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The Best Credit Card Processors of 2021

Donna Fuscaldo
business.com Staff
| Updated
Jul 09, 2021

Which credit card processor is right for your business in 2020? We review the top-rated services.
Best for Easy Approval
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98% Approval Rate
Fast turn around
Supports mobile payments
Best for POS
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All-in-one POS system
Flexible plans
Flat-rate pricing
Best for Small Business
Flat-rate pricing
QuickBooks integration
Omnichannel platform
Best for High-Risk Businesses
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Service for high-risk businesses
Month-to-month pricing
High approval rates
Best for High Volume
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Membership-based pricing
Wholesale rates
No termination fees
Which credit card processor is right for your business in 2020? We review the top-rated services.
Updated 07/09/21

We updated our FAQs to include information about how online credit card processing works and why tiered pricing plans should be avoided.

The Best Credit Card Processor Providers

To help you find the best credit card processing company for your small business, we researched the top processors in the industry. We looked for processors that have transparent pricing, low rates, few fees, and month-to-month or pay-as-you-go contracts. Read on to learn more about these payment processors and why we chose them, along with information on pricing, features and contracts for credit card processing.

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

Compare Our Best Picks

Credit card processing company Best for... Pricing model Monthly fees Contract terms 24/7 support PCI compliance fee E-commerce support Variety of payment types Reporting tools Fast deposit of receipts Early termination fee
Merchant One Easy approval Flat rate Flat rate Month to month Yes Yes Yes Yes Yes 1-2 business days No
Pro Merchant High risk businesses Flat rate and interchange plus Yes Month to month Yes Yes Yes Yes Yes 2 business days No
Clover POS Flat rate Yes Month to month Yes Yes Yes Yes Yes Yes No
Fattmerchant Small businesses Flat rate No Month to month Yes No Yes Yes Yes Yes No
Payment Depot High volume Fat rate No Month to month Yes Yes Yes Yes No 1-2 business days No
Square Growing businesses Flat rate No Pay as you go No Yes Yes Yes Yes 1-2 business days No
Helcim Established businesses Interchange plus Yes Month to month Yes No Yes Yes Yes 1-2 business days No
National Processing Low transaction rates Flat rate Yes Month to month Yes Yes Yes Yes No 1-2 business days Yes
Flagship Merchant Services Flexible contracts Flat rate and interchange plus Yes Month to month Yes Yes Yes Yes Yes Yes No
Chase Merchant Services All-sized businesses Custom No Custom No N/A Yes Yes Yes 1-2 business days N/A
Paysafe Online Businesses Custom No Month to month No Yes Yes Yes Yes 1-2 business days Yes

Our Reviews

Merchant One: Best for Easy Approval

PCI compliance is included in your monthly fee.
Merchant One can work with businesses of all sizes and various credit scores.
To get the exact rate on transactions you must speak to a sales representative.
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Merchant One provides merchant solutions designed to meet the needs of businesses of all sizes. It provides a wide range of services, from entire POS systems with terminals to credit and debit card swipers that attach directly to your iOS and Android devices. It's also willing to approve small businesses that may get turned down by rivals and has a quick turnaround time, making it our best pick for easy approval.

Editor's Score: 8.2/10

Merchant One doesn’t think a low credit score or a complicated application process should prevent you from running a business. Merchant One looks at more than an individual's credit score when approving an applicant. The company boasts an 98% approval rate and is willing to work with all companies.

We also like Merchant One because of its pricing transparency. You know how much you pay with its flat-rate pricing plan. Merchant One charges $6.95 a month, plus 0.29% to 1.55% for in-person transactions and 0.29% to 1.99% for keyed-in purchases. Merchant One does not charge a PC compliance or early termination fee. It also moves quickly once you apply for an account. Merchant One offers fast turnaround, with the ability to get your services up and running within 24 hours.

For merchants being able to accept payments in-store and online is increasingly important. Merchant One supports both channels, providing everything a small business needs to accept credit card and digital payments. For physical retailers Merchant One sells Clover POS hardware, provides high speed processing, supports gift and loyalty card programs, and offers the ability to launch text message marketing campaigns. On the mobile side, Merchant One lets you process payments anywhere your device gets a signal. There is not additional hardware required. Its card not present and e-commerce offering is also feature rich. Merchant One customers get a free shopping cart, online account manager and remote accessibility. There's also a check processing service and integration support.

Merchant One also stands out on the customer service front as well. This credit card processor provides you a dedicated account manager who is there to help you throughout the setup process and can offer any support you need once the system is operational. It also has 24 hour, seven days a week, customer support.

Whether you are just starting out or your credit score has taken a hit, Merchant One can support you. It boasts an approval rate of 98% and is willing to work with all business types. It offers flat-rate transparent pricing, 24/7 support, and a slew of features to support your business.

Read Merchant One Review

Clover: Best Credit Card Processor for POS

Clover is an all-in-one solution for credit card processing and POS functionality.
The flat-rate pricing structure is easy to understand.
You have to use Clover hardware with the service rather than picking hardware for yourself.
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Whether you sell in a store or online, Clover has everything you need to accept and process payments. Clover is a one-stop shop for a small business's customer transactions, offering top-of-the-line POS software and hardware as well as competitive credit card processing rates, making it our pick for best POS credit card processor.

Editor's Score: 8.4/10

Clover meets the needs of all types of small businesses with its flat-rate credit card processing and affordable POS software. Add a wide variety of POS hardware to the mix and you can see why Clover stands out.

We like Clover's flat-rate credit card processing approach, which takes the guesswork out of accepting credit card sales and makes it easier to manage your cash flow. Clover's Register Lite plan costs $9.95 a month. You pay 2.7% + $0.10 for in-person purchases and 3.5% + $0.10 for online or keyed-in purchases. The Register plan is $29 a month, and the transaction fee is 2.3% + $0.10 for in-person purchases and 3.5% + $0.10 for online or keyed-in purchases.

Clover also has a virtual terminal that lets you accept and process credit card payments without any POS hardware. You accept credit card and debit card payments from the Clover web dashboard and pay the keyed-in rate for these transactions. Its Rapid Deposit service enables you to get the money from your credit card sales in minutes instead of the standard one or two days; Clover charges a 1% fee for this feature.

We also like that Clover doesn't have a long-term contract, charging monthly instead. To cancel, though, you do have to provide written notice 30 days before your monthly payment date to avoid fees.

Clover has all the features a merchant needs from a POS system and credit card processor. We like that you get it all without having to worry about compatibility with different hardware and software, though it has a potential downside: You can't use third-party hardware even if you already have some or find a better price elsewhere.

Clover gives business owners access to cash through its merchant cash advance service. Clover will advance you cash and take a percentage of your credit card and debit card sales each day until it is paid off. If you're in the market for both a POS system and a credit card processor, Clover is an all-in-one solution.

May 2021: Clover can now accept PayPal and Venmo payments through its POS terminals. Customers can present a PayPal or Venmo QR code and speed through checkout. Customers receive a digital receipt of the transaction. Clover said the change is in response to consumers' increasing demand for contactless checkout options.

Read Clover Review

Fattmerchant: Best for Small Business

There's no percentage markup on transactions, so besides your monthly fee, you only pay interchange and a flat per-transaction fee.
Fattmerchant has a merchant dashboard that you can use to analyze your sales.
You need to process a minimum of $7,000 per month for this pricing model to save your business money.

Fattmerchant is our best pick for small businesses thanks to its affordable rates and ability to analyze sales. It uses the interchange-plus pricing model but doesn't charge a markup percentage. Rather, it only adds a per-transaction fee to the published interchange fee – the rate set by the credit card companies (Visa, Mastercard, Discover and American Express) that everyone pays.

Editor's Score 9.6/10

For account fees, it charges a single monthly membership (subscription) fee. There are no separate fees for statements, PCI compliance, customer support or account maintenance. Though the monthly membership fee is higher than what some of its competitors charge, its processing limits are less restrictive. The company notes that businesses need to process at least $7,000 per month for this to be a cost-effective credit card processing solution. Small businesses that process a high volume of transactions each month will see the most savings on their overall costs.

Fattmerchant has two pricing models; the one you'll use depends on how much you process each year. For businesses that process less than $80,000 annually, there's flat-rate pricing of 2.9% per transaction. For businesses that have more than $80,000 in annual sales, Fattmerchant charges a per-transaction fee of 8 to 15 cents, depending on how you accept the payment. Its subscription fee starts at $99 per month.

Fattmerchant also has Omni software that integrates with your sales data. The Omni software is available in three plans:

  • The Starter plan costs $49 a month and allows you to run reports on your gross and net sales, track refunds, and accept payments over the phone via virtual terminal.

  • The Growth plan costs $89 a month and includes everything in the Starter plan plus an invoice generator. You also get access to a dedicated account manager.

  • The Pro plan costs $129 a month and gives you everything in the two other plans as well as the ability to schedule payments and invoices, set up recurring invoices, add custom branding, and export your data. It includes a shopping cart, catalog management tools, advanced customer management features, an auto-updater for cards on file, and chargeback management.

Fattmerchant sets you up with a merchant account, so you can accept American Express, Discover, Mastercard, and Visa credit and debit cards. It also has an analytics dashboard that shows you at-a-glance sales data, which you can use to gauge how your business is doing.

Fattmerchant provides a host of credit card processing tools and support at competitive rates. Its flat-rate and membership-based wholesale pricing and processing software makes it a standout for any small business and worth a deep dive.


ProMerchant: Best for High-Risk Businesses

ProMerchant is willing to work with all types of small businesses, even if they're in a risky category.
It offers both flat-rate and interchange-plus pricing, giving small business owners more choice in how they pay.
You must contact the company to find out how much its plans will cost you.
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Not all credit card processors will work with any small business. Some are deemed too risky and turned down for a merchant account and credit card processing services. That's not the case with ProMerchant, which is why it's our best pick for high-risk businesses. You might not think running a legal sportsbook or selling CBD products is "high-risk," but to credit card processors, they are. Many processors won't touch businesses in these and other industries in the "high-risk" category.

Editor's Score: 8.0/10

ProMerchant takes a different approach. It's willing to work with companies in industries that others balk at, which is why it's a best pick. Of course, it can also serve businesses in all the standard industries, such as e-commerce, retail, and restaurants.

In order to process credit card sales, small businesses need a merchant account, which means they have to go through an approval process. ProMerchant makes it easy and boasts high approval rates, often approving businesses despite the owner's credit score or the industry. The company prides itself on considering other factors beyond credit score and industry when approving applicants.

Just because ProMerchant is willing to work with most small businesses doesn't mean it has inferior service and pricing. ProMerchant has two pricing models that are designed to be transparent: a fixed rate and interchange-plus. To find out how much it will cost your business, you have to fill out an online form or contact the company. While that's an extra step, it ensures you get an accurate quote.

ProMerchant charges fees similar to other credit card processors' but doesn't make you sign a long-term contract. Billing is month-to-month, so there are no early termination fees. When you sign up with this credit card processor, you are assigned a dedicated account team that helps you figure out the best pricing plan for your business and supports you as long as you have an account with ProMerchant.

ProMerchant also goes out of its way to help new businesses get up and running quickly and start bringing in sales. ProMerchant says it can approve merchants within a few hours to a couple of days after they fill out the online application. This credit card processor also provides overnight delivery of free terminals and next-day access to online payment processing tools.

