Login to Business.com

Social Login
Login with Your Account
Forgot Password?
New to Business.com? Join for Free

Join Business.com

Sign Up with Your Social Account
Create an Account
Sign In

Use of this website constitutes acceptance of the Terms of Use, Community Guidelines, and Privacy Policy.

Credit Card Processing Reviews 2018

by Lori FairbanksLast Modified: July 16, 2018

Best Picks
Pricing
Reviews
Methodology
What Features Do You Need?
Credit Card Processing Rates
Credit Card Processing Fees
Should You Buy or Lease Equipment?
Common Credit Card Processing Questions & Answers
Guides & Whitepapers (Downloads)
Community Picks
Map
Services
Compare Quotes

July 2018 Update

Following the Supreme Court's June 25, 2018, ruling on the Ohio v. American Express case, you still aren't allowed to discourage your customers from paying with their American Express cards or educate them about how it costs you more to process this card brand than its competitors. 

The court upheld the card network's anti-steering provisions, explaining that because credit card networks work with both consumers and merchants, they had to consider how the ruling would affect both markets. They found that although merchants dislike American Express's higher fees, they don't "stifle competition in the two-sided credit-card market." Rather, they allow the network to "maintain cardholder loyalty and encourage the level of spending that makes it valuable to merchants." 

As a merchant, you retain the ability to choose whether or not you accept American Express cards. Although not accepting this card brand keeps your processing costs lower, it may irritate high-spending customers that want to use their American Express cards. Despite losing its partnership with Costco in 2016, American Express has grown its market share and is on track to overtake Mastercard as the network with the second highest purchasing volume. 

Check out our reviews below.

The Best Credit Card Processing Companies for 2018

Credit card processing is a necessity for most businesses, because consumers expect you to accept credit cards as readily as you accept cash. While credit cards are extremely convenient for your customers, they can be a source of frustration and expense for you, which is why it's so important to choose the company that can provide credit card processing for your small business at the best possible price, with low fees, flexible terms, and responsive customer support.

Unfortunately, credit card processing can seem engineered to be confusing and expensive since it involves multiple parties, including banks, credit card networks and credit card processing companies that each want a share of every transaction you process. Processors use different pricing models, such as interchange-plus, tiered and flat-rate pricing, making it difficult to compare costs across services. They also charge a variety of fees in addition to processing costs, though some may be negotiable.

As you evaluate payment processors, you'll find that although several companies transparently post their pricing on their websites, most don't. Instead, you must call for a quote, as most processors customize their rates and fees to your business, considering factors like your monthly processing volume, average ticket size, and the type of transactions you process. Your company's creditworthiness and industry may also affect your rates.

Even though pricing customization is common and the pricing you receive may differ from the pricing we received in our merchant services review, it's extremely useful for you to consider the pricing estimates we received as a baseline you can keep in mind as you shop for the credit card payment processing service that's best for your business.

Our merchant account reviews can arm you with the information you need to know about this industry and can help you narrow your choices, though you still need to contact the companies you're most interested in and request quotes specific to your business. 

Fattmerchant, First Data, Flagship Merchant Services, Helcim, PayPal, Square, Stripe, TSYS and Worldpay Inc. top our list of credit card processing companies for small businesses. Below you can read more about them, along with pricing information, negotiation tips and features to look for as you select a service.

If most the majority of your receivables are check or cash and you only occasionally accept credit card payments, or if you want a very simple solution for your credit card processing needs, be sure to check out our Mobile Credit Card Processing review. Or, if you're looking for a complete point-of-sale system to use with your credit card processing, our POS Systems review can help you find what you're looking for.

Best Picks

There's no one-size-fits-all solution when it comes to choosing a processing company for small businesses. Multiple factors, such as the pricing model, contract terms, how you accept cards, hardware and features can determine whether a processor is a good fit for your business or not.

For this reason, we've based our selections on several use cases, allowing us to offer recommendations based on a variety of business needs. Although our picks have traditionally only included ISO/MSPs and payment facilitators, we've expanded our selections to include several of the country's biggest processors, giving you a broader range of recommendations to choose from.

