The Best Credit Card Processors of 2020

Lori Fairbanks
, writer
| Updated
May 29, 2020
Image Credit: radifanil / Getty Images

Credit Card Processing Comparisons

Update: Visa, Mastercard, American Express and Discover are (again) postponing the EMV liability shift for automated fuel pumps, and Visa announced it's waiving COVID-19-related dispute fees. Scroll down to "What to Expect in 2020" to learn more.

In nearly every industry, customers expect businesses to accept their credit cards and debit cards as payment just as easily as they accept cash. As a merchant, you know payment processing is more complex than it looks, and one of the hardest parts of getting it set up is choosing the right credit card processing company. You have hundreds of companies to select from – each offering very similar services. The questions becomes how do you choose one? 


Best Picks

Flagship Merchant Services
Flagship Merchant Services
Credit Card Processor with the Best Contract

Editor's note: Looking for the right credit card processor for your business? Fill out the below questionnaire below to have our vendor partners contact you about your needs.

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 or keep reading to learn more about pricing, features, and contracts. If your business is new or you process less than $3,000 per month, check out our mobile credit card processing reviews.

Credit Card Processing Reviews

Here you can find all of our credit card processing reviews. In addition to our best picks, we've reviewed other popular processing services that may be of interest as you look for the credit card payment processing company that will be the right fit for your business. If you want even more payment processors to choose from, check out the Services section at the bottom of this page, where you can view a comprehensive list of payment processing companies and read summaries of the services each claims to provide.

What to Expect in 2020

In 2020, we'll see several familiar themes 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 recent Ekata report that surveyed more than 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 via mobile. Mobile continues to gain importance in the payments industry: for mobile shopping (customers make purchases online using their smartphones), mobile wallet and contactless card acceptance (customers use an app on their smartphones like Apple Pay or a contactless credit card to make an in-store purchase), and mobile checkout (you use a mobile device and card reader to accept payments, allowing you to take payments wherever your customer is). 

  • Mobile shopping is an increasingly important payment feature for merchants to offer. Adobe Analytics reported that on Cyber Monday 2019, of the record-breaking $9.4 billion consumers spent, 32% of purchases (that's more than $3 billion in sales) were made on a smartphone. What this means for merchants is that if you haven't yet optimized your website for mobile, now is the time to do so.

  • Mobile wallets and contactless cards that use near-field communication (NFC) technology to "tap and go" should still be on your radar. Even though mobile wallet adoption has been much slower than anticipated, Mobile Payments Today says that nearly one-third of the U.S. adult population used a mobile wallet or app to make a payment or transfer money in 2019. Contactless cards, though, may take off much faster. This is largely due to Visa's push to get them into consumers' hands and give them new ways to use them. Visa partnered with Chase and New York's Metropolitan Transport Authority to accept contactless payments, and by the end of 2020, all rail lines and buses will be able to accept them. Visa exceeded its 2019 goal of getting 100 million contactless cards into the market and hopes to get 300 million contactless cards out in 2020.

  • Mobile checkout technology may be seeing an update. The Payment Card Industry's new standards for contactless payments hint that card readers may not be needed in the near future. Instead, merchants may be able to accept payments using a mobile device and a payments app only. In a press release, PCI SSC Senior Vice President Troy Leach said that the new PCI standards and program for contactless payments "now provide merchants the option to use validated solutions that require no additional hardware to accept contactless transactions." 

Finally, 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 (CNP) fraud continues to rise. Juniper Research predicts that it will cause retailers to lose $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. 

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

February 2020: Visa has notified its banking partners that it is 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 says this will be the most significant structural change to the rate tables in a decade, and plans a two-part rollout, scheduled for April and October. Visa says rates for card-not-present transactions (such as online purchases or 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.

March 2020: Your business's PCI compliance status is another thing you should look into in 2020. New data from the ControlScan/MAC 2020 Acquiring Trends Report revealed that PCI compliance rates are falling among merchants. That's not good for you or your customers, since noncompliant merchants are more vulnerable to hackers and you may be paying an expensive noncompliance fee each month (some are more than $50 per month). Just 26% of the merchant acquirers surveyed reported merchant compliance rates above 60%, and 23% reported compliance rates below 25%.