Small businesses aren't a monolith; a restaurateur will need different payment processing tools from an online merchant. ProMerchant understands that and has designed its service to support the unique needs of small businesses. It isn't afraid to approve high-risk companies, looks at more than your credit score in the approval process, and doesn't lock you into a long-term contract, making it a great option for small businesses in risky industries.

Read ProMerchant Review

Payment Depot: Best High-Volume Credit Card Processor

Payment Depot has membership pricing with wholesale rates.
You're not required to sign a lengthy contract.
Payment Depot's services can be expensive if your processing volume isn't high.can be expensive if your processing volume isn't high.
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Payment Depot is one of the few credit card processing companies to offer membership-based pricing with wholesale rates, and there are no lengthy contracts or early termination fees. Transparency is very important in credit card processing, and Payment Depot clearly posts its pricing, fees, processing equipment costs, and information about its terms on its website. It offers several plans to serve businesses of all sizes, providing online, in-person, and mobile processing to businesses in many industries, including B2B, professional services, restaurants, and retail. Payment Depot's wholesale rates can save money for merchants who have a high volume of credit card sales each month.

Editor's Score: 8.1/10

Payment Depot uses a membership-based pricing model in which customers pay a flat rate each month and then a small per-transaction fee. It doesn't charge a setup fee or many of the other account fees other processors charge, such as monthly fees. There are no long-term contracts with Payment Depot either, which is another attribute we like. It provides credit card processing services on a month-to-month basis, and there's no cancellation fee if you close your account and go with a different processor.

We also like that Payment Depot gives you a merchant account. You need a merchant account if you want to accept payments online or in person. This credit card processor supports in-store, mobile and online payment processing. It typically takes one or two business days for money from credit card sales to land in your account.

For businesses that want to integrate credit card sales with other aspects of their operations, Payment Depot delivers. It provides integrations with a slew of popular business programs and apps, including Shopify, QuickBooks, WooCommerce and 3dcart.

Another aspect that merchants with high transaction volumes will appreciate is Payment Depot's customer service and support. It assigns you a dedicated account representative who will serve as your main point of contact with the credit card processor. These dedicated account representatives are available Monday to Friday, 8 a.m. to 5 p.m. PST. Payment Depot also offers 24/7 phone support.

High-volume small businesses want a processor that can handle a lot of credit card transactions and not overcharge. Payment Depot checks off both boxes. It's one of the few players in the credit card processing market to offer membership-based pricing with wholesale rates. Add the fact that there are no lengthy contracts or early termination fees and it's worth a close look.

Read Payment Depot Review

Square: Best for Growing Businesses

For the basic service, all you pay are processing rates. There are no monthly or annual maintenance fees.
The app, available for both iPhones and Android phones, includes a full suite of POS features.
It charges a per-transaction fee as part of its in-person processing rate, which makes small tickets more expensive to process.
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Square is the best credit card processing vendor for growing small businesses thanks to its general lack of fees. The only fee Square charges for its basic processing service is a flat rate for each transaction. There are no monthly, gateway, setup, annual, PCI compliance or early termination fees. It doesn't even have a chargeback fee, which is unusual. Square's lack of fees makes it an affordable option for small businesses and individuals that don't process enough transactions to justify paying regular account fees each month.

Editor's Score: 8.3/10

Square also has the best mobile credit card processing app. It not only allows you to accept payments on the go, but also includes full-featured point-of-sale (POS) software that tracks inventory, manages customer information, and runs sales reports. The app is free to use – all you pay for is processing. It works on both Apple and Android phones and tablets, and you can add more business features by subscribing to paid services like payroll and email marketing or by integrating with third-party applications you already use, such as accounting software.

That's not all this credit card processor offers growing small businesses. Its retail- and restaurant-specific tools, including the ability to manage inventory and orders, help business owners meet demand now and in the future. We like that Square offers customers the ability to set up a free online store that syncs with your inventory and your social media. With purchases increasingly moving online, Square makes it easy to reach your customers wherever they are.  

Square isn't shabby on the accounting front either, which is another reason we like this credit card processor for growing businesses. Square lets you send and track invoices, accept payments, and manage them in one central location. It integrates with many accounting software programs, including QuickBooks Online and Zoho Books.

Once you've established a processing history with Square, it gives you access to Square Capital, which can provide your business with a merchant cash advance and fund it as soon as the next day. That option may prove useful in a short-term cash crunch.

Square offers a Mastercard business debit card called Square Card that makes it easy to access the money from your transactions. There are no signup fees, annual or monthly fees, minimum balance fees, or overdraft fees. One nice perk is that you receive an instant discount of 2.75% when you use this card to shop with other Square sellers.

We also like that even though Square's app is free, it includes a full suite of POS features and can be augmented with add-on services and integrations, allowing you to expand its functions as your business grows. It works on both Apple and Android phones and tablets, so you can use it with the devices you already own.  


Helcim: Best for Established Businesses

Helcim is transparent about its rates and fees online, so you'll know what to expect on your bill.
Its single monthly fee includes PCI compliance and access to the virtual terminal, online store, and more.
You may be able to find lower rates elsewhere, particularly for online processing.
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Helcim is the best credit card processor for small businesses because it's very transparent with its pricing, posting its complete rates and fees online. This full-service account provider offers interchange-plus pricing to all of its merchants, its retail rates are lower than average, and it has a rate-lock guarantee that promises not to raise its markup for the life of your account.

Editor's Score: 8.0/10

Also, instead of charging a handful of standard fees like most full-service processors, it charges a single monthly fee, which includes statements, customer service, PCI compliance and access to Helcim Commerce, the company's all-in-one payment platform. Like other top processors, Helcim provides its services on a month-to-month basis, so there are no early termination fees to worry about if you close your account.

Read Helcim Review

National Processing: Best for Low Transaction Rates

National Processing has low interchange-plus rates.
Customers receive a rate-lock guarantee that ensures their rates don't increase.
National Processing charges a PCI compliance fee.

We chose National Processing as the best credit card processor for low transaction rates because it charges interchange-plus rates that are lower than rivals' rates, and it has a rate-lock guarantee, which means your rates won't increase during your contract. There's no monthly minimum processing requirement, its fees are minimal, and National Processing works with both new and established businesses.

Editor's Score: 8.1 /10

When it comes to credit card processing and its associated rates, fees, and equipment costs, there is a lot for small businesses to pay attention to. National Processing makes it easier, offering transparent pricing on its website. Even more importantly, the prices are low, and the rate-lock guarantee ensures your rates don't increase over time.

National Processing has three rate plans, which cost $9.95 a month. Restaurants pay 0.14% + $0.07 above interchange per transaction; retailers pay 0.18% + $0.10 above interchange; and e-commerce companies pay 0.3% + $0.15 above interchange. While National Processing charges various fees, they are in line with industry standards and do not include an annual fee, monthly minimum charge, or early termination fee. There aren't any long-term contracts either. National Processing is so confident in its pricing, it will pay you $500 if it can't beat your current rate.

Another way National Processing keeps the cost down is by offering point-of-sale equipment from Clover, a well-known brand in the POS market. It's available from several vendors, which tends to drive the price down.

In addition to competitive and transparent pricing, this credit card processor offers a full suite of services, including a merchant account. Once you're approved (which takes a couple of days after you submit your online application), you'll be able to process payments in person, on mobile and online. It also supports online invoicing, ACH processing, a virtual terminal and QuickBooks integration.

Another aspect of National Processing that appeals to us is its customer support. It gives you a dedicated account executive whom you can reach Monday through Friday from 8:30 a.m. to 5:30 p.m. MT or by email. National Processing provides tech support 24/7 and live chat.

National Processing offers business owners some of the lowest interchange-plus-rates in the industry. Its rate-lock guarantee gives you pricing stability, and the lack of a long-term contract and early termination fees gives you flexibility. National Processing works with both new and established businesses, making it worth a close look if you care most about saving on credit card processing.

Read National Processing Review

Flagship Merchant Services: Best for Flexible Contracts

Flagship offers month-to-month service to all of its customers and doesn't charge a cancellation fee.
Merchants have a choice of interchange-plus or tiered processing rates.
It lacks pricing transparency, and its contract has a vague "additional services" clause that you must opt out of within 30 days to avoid a monthly fee for services you don't want.

Flagship Merchant Services is the full-service payment processing company with the best contract, because it offers merchant account services to all of its customers on a month-to-month basis and doesn't charge a cancellation fee. By contrast, standard merchant processing contracts have three-year terms with a short cancellation window of 30 to 90 days before automatically renewing for additional one- or two-year terms. They also have early termination fees to discourage you from exiting your contract before the term expires, some with liquidated damages clauses that make it very expensive to cancel.

Editor's Score: 8.8/10

Additionally, Flagship offers interchange-plus or tiered rates, allowing you to select the best pricing model for your business. If you're already processing, Flagship will negotiate with you to see if it can meet or beat your current pricing. It has a monthly minimum, and it charges a monthly fee, monthly payment gateway fee and PCI compliance fee. It doesn't charge application, setup or payment gateway setup fees, though. Flagship doesn't list its prices online, which means you have to take the added step of contacting the company.

Flagship provides several credit card processing solutions and sells a variety of credit card processing hardware, so you can accept credit card payments on every sales channel. If you are accepting payments in person at a store, you can purchase a simple credit card terminal with a built-in PIN pad and printer from Flagship. For a more comprehensive solution, a point-of-sale (POS) system is also available. Flagship sells Verifone terminals and the popular Clover line of POS systems.

You can also add mobile card readers to your system if you want to accept payments anywhere in the store, or tableside if your business is a restaurant. You can also accept online or mobile payments with this credit card processor.

Another reason we like Flagship is its customer service. Like a handful of the other credit card processors we reviewed, it assigns a dedicated account representative to your business, so when you need customer support, you have one point of contact with the account provider. If you need help with your account after hours, 24/7 technical support is available. Your account also includes an online reporting tool that you can use to analyze your sales data.   If flexibility in your contract and pricing is what matters most, then Flagship deserves a consideration.


PaySafe: Best for Online Businesses

Paysafe enables customers to make online purchases with cash.
In addition to accepting a variety of payments, Paysafe offers POS solutions, including the ability to set recurring payments and send invoices.
Paysafe doesn't disclose pricing on its website, requiring a call to a sales representative.

Whether you want to accept digital, mobile, or ACH payments or even gift cards, Paysafe can make it happen, which is why it's our best pick for online businesses. The world is increasingly digital, forcing small businesses to operate across multiple channels. They need a credit card processor that can handle a variety of payment types, whether they come through online or in the store – and that's where Paysafe shines.

Editor's Score: 8.7/10

Paysafe enables merchants to accept payments over the internet and in physical locations. In addition to processing payments, it has a full suite of point-of-sale devices to support checkout, including discounted Clover POS hardware. Its POS solution also includes PCI protection, as well as the ability to make recurring payments and send invoices. Meanwhile, its Mobile Pay solution enables you to transform your smartphone or tablet into a mobile POS.

We like Paysafe's emphasis on strict PCI compliance. The last thing an online merchant wants is to run afoul of regulations and face costly fines. Paysafe's out-of-the-box and customizable checkout platforms both focus on mitigating security risks for its customers.