After you review our picks, be sure to read our full merchant account reviews for an in-depth look at what each credit card processing company provides and how it compares to processors with similar offerings. If you want more options, we've included several reviews of popular processors and a full, alphabetized list of payment processing companies.

Best Picks

Best Contract
Small Business Overall
Lowest Fees
Low-Volume
Professional Service Providers
Best Rates
Direct Processor
Online Processor
Flagship Merchant Services

Credit Card Processor with the Best Contract

Flagship Merchant Services

Flagship Merchant Services is the full-service credit card processor with the best contract, because it offers its services to all of its customers on a month-to-month basis and doesn't charge a cancellation fee. As a contrast, standard credit card processing contracts have lengthy three-year terms with a short cancellation window of 30 to 90 days before automatically renewing for an additional one- to 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.

Additionally, Flagship offers a choice of interchange-plus or tiered rates, allowing you to select the pricing model that's the best fit 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 charges a monthly fee, monthly gateway fee and has a monthly minimum. It also charges an annual PCI compliance fee. It doesn't charge application, setup or gateway setup fees, though.

Helcim

Best for Small Business Overall

Helcim

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. It offers interchange-plus pricing to all of its merchants, and its retail rates are lower than average.

Instead of charging a handful of standard fees like most full-service processors, it charges a single monthly fee, which includes statements, customer support, 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 expensive early termination fees to worry about if you close your account.

Square

Best Low-Fee Credit Card Processor

Square

Square is the best low-fee credit card processing company because the only fee it charges is its 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.

Square also has the best mobile credit card processing app. Not only does it allow you to accept payments, Square includes full-featured point-of-sale 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.

PayPal Credit Card Processing

Best Low-Volume Credit Card Processor

PayPal Credit Card Processing

PayPal is the best low-volume credit card processor, because anyone can sign up for an account, making it an ideal choice for freelancers, solopreneurs, startups, and businesses that typically accept cash or check and only rarely accept credit card payments. It has no monthly processing minimum, no lengthy contract, and flat rates, so you can accept credit, debit and PayPal payments from customers online and in-person. And you only pay for the processing you use.

It's also the best Android mobile credit card processor. Its mobile payment app, PayPal Here, works equally well on Android and Apple phones and tablets, and both versions have all the same features. With this app and a card reader, you can use your phone or tablet to accept payments, manage your product list, email or text receipts, and generate sales reports. You can add multiple users to your account and control what features they can access. You can also transfer money from your PayPal balance to your PayPal Business Debit Mastercard or your bank account.

TSYS

Best Credit Card Processor for Professional Service Providers

TSYS

TSYS has been in business for 35 years and recently acquired Cayan, making it one of the country's 10 largest payment processors. It works with large and small businesses in many industries, providing reliable and comprehensive credit card processing services.

We selected TSYS as the best processor for professional service providers, specifically those in healthcare-related industries, because it offers competitive pricing, charges few fees, has healthcare-trained customer service agents in-house, and partners with the American Medical Association to offer discounts to medical practitioners.

Fattmerchant

Credit Card Processor with the Best Rates

Fattmerchant

Fattmerchant is the credit card processing company with the best rates. 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 rate – set by the credit card networks that everyone pays – for each transaction.

For fees, it charges a single monthly membership, or subscription, fee. There are no separate fees for statements, PCI compliance, customer support or account maintenance. The monthly membership fee is significantly more expensive than most, and the company notes that businesses need to process at least $4,000 per month for this to be a cost-effective processing solution. Small businesses that process a high volume of transactions each month will see the most savings on their overall costs.

Worldpay

Best Direct Processor for Small Businesses

Worldpay

Worldpay Inc., formerly known as Vantiv before acquiring and merging with Worldpay, is one of the world's biggest credit card processing companies. It processes more than 40 billion transactions worth over $1.5 trillion annually. It's also our pick as the best direct processor for small businesses – it works with businesses of all sizes, provides a full range of processing services, and offers competitive rates and favorable terms to small businesses.

Although you can find a few sample rates on Worldpay Inc.'s website, you'll receive better rates if you call the company for a pricing quote. The sales rep we spoke with in our testing offered interchange-plus pricing and a one-year contract that can be canceled anytime without penalty when you provide 30 days' written notice. The monthly fee includes PCI compliance, and there's no application fee, setup fee, annual fee or batch fees.

