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The Best Merchant Account Services of 2021

By
Donna Fuscaldo
,
business.com Staff
| Updated
Oct 19, 2021

See our expert and unbiased reviews of the top 10 merchant services. Compare 2020's top-ranked merchant account services for free at business.com.
Best for Easy Approval
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Support for low credit scores
Digital payments
Month-to-month contracts
Best Merchant Service for POS
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Flat-rate pricing
Full-featured POS software
Month-to-month contracts
Best for Small Businesses
Transparent, flat-rate pricing
QuickBooks integration
Month-to-month contracts
Best for Emerging Businesses
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Support for high-risk industries
High rate of approvals
Month-to-month contracts
Best for Low Transaction Rates
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Wholesale rates
No long-term contracts
Flat-rate pricing
See our expert and unbiased reviews of the top 10 merchant services. Compare 2020's top-ranked merchant account services for free at business.com.
Updated 10/19/21

This page has been updated with information on a new Clover delivery service integration.

The Best Credit Card Processor Providers

Whether you accept credit card payments over the phone, from customers online, or in person, it's important to be able to accept every payment type, which is why choosing the right merchant services provider is essential. You also want to work with a payment processing company that has transparent pricing, competitive rates and no lengthy contracts. With these qualities in mind, we researched merchant account service providers and payment gateways to help you find the best options for your business.

Check out our recommendations for the best merchant service providers for different business types below. If you process less than $3,000 per month, see our mobile credit card processing reviews. Otherwise, read on to learn more about the features, pricing and contracts you should look for in a merchant account provider for your business.

 

Find the Right Merchant Service for Your Business

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.
102
Considered
33
Researched
11
Selected

Compare Our Best Picks

Merchant Account Services Company Use Case Rate Plans Length of Contracts Fees Customer Service & Support Sales Deposit Speeds Penalty for Early Termination E-Commerce Tools Reporting & Analytics Supports Several Payment Methods Fee for PCI Compliance
Merchant One Easy Approval Fixed Per month Yes 24/7 Within 2 business days No Yes Yes Yes Yes
Pro Merchant High Risk Businesses Interchange+ and fixed Per month Yes 24/7 Within 2 business days No Yes Yes Yes Yes
Clover POS Fixed Per month Yes 24/7 Yes No Yes Yes Yes Yes
Fattmerchant Small Businesses Fixed Per month No 24/7 Yes No Yes Yes Yes No
Payment Depot High Volume Fixed Per month No 24/7 Within 2 business days No Yes No Yes Yes
Square Growing Business Fixed Per month No Not around the clock Within 2 business days No Yes Yes Yes Yes
Helcim Established Interchange+ and fixed Per month Yes 24/7 Within 2 business days No Yes Yes Yes No
National Processing Low Transaction Rates Fixed Per month Yes 24/7 Within 2 business days Yes Yes No Yes Yes
Flagship Merchant Services Flexible Contracts Interchange+ and fixed Per month Yes 24/7 Within 2 business days No Yes Yes Yes Yes
Chase Merchant Services All-Sized Businesses Customizable Customizable No Not around the clock Yes N/A Yes Yes Yes N/A
Paysafe Online Businesses Customizable Per month No Not around the clock Within 2 business days Yes Yes Yes Yes Yes

Our Reviews

Merchant One: Best Merchant Service for Easy Approval

There's no PCI compliance fee.
Merchant One is willing to work with businesses with bad credit scores.
You need to speak to a sales representative to get a quote.
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We chose Merchant One as our pick for businesses witheasy approval because the company is willing to look beyond credit score when approving applicants and won't make the application process cumbersome. This merchant account provider knows that a credit score doesn't tell the full story and looks at other aspects to approve you for a merchant account.

Merchant One is a full-service credit and debit card processing company that offers fast processing rates and point-of-sale features for both online and in-store payments.

Merchant One boasts a 98% approval rate and works with all companies. It doesn't matter if you have a bad credit score and operate in a risky industry; Merchant One is willing to work with you. That's key for business owners who have struggled to get approved for services because of past financial mistakes.

We would have preferred to see more information about Merchant One's pricing online, but it's not the only merchant account provider that requires you to contact the company to get a quote.

Merchant One moves quickly to get its clients up and running once they are approved, touting a turnaround time of less than 24 hours. The sooner you can begin accepting payments, the more sales you'll bring in. We also like that Merchant One makes it easier to accept payments online or in person. It sells Clover POS hardware, which is widely available, making it easy to comparison-shop.

Through the merchant account software, businesses can sell gift cards and create loyalty programs. You can even craft text marketing campaigns through the Merchant One platform.

Thanks to its mobile capabilities, Merchant One also supports on-the-go businesses. You can accept payments from your mobile device anywhere you have internet connectivity. The company also offers a free shopping cart for card-not-present and e-commerce transactions, online account management tools and remote access to sales data.

We like that this merchant account provider assigns you a dedicated account manager who can help you through the setup and offer support once you begin accepting payments. Merchant One also has 24/7 customer support.

Small business owners h shouldn't be shut out of a merchant account because of the industry they operate in or their current credit profile, which is why we selected Merchant One as our best pick for easy approval.

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Clover Merchant Services: Best Merchant Service for POS

Clover is an all-in-one solution for credit card processing and POS functionality.
The flat-rate pricing structure is easy to understand.
You have to use Clover hardware.
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We chose Clover as the best merchant account for point of sale (POS) because of its feature-rich POS software and hardware and competitive pricing. Whether you run a restaurant, shop or e-commerce store, Clover can cover all of your payment needs.

September 2021: Clover recently announced a new integration with Grubhub that will make it easier for restaurants to partner with the delivery service. Clover users can now process Grubhub orders directly through their POS systems. Additionally, those who aren't partnered with Grubhub can sign up for the service via any of Clover's platforms or terminals.