Another thing that makes Paysafe stand out for online merchants is the ability for customers to pay with a voucher. The Paysafecard is available at over 650,000 physical outlet locations, where customers can pay cash in person for it. Then, they can make a purchase from you online by entering their Paysafecard's 16-digit code. That expands the potential client base for a small business, particularly ones selling outside the U.S., because it allows customers who are unbanked, don't have a credit or debit card, or don't want to share their personal information online to make a purchase on your online store.

Paysafe also integrates with Skrill and Neteller, two e-money transfer services it owns. They enable real-time payments at more than 25,000 online merchants in more than 40 currencies. If you are selling internationally, support for these two digital wallets can drive sales growth. Additionally, Paysafe has a remittance product that lets customers transfer and receive money across the globe. It's a great solution for online businesses that need a specialized credit card processing and payment solution. It has customization options that let you set up payouts, splits, flows and routing preferences, among other things.

Internet sales are surging, thanks in part to the COVID-19 pandemic, and that's not expected to change anytime soon. Online businesses that can accept payments in various ways stand to benefit the most. With Paysafe, you can easily accept digital, mobile, and even cash payments online, making this credit card processor worth a serious evaluation.


Chase Merchant Services: Best for All-Sized Businesses

Offers flat-rate and interchange + pricing depending on your monthly sales.
Chase Merchant Services' mobile app has built-in POS capabilities.
If you have more than $5,000 in monthly sales the flat-rate pricing plan may get expensive.

Chase Merchant Services offers many flat rate plans for microbusinesses to interchange + pricing for businesses with more sales. Chase will work with you to find ways to lower your processing fees if switching from a rival and will review your costs yearly. Businesses that use Vend accounting software get lower rates. Chase is also partners with BigCommerce, enabling integration with the e-commerce platform. 

Editor's Score: 8.4/10

Chase is a popular payment processor for businesses of all sizes, from international corporations to mom-and-pop shops, and across many industries. We like this credit card processor for established businesses because its competitively priced and offers a lot of options for growing enterprises.  

Take its pricing plans for starters. Its flat-rate plans are ideal for businesses that process less than $5,000 a month and are Chase customers. In-person transactions accepted with a card reader costs 2.6% + $0.10 while manually entered transactions are 3.5% + $0.10. Chase has other rates for Vend and BigCommerce users. 

If you process more than $5,000 per month one of Chase's interchange-plus pricing plans can support that. You have to call Chase Merchant Services to get the rates. We like that Chase is willing to review your recent statements if you process with another vendor to spot ways to save money. After one year processing with Chase you can request a pricing review to see if there are ways to reduce your costs. It's very helpful if your business is in growth mode. 

Beyond pricing, Chase Merchant Services has a lot of features geared towardall-sized businesses. Take its mobile credit card processing for starters. Merchants can accept payments via the Chase Mobile app or the Chase Mobile Checkout app and a card reader to accept payments on the go. It works on iPhones, iPads, and Android phones and tablets. At the Chase Mobile Checkout app, you can also create a product catalog, prompt customers for tips with suggested amounts, email and text receipts, issue refunds and void transactions, search transactions, add employees to your account, and manage user access permissions.

You also get a choice of payment gateways when you use Chase Merchant Services. You can use its own Orbital Gateway or a partner payment gateway such as Authorize.Net. In addition to its partnership with BigCommerce, Chase Merchant Services integrates with more than 140 software solutions, including other e-commerce platforms like Shopify, Volusion and WooCommerce.

Chase Merchant Services has been processing credit card payments for decades and is a popular choice among business owners. With competitive rates and a full suite of services, this credit card processor makes a lot of sense for business owners who are just starting out and are already up and running.


Buying Guide

Credit Card Processing Rates

Credit card processing rates are typically expressed as a percentage of the sale plus a small per-transaction fee. Most rates average 2% to 4% of each transaction. The processor considers several factors to determine the processing fees it charges you, including your monthly processing volume, your average ticket size, your business's industry and your processing history. It may also consider your business and personal credit.

The credit card processing industry is very competitive. Companies want to work with you, especially if you've been in business a few years and process a high volume of payments each month. Many are open to negotiating a deal with you and advertise that they're willing to meet or beat your current rates. But first, you need to understand what costs go into credit card processing rates and which are negotiable. All rates have three parts:

  • Interchange fees. This is a non-negotiable rate set by the card networks, and every processor pays the same amount. There are hundreds of rates, arranged by industry, card type, sales ticket amount and acceptance method. You can view interchange rate tables on the card networks' websites.

  • Assessment fees. Like interchange rates, these are non-negotiable, and every processor pays the same amount. These rates vary by card brand.

  • Processor's markup. This is the only negotiable part of the processing rate.

Here's why you need to know this information:

  • If a company says it has lower interchange rates than other processors, it's not true. All processors pay the same amount.

  • If a company posts links to interchange rate tables, indicating that this is what you'll pay, you need to know that this is only a portion of the rates you'll pay the processor.

Second, you need to identify which pricing model is best for your business. For most businesses, industry experts recommend interchange-plus pricing, but credit card processing companies prefer tiered pricing because they make more money with it. Some processors give you a choice of pricing models and may allow you to switch so you can evaluate for yourself which one provides the best savings for your business. Here are the three most common:

Credit Card Processing Pricing Models

Tiered pricing Interchange-plus pricing Flat-rate pricing

Most plans include the following tiers, with different rates for debit and credit cards at each tier.

  • Qualified rate: Regular cards, swiped
  • Mid-qualified rate: Rewards, swiped
  • Non-qualified rate: Premium rewards, swiped rewards, keyed

Interchange-plus pricing has two parts:

  • Wholesale rate (interchange and assessment). These are not negotiable.
  • Processor's markup (the percentage and per-transaction fee). You may be able to negotiate this part of the rate.

Flat-rate pricing is expressed as one of the following:

  • Flat percentage of the transaction
  • Flat percentage plus a per-transaction fee

It's hard to know how much you're paying the processor – or if you're overpaying – because each processor decides which rates go into each tier.

You can see the processor's markup, which makes it easier to determine if you're getting a good deal. This is usually the most cost-effective pricing model.

Flat rates are higher than the prices in the other models but may save you money, because most have no additional fees and no contract.

This pricing model is a good choice if your customers prefer paying with debit cards.

This is the pricing model most experts recommend for small businesses.     

This is the best pricing model for businesses with small tickets or low monthly volume.


Tiered Pricing

This is the most common pricing model, but it's widely criticized by industry experts because it's not as transparent as interchange-plus pricing. It attempts to simplify the interchange table by combining interchange rates, assessment fees, and markups and then sorting them into tiers. Tiered pricing is also referred to as "bundled pricing" or "bucket pricing."

Most processors categorize these tiers as qualified, mid-qualified, and non-qualified transactions, although some plans may have only two or up to six tiers, with separate rates for credit and debit cards. The factors that determine the transaction category include the type of card (whether it's debit or credit and if it's a regular, rewards, corporate, government-issued, or international card) and how the transaction is processed (whether you accept the card in person using a card reader, accept it online, or manually key it in). Some processors have a special lower rate for PIN debit transactions.

Critics note a variance between processors as to which interchange rates fall into each tier, which makes it difficult to compare pricing between services. We found this to be true in our research, as some processors categorize rewards cards as mid-qualified and others define them as non-qualified. This variance in tier categorization, sometimes referred to as "inconsistent buckets," makes it difficult to determine how much you can expect to pay above the set costs for your processing.

  • Low rates advertised on processor websites are usually qualified debit rates. These only apply to non-rewards debit cards accepted in person with a card reader.

  • Qualified debit and qualified credit may be the only rates the sales rep quotes you, so it's important to ask about the number of tiers, what they cost, which types of cards and acceptance methods each tier includes, and what actions may cause a transaction to be downgraded to a lower tier.

  • The tiered pricing model is best for businesses whose customers prefer paying by debit card.


Most industry experts prefer this model because it promotes pricing transparency. The interchange-plus pricing model may also be called "pass-through pricing" or "cost-plus pricing," because the processor passes the interchange rates and assessment fees to you at cost and adds a markup.

The processor's markup stays the same no matter what card type your customers pay with, so you can see how much you're paying the processor. This makes it easier to spot savings when you're comparing services. Plus, many of the companies that offer interchange-plus pricing post their rates on their websites, which saves you time in gathering rates from the companies you're interested in learning about.

  • Many companies will quote you interchange-plus rates if you specifically request it, but some only offer this type of pricing to established customers, requiring you to process with them for a certain amount of time before you qualify. The best companies offer this pricing to all their customers.

  • The rate you're quoted is only the markup. You'll pay this amount in addition to the actual interchange rate and assessment fee.

  • Interchange-plus pricing is best for most businesses; it's the pricing model recommended by industry experts.


This is the simplest pricing model. Most processors that use this model charge a fixed percentage rate for each sale, regardless of card type. Alternatively, some processors charge a fixed percentage rate and a per-transaction fee. There are usually different rates for cards accepted in person and online.

Mobile credit card processing companies commonly use this pricing model. There are typically no monthly or annual fees, making it a good option for small businesses that don't process enough transactions to cover these costs. Most of the time, the only other fee is a chargeback fee, which is only triggered when a customer disputes a transaction.

  • If your business processes less than $2,500 per month, some credit card processors will refer you to a processor with flat-rate pricing.

  • Most companies offering this pricing structure set you up as a submerchant under their master merchant accounts, allowing for fast setup.

  • Flat-rate pricing is best for businesses that have small sales tickets or process a low volume of credit card transactions each month.

Credit Card Processing Fees

In addition to processing rates, you'll pay various fees to whichever credit card processor you choose. Some of these are one-time or per-occurrence fees, and others are charged monthly or annually.

It's important to read through the application and the terms of service to learn about the fees that accompany your small business credit card processing account. For a complete list and explanation of fees, including nonstandard fees that you should never pay, see our small business guide to credit card processing fees


Most credit card processing companies charge these recurring fees:

  • The monthly fee (sometimes called a statement fee) usually ranges from $5 to $15. It may be higher if it includes PCI compliance and gateway fees.

  • The monthly minimum fee is normally $25, though this usually means the amount you pay in processing costs, not the minimum dollar amount of sales you must process per month.

  • PCI compliance is $100 per year on average, though some companies may prorate it and charge it monthly, sometimes baking it into the monthly fee.

  • The payment gateway fee varies by the payment gateway you use. Most are charged monthly, though some companies also charge a small per-transaction fee.

  • Various network fees, such as Mastercard's Merchant Location Fee and Visa's Fixed Acquirer Network Fee, may be passed on to you as either monthly or annual fees.

These fees are also common but only charged per occurrence:

  • Batch fees are nominal daily fees that you pay when you close out the day's sales, costing 10 to 30 cents (usually the same amount as your per-transaction fee).

  • Address Verification Service (AVS) fees are usually a few cents per transaction when you use this anti-fraud tool to verify the address and ZIP code of the cardholder.

  • Voice authorization is another anti-fraud tool with a small per-use fee. It's rarely required, but you're charged for each occurrence.

  • Chargeback fees are usually $15 or $20 per incident but may be as much as $45.

  • PCI noncompliance is an expensive monthly fee that you must pay if you fail to establish and maintain your PCI compliance.

  • A non-sufficient funds (NSF) fee is charged if you don't have enough money in your business bank account to pay the fees you owe the processor.


Some processors charge a variety of miscellaneous fees in addition to the standard fees listed above. Some of the worst are cancellation fees, club or membership fees, and fees for what the contract vaguely defines as "additional services."


