Small business owners must make thousands of decisions when starting a business and running its daily operations. Deciding to accept credit card payments is a crucial choice that spurs another critical decision: What credit card payment processing service should you use?
Choosing a credit card payment service entails evaluating credit card processing fees, approval rates, equipment and more. To help small business owners select the right credit card payment service, we’re highlighting 10 trustworthy options that provide a unique range of services and options to help you choose the right processing partner for your needs.
The best credit card payment services for small business owners
The best credit card processors have reasonable fees, pay you quickly, and support your business with excellent customer service. Consider the following 10 services as you search for your credit card processor.
Helcim provides services and equipment for brick-and-mortar and online businesses, including EMV-compliant and NFC-capable terminals. There’s also a card reader for accepting credit card payments on mobile devices and a virtual terminal for online transactions.
Helcim has a robust software interface that gives merchants tools most other credit card processors charge extra for, such as POS system capabilities. With Helcim, POS software is free, and there are no monthly fees. Helcim also gives new merchants a free online store.
Helcim has a transparent interchange-plus rate structure, charging 0.3% plus 8 cents per transaction for card-present transactions and 0.5% plus 25 cents per transaction for keyed-in transactions. These fees are in addition to the interchange rate every merchant must pay.
To learn more, read our in-depth review of Helcim.
2. Stax by Fattmerchant
If you have an established company with a high monthly transaction volume, Stax by Fattmerchant may be the processor for you. It works on a subscription model; you pay a monthly fee for your required functionality level. Plans start at $99 and go up to $199 monthly. You’ll pay a small markup on interchange rates of 0% plus 8 cents for in-person transactions and 0% plus 15 cents for e-commerce and other keyed-in transactions.
Stax notifies you in real time when online invoices are paid and automatically displays the lowest-rate payment option on e-commerce payment pages.
Our review of Stax by Fattmerchant provides more details about the service.
Credit card processors can also help businesses accept other payment forms, such as mobile wallets like Apple Pay, Samsung Pay and Google Pay.
Since 2009, Square has helped small businesses – no matter where they’re located – accept credit cards thanks to its innovative card reader. (This longevity has contributed to its popularity and given rise to Square vs. Shopify comparisons).
Today, Square offers a wide range of credit card terminals that let businesses process payments in-person or online. It also provides a helpful dashboard for sending invoices, viewing analytic reports, and managing inventory. Square is an excellent choice for startups since it has a high approval rate.
The mobile card reader is free for new merchants, but Square charges a flat rate of 2.6% plus 10 cents for in-person transactions, 2.9% plus 30 cents for online payments, and 3.5% plus 15 cents for keyed-in transactions.
Check out our Square review to learn more about custom rates and additional options.
4. Merchant One
Merchant One has a 98% approval rate for new merchants, even those in high-risk industries. To account for various risk factors, Merchant One has custom pricing on credit card processing rates and fees. Monthly fees start at $6.95, but there is also a $99 annual fee.
Merchant One uses interchange-plus processing rates that range from 0.29% to 1.99% per keyed-in transaction and 0.29% to 1.55% per card-present transaction.
Additionally, Merchant One’s software interface gives merchants a high degree of functionality, including gift card and customer loyalty programs, business texting for marketing, and a free shopping cart.
Our Merchant One review provides more information about the company’s features, services, and software integrations.
5. Chase Payment Solutions
Chase is one of the largest banks in the United States and issues its own credit cards as an acquiring bank. This allows it to give its merchants near-immediate access to the funds they generate from credit card sales – sometimes on the same day. For small businesses, that quick access to funds can make a big difference in managing cash flow.
Chase has no monthly fees, but its rates are higher than some other processors. It charges 2.6% plus 10 cents for in-person transactions, 2.9% plus 25 cents for online transactions, and 3.5% plus 10 cents for keyed-in transactions.
Our in-depth Chase payment solutions review goes into more detail about its features, services, and processing equipment options.
Clover’s card readers and POS hardware and software are the industry standard and are resold by many other processors. In addition to its traditional POS system, it has specialized versions for retailers and restaurants. It also integrates with over 500 third-party apps to let you seamlessly run your entire operation.
Clover uses a tiered pricing model with three different plans, each with a monthly fee ranging from $9.95 to $49.90. Processing rates range from 2.3% to 3.5% plus 10 cents per transaction and functionality. Additional POS stations cost $9.95 monthly.
Our full Clover review explains more about onboarding your business and implementing the system.
7. Payment Depot
Like Stax, Payment Depot has subscription-based pricing with minimal markup on interchange rates, making it an excellent choice for high-transaction-volume businesses. Subscription plan membership fees range from $59 to $99 monthly. Processing rates are 0% plus 5 to 15 cents per transaction.
Payment Depot’s pricing structure differs from other processors that charge a higher flat percentage rate plus a per-transaction amount, sometimes with higher monthly fees. Payment Depot also has fast payout, with funds from transactions settled by 8:30 p.m. EST available the next day.
Read our in-depth Payment Depot review to learn more about this company’s terms, features and pricing.