May 2020: The four major card networks – Visa, Mastercard, American Express and Discover – have again postponed the EMV liability shift for automated fuel pumps – now to April 2021 – citing merchant difficulties meeting the deadline due COVID-19. Previously, it was slated to go into effect October 2020 (a three-year extension of the original October 2017 deadline, granted due to the expense and complexity of updating processing equipment on fuel pumps). Visa also said it is delaying previously announced changes to interchange fees until April 2021 and capping chargeback fees for certain disputed charges related to canceled services.


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) using the criteria listed below. 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 and asked 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, nine made our best picks list: Fattmerchant, Fiserv, Flagship Merchant Services, Helcim, PayPal, Square, Stripe, TSYS and Worldpay. Eleven more processors made onto our short list: Authorize.Net, Braintree, Chase Merchant Services, Dharma Merchant Services, Elavon, EMSPlus, Global Payments, Moolah, Payline, Payment Depot and SumUp.


What 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 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 who 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 to 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. We also considered the pricing model the company uses and whether it practices pricing transparency.
  • Contracts and service terms. Standard processing contracts have lengthy terms and expensive 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.
  • Types of processing offered. 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 merchants 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.
  • Payouts and reporting. We 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.
  • Additional features and benefits or service limitations. We looked for other features that would contribute to a merchant's satisfaction or dissatisfaction with a processor.

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 when determining 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 amounts.
  • If a company posts links to interchange rate tables, indicating 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, 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 several 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 other pricing 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 together and then sorting them into tiers. Tiered pricing may also be 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 as little as two or as many as 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 when you're evaluating services. We found this to be true in our testing, 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.
  • Best for businesses whose customers prefer paying by debit card.

Interchange-Plus Pricing

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.
  • Best for most businesses; recommended by industry experts.

Flat-Rate Pricing

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 very 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.
  • Best for businesses that have small sales tickets or process a low volume of credit card transactions each month.


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, because it contains important details that can cost you money. For example, it often includes information on early termination fees and the instructions you need to follow if you cancel your account, which may involve providing a written notice to the processor within a certain timeframe.

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

Term Length

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 length shouldn't be excessive and shouldn't automatically renew for additional lengthy terms. For example, a non-excessive 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 plan is month to month and there are no cancellation fees, it's still important that you read the contract and make sure this information is consistent with the information in the contract.

  • 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. Be sure to ask the rep if they can give you a waiver or amendment that puts you on a month-to-month plan and waives all ETFs.

Automatic Renewals

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.

Early Termination Fees

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 you want to look for this term in the contract text as well.

Personal Guarantees

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, for any reason, your business is unable to meet its obligations. 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.

Additional Service Clauses

These indicate that the processor may sign you up for various additional services that have additional fees, 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.

Credit Card Processing Fees

In addition to processing rates, you'll pay a variety of 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.   

Common 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 refers to 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 baked into the monthly fee.
  • The payment gateway fee varies by the payment gateway you use. Most are charged monthly, though some also come with 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.

Fees to Avoid

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

Again, it's important that you read the entire contract before signing anything to make sure you're aware of every fee you'll be obligated to pay. 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 it in writing, either noted on the contract or as an addendum.

Frequently Asked Questions About Credit Card Processing

How can I save money on credit card processing?

If you're currently with one processor and want better rates, it may be worth your time to contact your account manager and ask 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 closely monitor your statements so you know what's going on with your account. Regularly review your rates and fees so you get a feel for what you can expect to pay on average for processing each month.

Also, watch for notifications about rate increases, new fees and reminders about 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, call your rep to discuss your account.

2. 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 can 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.

3. Request interchange-plus pricing. If you're currently processing 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 pricing 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.

4. 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. Your rep may also waive the PCI compliance fee after you complete the annual questionnaire.

5. Shop around and renegotiate your rates. If you've been with your 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 rep to see if they 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, you want to 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.

Card readers, terminals and POS systems: What should I use to accept credit cards?

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 for a model that supports all three acceptance methods: magstripe, EMV chip and NFC contactless payments.