Again, it's important to read the entire contract before you sign anything to make sure there aren't any fees tucked away in the fine print. As you read the contract, note every fee it lists. Then, before you sign the contract, ask your sales rep what each fee is for, how much it costs, how frequently it's charged, and if it can be waived. If the sales rep agrees to waive a fee, be sure to get this in writing, either in the contract or as an addendum.

What Credit Card Processing Features Do You Need?

No matter which credit card processing service you select, you should expect it to provide the basic services that you need to accept payments. The processor should:

  • Allow you to accept all major cards, including Discover and American Express, so you don't lose sales from users of certain cards.

  • Comply fully with the Payment Card Industry Data Security Standard (PCI DSS) and help you attain PCI compliance.

  • Offer EMV-compliant card readers to reduce your vulnerability to fraud and to ensure that, in the event of a security breach, you aren't held liable for using outdated equipment. Visa recently announced a "76% dip in card-present (CP) counterfeit payment fraud" for merchants that accept chip cards.

  • Provide readily accessible customer support that you can reach by phone 24/7 so that, no matter what hours your business keeps, you can immediately get the assistance you need to continue accepting payments or resolve an issue.

In addition to these criteria, we considered the following factors to evaluate each processing company:

  • Pricing. We looked at processing rates and account fees to find out how much it costs to accept credit card payments with each company.We also considered the pricing model the company uses and how transparent it is about its pricing.

  • Contracts and service terms. Standard processing contracts have lengthy terms and hefty early termination fees that make it difficult to switch providers. We looked for processors that offer month-to-month service with no cancellation fees, so you aren't locked in to a service.

  • Selection of processing types. Many small businesses want to accept payments wherever their customers are, so we considered whether the processor offers multiple processing methods. We looked for those that allow you to accept PayPal and ACH payments in addition to all major credit cards.

  • Processing equipment options. This industry is notorious for bad leasing contracts, so we looked for processors that allow you to purchase credit card terminals and other processing equipment upfront. Also, whether you need a countertop credit card terminal or a mobile card reader, the processing equipment should allow you to accept chip cards, contactless cards and mobile wallets.

  • Third-party integrations. Because the ability to integrate with POS systems, accounting software, and other commonly used business software saves you valuable time, it was one of the features we looked for in a processor.

We also considered how long it takes the processor to clear the account and deposit transaction money in your business bank account and whether it offers additional funding options.

Benefits of Using Credit Card Processing

The main benefit of credit card processing is that it allows you to accept credit and debit cards and, in many instances, mobile wallets like Apple Pay and Google Pay. Acceptance of these types of payments is increasingly important for nearly every type of business, as many customers don't carry cash anymore.


In addition to preventing loss of business from customers who prefer to pay with cards, credit card processing helps you analyze your sales. Most services either connect with a POS system or provide an online dashboard that lets you run detailed reports on your sales. Many also integrate with accounting software, which saves you the effort of manually entering transaction data and reduces the risk of error due to manually entered data.


Another important benefit is that credit card processors make it easy to accept payments across multiple sales channels.

  • In person: You can accept payments at your brick-and-mortar location with a payment terminal, card reader or POS system. You can also accept payments offsite with an app and mobile card reader.

  • Over the phone: Using a virtual terminal, you can manually record card details in your computer.

  • Online: You can accept online payments in various ways. On your website, you can embed a payment form or hosted payment page. On social media channels and in your text messages, invoices, and emails, you can post payment links.


When you ask a processor to send you the contract to look over, the rep usually sends a "merchant application," "merchant agreement" or even a "pre-application form" for you to fill out. The term "application" is misleading, because it's actually part of the contract, and signing the application is signing the contract.

Although some applications include the terms and conditions and act as a full contract, most don't. Some applications include links in the fine print to the terms and conditions and the program guide, but in most cases, you'll have to specifically ask your rep for these additional documents.

You want to read the full contract so you know exactly what you're agreeing to and can verify that the rates, fees and terms you were quoted are accurate.

  • Don't enter your bank account information on an application until you're ready to sign up with a company.
  • Don't sign the application until you've thoroughly read the full contract and verified that the rates and fees are correct, waivers are noted, and you understand the term length and cancellation policy.
  • Contracts usually have three parts: the merchant application, terms and conditions (or terms of service), and the program guide (or merchant operating guide). Make sure you get the full contract to review!

When you receive the program guide, you may feel overwhelmed at the thought of reading it, because these documents are often more than 50 pages long and delve into the minutiae of processing. However, you don't want to sign the application until you've read it all, because it contains important details that can cost you money. For example, it often provides information on early termination fees and the instructions you need to follow if you cancel your account, which may include providing a written notice to the processor within a certain timeframe.

Here are some factors to look for as you review contracts.


The industry is shifting away from three-year contracts in favor of month-to-month agreements, and all the best processors offer this as an option. A processor should be confident enough in the quality of its service and the competitive value of its pricing that it doesn't require its customers to sign lengthy contracts.

The only exception that justifies a contract is if you accept free equipment, in which case it's reasonable for a company to expect you to remain a customer long enough for it to recoup its costs. We recommend purchasing your equipment instead, so you can avoid long-term contracts, but if you decide to sign a contract for this reason, the contract term length shouldn't be excessive, and the contract shouldn't automatically renew for additional lengthy terms. For example, a reasonable term would be no longer than a year with a month-to-month renewal. An excessive contract would span three years or longer and renew for additional two-year terms.

Even if the processor advertises (or the sales rep tells you) that the service is a month-to-month plan with no cancellation fees, it's still important for you to read the contract and make sure this information is consistent with what the contract says.

  • If the contract says the term is for three years or there's an early termination fee (ETF), ask for a waiver or amendment that stipulates the service is provided on a month-to-month basis and waives all ETFs.
  • If the processor you want to work with has a lengthy contract, it's worth trying to negotiate for better terms. Ask the rep if they can give you an amendment that puts you on a month-to-month plan and waives all ETFs.


If, for some reason, you choose a company with a traditional three-year contract, be aware that these contracts typically automatically renew for additional one- or two-year terms. It's worth your time to ask for a waiver that puts you on a month-to-month plan after the initial term ends.


There's usually a very short window before a term expires in which you can cancel your account without incurring an ETF. Most early cancellation fees are a few hundred dollars; however, some are very expensive.

Scour any contract you sign for liquidated damages, which is either a percentage or the full amount of the projected revenue the processor expected to make on your account. This is a very punitive fee that can be exorbitant. The ETF may be disguised as an "early deconversion fee" (EDF), so look for this term in the contract text as well.


Most application forms include personal guarantee clauses that grant the processor the right to perform credit checks. This guarantee also gives the processor the right to collect money from you personally if your business is unable to meet its obligations for any reason. In addition to holding you personally responsible for all expenses, some of these clauses hold your successors and heirs responsible for your debt if you die.


These indicate that the processor may sign you up for various additional services that have extra costs, and you have a very short period (typically 30 days) to cancel or opt out. Again, you may be automatically enrolled in additional services, and you must figure out what they are and how to cancel them or you will be charged for them. Approximately one-quarter of the companies we reviewed include this clause in their contracts.

Frequently Asked Questions About Credit Card Processing


Credit card processing is the process of transferring money from a cardholder's account to a merchant's account when the cardholder pays for a purchase using a credit or debit card. Though the process is simple and takes just a few seconds on the front end, the back end of the process is intricate, with data traveling between the merchant, processor, credit card network and multiple banks.


When a customer inserts a credit card into a merchant's card reader, it initiates a complex series of data transfers that results in money being debited from the cardholder's account and credited to the merchant's bank account. The data passes through the terminal via secure connection to the processor, the credit card network, the bank that issued the customer's credit card, and the merchant's bank.


Businesses should use credit card processing because it allows them to accept credit card payments, which is the increasingly preferred payment method for consumers. Although it costs money for merchants to accept credit card payments, consumers tend to spend more money when using credit and debit cards than with cash, potentially increasing your sales.


If you're currently with a certain processor and want better rates, it may be worth your time to ask your account manager if they can help you reduce your costs. Also, by reviewing your statement on a regular basis, you may be able to identify costs or fees that you're overpaying. Here are five steps you can take to ensure you're getting the best pricing on your credit card processing service.

  1. Review your statement every month. Credit card processing contracts rarely include pricing guarantees, so it's important to monitor your statements closely so you know what's going on with your account. Regularly review your rates and fees to get a feel for what you can expect to pay on average for processing each month.

    Also, watch for notifications and reminders about rate increases, new fees, and PCI compliance requirements, such as the annual questionnaire that you need to take to avoid costly noncompliance fees. If you notice a change in your pricing, if there are fees that you don't understand, or if you receive a notification about your compliance status lapsing, call your rep to discuss your account.
  1. Request a pricing review. If you're an established merchant and you want lower fees, you may be able to request a pricing review or audit to see if you qualify for lower pricing. Requesting an account analysis could be particularly worthwhile if your business has grown since you signed up with the processor and your transaction volume exceeds your initial estimates, as you may be eligible for lower rates.

  2. Request interchange-plus pricing. If you're currently on a tiered pricing plan, ask your processor if it can switch your account to interchange-plus pricing. Many processors allow you to switch to a different pricing model so that you see for yourself which model works best for your business. If you do this, be sure to ask if the new plan triggers any different fees or requirements. For example, ask about the new plan's monthly minimum and how much you need to process to meet that requirement.

  3. Ask if fees can be waived. Some fees are negotiable, and your rep may be able to waive or lower them for you. For example, if your business is seasonal and you're having trouble meeting the monthly minimum in the offseason, your rep may be willing to waive or lower it for you. They might also waive the PCI compliance fee after you complete the annual questionnaire.

  4. Shop around and renegotiate your rates. If you've been with your current processor for a year or longer, consider shopping around to see if your rates are still competitive. As with car insurance, it's beneficial to take the time to look for better deals every year or two. This is particularly important if your rates have increased over time or if you've been with your processor for several years and you don't know what pricing is available elsewhere.

If you find better pricing from another processor, don't be afraid to contact your current processor to see if you can renegotiate your rates. You have more negotiation power if your service is provided on a month-to-month basis and you own your equipment, since you can switch to a new service without penalty. If you're under contract, the rep may be less willing to renegotiate, but it's still worth a try.

If you're overpaying for your processing and the rep won't renegotiate your rates, read your contract to find out the procedure you need to follow to switch processors when your contract finally expires. Be aware that most contracts automatically renew, that you have a very short window in which you may cancel without penalty, and that you may need to begin the cancellation process well in advance of the contract's expiration date.


You have several options for the processing hardware you use to accept credit cards at your business. Which one is the best credit card reader for your business depends on how and where you plan to accept cards, and whether you want something basic and inexpensive or a solution built into a larger system.

You should be able to accept magstripe cards, chip cards, contactless cards and mobile wallets. No matter which style of card reader you choose, you want it to be EMV compliant so you can accept chip cards and avoid liability for fraud occurring at the point of sale. This also allows you to skip signature authorization, which speeds up checkout.

If you're purchasing new equipment, you also want it to include near-field communication (NFC) technology so you can accept mobile wallets like Apple Pay and Google Pay as well as contactless cards, saving you the expense of updating your equipment later as these payment methods grow in popularity.

Consider choosing a device with a built-in keypad or a connected PIN pad if your customers prefer paying with debit cards, as many full-service processors offer special low rates for debit PIN transactions.