Stripe

Best Credit Card Processor for Online Businesses

Stripe

Stripe is the best online credit card processor because it's very versatile. Its integrations, prebuilt forms, and UI elements make it easy for even very small businesses to use it, and its APIs allow larger businesses to create custom checkout forms and payment flows. There's no extra charge for its integrations, prebuilt forms and developer tools; for its basic payment services, all you pay are transaction fees.

Like other merchant aggregators, Stripe has competitive flat-rate pricing with no setup fees, monthly statement fees, gateway fees or annual PCI compliance fees. If a customer disputes a charge, there is a chargeback fee, but it refunds this fee to you if you win the dispute. Custom pricing is available for high-volume businesses, registered nonprofits and businesses with average transaction sizes that are either very large or very small.

Pricing

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 he or she 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.

Editor's note: Looking for a credit card processor for your business? If you're looking for information to help you choose the one that's right for you, use the questionnaire below to have Business.com, provide you with information from a variety of vendors for free:

More Negotiation Tips

 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 inquire 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. As mentioned above, some fees are negotiable, and your rep may be able to waive them for you. For example, if your business is seasonal and you're having trouble meeting the monthly minimum in the off season, 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 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 he or she is willing to renegotiate your rates. If your service is provided on a month-to-month basis and you own your equipment, you have more negotiation power 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 cancellation procedure that 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.

Reviews

Here you can find all of our merchant account reviews. In addition to our best picks, we've reviewed other popular processing services that may be of interest as you look for the best credit card payment processing company for your business.

For more options, you can view an alphabetized list of companies that provide credit card processing for small businesses and a summary of the services each claims to provide.

Methodology

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 to the list 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 case scenarios (our best picks categories) using the criteria listed below. Our research included studying each company's website, examining help resources and how-to guides, watching videos and trying out demos 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 more than 85 credit card processing companies, 19 made it onto our short list of top credit card processing companies: Braintree, Chase Merchant Services, Dharma Merchant Services, Elavon, EMSplus, Fattmerchant, First Data, Flagship Merchant Services, Global Payments, Helcim, Payline, PayPal Here, QuickBooks Payments, Shopify Payments, Square, Stripe, SumUp, TSYS and Worldpay Inc.

Here are the criteria we used to evaluate each credit card processing company:

  • Transaction/swipe rates
  • Pricing transparency
  • Contracts and service terms
  • Tyes of processing offered
  • Merchant services
  • Equipment, setup and other costs
  • Ease of setup and use 
  • Time to clear account and funding options
  • Types of payments accepted
  • EMV/NFC capability
  • Customization options
  • Third-party integrations
  • Reporting and analytics
  • Additional features and benefits
  • Service limitations
  • Customer service

What Features Do You Need?

No matter which credit card processing service you select, you should expect it to provide you with 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 because you can't accept your customers' preferred form of payment.

  • Be fully compliant with the data security standards (DSS) established by the Payment Card Industry (PCI) and help you attain PCI compliance.

  • Offer EMV-compliant card readers so that in the event of a security breach, you aren't held liable because you use outdated equipment.

  • Provide readily accessible customer support that you can reach by phone 24 hours a day, seven days a week, so that no matter what hours your business keeps, you can immediately get the assistance that you need to continue to accept payments or to resolve an issue.

Card Readers, Terminals and POS Systems: What Should You Choose?

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.  

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 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 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 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 via 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 accepts 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 full service and mobile credit card processing companies. See our mobile credit card processing review to learn more.

2. Standalone and wireless terminals are the next cheapest options, usually costing between $150 and $600. These countertop credit card readers have built-in receipt printers and keypads. Most connect using either dialup or Ethernet, and wireless models connect with 3G, GPRS or WiFi 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 there's a specific POS system you plan to use, you want to check with the company to find out which processors the system is compatible with, as some only integrate with a few. Other 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 between $1,000 and $1,500. Top brands include CloverSquare and NCR Silver. See our point of sale systems review to learn more.