The best mobile credit card reader brands include Clover, Ingenico, PayPal, QuickBooks Payments and Square. 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, you want to check with the company to find out which processors the system is compatible with, as some only integrate with a few. Others are proprietary and require you to use the 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.

Should I buy, lease or accept free processing equipment?

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 option 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 an expensive upfront cost, over time it's less expensive and less restrictive 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, you want to 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, check with your new processor to see 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 choose to accept free equipment.

Another thing to be aware of if you accept free equipment is that 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 accepting higher processing costs is worth the purchase price of the equipment.

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

Many free placement programs come with monthly fees and may include additional monthly minimum requirements 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 accept 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 the following leasing myths and truths. 

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

Truth: While technically true, most equipment comes with a manufacturer's warranty, and you may 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, you want to do the math to verify that the costs and savings are in fact 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.

Should I work with a direct processor, ISO/MSP or a payment facilitator?

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 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.

How can I protect my business from credit card fraud?

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. First, comply with PCI DSS. PCI DSS measures have proven successful in discouraging attacks, as 96% of merchants that sustained data breaches in 2011 were not PCI DSS compliant. 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.

Common Credit Card Processing Questions & Answers

Have a credit card processing question of your own?

Fees depend on a number of variables including size of average transactions, number of transactions, and annual/monthly volume. The industry is highly competitive. I am a member of Costco they offer On Site and In Store 1.38%¹ Plus 19¢ per transaction, Online 1.99%¹ Plus 25¢ per transaction and On-the-Go 2.49%¹ $0 per transaction. Service is sponsored through Elavon.

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Depending on your needs, you can either adapt a Shopping Cart system or go "custom". Custom allows you the greatest flexibility. If you go that route, you can backend to just about any provider. Personally, I've found Elavon the easiest to build an interface. (Elavon is the provider-of-cfhoice through COSTCO.) And, yes, SSL is a definite must. You should note that SSL has really nothing to do with e-commerce. You can use it for anything. Essentially, SSL encrypts all communications...

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Speak to your local banks and see what they can offer. Once you obtain a competitive rate (lot better than Paypal for example) with all required inclusions you can then hook it into a credit card gateway provider which in turn can connect to your website or shopping cart.

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Downloadable Guides Community Survey Results Community Survey Results
More Customers? Increased Revenue?
More Customers?  Increased Revenue?

Yes, Please!

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It’s become fact that businesses see increased traffic and revenue when they accept credit cards as a form of online or in-store payment.  Furthermore, new technologies are making it easier and more affordable to include credit card payments.  Don’t miss out on the chance to increase your bottom line – find out who you’re losing and how you can gain from adding credit cards to your payment mix.

Our Benefits to Credit Card Processing infographic is completely free. Simply register your email to download it now.

Credit Card Processing Fees
Credit Card Processing Fees

The Ultimate Guide to Understanding Your Fees (and How to Find the Best Rates)

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When you accept credit cards, you lose part of every sale to the credit card processing company’s fees. Do you know what elements make up those fees or how the banks decide how much to charge you? In this whitepaper, you’ll learn what types of charges make up your credit card processing fees and what you can do to make sure your business is paying the lowest possible rate.

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Whitepaper Download

Mobile Payments: What every small and mid-sized business should know


In this report, we will examine all facets of mobile payment processing, beginning with a very brief history of mobile payments and forecasts for the future. We will then explore the benefits of mobility for small and mid-sized businesses, the ease of processing mobile payments, the equipment required and the issues small and mid-sized businesses should take into consideration when taking your business mobile.

Overview of Credit Card Processing
Overview of Credit Card Processing

Consumers expect to be able to pay for anything with plastic. Our guide to credit card processing makes it easy for you to make this happen.

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There’s a television commercial for a major credit card
company that shows people zipping through a checkout
line to make purchases. Then along comes some guy
trying to pay with cash, and everything slows down,
causing the cashier considerable angst’not to mention
the customers at the back of the line.

These days, almost everybody uses plastic to pay for
even the smallest items. There was a time when you
couldn’t use a credit card to buy anything under $10.
Now, you can buy a pack of gum and put it on your
card. Consumers are so used to the convenience of
credit and debit cards that it’s no longer an option for a
merchant to take plastic-it’s a necessity.