PaySafe is a lesser-known payment processor with unique benefits for small businesses. For example, PaySafe lets merchants accept more payment types than any other processor, including cash and transactions in over 100 international currencies.
Unlike other processors, PaySafe lets you accept payments from people who don’t have a debit or credit card – or even a bank account. If a large portion of your customer base falls into this category, then PaySafe is the best processor for you.
9. Flagship Merchant Services
Flagship Merchant Services is one of the most well-known credit card processing companies. It lets businesses accept credit card payments by phone, mobile card reader, POS terminals and online. While it doesn’t publish its fees or rates online, Flagship is so confident in its pricing competitiveness that it promises a $200 American Express gift card if it can’t meet or beat competing offers.
Flagship also helps merchants use branded gift cards and customer loyalty rewards programs to boost sales. Learn more in our detailed Flagship Merchant Services review.
PayPal was the original digital wallet and online payment platform and still has a vast user base of more than 246 million people worldwide. PayPal has become a powerhouse in the credit card processing industry with nearly ubiquitous integration into e-commerce platforms, making it easy for your business to accept credit card payments with PayPal.
Like Square, PayPal has close to a 100% approval rate for new merchants. It charges a flat rate of 2.7% for in-person transactions, 3.5% plus 15 cents for manually keyed-in transactions, and 2.9% plus 30 cents for e-commerce or digital invoice transactions.
Our PayPal credit card processing review offers more information about its low fees, special pricing and other features.
Credit card processing rates and fees are often negotiable, both at the beginning and after establishing a positive relationship with the payment service.
How to choose a credit card payment service
There are many factors to consider when choosing a credit card payment service; a service that’s perfect for another business may not be suitable for you.
When researching credit card payment services, narrow your list to reputable companies with good customer service and few merchant complaints. Then, consider the following factors:
Generally speaking, credit card payment services are risk-averse. They prefer not to do business with these types of clients:
- Companies with no history of processing credit card payments
- Business owners with poor credit or little business experience
- Businesses in industries they consider to be high risk
These are some industries often classified as high-risk business:
- CBD and cannabis
- Online gambling
- Credit repair and debt consolidation
- Affiliate marketing
- Auto warranties
- Beauty, skin care and hair care
If your business falls into one of these categories, your list of possible credit card payment services narrows considerably. Even if your application is approved, some credit card processing companies will charge you a higher processing rate and fee, at least until you have established a good history with them.
Processing rates and fees
Credit card payment services make money in several ways, including processing rates and monthly or yearly fees.
In general, processors that charge high monthly fees charge low processing rates, and vice versa. These two pricing models benefit different businesses.
- Low or no fees and high processing rates: Small businesses with low transaction volumes end up paying less with the low-to-no fee/high-rate model. When they have low sales, they pay very little because fees are based on sales volume. Seasonal businesses also benefit from this structure. For example, a snow ski rental business only makes money during the winter. It would be a waste to pay fees for the spring, summer and fall months when it has no revenue.
- High fees and low processing rates: Established companies with high transaction volumes benefit from subscription-based, interchange-plus pricing. Because they are processing so much each month, they want their processing fees to be as low as possible. They can easily absorb the monthly fee, if there is one.
In other words, businesses that sell fewer but more expensive items – like furniture stores – prefer a low processing rate and higher per-transaction flat rate. Companies with many smaller transactions monthly – like a dollar store – would prefer to pay a higher percentage on the processing rate and a lower (or zero) flat per-transaction amount.
To save money on credit card processing fees, consider charging a convenience fee, raising your prices slightly to cover the additional cost, or setting a minimum purchase amount.
Some businesses use their payment processor’s software to run their business, while others don’t need this much functionality. Services like Helcim, Stax and Clover provide robust features, including customer management, employee tracking and management, inventory management, digital invoicing, gift cards and loyalty programs, and membership billing.
Usually, all-encompassing services charge higher monthly fees based on the functionality you need (except Helcim, which charges no monthly fees). If you need specific software functionality, it may make sense to pay for it through your provider instead of buying individual software packages. However, if you have a very straightforward business, you probably won’t need so many robust features, and it won’t make sense to pay for them.
Credit card processing equipment
If you do any in-person business, you probably need a credit card reader. However, if you’re strictly e-commerce or phone sales, you only need a virtual terminal (a secure payment interface in a web browser).
Equipment can be as simple as a single Bluetooth-connected mobile reader or as complex as a multilocation POS system with multiple stations. It may be important to you that your customer-facing equipment is attractive and easy to use, as with a touch screen. Or maybe cost is your deciding factor.
Drew Hendricks contributed to the writing and reporting in this article.
Regardless of the equipment you choose, you’ll pay less if you buy it instead of lease it.
Flexibility and freedom
When choosing a credit card payment service, you’ll ideally be happy with the company for the long term. However, things don’t always work out that way. If you’re dissatisfied with the company for any reason – such as its pricing, policies or customer service – you’ll want the flexibility to ditch them and choos a new processing company.
To ensure your flexibility and freedom, choose a payment service with a month-to-month contract and no early termination fee. It also helps if the hardware isn’t proprietary to the processing company, so you won’t have the expense of buying all new equipment.