May 2021: Clover recently announced that it has added support for PayPal and Venmo to its roster of accepted payment methods. That means small business owners using Clover's merchant account services can accept PayPal and Venmo QR code payments at checkout. This can reduce the time it takes to get customers out of the store and the amount of contact between the salesclerk and consumer.

Clover charges a flat rate per transaction and offers two pricing plans. The Register Lite Plan is $9.95 a month, plus 2.7% and 10 cents for in-person transactions and 3.5% and 10 cents for virtual or keyed-in transactions. The Register Plan is $29 a month, plus 2.3% and 10 cents for in-person transactions and 3.5% and 10 cents for online and keyed-in transactions.

We like that Clover also offers a virtual terminal to accept and process payments without the need for POS hardware. That can save you money, particularly if you do only online sales. With Clover's virtual terminal, you can accept the card payments directly from the Clover dashboard. The company charges the keyed-in rate for virtual terminal transactions. Merchants that need quick access to their credit card and debit card sales will appreciate Clover's Rapid Deposit service; for a 1% fee, you can access your credit card sales in minutes instead of a day or two.

Another reason Clover is our POS best pick is that it doesn't require a long-term contract; you pay month to month. To cancel, you must give the company written notice 30 days before your monthly payment is due.

Beyond competitive pricing, Clover offers many useful POS features. With the POS software, you can set employee permissions, track sales, run reports, and integrate with other business apps via Clover's App Market. The app store has a slew of integrations that cover all aspects of your business, including payroll and COVID-19 resources.

Clover also offers specific functionality for restaurant and retail customers. For example, you can send orders directly to the kitchen, connect a weight scale and other peripherals, track products, and manage staff. We also like that Clover has a lot of equipment resellers, so you have an opportunity to shop around and save more.

Small businesses that want a one-stop solution for their credit card and POS needs should consider Clover for its flat-rate, affordable pricing and POS capabilities.

Did You Know?Did you know? Many merchant account providers also offer POS, e-commerce and invoicing capabilities.

 

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Fattmerchant: Best Merchant Service for Small Businesses

Fattmerchant doesn't add a percentage markup to card transactions. You pay a monthly fee, interchange rate and flat per-transaction rate.
The merchant dashboard enables you to track and analyze sales performance.
To save money with Fattmerchant's pricing model, you have to process more than $7,000 in card payments each month.

We selected Fattmerchant as the best merchant account service for small businesses because it offers flat-rate pricing with no markup and a merchant account dashboard that lets you manage and analyze sales. We like that Fattmerchant doesn't charge a markup percentage on each transaction; instead, it adds a flat-rate fee to the interchange, which is the rate Visa, Mastercard, Discover and American Express charge and everyone must pay. 

For account fees, Fattmerchant charges one monthly membership or subscription fee that includes everything from PCI compliance to account maintenance. For this pricing structure to be worthwhile, however, you need to process $7,000 or more in card payments monthly. If you process a high monthly volume of card purchases, you'll realize the most savings with Fattmerchant.

Fattmerchant breaks down its pricing into two models that are based on annual processing volume. If you process less than $80,000 annually, Fattmerchant charges a flat rate of 2.9% per transaction. If you process more than $80,000 annually, there is a per-transaction fee of 8 cents or 15 cents depending on how the payment is accepted. The monthly subscription fee is $99, which is more than some competitors charge, but there aren't any additional fees or charges (other than the transaction fees).

Fattmerchant offers Omni software, which integrates with your sales data to improve customer management. The company offers three pricing plans for the software:

  • Starter: This plan is $49 a month. It lets you run reports, track refunds and access a virtual terminal so you can accept phone and internet payments.

  • Growth: This plan is $89 a month and gives you everything in the Starter plan, plus a dedicated account manager and the ability to create invoices.

  • Pro: This plan is $129 a month and comes with everything in the two other plans, plus the ability to schedule payments and invoices and send recurring invoices. It also includes a shopping cart and lets you manage product catalogs, customers and charge-backs.

Fattmerchant lets you accept all major payment cards, including American Express, Visa, Mastercard and Discover. The analytics dashboard shows you sales data at a glance, which is particularly helpful for gauging how your business is faring.

If you want a quick and affordable way to accept card payments and analyze and manage sales, Fattmerchant is a great option. Add e-commerce management tools to the mix, and you can see why Fattmerchant landed on our best picks list.

August 2021: Fattmerchant recently announced a new partnership with TimeSolv that will help make payment processing a simpler process for those in the legal industry. TimeSolv provides time and billing software for lawyers and other professionals that help them manage their billable time and project invoices. The partnership with Fattmerchant will allow those in the legal industry to consolidate their time capture, billing, invoicing and payment collection processes within one platform.

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ProMerchant: Best for Emerging Businesses

High-risk businesses aren't turned away.
You can choose between a flat rate and interchange-plus rates.
ProMerchant's website doesn't list pricing.
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ProMerchant is our choice for the best merchant account for emerging businesses, because unlike many merchant account providers, it's willing to work with businesses from any industry. Whether you run a legal betting company or sell online or through the mail, ProMerchant won't turn you away simply because your industry has been deemed risky. ProMerchant also looks beyond credit score when considering applicants, so even if your credit score isn't perfect, there's a good chance you'll be approved. 

There are two pricing models: flat rate and interchange plus. Your monthly volume of credit and debit card payments will dictate which pricing structure is right for you. To get an accurate quote, you have to complete an online form or call the company. Although we prefer that vendors list their prices on their websites, it's common to have to call for a quote. It requires a little work on your part, but you'll know exactly how much you'll pay to process payments.

ProMerchant's fees are in line with competitors', and the company bills monthly. You don't have to sign a long-term contract, which is a big plus. We also like that ProMerchant assigns you a dedicated account representative, who not only helps you determine the correct pricing plan but also remains your main point of contact as long as you are a customer. The company also offers email and telephone support.

