with—for example in-store, mobile, and/or online. You will also need to set up your processing hardware and point of sale software.
What is the most important consideration when choosing a payment processor?
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
The most important consideration is the processor’s transparency. A reputable processor will clearly list their account fees and transaction fees on their website.
FAQs: Small Business Credit Card Processing Companies
Why does my business need to accept credit cards?
Accepting credit and debit cards gives your customers more ways to pay you and increases sales. Numerous studies have consistently found that offering credit card payments can raise your overall sales volume by 20% or more. Offering the option to pay by credit card can also shorten the time it takes to get paid, improving your cash flow and reducing the need to track down unpaid invoices.
Who are the largest credit card processing companies?
Some of the largest credit card processors in the United States in terms of transaction volume and purchase volume include JPMorgan Chase & Co, Fiserv, WorldPay by FIS, Wells Fargo, and Global Payments.
However, with the exception of Chase, these large companies are usually not a good choice for small businesses due to their high costs, long-term contracts, and expensive early termination fees.
What do credit card processing companies do?
Credit card processing companies provide access to processing networks that can authorize a credit/debit card transaction and distribute funds to the merchant from approved sales. Today, most credit card processors also offer a variety of additional services, including processing hardware, payment gateways for online transactions, support for ACH transfers and other payment methods, and detailed analytics and reporting features.
Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law.
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