Before buying processing equipment from a third-party vendor, check with your credit card processing company to make sure it will be compatible. Here are three types of equipment, along with some of the top brands for each.

  1. Mobile credit card readers are the most affordable option. Prices typically range from free to $100. These card readers connect to your phone or tablet through the headphone jack or Bluetooth and work using a credit card payment app that you've installed on your device. Many processors offer free magstripe card readers to their new customers, no strings attached. However, in most cases, you'll want to upgrade to one that accepts chip cards or splurge on a model that supports all three acceptance methods: magstripe, EMV chip and NFC contactless payments. The best mobile credit card reader brands include Clover, PayPal, QuickBooks Payments, Square and Ingenico. Mobile card readers are available from both full-service and mobile credit card processing companies. See our mobile credit card processing review to learn more.

  2. Stand-alone and wireless terminals are the next cheapest options, usually costing $150 to $600. These countertop credit card readers have built-in receipt printers and keypads. Most connect using either dial-up or Ethernet, and wireless models connect with 3G, GPRS or Wi-Fi via Bluetooth. All new terminals are EMV compliant and allow you to accept both magstripe and chip cards. Many also accept NFC payments. Top terminal brands include Dejavoo, Ingenico, PAX and Verifone.

  3. Point-of-sale systems are usually the most expensive option, though there's a wide range of prices, depending on the type you choose. If you plan to use a specific POS system, ask the company which processors the system is compatible with, as some only integrate with a few. Others are proprietary and require you to use that POS company as your payment processor. Tablet-based systems are the cheapest and work with mobile card readers. POS systems with built-in card readers cost $1,000 to $1,500. Top brands include Clover, Square and NCR Silver. See our POS systems review to learn more.


The easiest way for a small business to set up credit card processing is to start an account with a mobile credit card processor that offers an app and a mobile credit card reader. Then, all you have to do to start accepting credit cards is download the app to your phone or tablet and connect the card reader.


If your small business processes less than $5,000 per month, you're going to save money with a processor that has a flat-rate pricing structure and doesn't charge any account fees (no monthly fee, annual fee or PCI compliance fee). Even though the rates are higher, you aren't processing enough to offset the account fees.

If you process more than $5,000 per month, the cheapest credit card processing service is going to be one that has an interchange-plus pricing structure with a low margin. Fees can be problematic for this type of service as well, so pay attention to what fees they charge. For instance, some might have a very low monthly fee but charge a handful of additional fees that bring up your overall costs. Look for a service that is transparent about both its rates and fees, as these companies tend to have the lowest credit card processing fees.


Nearly every credit card processing company has some sort of free equipment offer. Some processors give you a terminal if you sign a contract, while others have a free placement program in which you borrow the equipment.

Accepting free equipment sounds like a great way to save money, but as a perceptive businessperson, you know that "free" often isn't really free, and you need to do the math to determine whether the free offer is actually the best option for your small business.

Purchasing Credit Card Processing Equipment

Buying processing hardware outright is nearly always your best bet. Although it may be a big upfront cost, it's less expensive and less restrictive over time than other equipment options. You can keep your purchasing costs low by shopping around for the best price, choosing a basic terminal instead of a fancy POS system, and asking if used equipment is available for purchase.

As you shop around for equipment, find out if the equipment is proprietary or "locked." This is an important consideration, because you don't want your purchased equipment to be unusable if you switch processors. If you already own unlocked equipment or decide to shop for new or used equipment online, ask your new processor how much it charges to reprogram the equipment, including shipping and handling costs, and how long the process takes. Many processors offer this as a free service.

Free Credit Card Terminals

Although "free" sounds fantastic, even the best processors may require you to sign a contract in return for free equipment. The best contract terms for free equipment are one year long and then go forward on a month-to-month basis. Most free equipment contracts last for three years, and many automatically renew for two-year terms. Some companies require you to sign up for a different pricing plan if you accept free equipment.

Also, some processors may charge you the full price of the terminal in addition to an early termination fee if you end your relationship with the company before your contract expires. Before accepting free equipment, consider whether being tied to a contract or paying higher processing costs is worth cutting out the purchase price of the equipment.

Free Placement Programs

These may sound like a good deal, and many processors offer this option, but as with free equipment offers, you might be required to sign a long-term contract. When your contract expires or you switch processors, you're required to return the equipment.

Many free placement programs charge monthly fees, and some have additional monthly minimums that you must meet to avoid penalty fees. Be sure to request the contract and a list of all the fees associated with the program – such as insurance or maintenance fees – to read over before you agree to such an arrangement.

Leasing Equipment

Many processors encourage you to accept a lease on equipment because it's a very lucrative arrangement for them. Some reps give persuasive reasons for leasing equipment, such as "it's like a cell phone plan" or "many customers choose to lease for tax reasons." However, carefully consider every other option before you lease equipment, as this is generally one of the worst decisions a small business can make when setting up credit card processing.

Consider these leasing myths and truths.

Leasing myth No. 1: It's like getting a cell phone, because if the equipment breaks, the processor will replace it.

Truth: While this is technically true, most equipment comes with a manufacturer's warranty, and you might be able to purchase an extended warranty or insurance. If your purchased equipment breaks while under warranty or while insured, the manufacturer replaces the equipment anyway, according to the terms of the warranty or insurance.

Leasing myth No. 2: It's easier to update to the newest model if you lease your equipment.

Truth: This myth assumes that if you purchase equipment, you probably keep it longer than the four-year term of your lease. The processor expects that when your lease expires, instead of purchasing your existing equipment, you'll take out a new lease on new equipment. However, the money that you save by purchasing the equipment outright puts you in a better position to buy new equipment when it becomes available.

Leasing myth No. 3: Leasing is better for tax write-offs, since you'll have an expense that you can write off yearly instead of just a one-time purchase.

Truth: The long-term expense of leasing is still higher than purchasing equipment outright, even if you factor in the tax write-offs you expect to receive. If you're considering leasing for these tax reasons, do the math to verify that the costs and savings are what they're purported to be.

Remember, leasing is short-term cheap and long-term expensive. You'll often find that for the amount of money you pay over the life of the lease, you could purchase the equipment several times over. Additionally, most equipment leasing contracts are noncancelable, which means that you can't return the equipment and, further, you pay a fee to get out of it. Even if your business fails, you return the equipment, and you get out of your processing contract, you'll still be held personally responsible for the remaining time on your equipment lease.


There are three main types of companies that provide payment processing services:

  • Direct processors that provide merchant accounts and have relationships with the banks and credit card brands

  • ISO/MSPs, which are independent sales organizations (ISO) and member service providers (MSPs) that resell merchant accounts

  • Payment facilitators (also called PayFacs or merchant aggregators) that have master merchant accounts and provide submerchant accounts

Traditionally, ISO/MSPs are considered the best choice for small businesses; they cater to this market, offering a high level of service, low rates, few fees and favorable contract terms. PayFacs are also popular with small businesses, providing processing services on a pay-as-you-go basis that allow even very small businesses to accept credit card payments.

However, big processors want your business too. They're making efforts to tailor their credit card processing services to small businesses by offering more competitive pricing, developing technology that makes it easier for you to run your business, and providing industry-specific processing solutions.

What this means for you, the small business owner, is that you have a wealth of choices for credit card processors. We included all three types in our best picks. Read on to learn more which companies we recommend and the qualities we looked for in each use case.


Data security is a huge issue in the credit card processing industry. Although the large breaches that you read about in the news, such as those sustained by Home Depot and Target, may lead you to believe that your business is too small for criminals to be interested in, that isn't the case. In fact, small businesses are often the preferred targets of security attacks.

According to the PCI Security Standards Council, 71% of cybersecurity attacks are aimed at small businesses. Even more grim is the success that criminals have with their small business targets. Security experts estimate that 90% of data breaches affect small merchants. Criminals target small businesses because many business owners fail to prioritize data security. As a result, the data often isn't as secure as it is with large companies that have the resources and personnel to put stronger security protocols in place.

You can take two important steps to increase security, protect data and reduce fraud. Firstly, comply with PCI DSS. Second, if you haven't done so already, upgrade to EMV-compliant processing equipment. Visa reports that EMV-compliant merchants have seen counterfeit fraud drop by 76% since the liability shift of 2015.


As we've all seen over the years with major credit card breaches at some of the largest retail chains in the country, there's no such thing as a completely secure credit card transaction. However, there are measures you can take to secure these transactions against potential intrusions.

The first step you should take is to ensure the credit card processing service you use is compliant with the Payment Card Industry Data Security Standard (PCI DSS) – and that your business complies with these guidelines too, since this dramatically reduces your vulnerability.

Second, make sure your credit card processing equipment can read EMV (Europay, Mastercard and Visa) chips. As mentioned above, when comparing the number of card-present counterfeit payment fraud incidents in December 2018 to those that occurred in September 2015, Visa estimates that merchants who upgraded to EMV readers saw a 76% decrease in incidents. If you ensure compliance with these two tech standards, your credit card transactions will be significantly more secure.


Credit card processing fees are how credit card companies make their money. With that in mind, there's no real way to avoid those fees. What you can do, however, is negotiate those rates before signing up with a processor. By taking certain steps during the application process and beyond, you can potentially cut your fees to a more manageable level.

Your customers can also help you offset these fees in a couple of ways. One of the more common ways is for merchants to set a certain transaction threshold that a customer must meet in order to use a credit card for a purchase. By disallowing credit cards for any purchase below $5 or $10, for example, you ensure that you come out ahead of the fees. Check the guidelines on minimum transaction amounts from each of the major credit card networks to ensure you're complying with their rules.

Some retailers also tack the fees on to the transaction itself. This surcharging tactic is often seen at gas stations, where cash customers pay a lower price for each gallon of gas, but it could also work in a retail setting. This method could backfire, but people who pay with cash will likely see the rule as a discount. Check the credit card networks' rules for surcharging to ensure you follow best practices. [Read related article: The Truth About Free Credit Card Processing]


Authorization holds are based on the banking practice that electronic transactions can be held in limbo until the merchant marks that the payment has been settled. If it hasn't been settled within the amount of time determined by the cardholder's bank, it "falls off" the account.

An authorization hold can last as long as 30 days, but American Express cards have a limit of seven days and Discover cards have a 10-day limit. Merchants that fail to complete a transaction hold within the allotted time could be charged a misuse fee by the credit card processor.


Credit card processing pricing typically comes in one of three versions: tiered, interchange-plus or flat-rate pricing. Which one makes sense for you depends on the number and size of your transactions.

  • Tiered pricing: With tiered pricing, credit card processors bundle the interchange rate, assessment fees, and markups into different pricing plans. While it's a common pricing model, it isn't very transparent, making it hard to do a proper comparison of vendors, and thus has a lot of critics.

  • Interchange-plus pricing: This is the preferred pricing model for most merchants because it's very transparent. With this model, credit card processors charge you the interchange rate plus assessment fees and a markup. The markup doesn't change, no matter what type of card your customers pay with, so there are no pricing surprises. This makes it easier to comparison shop.

  • Flat-rate pricing: With this pricing model, credit card processors charge a fixed percentage rate per sale, regardless of what credit card the customer used. Some vendors charge a per-transaction fee in addition to the fixed percentage of the sale. You typically pay a lower rate when you accept a payment in person than you would for a card-not-present transaction.