ProMerchant boasts a quick turnaround time once you are approved for a merchant account, sometimes even the same day. Otherwise, it shouldn't take more than two business days to have a decision. The company will also overnight your free terminals and have your account operational within one day.

We also like that ProMerchant designs its offerings around the unique needs of small businesses. The company understands that restaurant owners need different processing tools than online merchants, for example. ProMerchant isn't afraid to take on clients in high-risk industries, doesn't lock you into a long-term contract and provides two pricing models. For these reasons, this merchant account services provider landed on our best picks list.

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Payment Depot Merchant Services: Best Merchant Service for Low Transaction Rates

You get membership pricing and wholesale rates.
There are no lengthy contracts or early-termination fees.
If you don't process a high volume of card payments, Payment Depot's services can get pricey.
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We chose Payment Depot as our best pick for high-volume businesses because it offers membership pricing and wholesales rates. We also like that Payment Depot is flexible; it doesn't lock you into a long-term contract or charge early-termination fees. And if you aren't happy with the merchant account services, you can switch providers at no cost.

Another reason we chose Payment Depot is its transparent pricing. The website clearly lists pricing, including fees and processing equipment costs, as well as the terms. Payment Depot has several plans to fit a variety of business needs and sizes.

You can accept payments online, on-site and via mobile devices. Payment Depot serves several industries and business types, including business to business, professional services, restaurant and retail. If you fall into one of these categories and have a high monthly volume of credit card sales, Payment Depot can save you money with its wholesale rates.

With the company's membership pricing model, you pay a flat rate each month and a small per-transaction fee. There aren't any setup or monthly fees. Payment Depot charges on a month-to-month basis. There is no cancellation fee if you close your account.

Through Payment Depot's merchant account, you can accept in-store, mobile and in-person payments, with the sales landing in your bank account within one or two business days. Payment Depot also has integrations with popular business programs, including Shopify, QuickBooks, WooCommerce and 3dcart. With those integrations, you can sync your card payment data with other aspects of your business, giving you deeper insight into your business's operations.

Standout customer support is another reason Payment Depot made our list of best picks. When you open a merchant account, you get a dedicated account representative who serves as your main point of contact. Your account representative is available Monday through Friday, 11 a.m. to 8 p.m. ET. Payment Depot also provides 24/7 phone support in case you need help outside of those hours.

If you accept high volumes of credit and debit card payments each month, you need a merchant account provider that isn't going to charge you a lot. You also need one that will fund your accounts quickly and provide support whenever you need it. Payment Depot meets all of those requirements. The company's membership pricing with wholesale rates ensures you don't pay too much to accept card transactions. Add in the flexible terms, and you can see why Payment Depot is our best pick for high-volume businesses.

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Square Merchant Services: Best Merchant Service for Growing Businesses

There are no monthly or annual maintenance fees, only processing rates.
You get access to a full suite of POS features through the iPhone and Android apps.
Square charges a per-transaction fee for in-person processing, which makes small tickets pricier to process.
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Square is the best credit card processing vendor for growing small businesses thanks to its general lack of fees. The only fee Square charges for its basic processing service is a flat rate for each transaction. There are no monthly, gateway, setup, annual, PCI compliance or early termination fees. It doesn't even have a chargeback fee, which is unusual. Square's lack of fees makes it an affordable option for small businesses and individuals that don't process enough transactions to justify paying regular account fees each month.

Editor's Score: 8.3/10

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

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

The payment processor is stepping it up on that front. In late September Square announced a new integration with TikTok, the wildly popular short video app. Through the partnership, sellers can send TikTok users directly from their videos, ads, shopping tabs and profiles to the products in their Square Online store. That streamlines the shopping experience for TikTok users and helps the merchants find new customers and grow. 

Square also recently rolled out Cash App Pay, a new contactless payment method. With it, consumers can pay with their Cash App account online and in-store by scanning a seller's QR code at checkout. The new feature makes it easier for Square sellers to reach Cash App's over 70 million active customers.  

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

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

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

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

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Helcim: Best Merchant Service For Established Business

Helcim is transparent about its rates and fees online, so you'll know what to expect on your bill.
Its single monthly fee includes PCI compliance and access to the virtual terminal, online store, and more.
You may be able to find lower rates elsewhere, particularly for online processing.
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Helcim is our merchant account services pick for small businesses because of its transparent and competitive pricing, solid customer service, and flexible contracts. When you select Helcim for your payment processing needs you get fast processing and features and applications designed to help you run your business.

We like that this full-service merchant account provider charges merchants interchange-plus pricing. With that pricing model you know exactly how much you'll pay per transaction. While Helcim may not be the cheapest processor on the market, its retail rates are lower than average, and its rate-lock guarantee isn't too common in the industry. With it Helcim promises not to increase its markup as long as you are a customer.

Helcim is also transparent when it comes to the fees it charges. Instead of hitting you up with a fee for PCI compliance, online statements, or for account maintenance it includes it in one monthly charge. With it you get customer support, PCI compliance and access to Helcim Commerce, the company's payment platform. Since its services are charged on a month-to-month basis you don't have to worry about getting hit with an early termination fee if you choose to close your account.

Beyond its transparent and competitive pricing, Helcim has a lot of merchant account services that makes it a standout. Take its POS app for starters. With it you can track inventory, store customer information, records transaction history, displays sales trends and generates several different reports. There's also a mobile version that works with Apple and Android devices. The apps support an unlimited number of user accounts and has access controls for employee access. You can add a cash drawer, card reader and barcode scanner to create a POS station if you are accepting payments in store. We also like that Helcim has a virtual terminal that lets you accept payments online. You can also issue refunds, void transactions, preauthorize credit cards and accept payments made through ACH transfers.