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 between 2 and 4 percent of each transaction. The processor considers several factors when determining the rate it charges you, including your monthly processing volume, your average ticket size, your business's industry and your processing history. Your business and personal credit may also be considered.

The credit card processing industry is very competitive, and 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 are made up of three parts:

  • Interchange rate. 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 depending on the 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. 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 ModelInterchange PlusFlat Rate

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

Interchange-plus pricing has two parts:

Flat-rate pricing is either a:

  • Qualified Rate: Regular cards, swiped
  • Interchange (wholesale rate)
  • Flat percentage of the transaction
  • Flat percentage plus a per-transaction fee
  • Mid-Qualified Rate: Rewards, swiped
  • Processor's markup (the percentage and per-transaction fee)

These rates are higher but may save you money because most have:

  • Non-Qualified Rate: Premium rewards, swiped rewards, keyed

The wholesale rate is set by credit card networks. It isn't negotiable; everyone pays it. The markup percentage and per-transaction fee may be negotiable

No additional fees, 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, online or manually key it in). Some processors have a special lower rate for PIN debit transactions.

Critics note that there's variance between processors as to which interchange rates fall into each tier, which makes it difficult to compare pricing when you're evaluating services. In our testing, we found this to be true as processors categorize rewards cards differently, with some categorizing them as mid ­­­­qualified and others 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 using a card reader.

  • Qualified debit and qualified credit may be the only rates the sales rep quotes you, so it's important to ask how many tiers, what they cost, which types of cards and acceptance methods are included in each tier, 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 pricing model because it promotes pricing transparency. The interchange-plus pricing model may also be called "interchange-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 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; industry expert recommended.  

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.

Contracts

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're going to 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 so that you 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 lengthy 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 that 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 that 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 he or she 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 early termination fee. Most ETFs 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 exorbitantly expensive. 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 Fees

Most credit card processing companies charge the following recurring fees:

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

  • The monthly minimum fee normally is $25, though this usually refers to 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.

  • Gateway fees vary, depending on the payment gateway you use. Most are charged monthly, though some also charge a small per-transaction fee.

  • Various network fees such as Mastercard's Merchant Location Fee and Visa's Fixed Acquirer Network Fee (FANF) that the processor passes on to you as either monthly or annual fees.

These fees are also common but are 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 usually cost 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 usually cost $15 or $20 per incident, but may be as much as $45.

  • PCI non-compliance is an expensive monthly fee charged if you fail to establish and maintain your PCI compliance.

  • 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 to pay 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.

Should You 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 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 inquiring 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 if you 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.

Free Equipment

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 like free-equipment offers, you may be required to sign a 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 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 very 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 that 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 more expensive than purchasing equipment outright, even if you factor in the tax write offs that 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. Often, you'll 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.

Direct Processors, ISO/MSPs and Payment Facilitators: Which One Should You Choose?

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 when it comes to selecting a credit card processing company. 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.

State of the Industry

The credit card processing industry is making improvements toward increased transparency and security. Many companies have adopted transparency in pricing, which is evident in the increased number of companies that post their rates and fees on their websites and offer the interchange-plus pricing model.

As a result of the broad adoption of EMV technology, the four largest card networks – American Express, Discover, Mastercard, and Visa – no longer require merchants to collect and store customer signatures as proof of payment authorization. Finally, more merchants are accepting payments made with mobile wallets, such as Apple Pay and Google Pay, that use near-field communication (NFC) secured with tokenization technology.

EMV and PCI Discourage 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 percent of cybersecurity attacks are aimed at small businesses. Even more grim is the success that criminals have with their small business targets. Security experts from First Data, one of the world's largest payment technology companies, estimate that 90 percent of data breaches affect small merchants. Criminals target small businesses because many small business owners fail to prioritize data security. As a result, the data often isn't as secure as large companies that have the resources and personnel to put stronger security protocols in place.

Protect Your Business from Fraud

You can take two important steps to increase security, protect data and reduce fraud. First, comply with PCI data security standards. PCI DSS measures have proven to be successful in discouraging attacks, as 96 percent 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 70 percent since the liability shift of 2015.