The time it takes to settle a credit card sale varies by credit card processor. Merchant accounts are used to complete the credit card payment process efficiently; the type of merchant account will determine if it takes only 24 hours or as long as three days.

How does online credit card processing work?

Similar to how consumers swipe their credit cards at checkout in a store they do the same online, but digitally. When a consumer makes a purchase online, he or she inputs credit card information (number, expiration date CVV number). The payment is then processed just like an in-person transaction. 

Why should small businesses avoid tiered pricing when selecting a credit card processor?

Some credit card processors will charge you on a tiered pricing basis. This means they bundle the interchange rate, assessment fees and markups into different plans. This isn't that transparent because they don't break out what each cost is. That makes it more difficult to shop. Around to ensure you are getting the best deal.

Community Expert Insight

We reached out to small business owners and leaders, asking them to share their insights about the credit card processing services they use.

Gene Mal, CTO at Static Jobs, chose Stripe for his online business because of its clear fees and ease of integration. With his background in software engineering, he also appreciated the technical documentation the company provides on its website.

"It was a breeze to start accepting credit card payments using Stripe," Mal said. "In just three days, I had a fully working and tested code that was able to make test charges against their test credit card number, and going live was just a matter of changing two lines of code. We didn't have to open a merchant account or worry about PCI DSS compliance, plus it's very fast for our own customers to use."

Yungi Chu, owner of HeadsetPlus.com, has operated his online business for more than 20 years. He used his bank as his merchant services provider until he discovered that much better rates were available from other providers. He now uses TSYS as his credit card processor.

"When I first started my business, I thought there was no difference between banks and providers, so I went with my bank," Chu said. "Boy, was I wrong. These large banks have the worst credit card processing rates. I was paying 3.5% per transaction. I'm currently paying 2% on average."

Chu says small business owners should shop around for good rates – just as you would for car insurance.

"Every provider has different rates, and they are all negotiable," he said. "The more transactions you have, the better rates they're willing to give you. When you negotiate, always ask for an interchange-plus rate."

David Ciccarelli, CEO of Voices.com, has used PayPal as his credit card processor for more than 15 years. He appreciates how PayPal continues to update its systems to stay relevant and improve fraud protection and security controls. He also likes its reliability.

"I can't recall a time in the last 15 years that PayPal has gone down," he said. "Fifteen years of uptime is pretty good by my account."


We began our search for the best credit card processing companies by asking small business owners which processors they currently use and their experience with these services. Starting with a list of the processors they mentioned, we added companies we were already familiar with and those that had reached out to us asking to be considered for review. We then added credit card processors we found on reputable online sources such as business, industry and review websites.

With this list in hand, we started our research. We narrowed the list down based on different use cases (our best picks categories). Our research included studying each company's website, examining help resources and how-to guides, and watching videos tutorials when available. We reached out to the companies as small business owners, asking sales reps and customer service agents questions to gauge the quality of service and gather information that wasn't available online.

From our list of over 100 credit card processing companies, 10 made our best picks list:  Fattmerchant, Square, Payment Depot, National Processing, Paysafe, Clover, ProMerchant, Chase Merchant Services, Flagship Merchant Services and Merchant One.

What to Expect in 2021

In 2021, we'll see several familiar trends continue to develop in the payments industry, but the overarching theme – and one that multiple industry experts talk about – is improving the customer experience.

As Michel Léger, executive vice president of innovation at Ingenico, explained in a recent press release, "Now, everyone can pay when they want, where they want and how they want ... It's not enough anymore to just offer payment solutions that are tailored to consumers: Now, payments need to be taken right to them."

Consumer expectations surrounding payments are exceptionally high. A Vanson Bourne and Ekata study of over 7,000 consumers in North America and Europe found this data:

  • 92% of respondents expect a "fast, frictionless experience" that is also secure.
  • Over 70% say account creation for online shopping should be instantaneous.

One of the most obvious ways to take customer payments is on mobile. Mobile continues to gain importance in the payments industry. According to Adobe, mobile sales accounted for 40% of the $10.8 billion made on Cyber Monday alone.

Contactless payments  is another payment technology growing in usage. The novel coronavirus pandemic has had a massive impact on the economy, including on how people pay. Square's data revealed a spike in cashless merchants, jumping from 5.4% in February 2020 to 23.2% in April 2020 before settling at 13.4% in August 2020.

Square economist Felipe Chacon said the findings marked a "significant and stabilizing increase in cashless adoption rates compared to pre-pandemic, with business owners increasingly reliant upon contactless and online payments and consumers utilizing those alternatives." Had COVID-19 not drastically changed the landscape, Square officials believe the same increase would have taken three years to achieve.

Security continues to be a hot topic in the payments industry, and the stakes are high. Although EMV adoption has been highly successful in reducing card-present fraud, card-not-present fraud continues to rise. Juniper Research predicts that CNP fraud will lose retailers $130 billion between 2018 and 2023. Consumers are also worried about fraud – 90% of them, according to the Ekata report – and over 60% of them feel that the businesses accessing their personal data are responsible for fraud prevention. When that doesn't happen, 91% of consumers who experience fraud will not do business with that company again, and 86% of them will warn others about their experiences.

Credit card processing companies are proactively combating fraud, though: Juniper researchers say that payment processors will spend nearly $10 billion to detect and prevent fraud by 2023.

Your business's PCI compliance status is another thing you should look into in 2021. Data from the ControlScan/MAC 2020 Acquiring Trends Report revealed that merchants' PCI compliance rates are falling. That's not good for you or your customers, since noncompliant merchants are more vulnerable to hackers and you might pay a high noncompliance fee (more than $50 in some cases) each month. Just 26% of the merchant acquirers in the survey reported merchant compliance rates above 60%, and 23% reported compliance rates below 25%.

Also, on the horizon in the credit card processing industry are changes to interchange rates. Last year, Visa notified its banking partners that it was updating its interchange rate structure to "optimize acceptance and usage and reflect the current value of Visa products," according to a Visa document obtained by Bloomberg. The card brand called this the most significant structural change to the rate tables in a decade. Visa said rates for card-not-present transactions (such as online purchases and payments accepted by phone) will increase, but rates for businesses in education, healthcare and real estate will be lowered. It will also expand its categories to include parking, rent and vending machines.

Donna Fuscaldo
Donna Fuscaldo
business.com Staff
Donna Fuscaldo is a senior finance writer at business.com and has more than two decades of experience writing about business borrowing, funding, and investing for publications including the Wall Street Journal, Dow Jones Newswires, Bankrate, Investopedia, Motley Fool, and Foxbusiness.com. Most recently she was a senior contributor at Forbes covering the intersection of money and technology before joining business.com. Donna has carved out a name for herself in the finance and small business markets, writing hundreds of business articles offering advice, insightful analysis, and groundbreaking coverage. Her areas of focus at business.com include business loans, accounting, and retirement benefits.

Other Services Considered

We selected Dharma Merchant Services as the best credit card processor for businesses with high sales volume – more than $10,000 per month – because of its low rates, single monthly fee, high-quality customer service and lack of long-term contract. It also provides nice features, some at no additional cost, such as a virtual terminal, a mobile app, online payment links, and next-day funding for in-person sales.

Interchange-Plus Rates

Dharma uses the interchange-plus pricing model for all of its merchants, which is the pricing model that industry experts recommend as the most cost-effective option for most businesses. In addition to posting its markup on its website, it provides samples of what the actual processing cost will be for different types of transactions with all fees added in: interchange, assessments and Dharma's margin.

Here's what it costs to accept credit cards using Dharma Merchant Services:

  • In-person processing with Visa, Mastercard and Discover cards, accepted using a card reader: 15% + $0.07 above interchange
  • In-person processing with American Express cards, accepted using a card reader: 25% + $0.07 above interchange
  • Online and card-not-present processing with Visa, Mastercard and Discover cards: 2% + $0.10 above interchange
  • Online and card-not-present processing with American Express cards: 3% + $0.10 above interchange
  • Merchants that process more than $100,000 in sales or 5,000 transactions per month qualify for even lower pricing, at 1% + $0.05 above interchange for both in-person and online transactions.

Credit Card Processing Fees

Like other full-service credit card processors, Dharma Merchant Services charges a monthly fee. However, this is the only regular account fee you'll pay.

  • The $20 monthly fee includes online reporting, customer support, PCI compliance, access to a virtual terminal and mobile processing.
  • Merchants that process more than $100,000 in sales or 5,000 transactions per month qualify for a lower monthly fee of $15.

Optional and Incidental Fees

There are some incidental fees that every processor charges when they're triggered by certain actions. 

  • Chargeback fee: $25. You pay this fee if one of your customers calls their credit card company to dispute the sale.
  • Invoicing app: $10 per month. You can email or text invoices to your customers using this app. It also supports recurring payments.
  • Insights app: $10 per month. This app provides deeper analytics and insights into your customers than you can get from regular reporting. It also connects to your social media accounts to schedule and post messages across multiple platforms.
  • B2B processing: $20 per month. If you accept a lot of payments from other businesses, level two and level three processing could save you money.
  • Online ordering: $49 per month. You can offer pickup and delivery services with this feature.
  • PCI noncompliance fee: $24.95 per month. You'll only be charged this fee if you allow your PCI compliance to lapse.
  • Voice authorization fee: $1.50. You only pay this in the rare instance that you're prompted to contact a customer's bank to verify a charge while ringing up a sale (for instance, if a customer is making a large purchase at your store but has a fraud alert on their credit card).
  • Wireless fee: $20 per month. The company says most merchants won't pay this fee – it only applies to merchants that use wireless terminals.

Here's a list of the fees you won't pay with Dharma Merchant Services:

  • No annual fee
  • No monthly minimum
  • No PCI compliance fee
  • No early termination fee
  • No batch fee
  • No AVS fee
  • No IRS/regulatory fee
  • No gross funding fee
  • No bank charge fee
  • No account update fee
  • No virtual terminal fee

Processing Equipment Costs

Several brand-name payment terminals are available through Dharma, including the popular Clover POS systems. One of the things we like about Dharma is that it doesn't try to lure customers into signing lengthy contracts with "free terminal" offers or take advantage of customers with predatory leases (which are notorious in this industry). Instead, it charges fair prices and posts them clearly on its website. If you need financing, it offers interest-free payment plans over three months.

According to Dharma's website, it only sells the current models of the terminals it offers to ensure that they are "future-proofed" (i.e., won't quickly become obsolete). If you already have a terminal, you may be able to continue using it if it's a current, unlocked model and Dharma is able to reprogram it.

Here are some of the processing hardware models available and what they cost.

  • Verifone VX 520 terminal: $179. This terminal accepts magstripe and chip cards and has a PIN pad.
  • First Data FD150 terminal: $295. With this model, you can accept magstripe, chip cards, and contactless payments like Apple Pay and Google Pay. It also has a PIN pad.
  • Clover Flex: $499. This hand-held device accepts magstripe, chip cards, and contactless payments and has a built-in barcode scanner.
  • Walker 2: $99. This mobile card reader accepts magstripe, chip and contactless payments. Bluetooth and audio jack models are available, and it can be used with iPhones, iPads, and Android devices.


Dharma Merchant Services doesn't require you to sign a long-term contract; it provides service on a month-to-month basis. As such, there's no early termination fee.