Helcim also makes it easier to manager relationships with customers via its customer portal. With it you can create customer profiles, view purchase histories, and store their credit card data. You can also send invoices, set up recurring payments and integrate with several shopping carts, e-commerce platforms and accounting software. It also has an API available if you want to build custom Intergrations. Whether you are just starting out or have been in business for years, Helcim can meet your merchant account needs. This full-service vendor checks off all the boxes, making it our best pick for small businesses.

Read Helcim Review

National Processing Merchant Services: Best Merchant Service for Fixed Transaction Rates

The interchange-plus rates are low.
There is a rate-lock guarantee.
There is a PCI compliance fee.

National Processing is our best pick for fixed transaction rates because its interchange-plus rates are below those of many competitors and it offers a rate-lock guarantee, which means your fees can't increase during your contract. Plus, there aren't any minimum processing requirements. Although National Processing does charge fees, they are standard for the industry.

Small businesses that accept card payments need a merchant account provider that is transparent about how much it charges to process transactions. National Processing stands out in that area, offering very clear pricing on its website.

The company has three rate plans, all of which cost $9.95 a month plus interchange. For the restaurant plan, you pay 0.14% plus 7 cents above interchange per transaction. The retail plan costs 0.18% plus 10 cents above interchange, and the e-commerce plan costs 0.3% plus 15 cents above interchange.

Like other merchant account providers, National Processing charges fees. However, it doesn't hit you with an annual fee, monthly minimum charge or early-termination fee, nor does it lock you into long-term contracts. National Processing will even pay you $500 if it can't meet or beat your rates from a competitor.

National Processing also sells POS equipment from Clover, which is a well-known brand. There are several resellers of Clover equipment, so you can shop around for a low price.

National Processing's merchant account offers online invoicing, ACH payment processing, a virtual terminal to accept online and telephone payments, and QuickBooks integration. After you submit your online application, it takes a couple of days to get approved for a merchant account.

Like some of its rivals, National Processing assigns you a dedicated account executive when you open a merchant account. You can reach your rep Monday through Friday from 10:30 a.m. to 7:30 p.m. ET via phone and email. National Processing also has 24/7 tech support and live chat.

Small businesses that care most about low rates should give National Processing serious consideration. This merchant account provider offers some of the lowest interchange-plus rates in the market and provides a rate-lock guarantee. Plus, there are no long-term contracts or early-termination fees. All of these benefits make National Processing a worthy contender for businesses that want to save money when accepting card payments.

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Chase Merchant Services: Best Merchant Service for All-Sized Businesses

There are several flat-rate and interchange-plus pricing models.
The mobile app has e-commerce and POS features.
Flat-rate pricing can get expensive if you have more than $5,000 in monthly sales.

We selected Chase Merchant Services as our best pick for all-sized  businesses because it offers several flat-rate and interchange-plus pricing models to fit all small businesses' needs. Chase will work with you to identify ways to reduce your processing fees if you are coming from a competitor, and existing Chase customers are eligible for an annual review to find ways to cut costs. Not many merchant account providers are so proactive, so Chase Merchant Services stood out by offering these services.

Another reason we selected Chase Merchant Services as our best pick for established businesses is it offers competitive pricing no matter which rate model you choose. The flat-rate plans are best for businesses that process less than $5,000 a month. In-person transactions accepted with a card reader cost 2.6% plus 10 cents, while manually entered transactions are 3.5% and 10 cents. Through its partnerships with Vend and BigCommerce, Chase has different rates for users of those services.

For businesses that process more than $5,000 per month, Chase offers interchange-plus pricing plans. To get a quote, you must call the company.

Chase Merchant Services offers features that many established businesses will find valuable. For example, with Chase's mobile credit card processing service, you can accept payments through Chase's mobile app or mobile checkout app. The mobile app works on iPhones, iPads, and Android phones and tablets. The app also enables you to create a product catalog, accept tips, text and email receipts, issue refunds and void transactions. You can also add employees to the account and manage permissions on the go.

We also like that Chase gives you a choice of payment gateways. You can go with Chase's Orbital Gateway or choose another one, such as Visa's Authorize.net. Chase Merchant Services also integrates with 140-plus software solutions, including other e-commerce platforms, like Shopify, Volusion and WooCommerce.

Chase Merchant Services has been in the business of processing credit card payments for years and has long been a popular choice among merchants of all sizes. When you go with Chase, you get competitive rates, a full suite of services and top-notch support, making it our best pick for established businesses.

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Flagship Merchant Services: Best for Flexible Contracts

There are no long-term contracts or cancellation fees.
Pricing is either interchange plus or tiered processing rates.
The pricing isn't transparent, and the contract has a vague "additional services" clause that you must opt out of within 30 days to avoid a monthly fee for services you don't want.

We selected Flagship Merchant Services as the best merchant account services provider for flexible contracts because it offers month-to-month billing and doesn't charge a cancellation fee. Unlike some merchant account providers, Flagship doesn't lock you into a long-term contract. The pricing is structured to give you choice, and the fees are in line with industry norms.

While many of our other best picks don't lock you into long-term contracts, many merchant processing contracts have three-year terms with a short cancellation window of 30 to 90 days before they automatically renew for additional one- or two-year terms. Many also have early-termination fees, which can get expensive. Flagship doesn't have any of that.

Flagship offers two pricing structures, which is another reason we chose it as our pick for flexible contracts. It offers interchange-plus and tiered rates, allowing you to select the best pricing model for your business. Keep in mind that the tiered pricing model is the least transparent and thus could be the costliest. If you choose the tiered pricing model, make sure you understand all of the pricing terms and fees associated with different transactions.

If you already have a processor, Flagship will try to meet or beat your current rates. The company has a monthly minimum processing amount and charges a monthly fee, a monthly payment gateway fee and a PCI compliance fee. However, there are no fees for the application, setup or payment gateway setup.