The pricing listed in this article and in our reviews is reflective of the date this review was last updated. Pricing reflects our testing scenario; the pricing you receive may differ due to processing volume and average ticket size, among other factors. The processors had no input or influence over our testing methodology, nor was the methodology provided to any of them in more detail than is available through reading our reviews. Results of our evaluations were not provided to the companies in advance of publication.

Common Credit Card Processing Questions & Answers

Have a credit card processing question of your own?

Business payment history is the lion's share of what goes into your business credit scores. Other factors are outstanding judgments, liens, etc. But the big one is payment behaviors. Pay on time or early, as in full as you possibly can (i. e. go beyond the minimum amount to as full as your budget can stand), and that will help build your business credit. Another piece of the business credit puzzle (it happens to be true for consumer credit as well) is to check your reports - not just...

Read More ▼

Sharyl, it is definitely nice to be able to do business on a cash basis, however, in a B2B environment some of your potential customers may be getting paid in 30-60 days and therefore the velocity of their cash flow is mismatched with your credit policy. You are thus missing out on additional business. Although credit applications and follow-up of customer accounts are tedious and increase the risk of non-payment, it will remain an integral part of B2B activity. Instead of offering no terms, I...

Read More ▼

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...

Read More ▼

I'm not a big fan of giving employees expense cards, unless they are vetted and you can be sure there won't be issue. Having the employee submit a receipt and request for reimbursement forces them to do better receipt logging. As far as how many credit cards you should open, I can't provide much there. Just keep it simple and don't play the Points Game. Focus on building value for your customers and you'll make more money than the points will give you!

Read More ▼

Downloadable Guides

More Customers? Increased Revenue?
More Customers?  Increased Revenue?

Yes, Please!

View Infographic

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)

Get the Whitepaper

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.

Whitepaper Download
Whitepaper Download

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

DOWNLOAD

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.

Download Now

There’s a television commercial for a major credit cardcompany that shows people zipping through a checkoutline to make purchases. Then along comes some guytrying to pay with cash, and everything slows down,causing the cashier considerable angst’not to mentionthe customers at the back of the line. These days, almost everybody uses plastic to pay foreven the smallest items. There was a time when youcouldn’t use a credit card to buy anything under $10.Now, you can buy a pack of gum and put it on yourcard. Consumers are so used to the convenience ofcredit and debit cards that it’s no longer an option for amerchant to take plastic-it’s a necessity.

Community Picks

We polled members of the Business.com community to see which credit card processors they prefer. Among those who currently use one, these are the top three vendors.