These are important considerations when you're working with a full-service credit card processor. Many others hold you to a standard three-year contract and charge hundreds of dollars (or more, if they have a liquidated damages clause) if you decide to close your account before the end of the terms – which can be tricky, since these contracts automatically renew and you have a very short window (usually 30 days) at the end of the term when you can cancel without penalty.


As a full-service payment processing company, Dharma Merchant Services sets you up with your own merchant account. As such, it requires you to provide more information to set up your account than processors like Square or PayPal, and your online application must be approved. Dharma says it usually approves applications in two days, but some merchants can be approved the same day they apply.

Here are some of the features Dharma Merchant Services offers:

  • Mobile processing. Dharma offers the MX Merchant Express app for mobile processing on both Apple and Android devices. You can accept payments, prompt for tips, and email or text receipts to customers with it.
  • Level two and three processing. This service costs extra, but if your business accepts credit card payments from other businesses or government agencies, this type of processing can save you money. It provides a greater level of information for each transaction – such as the invoice number, purchase order number, tax amount, product code, product description and freight charges – which qualifies you for lower interchange rates.
  • Virtual terminal. This allows you to accept payments over the phone and manually enter the credit card details into your computer.
  • Customer database. You can store your customers' contact information and keep their cards on file, which makes it easy and fast for your regular customers to pay you. You can also use it to look up past payment records for your customers and store notes that help you cater to your customers, such as their birthdays or preferences.
  • Online reporting. From this dashboard, you can run reports that help you analyze your deposits, payments, transactions and customers.
  • Analytics and social media support. Using the Insights app, which costs extra, you can dig into your sales, customer and social media data.
  • Hosted payment links for your website. This feature lets you add secure payment links to your website. When customers click these links, they're taken to a payment page where they can securely enter their credit card information and get a receipt.
  • Invoicing and recurring payments. For an extra cost, you can email and text invoices to your customers, and they can pay you online using the "click to pay" button on their invoice. You can also set up ongoing payments from your customers, such as for subscription services.
  • Online ordering. This feature costs extra as well. With it, you can offer your customers pickup and delivery services.

Customer Support

This credit card processing company offers quality customer support, with a dedicated, U.S.-based support team and noncommissioned account managers. It offers 24/7 phone support, with after-hours calls directed to the company's back-end processor. You can also contact the company by chat and email.

One thing we appreciate about Dharma is that the company lets you know upfront if it's a good match for your business – and if it's not, it recommends other solutions.

If you prefer to figure things out yourself, the website has a searchable knowledgebase and a blog where you can find answers to your processing questions and instructions that walk you through certain features.


Dharma Merchant Services is a great choice for merchants that process more than $10,000 each month, as its low rates can save you a lot of money – especially if you're only paying the monthly fee and don't require the optional services that cost extra. If you do need those extra services, the monthly cost can escalate quickly. When you're evaluating processors, you should include those costs in your pricing comparison to make sure that you'd still be getting a good deal.

Also, like many processors, Dharma doesn't serve high-risk businesses. Before you go through the application process, verify with your sales rep that Dharma works with your business type and that your products or services don't violate its terms.


Payline provides cost-effective credit card processing solutions with no lengthy contracts to businesses of all sizes. It has multiple plans, each featuring interchange-plus pricing with rates transparently posted on its website. Custom solutions are also available. Payline offers in-store, online, mobile and ACH payment processing, subscription billing services and more. Read Review.

PayPal is one of the few processors that allows both businesses and individuals to accept payments, making it a popular choice for freelancers, consultants, solopreneurs, and other very small businesses. It has flat-rate pricing and no contract, so you only pay for the processing services you use, and you can close your account at any time without paying a penalty. For these reasons, it's our pick as the best credit card processor for businesses with low sales volume.

Pricing and Terms

If your business doesn't accept many credit card payments each month, you may find it expensive to work with a full-service processor that has a monthly minimum processing requirement and a handful of regular fees, such as monthly statement and gateway fees and an annual PCI compliance fee. Choosing a processor like PayPal that has flat-rate pricing and pay-as-you-go terms can save you money, since you'll only pay for the processing you use.

PayPal is very transparent with its pricing; you can find all of its rates and fees posted on its website. Here's what you'll pay when you accept credit cards using PayPal:

Accepting credit card payments in person using PayPal Here

  • 7% of each transaction for credit cards, debit cards, and contactless payments you accept in person using the PayPal Here app and a card reader. The rate is the same, no matter what type of credit or debit card your customer uses – including mobile wallets like Apple Pay, Google Pay and Samsung Pay.

  • 5% + $0.15 of each transaction for the credit and debit cards you manually key or scan in using the PayPal Here app. If you don't yet have a card reader and need to accept credit card payments, you'll pay this higher rate.

To promote its QR code payments, PayPal is charging a reduced rate of 2.2% of each QR code transaction until March 31, 2021. After that, these transactions will cost 2.7% like other card-present transactions.

Accepting payments online or by invoice

  • 9% + $0.30 of each online transaction for credit and debit cards you accept through your website or digital invoice.

Accepting credit and debit card payments using a virtual terminal

  • 1% + $0.30 of each transaction for the Visa, Mastercard and Discover payment cards you accept using PayPal's virtual terminal (such as payments you accept over the phone, by fax or by mail).

  • 5% of each transaction for the American Express cards you accept using PayPal's virtual terminal, PayPal Payments Advanced or PayPal Payments Pro.

You'll notice that PayPal's transaction fees are somewhat higher than those of full-service processors. However, it's still more cost-effective if your monthly processing volume is low, because you aren't paying account fees. If you use a full-service processor, you pay around $20 per month in account maintenance fees and have a monthly minimum of $25, which can be difficult to meet if you process less than $2,500 per month.

Here are the fees you won't pay using PayPal:

  • No application fee or setup fee
  • No monthly fee for statements and customer support
  • No monthly minimum processing requirement
  • No gateway setup fee
  • No annual fee
  • No annual or monthly PCI compliance fee
  • No early termination or account closure fee

Incidental and Optional Fees

PayPal offers some additional services that cost extra. For example, if you need the money from your transactions immediately, you can pay 1% for an instant transfer from your PayPal balance to your bank account. Regular bank transfers are free and usually take one business day.

Here are some more optional services that carry fees:

  • Chargebacks: $20 per incidence
  • Recurring billing service: $10 per month
  • Advanced fraud protection services: $10 per month plus $0.05 per transaction
  • PayPal Payments Pro: $30 per month (allows you to accept payments directly on your website and includes a virtual terminal)
  • Virtual terminal: $30 per month
  • Cross-border fee: 5% is added to the transaction fee when you accept payments from customers outside the U.S. If your cross-border payments require currency conversion, it costs an additional 3%.

Special pricing is available for certain business types:

  • Registered charities pay 2.2% + $0.30 for online donations; in-person donations cost the same as regular business accounts, at 2.7% for card-present transactions and 3.5% + $0.30 for keyed-in transactions.

  • Businesses with transactions less than $10 may qualify for PayPal's micropayment fees, which are 5% + $0.05 per transaction.


There's no long-term contract requirement with PayPal; you accept a user agreement instead of signing a contract. As your business grows and your processing volume increases to the point where the savings from lower rates would surpass the account fees, you can close your PayPal account and switch to a full-service processor at any time without penalty.


One of the best things about PayPal is that you can accept various payment methods simultaneously – on the go and at brick-and-mortar locations using QR codes or a card reader and online using invoices, social media, and your website – and the money from all of your transactions goes into one PayPal account, making it easier to manage your finances.

Here are more features PayPal offers:

Free Basic POS Software

To accept payments in person at your business or on the go, you install the PayPal Here app on your phone or tablet and attach a credit card reader. This mobile credit card processing app includes point-of-sale features that help you run your business. Here's what it can do:

  • Accept credit and debit card payments
  • Record checks and cash payments
  • Create an inventory list and add photos of items
  • Add multiple users to your account and manage their access
  • Set taxes, suggest tip amounts, apply discounts at checkout
  • Email, text or print receipts
  • Refund sales
  • Generate sales reports
  • Transfer funds from your PayPal balance to your bank account or your PayPal Business Debit Mastercard

Card Reader Options

PayPal has several card readers for you to choose from. They are all EMV compliant and connect to your phone or tablet via Bluetooth. PayPal also sells receipt printers, cash drawers, stands and cases.

  • Chip and swipe reader: $24.99. You can accept magstripe and chip cards with this reader.

  • Chip and tap card reader: $59.99 (or $79.99 with charging stand). This model accepts magstripe, chip, and contactless credit and debit cards. It also accepts mobile payments from Apple Pay and Google Pay.

  • Chip card reader: $99.99. This reader accepts magstripe, chip, and contactless cards as well as mobile wallets. It's the only model with a screen and a built-in PIN pad.

PayPal Integrations

One of PayPal's strengths is that it integrates with many business systems and applications. Here's a small sampling of the business solutions PayPal integrates with:

Online Payments

PayPal makes it easy to accept credit, debit and PayPal payments online. It offers a few different ways to do this, including a payment gateway option.

  • PayPal Checkout: There's no monthly fee for this plan; all you pay are the processing fees for your online transactions. On this plan, you place buy buttons on your website that redirect your customer to a checkout page hosted by PayPal. Some e-commerce platforms already have this feature built into their platforms.

  • PayPal Payments Pro: This plan costs $30 per month. With it, you can design and host the checkout pages yourself. It includes a virtual terminal that you can use to key in credit card information for sales made over the phone or by fax or mail.

  • Payflow (payment gateway): If you need a payment gateway for your website and want it to have a secure payment template that you can embed, Payflow Link may be a good option for you. With it, you can accept credit and debit card payments as well as PayPal payments on your website. It costs 10 cents per transaction (above the processing rates you pay your other processor), with no setup or monthly fees. If you require a fully customizable solution, you can get Payflow Pro for $25 per month, but this option has a $99 setup fee.

  • Pay in 4 and PayPal Credit: These programs pay you upfront but allow your customers to pay for their purchases over time, either in four payments or over a set period.

  • Sell on Social: This feature lets you create shopping links for your product listing that you can share on social media channels, chat and email.

Online Invoicing

You can create and send invoices by logging in to PayPal's website with your business account credentials or by using the PayPal Business app on your phone or tablet. Your customer receives an email with a link, clicks the link to open the invoice, and can then choose to pay the invoice using their credit or debit card or their PayPal account. There's no cost to send invoices; when receiving payments from your customers, you pay 2.9% + $0.30 for each transaction.

  • Invoicing with Messenger: If you and your customers use Facebook, you can create invoices in Messenger to send to your customers. Your customers can click on the invoice in your message to pay it using their PayPal account. 
  • PayPal Commerce platform: Startups with online marketplaces, crowdfunding platforms and other e-commerce solutions can use this advanced payment platform to allow their sellers to accept payments from buyers around the globe.

If your small business sells to customers in other countries, PayPal is a good processor for you. It accepts payments made in over 100 currencies around the world.

Additional Considerations

Here's some additional information about PayPal for you to keep in mind as you decide which payment processing company is the best fit for your business.

Customer Service

If you run into an issue using PayPal, you can call or email the company 24/7 or use the self-help resources on its website, which include live chat, FAQs, a searchable knowledgebase, how-to guides, a community forum, and its Resolution Center that assists with customer disputes. Although the company lists extended phone hours on its website, a company rep told us that you can actually reach a customer service representative 24/7, though if you call after hours, your call may be routed to one of its international offices.