For small businesses that care most about flexibility, Flagship also delivers on the POS side. Flagship sells and supports several credit card processing hardware vendors, thereby allowing you to accept payments across all sales channels. You can start out with a simple credit card terminal with a built-in PIN pad and printer, and move to a more comprehensive POS system as your business grows. We like that you can easily add a mobile card reader if you want to accept payments on the go, curbside or at the table. You can also accept online payments.

Flagship's customer service is also in line with the rest of the industry. It offers a dedicated account representative, giving you a single point of contact for help during normal business hours. Flagship also offers 24/7 technical support.

For small businesses that care most about flexibility and choice in pricing, Flagship is worth a serious look.

Did You Know?Did You Know: Many of the merchant account providers that made our list assign you a dedicated account representative. That could prove useful if you have any questions during setup or when you begin accepting card transactions.

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Paysafe: Best Merchant Service for Online Businesses

Paysafe supports e-cash payments.
You get POS solutions, including the ability to make recurring payments and send invoices.
The website doesn't list pricing, so you have to call a sales representative.

We selected Paysafe as our best pick for online businesses because it enables you to accept digital, mobile and ACH payments, as well as cash online. With e-commerce becoming a larger part of small businesses' sales, it pays to have a merchant account service provider that can support your sales no matter where they occur.

When you open a Paysafe merchant account, you'll be able to accept payments both in person and online. Paysafe also sells an array of point-of-sale devices, including discounted Clover POS hardware. That could save you money; there are a lot of Clover equipment resellers, so you can shop around for the best price.

Paysafe's POS solution also gives you PCI protection, recurring payments and the ability to send invoices. We like that Paysafe takes PCI compliance seriously and helps you maintain it. If you don't meet the Payment Card Industry Data Security Standard, you could face costly monthly fees, so it's helpful that Paysafe's out-of-the-box and customizable checkout platforms have built-in capabilities to reduce security risks.

On the mobile front, Paysafe has all of the features merchants need to run a business online and offline. With the company's mobile solution, you can transform your mobile device into a POS system. Online businesses will also appreciate Paysafe's e-cash service, which allows you to accept cash as a payment method online. Customers make a purchase by entering a 16-digit code. By accepting e-cash, you can expand your client base.

This merchant account provider also integrates with Skrill and Neteller, the e-money transfer services owned by Paysafe. That's particularly useful if you sell products outside the U.S., as those two apps are accepted at more than 25,000 online merchants in more than 40 currencies. Paysafe's remittance product is another unique feature that's particularly useful for businesses that operate internationally because it lets you transfer and receive money around the world.

For online businesses that want a merchant account provider that is focused on e-commerce and digital payments, Paysafe delivers.

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Pricing

Cost is often a top factor when you're looking for the right merchant account services for your business. If you process a lot of card payments each month, it can be expensive if you go with the wrong provider. There are three types of costs you need to investigate:

  1. Processing fees
  2. Account fees
  3. Equipment costs

Many of the best merchant services and payment gateway providers post pricing on their websites. However, more commonly, you'll have to speak with a sales representative. During these calls, the rep will ask about the specifics of your business, such as your transaction volume, average ticket size, industry and creditworthiness. If you're already processing, many reps will ask you to send them a recent statement so they can try to meet or beat your current rates.

1. Processing Fees

Whether you accept credit card payments online or in person, you pay a small fee for every transaction, which is expressed as a percentage of the sale plus a few cents. However, providers calculate these costs differently, which makes it difficult to compare prices. To make an accurate comparison, you need to know the types of processing fees and pricing models.

Processing fees have three parts:

  • The interchange rate: This is a non-negotiable cost set by the card brands (American Express, Discover, Mastercard and Visa), and every service provider pays the same amount. Each card brand has its own rate table with different interchange rates based on the type of card (credit or debit, regular or rewards, etc.), your industry, the size of the sales ticket and how the card is accepted (in person or online, using a chip card reader or swiper, etc.).

  • The card-brand fee: This is also a non-negotiable fee that the card networks charge; every processing service provider pays the same amount.

  • The processor's markup: This portion of the fee is negotiable.

Recognizing how confusing this is, many processors try to simplify processing rates and how they communicate them to their merchants. Most use one or more of these three pricing models: interchange-plus pricing, tiered pricing and flat-rate pricing.

Interchange-plus pricing: Industry experts favor this pricing model – sometimes called interchange pass-through pricing or cost-plus pricing – because it's the only pricing model that shows you exactly what the processor's markup is. This is significant because the markup is the only part of the cost that you can negotiate. As a result, this model has the best pricing for most merchants.

  • When you're quoted this rate, it will look something like this: 3% plus 15 cents. Remember, this is only the processor's markup; you still must pay the interchange and assessment fees. For example, if you have a retail business and you accept a rewards Visa in person using a chip card reader, the interchange fees might be 1.65% plus 10 cents. The card association fee for Visa would be an additional 0.15% plus 2 cents. Adding up all three costs, the full rate you would pay for this transaction would be 2.1% and 27 cents.

Tiered pricing: Though this is the most common pricing model, industry experts criticize its lack of transparency. Other names for this model include bundled or bucket pricing, because it attempts to bundle interchange fees, card-brand fees and markups and then segment transactions into tiers, or buckets. These tiers are often sorted into qualified, midqualified and nonqualified, with separate tiers for debit and credit card transactions.

The low teaser rates that many companies advertise are usually qualified debit transactions, which means they apply only to regular debit cards that you accept in person using a card reader. Midqualified transactions are usually rewards cards, and nonqualified transactions are most often business or foreign cards, though some also include premium rewards cards. Most merchant services offer three tiers, but some have as few as two or as many as six.

  • When you see this rate advertised, it looks something like this: 39% plus 21 cents. However, this rate is only for debit cards accepted in person, so if you accept a credit card, you'll pay a different rate, perhaps 1.59% plus 21 cents. If it's a rewards card, it would be downgraded from qualified to midqualified, which might add another 1% to the cost. So, for this example, the rate would be 2.59% and 21 cents.