Map

Flagship Merchant Services
100 City Square
Charlestown, MA
Flagship Merchant Services
Helcim
701 5th Ave.
Seattle, WA
Helcim
Newtek
1981 Marcus Ave.
Lake Success, NY
Newtek
Sekure Merchant Solutions
1501 Broadway
New York, NY
Sekure Merchant Solutions
Moolah
34700 Pacific Coast Highway
Capistrano Beach, CA
Moolah
Shopify Payments
33 New Montgomery St.
San Francisco, CA
Shopify Payments
Elavon Credit Card Processing
Two Concourse Parkway
Atlanta, GA
Elavon Credit Card Processing
National Merchants Association
43620 Ridge Park Drive
Temecula, CA
National Merchants Association
EMSplus
5005 Rockside Rd
Cleveland, OH
EMSplus
Payline Credit Card Processing
225 W Wacker Drive
Chicago, IL
Payline Credit Card Processing
Stripe
185 Berry St.
San Francisco, CA
Stripe
Worldpay
8500 Governors Hill Drive
Symmes Township, OH
Worldpay
TSYS
One TSYS Way
Columbus, GA
TSYS
Square
1455 Market St.
San Francisco, CA
Square
Chase Merchant Services
270 Park Ave.
New York, NY
Chase Merchant Services
Amazon Pay
410 Terry Ave. N
Seattle, WA
Amazon Pay
Flint
805 Veterans Blvd
Redwood City, CA
Flint
NextPay
Edificio 4, Piso 3, Sabana Sur
San Jose,
NextPay
First Data
5565 Glenridge Connector, NE
Atlanta, GA
First Data
Maverick BankCard
28720 Roadside Drive
Agoura Hills, CA
Maverick BankCard
National Transaction Corporation (NTC)
11951 NW 37th Street
Coral Springs, FL
National Transaction Corporation (NTC)
Nationwide Merchant Solutions
195 Main St.
New Milford, NJ
Nationwide Merchant Solutions
Merchant Solutions LLC
12 N Main St.
West Hartford, CT
Merchant Solutions LLC
MSI Merchant Service
406 Bay Road 2
South Easton, MA
MSI Merchant Service
National Processing
1020 W 600 S
Lindon, UT
National Processing
Total Merchant Services
21650 Oxnard Street
Woodland Hills, CA
Total Merchant Services
Tidal Commerce
2625 Butterfield Rd
Oak Brook, IL
Tidal Commerce
Electronic Cash Systems (ECS)
29883 Santa Margarita Pkwy
Rancho Santa Margarita, CA
Electronic Cash Systems (ECS)
Electronic Payment Exchange
1201 N Market Street
Wilmington, DE
Electronic Payment Exchange
Electronic Payment Systems
6472 S. Quebec St.
Englewood, CO
Electronic Payment Systems
Electronic Transfer, Inc.
3107 E Mission Ave.
Spokane, WA
Electronic Transfer, Inc.
Federated Payments
One Huntington Quadrangle
Melville, NY
Federated Payments
Planet Payment
670 Long Beach Blvd
Long Beach, NY
Planet Payment
eMerchant
78 Discovery
Irvine, CA
eMerchant
eData Financial Group
20423 State Road 7
Boca Raton, FL
eData Financial Group
E-Commerce Exchange
2321 Rosecrans Ave.
El Segundo, CA
E-Commerce Exchange
Currencycloud
31 West 34th Street
New York, NY
Currencycloud
SumupLondon,
Sumup
Sterling Payment Technologies
PO Box 20427
Tampa, FL
Sterling Payment Technologies
SecurionPay
Sihleggstrasse 23
Wollerau,
SecurionPay
Transparent Merchant Services
4040 East Camelback Road
Phoenix, AZ
Transparent Merchant Services
US Merchant Systems (USMS)
48073 Fremont Blvd
Fremont, CA
US Merchant Systems (USMS)
TransNational Payments
9550 W. Higins Road
Rosemont, IL
TransNational Payments
2Checkout
855 Grandview Avenue
Columbus, OH
2Checkout
Velocity Merchant Services (VMS)
3051 Oak Grove Rd
Downers Grove, IL
Velocity Merchant Services (VMS)
Fattmerchant
100 S Orange Ave.
Orlando, FL
Fattmerchant
CDGcommerce
860 Greenbriar Circle
Chesapeake, VA
CDGcommerce
Cartwheel Register
2929 Canton St.
Dallas, TX
Cartwheel Register
Change Merchant Solutions
22136 Clarendon St.
Woodland Hills, CA
Change Merchant Solutions
Signature Card Services
2101 W Burbank Blvd
Burbank, CA
Signature Card Services
Dharma Merchant Services
500 W 8th St.
Vancouver, WA
Dharma Merchant Services
Payment Depot
238 W Chapman Ave.
Orange, CA
Payment Depot
CreditCardProcessing.com
30721 Russell Ranch Road
Westlake Village, CA
CreditCardProcessing.com
PayAnywhere
250 Stephenson Hwy
Troy, ME
PayAnywhere
National Bankcard
538 Broadhollow Road
Melville, NY
National Bankcard
Leaders Merchant Services
725 Via Alondra
Camarillo, CA
Leaders Merchant Services
goEmerchant
1 Mall Drive
Cherry Hill, NJ
goEmerchant
PayJunction
1903 State Street
Santa Barbara, CA
PayJunction
Merchant One
524 Arthur Godfrey Road
Miami Beach, FL
Merchant One
Gotmerchant.com
P.O. Box 751
Fate, TX
Gotmerchant.com
The Transaction Group
2455 Las Calinas Blvd.
St. Augustine, FL
The Transaction Group
iTransact
314 South 200 West
Farmington, UT
iTransact

Services

List of 85Credit Card Processing Reviews 2018

Reset Your Password

Enter your email address and we'll send you an email with a link to reset your password.

Cancel
close