PayPal uses multiple security measures to keep your customers' payment data safe, including end-to-end encryption and 24/7 transaction monitoring. It complies with the data security standards established by the Payment Card Industry, and most of its card readers are EMV compliant, which deters counterfeit fraud. Your account is password-protected, and you can add a second authentication factor using PayPal Security Key, which sends a unique one-time PIN code to your phone via text.

PayPal Business Debit Mastercard

Using this card, you can spend your PayPal funds at any store and receive 1% cash back on qualified purchases. You can also withdraw cash from in-network ATMs. There's no annual fee for this business debit card.

PayPal Business Loan and PayPal Working Capital

Eligible merchants can receive small business loans and working capital through PayPal.


PayPal is a great solution for low-volume businesses, as it allows you to accept credit, debit, and PayPal payments in person and online on a pay-as-you-go basis, with no monthly or annual account maintenance fees and no long-term contract. However, if you go beyond the basic credit card processing services, there are lots of little fees to keep track of, and they could add up quickly. To PayPal's credit, it lists these fees in full on its website.

Another issue to be aware of is held funds and frozen accounts, which is the cause of many online complaints. This problem isn't exclusive to PayPal – you'll find similar complaints about other payment facilitators online – as this type of payment processor tends to be more wary of fraud than traditional processors, and irregular patterns in your processing, such as spikes in transaction amounts or frequency, can raise red flags.

Following PayPal's best practices for sellers reduces the likelihood of having your money held in a reserve account. Also make sure that the products or services your business provides are within PayPal's acceptable use policy; otherwise, your funds may be frozen or your account closed without notice.

We chose Stripe as the best credit card processor for online businesses because of its versatility. It integrates with hundreds of e-commerce platforms, shopping carts, and other business software and services. It has prebuilt checkout forms that can easily embed into an existing website. For businesses with development resources, Stripe offers APIs and developer tools that allow you to create custom checkout forms or entire payment flows for your website and mobile app.

Pricing and Terms

The best online credit card processing companies have clear, transparent pricing and terms of service. Stripe is a good example of this, as it posts detailed information about its rates and transaction fees, and you can read all of its service agreements on its website.

Stripe has simple flat-rate pricing and charges very few fees. There's no additional cost to use Stripe's integrations, prebuilt checkout form or developer tools.

Here's what you'll pay when you accept credit card payments online using Stripe Payments:

Accepting Online Payments

  • 9% + $0.30 for domestic credit and debit card payments, no matter what type or brand of card your customer uses, or if they use a digital wallet.

  • 8% with a $5 cap for ACH debit transfers. Stripe also allows you to accept ACH credit and wire transfers, and you can view pricing for these payment methods on the company's website.

Accepting In-Person Credit Card Payments Using Stripe Terminal

  • 7% + $0.05 per transaction, regardless of card type or brand.

Stripe offers volume discounts for businesses that process more than $100,000 per month, and custom pricing is available for businesses that have microtransactions or abnormally large sales tickets. Nonprofits may qualify for special pricing.

These are some of the incidental fees you may encounter while using Stripe:

  • If you need an instant payout, it costs 1%, with a minimum fee of 50 cents.

  • If you accept international cards, you add 1% to the transaction rate, and if currency conversion is necessary, it costs an additional 1%.

  • If a customer disputes a charge and requests a payment reversal, you pay a $15 chargeback fee. If the dispute is resolved in your favor, however, Stripe refunds this fee, which most processors don't do.

  • If you issue a refund, there's no fee, but it doesn't return the original processing fee to you.

Here's a list of the fees you won't pay when you use Stripe as your online payment processing company:

  • No application or setup fee
  • No monthly fees for statements or customer service
  • No monthly minimum processing requirement
  • No payment gateway setup fee
  • No monthly payment gateway fee
  • No annual fee
  • No PCI compliance fee
  • No early termination or account closure fee

Optional Fees

Stripe offers several other products, such as Stripe Billing, Stripe Connect, Radar for Fraud Teams, Stripe Sigma and Stripe Atlas. If you choose to use them, other fees apply. You can learn more about these products and what they cost on the company's website.


Once you begin accepting credit card payments using Stripe, you must wait seven to 14 days for the company to transfer the money from your transactions into your bank account. After this initial payout, your funds are transferred on a rolling schedule.

Most businesses are on the two-day rolling schedule – which is an average amount of time – but if Stripe considers your business to be a higher risk, you may be placed on a seven- or even 14-day schedule.

If your cash flow is often tight and you need to receive your money faster, instant payouts are available for 1% (with a minimum fee of 50 cents).

Terms of Service

Stripe Payments offers its services on a pay-as-you-go basis, so you can close your account at any time without incurring high early termination fees. Instead of signing a multiyear contract, you accept a service agreement that you can read in full on the company's website. As with all payment processing companies, you should take the time to read this document before signing up with the company to make sure it's a good fit for your business and you understand what you're agreeing to.

Like many processors that offer flat-rate pricing with few fees, Stripe doesn't provide you with your own merchant account, setting you up as a submerchant under its master merchant account instead. This has some advantages, such as faster account setup that doesn't require a credit check and simplified PCI compliance with no related fees. However, Stripe and other merchant aggregators receive a lot of complaints online about frozen funds and sudden account terminations. You can reduce your chances of experiencing these issues by reading the service agreement and complying with its terms.

Make sure that:

  • Your business type and the products and services you sell aren't on Stripe's list of prohibited businesses.
  • You use Stripe's services as they're intended to be used. For example, you can't use Stripe Dashboard as a virtual terminal except in rare circumstances. Using it in this manner on a regular basis is specifically forbidden in the service agreement.
  • You comply with network rules and do your part to keep card data secure, in accordance with PCI standards.

As the company explained in a letter to the Better Business Bureau, per its service agreement, Stripe reserves the right to hold your funds in a reserve account if it suspects a risk of loss or fraud, or if you have a lot of chargebacks. It may close your account if it determines your business is a fraud or credit risk, if you offer products or services on its prohibited businesses list, use the service in an unauthorized way, or violate terms of the agreement.


Stripe says that it offers more than 100 features, and this wealth of capabilities allows many different business types and sizes to use Stripe as their online payment processing service. You can choose from premade solutions that you connect to with just a few clicks or payment flows custom-built by your development team.

Stripe is regularly updated, and each month the company posts a changelog on its blog that shows new features or improvements to its existing capabilities.

Here are some of the products and features Stripe offers.


The easiest way to use Stripe is to connect to it from one of the business applications you already use. Stripe offers hundreds of integrations across multiple categories, so you can start accepting payments quickly, then automatically sync your sales data to the other programs you use. For example, if you use an e-commerce platform for your online store, you can choose Stripe as your payment processor and connect to your account with just a few clicks. You can then connect your Stripe account to many of the other programs you already use, such as your accounting, invoicing, inventory management, CRM and email marketing software. Plugins for third-party services are also available.


The second easiest way to use Stripe is to embed Stripe Checkout, a premade checkout form, into your existing website. To do this, you copy and paste a few lines of JavaScript. The form redirects the customer to a Stripe-hosted payment page that you can customize with your branding and product images. Checkout is PCI compliant and tokenizes your customers' payment data so it's never stored on your server.

Stripe Elements

If you have some coding skills, you can use Stripe's prebuilt UI elements – input fields and buttons – to create a custom checkout form that complements the look and feel of your website. Like Stripe Checkout, Elements is PCI compliant, and Stripe takes care of the heavy back-end coding – all you're doing is customizing the look and format of the checkout form.


This method for using Stripe to accept payments on your website requires more development know-how, as it allows you to use Stripe's JavaScript library and APIs to build a checkout form of your own.

Stripe Billing

This API allows you to customize a solution for recurring payments and subscription billing. You can decide how to charge customers, such as with a flat recurring fee or based on their product usage or tier, and how frequently you bill them. You can also offer discounts and trial periods.

It has a customer portal that your customers can use to manage their billing details themselves – which saves you time, since your customers can check their billing histories, upgrade or downgrade their subscriptions, cancel their subscriptions, and update their payment methods without your help.

This is a prebuilt solution, which means it's easy to set up, and Stripe hosts it to keep it secure. You can customize it to match your brand by adding your logo, brand color, and accent color, and you can add links to helpful information on your website, such as your terms of service.

Stripe Connect

Stripe can provide payment services for marketplaces and platforms – onboarding users, managing payments, handling compliance issues, tax reporting and more.

Stripe Terminal

You can now use Stripe to accept credit card payments in person. You can integrate Stripe Terminal into your existing checkout flow, or use its SDKs to create your own mobile or web-based app. The company offers two card readers to use with this payment method. Both are EMV-certified and support chip cards and contactless payments, including mobile wallets like Apple Pay and Google Pay.

  • The BBPOS Chipper 2X BT, which costs $59, is a mobile card reader that uses Bluetooth to connects to smartphones and tablets.
  • Verifone P400, which costs $299, is a countertop credit card terminal.

Mobile Payment Options

If you have a mobile app, you can boost sales by adding in-app payments, letting your customers shop and complete purchases with it. Stripe payments are currently supported on iOS and Android devices.

Digital Wallet Support

Stripe allows you to accept payments from digital wallets. In addition to Apple Pay and Google Pay, it supports Visa Checkout, Masterpass by Mastercard, Amex Express Checkout, Microsoft Pay, Alipay and WeChat Pay.

International Currency Support

For businesses with customers outside the U.S., Stripe is a good option because it allows your customers to pay with their local currency. Stripe then converts it, so you receive your funds in your currency. It supports more than 135 currencies.

Dashboard App

Available for both Android phones and iPhones, the Stripe Dashboard app allows you to track your sales when you're away from the office. You can issue refunds, set alerts, and view daily summaries, reports and historical comparisons on the Android version. On the Apple version, you can also email customers, search transactions and create new customer subscriptions. 


You can view your sales data and account balance history in the dashboard. It has several built-in reports, and you can export your data to CSV files. If you integrate Stripe with other programs, such as your accounting software, it automatically syncs to that application. If you want advanced reporting capabilities, you can use Stripe Sigma for an extra cost.

Additional Considerations

Here's some additional information about Stripe to keep in mind as you select a payment processing company for your business.


Stripe takes data security seriously and has multiple security protocols in place to keep your customers' payment data secure. It uses tokenization technology, so no actual payment data is stored on your servers, and includes Radar, its fraud-prevention tool, with every account.

PCI Compliance

Stripe is a PCI Service Provider Level 1, the highest certification available, but you still have to comply with PCI data security standards and complete a self-assessment each year. It doesn't charge a PCI compliance fee.

Customer Support

If you need help using Stripe, you can email the company or use its online resources, which include searchable documentation, reference guides, articles, tutorials and FAQs.


Stripe is unique in that it's designed for developers. While this is one of the reasons it's such a versatile product, it can be overwhelming for small business owners who aren't developers. Even figuring out how to use Stripe and where to find its easy-to-use products, such as its integrations and Stripe Checkout, is challenging, and you may need to hire a developer if you want any customizations.

Stripe doesn't provide inbound phone support. If you run into a problem while using the service, you'll have to email the company.

As discussed above, Stripe is like other merchant aggregators in that it's wary of risk compared to full-service processors. It may hold your funds or close your account if you have a lot of chargebacks or there's something irregular about your transactions, such as an abnormally high sales ticket, that makes Stripe suspect fraudulent activity.

Image Credit: radifanil / Getty Images
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