If you're quoted tiered rates, it's important to ask how many tiers there are and which types of cards and acceptance methods apply to each. Make sure you know which types of cards your customers use most so you can judge whether this pricing model is cost-effective for your business. If the majority of your customers use regular debit cards and you accept cards in person, this processing model may be worth considering; otherwise, you should look for a processor that offers one of the other pricing models.

TipPro tip: If you go with a tiered pricing plan, make sure you find out how many tiers there are and which types of cards and payment methods apply to each tier.

Flat-rate pricing: Most of the merchant service companies that use this simple pricing model charge a single fixed percentage rate per transaction, though some also charge a per-transaction fee. This pricing model is popular with mobile merchant service providers, and it may be the most cost-effective option for small businesses that process less than $3,000 per month or have small tickets. This type of transaction rate is noticeably higher than those from the other two pricing models, but there usually are no other account fees; all you pay are the processing fees for each transaction, which is why it's such an attractive option for new and very small businesses.

  • When you see this rate advertised, it looks something like this: 75%. Using the above scenario with the rewards credit card, this is the processing fee you would pay. It is higher than the other two pricing models' fee percentages, but there aren't any other fees for your account, which may make it less expensive overall, depending on how much you process each month and what types of cards your customers prefer. The consistent rate makes it easy for you to calculate exactly how much you'll pay in processing fees each month.

2. Merchant Account Fees

In addition to the processing rates for each transaction, you'll pay account maintenance fees if you're working with a full-service merchant account provider or payment gateway service. These typically use the interchange-plus or tiered pricing models. Generally, providers that use the flat-rate processing model don't charge account maintenance fees.

When you ask about account fees, most sales reps will tell you about the monthly fee, but there are a lot of complaints online about surprise fees on credit card processing statements. For this reason, it's important to read the full contract (application, terms of service and program guide) to ensure you're aware of every fee.

Here are some of the fees most merchant services providers charge. For a detailed list of fees to look for as you read processing contracts, see our Credit Card Processing Fees: Small Business Guide.

  • Monthly fee: Most merchant service companies charge a monthly fee, sometimes called a statement fee, that covers the cost of preparing your monthly billing statement and providing customer support. This fee usually ranges from $5 to $15. Some providers may charge more if they roll other regular account fees into this charge.

  • Gateway fee: A payment gateway is necessary if you intend to accept credit cards online. Small business owners with online shops need a gateway because it encrypts and securely transmits credit card data from your website to the processor. Pricing varies; some processors charge a monthly fee of around $10 for this service, some charge a per-transaction fee ranging from 10 to 25 cents and some charge both.

  • PCI compliance fee: If you work with a standard processor that gives you your own merchant account, you're required to be PCI compliant. That designation means you adhere to the Payment Card Industry Data Security Standard, which was developed to help merchants prevent data theft and fraud. Most processors that charge this fee offer to help you complete the annual questionnaire that is required to demonstrate your compliance. Your rep may call or email to remind you to take the assessment each year, or the processor may note it on your statement. On average, this fee is $99 annually.

  • PCI noncompliance fee: Even if the processor doesn't require you to pay an annual PCI compliance fee, it may charge you a monthly noncompliance fee if you fail to establish compliance by filling out the annual questionnaire. You can easily avoid this fee by staying up to date with your PCI responsibilities. This fee can be very high, ranging from $20 to $60 per month, as it is meant to discourage you from letting your PCI compliance lapse.

  • Charge-back fee: If a customer disputes a charge and requests their money back, the processor charges you this fee. Charge-back fees are usually $15 to $25. Charge-backs are more common when you accept credit cards online than in person, because typical reasons for charge-backs include delivery failures, technical errors, fraud and customer dissatisfaction. Another common cause of charge-backs is if your store name is different from the name on your merchant account and your customer doesn't recognize your merchant name on their credit card statement.

Some processors charge a setup fee or an application fee for your merchant account, a payment gateway setup fee to connect the payment gateway with your website, and an early-termination fee if you want to close your account before the contract's term expires. The best providers don't charge these fees, though, so you should ask to waive them if they're included in your quote or look for a provider that doesn't tack them on.

TipPro tip: Avoid merchant account providers that charge you fees for setup or application. The best providers won't hit you with these extra expenses.

3. Processing Equipment Costs

If you accept credit cards in person, you need to purchase a card reader or terminal. Here are the three most popular options:

  • Mobile card readers: This is the cheapest option, as many providers give you a free swiper when you sign up for an account. If you want to purchase a mobile card reader that also accepts EMV chip cards, contactless cards and mobile payments, it costs less than $100.

  • Credit card terminals: This is the midrange option. These devices cost $150 to $600, depending on whether you choose a countertop or wireless unit. They have built-in keypads and receipt printers, and all new models can accept both chip cards and contactless payments.

  • POS systems: This may be the most expensive option, but costs depend on the type of system you choose. Tablet POS systems are often the least-expensive and work with mobile card readers.

The most important thing to know about processing hardware is to avoid leasing it, because you can't cancel leasing contracts, and in most cases, you'll pay much more over the long term than you would to buy it upfront. It's enough of a problem that the Federal Trade Commission cautions against it, noting that businesses that lease may pay thousands of dollars for equipment that costs just a few hundred dollars.

Buying Guide

Features

Whether you work with a merchant services provider, a payment gateway provider or a credit card processing company that provides you with both a merchant account and a payment gateway, the company you choose should be up to date with industry standards and allow you to accept all major cards (American Express, Discover, Mastercard and Visa). Here are more qualities you should consider as you look for a merchant processor for your small business:

  • Pricing: The best service providers are transparent about pricing, either by clearly posting their rates, fees and processing hardware costs on their websites or by making it easy to get a quote from a company representative. Look for a merchant account service that offers interchange-plus pricing and doesn't charge setup fees, cancellation fees or nonstandard fees, like quarterly technology fees or semiannual postage and handling fees.

  • Contracts: Choose a service provider that offers month-to-month or pay-as-you-go terms so you can move on without penalty if you find a better deal elsewhere. Standard payment processing contracts have three-year terms and charge hefty early-termination fees; some even have liquidated damages clauses.

  • Scalability: As your business expands, you may want to accept credit cards online in addition to in-store and on the go, so look for a company that offers multiple ways to accept payments. You should also be able to add registers, or even locations, to your account.

  • Security: The credit card processing company providing your payment gateway and merchant account should comply with the Payment Card Industry Data Security Standard. It should also help you become PCI compliant.

  • Processing hardware: The services provider should offer card readers or terminals that are EMV- and NFC-capable so you can securely accept chip cards, contactless cards and mobile payments such as Apple Pay and Google Pay. It should also allow you to purchase the hardware upfront so you can avoid bad leasing contracts and the headaches that come with them.

  • Integrations: If you have a website or use other business software – like an e-commerce platform, POS system, customer relationship management software or accounting software – you'll want a merchant account or payment gateway that integrates with those platforms so you can easily sync data instead of manually downloading and uploading it between systems.

  • Payouts: It's important to consider how and when you receive your money after a sale. Most service providers offer next-day funding, taking one or two days to deposit your money into your business bank account, and some can do it even faster, offering same-day or instant funding for a fee. Some providers give you the option of having your money loaded onto a business debit card.

  • Customer support: The company's customer service team should be readily accessible. The best providers offer 24/7 customer service so you can resolve issues no matter when you call.

  • Other benefits or service limitations: If there are certain features you need – for example, a virtual terminal so you can accept payments using a computer with internet access – make sure to look for them before selecting a processor. Also consider whether there are certain limitations, such as monthly processing limits or vendors that support only one acceptance method.

Payment Processing Contracts

The best merchant account contracts have month-to-month terms with no early-termination fees. However, the standard merchant account contract has a three-year term that automatically renews for an additional one or two years. If the processing service provider you want to work with has a lengthy contract, ask the sales rep if they can give you month-to-month terms. They want your business, and many are willing to negotiate.

With a standard merchant account contract, you have a very short window at the end of the term, usually 30 days, in which to cancel your account without penalty if you don't wish to renew. Most providers require you to submit a cancellation request in writing.

If you miss this window or decide to close your account early, the company charges you an early-termination fee, which is usually a few hundred dollars. Some contracts also have liquidated damages clauses, which can make it very expensive to get out of your contract.

No matter which service provider you choose, it's important to read the entire contract (the application, the terms of service and the program guide) before you sign anything or give the company your bank account and Social Security numbers. Be aware of all the fees listed in the contract, as you will be expected to pay them even if they weren't disclosed by a sales rep. If the sales rep offers to reduce or waive the term length or certain fees, get that in writing by amending the contract or receiving a written waiver.

TipPro tip: Avoid merchant account providers that try to lock you into a long-term contract. Most of our best picks charge you on a month-to-month basis.

Methodology

Our first step in choosing the best merchant services and payment gateway companies was to compile a list of providers. We considered credit card processing companies that small business owners told us they liked, companies that asked us to consider them, those we were already familiar with and those we found on well-known websites. This list of more than 100 payment processing providers included large banks and industry leaders, as well as small companies and those new to the industry.

We then researched the companies on our list by studying the information and resources on each one's website and began narrowing our list based on the criteria in the section below. Here are the 10 merchant account providers and payment gateway services we selected as our best picks: Fattmerchant, Square, Payment Depot, National Processing, Clover, ProMerchant, Merchant One, Flagship Merchant Services, Chase Merchant Services and Paysafe.

Frequently Asked Questions About Merchant Services

WHAT IS A MERCHANT ACCOUNT?

A merchant account is a type of bank account that allows you to accept payments from your customers using credit and debit cards. The credit card processing company sets it up for you and assigns you a merchant ID number (MID). Once you start accepting credit card payments, the company holds your funds until settlement, when they are transferred to your business bank account.

DO I NEED A MERCHANT ACCOUNT TO ACCEPT CREDIT CARDS?

If you sign up for a processing account with a payment facilitator (PayFac) or aggregator like Square or PayPal, you don't need your own merchant account. Instead, you sign up as a submerchant under the provider's master merchant account.

The benefit of working with a PayFac is that it's faster and easier to set up your account, service is provided on a pay-as-you-go basis and there are usually no account maintenance fees. But there are some limitations. Most aggregators don't work with high-risk merchants, so if your business is in a high-risk industry, you'll need to get your own merchant account. PayFacs are also more risk-averse than full-service payment processors, which means that your funds could be held if something about a transaction raises a red flag.

There are also some advantages of having your own merchant account. You can often get lower rates and better customer service, and the likelihood of having your money held or your account frozen is lower. There are account maintenance fees, but if your processing volume is high enough, they're offset by the lower transaction rates.

WHAT IS A PAYMENT GATEWAY?

A payment gateway is the technology that creates a secure connection between your website or browser and the credit card processing company, encrypting payment data for each credit card transaction. Some merchant service companies have proprietary payment gateways, but most set you up with a third-party payment gateway, such as the popular Authorize.net and NMI gateways.

The advantage of setting up a payment gateway through your merchant account provider is that it reduces the likelihood of compatibility issues and, in some cases, can be less expensive. For instance, you may not be required to pay a gateway setup fee if you go through your service provider instead of going direct. Also, depending on your processing contract, there may be an exclusivity clause that requires you to go through your merchant account provider.

HOW DOES A PAYMENT GATEWAY WORK?

Each time you run a transaction online or a customer makes a purchase on your website, the credit card information enters the payment gateway, where it's encrypted and routed through a secure connection to the credit card processor, the card network, the bank that issued the card and your business's bank account. Your customer's card is charged for the transaction amount, and you receive the funds from the sale, minus the processing costs.

DO I NEED BOTH A MERCHANT ACCOUNT AND A PAYMENT GATEWAY?

It depends. If you want to accept credit cards online and in person, you will need both a merchant account and a payment gateway. If you exclusively accept credit and debit cards using a credit card terminal, you won't need a payment gateway. But you will need one if you use your computer as a virtual terminal or accept cards through your website.

WHAT ARE THE BENEFITS OF ACCEPTING CREDIT CARDS ONLINE?

The main benefit of accepting credit cards online is that it gives you more ways to accept payments from your customers. According to Visa, "78% of consumers surveyed rank a digital payment method, such as paying with a card or mobile device, as their No. 1 preferred payment option."

Even a business that has brick-and-mortar locations – whether it's a retail store, restaurant, office, salon or other type of establishment – may benefit from accepting credit cards online, as Visa notes that "52% of consumers surveyed say they would prefer to shop exclusively online."

Merchant account providers offer several e-commerce solutions that can help you accept credit cards online, such as hosted payment pages, buy buttons and forms that can be added to existing websites, and integrations with e-commerce platforms. Some can also help you accept payments from customers through your social media pages.

If your business invoices its customers, you can use online invoicing to make it easy for them to pay you on time. All they'll have to do to pay you is click a link in the invoice and enter their credit card information. Many payment processors can also help you accept ACH payments if your customers prefer to pay invoices by e-check.

HOW CAN YOU AVOID CREDIT CARD PROCESSING FEES?

Because credit card processing fees are how credit card companies generate revenue, it's extremely unlikely you'll ever be able to avoid the added cost. Through negotiation during the initial application process, however, you can attempt to ensure the rate is favorable.

There are also other ways you can offset your credit card processing fees. For example, some businesses push the fees onto the customer in the form of a surcharge or offer a small discount to customers who pay with cash. This tactic is generally seen at gas stations, where it costs more to pay with a credit card than with cash. While this method eliminates the credit card processing fee levied against your business, it could be a double-edged sword because it could push credit card users away from your business. The credit card networks have strict rules around surcharging, so make sure your policy is in line with their recommendations. [Read related article: The Truth About Free Credit Card Processing]

Alternatively, you can set a minimum purchase amount for all credit card transactions. By requiring a purchase of $5 or $10 for each credit card purchase, you can ensure that the transaction is worth paying the credit card processing fee. This option is widely used by many businesses, since it's an easily understood rule for customers and doesn't feel as punitive as other options. The credit card networks have rules about minimum purchase amounts as well, so again, it's important to make sure that your policy complies with their guidelines.

In both instances, you could alienate potential customers who only carry credit cards. The number of people who don't carry cash is growing, so you ultimately have to weigh the potential savings on credit card fees against the risk of losing sales.

WHAT DO YOU NEED TO OPEN A MERCHANT ACCOUNT?

When signing up for a merchant account, you should have several things on hand to make the process move smoothly. Most credit card processing companies require some general information on your business so they can determine whether it is a high or low risk.

The business's risk level depends on factors such as the business's potential to be a victim of credit card fraud or a high rate of return. The payment processor also considers how long the business has been in operation, since it's harder to lend money to what may amount to a fly-by-night operation. [Read related article: Credit Card Processing in High-Risk Industries]

Most payment processors also want information on the business's history, including any bankruptcies, defaults or previous merchant accounts on its record. In addition, most processors want information on the business owner, including their personal credit history, as many contracts require the business owner to sign a personal guarantee.

Some merchant account providers charge fees for the application or setup, but this is unusual among the best processors. You may want to consider other options if the company charges these fees. [Read related article: The Ultimate Small Business Guide to Credit Card Processing Fees]

Is there a way to avoid merchant fees?

Few things in this world are free, so avoiding merchant fees altogether isn't a very realistic scenario. That being said, there are ways to potentially limit your costs. A good opportunity to do so is by looking for a service that offers a subscription pricing model. Using a subscription model ensures your interchange rates don't fluctuate, while also often taking some of the added fees off of the table.

Can I make customers pay extra when they use a credit card to make a purchase?

You certainly can pass on the added cost of using a credit card to your customers. This added surcharge however will likely not be appreciated by your customers and could ultimately result in a loss of business from those who would rather pay less somewhere else. Before instituting this surcharge, you should carefully consider how much you will actually be saving and whether that savings will offset the cost of losing a chunk of your customer base.

What to Expect in 2021

Improving the customer experience will remain a top priority in 2021 for those in the payment industry. Giving people the ability to pay when, where and how they want will be merchant service providers' focus in the coming year, especially because more business has shifted online due to the COVID-19 pandemic.

"It's not enough anymore to just offer payment solutions that are tailored to consumers; now, payments need to be taken right to them," Michel Léger, executive vice president of innovation at Ingenico, said in a statement.

A recent Ekata survey of more than 7,000 consumers throughout North America and Europe revealed that 92% expect a secure, fast and frictionless payment experience, while 70% believe that online shopping account creation should be instantaneous.

To support those desires, mobile payments will continue to be paramount for merchant service providers. Finding better ways to support mobile shopping, mobile wallets and mobile checkouts will be a top priority for payment providers this year.

Recent research from Adobe found that 37% of purchases on Cyber Monday in 2020 were made on mobile devices, CNBC reported.

In addition to accepting mobile payments, you should focus on finding ways to let your customers pay with mobile wallets and contactless cards that use near-field communication (NFC) technology in 2021, as this type of payment is growing in popularity. According to CPA Practical Advisor, digital payments are poised to hit $6.6 trillion during 2021 and reach $10.5 trillion in the next four years.

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