Saving On Credit Card Processing Without Switching Providers
Merchant Cost Consulting analyzes your payment processing statements to find any hidden junk fees or exorbitant rates and estimate how much they can save you per month. They will renegotiate your agreement for you, so you don’t have to switch processors to get immediate savings.
These credit card payment processors offer merchant services with reasonable costs, accessibility, transparency, and good overall value.
Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law.
WRITTEN & RESEARCHED BY
Frank KehlFrank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law.
Expert Contributor
Last updated onUpdated
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
REVIEWED BY
Shannon VissersShannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
Expert Contributor
Our content reflects the editorial opinions of our experts. While our site makes money through referral partnerships, we only partner with companies that meet our standards for quality, as outlined in our independent rating and scoring system.
Credit card processing is essential for most small businesses, as many of your customers will surely want to pay with a card or another electronic payment method. However, finding the best small business credit card processor comes down to more than just cost—industry specialization, merchant agreement terms, and customer support quality are also considerations.
In this article, we review our top recommendations for credit card processing based on our years of industry research and expertise and explain how to find the best provider for your business.
The Best Credit Card Processing For Small Business
The best payment processors for small businesses offer a combination of affordable costs, flexible contract terms, and transparent sales practices. High-quality customer support additionally sets them apart from their competitors. Here are our picks for the best credit card processors for small businesses:
Helcim stands out from the crowd as one of the very few credit card processors in the industry to offer a full-servicemerchant account without requiring a monthly fee. It also offers numerous perks for merchants who do a lot of sales remotely, including overseas. Helcim's interchange-plus pricing rewards higher volumes of transactions, though lower-volume businesses can use Helcim as well.
Helcim distinguishes itself from many other providers by offering true month-to-month billing, exclusive interchange-plus pricing, and no monthly account fees -- all of which the company fully discloses on its website.
Helcim Features
Helcim offers a robust suite of proprietary products and services to meet the needs of most retail or online businesses. The versatile Helcim Card Reader, in particular, is both affordable and can function as either a mobile card reader or countertop terminal. Helcim also provides an excellent suite of features for eCommerce, including hosted payment pages for secure online checkouts, menu embedding, and buy-now buttons.
Your Helcim account comes with a full range of essential payment processing features, including the following:
Full-service merchant account
Proprietary Helcim Card Reader or Helcim Smart Terminal for in-person payments
Not recommended for businesses processing less than $10,000/month
Not available to high-risk industries
Why We Chose Dharma Merchant Services
We chose Dharma Merchant Services as one of our top small-business processors primarily for the significant pricing discounts the company offers to nonprofit organizations. However, Dharma is also an excellent choice for any low-risk small to medium-sized business that's looking for interchange-plus pricing and Clover hardware. Like our other top choices, you'll also enjoy month-to-month billing with no long-term contracts or early termination fees (although a fully disclosed $49 account closure fee is required if you close your account).
Be aware, however, that the company doesn't recommend its services to businesses processing less than $10,000/month and doesn't accept high-risk merchants.
Dharma Merchant Services Features
In addition to being one of the most ethical and transparent providers in the processing industry, Dharma Merchant Services offers a complete line of services for small and large businesses. Here are the highlights:
Full-service merchant accounts through Fiserv or TSYS
MX Merchant integrated payment platform
Choice of Authorize.Net or MX Merchant payment gateways
QuickPay virtual terminal
Full line of credit card terminals, including Verifone Engage V200c, Fiserv FD-150, Ingenico Desk/5000, Dejavoo Z11, and other models
Discounts available for healthcare businesses & qualified nonprofits
Cons
High interchange-plus processing rates
Why We Chose Payline Data
Payline Data is a great choice for nearly any business, but we especially like that it offers discounted processing rates to healthcare businesses and qualified nonprofits. We also like that Payline Data offers multiple solutions to serve many businesses, regardless of size, and even works with high-risk businesses in certain high-risk industries.
Payline Data uses interchange-plus pricing and uses Fiserv/CardConnect as its primary back-end processor for low-risk businesses. While its rates may be a little more than some of its competitors, it doesn't charge hidden fees, and there aren't excessive fees -- factors which could help keep your monthly processing costs competitive and affordable.
Payline Data Features
Payline Data’s most notable features include:
Full-service merchant accounts
Level II/III data support
Discounted rates for nonprofits & healthcare businesses
Choice of Payline Gateway, Authorize.Net, or the NMI gateway
Virtual terminals for card-not-present transactions
Card readers, credit card terminals, and POS systems — including Clover equipment
Integrations with 175+ shopping carts
QuickBooks integration
API for developers
Chargeback protection through partnerships with Ethoca and Verifi
Payline Data Pricing
Payline Data charges a monthly fee of $10 – $20/month. The lower pricing is available for businesses that mostly have card-present transactions, while you’ll pay the higher monthly fee if you process mostly card-not-present transactions. You’ll also pay the lower monthly fee if you operate a healthcare business or nonprofit, as well as reduced processing fees.
Payment processing fees are Interchange + 0.4% + $0.10 for card-present transactions, and Interchange + 0.75% + $0.20 per transaction for card-not-present transactions.
Custom processing rates are available for larger, high-volume businesses.
Payline Data Is Best For...
Healthcare businesses that want reduced processing rates
Qualified nonprofits
High-risk businesses in certain high-risk industries
Offers (optional) terminal lease, which could have long-term contract
Does not accept merchants based outside of US & Canada
Why Payment Nerds Is Great For Most Businesses
Payment Nerds is a newcomer to the payments scene, but the company builds on the years of payments experience and vast processing network of its owner Electronic Merchant Services (EMS). Payment Nerds draws on these resourcesto offer an exhaustive list of payment processing services , as well as tailored solutions that can cater just about any processing need, regardless of your industry, phase of growth, or risk level.
For a provider that can accommodate just about any business (Payment Nerds boasts that it accepts 98% of businesses that apply), Payment Nerds is also refreshingly straightforward and fair, offering transparent pricing and month-to-month contracts to all of the businesses it serves--even those in high-risk industries.
Payment Nerds Features
Some of Payment Nerds best features include multicurrency support to accept global payments, numerous eCommerce integrations, a cash discount program for businesses who want to pass along processing fees to customers, robust APIs for building your own customized solution, and more.
Payment Nerds Features
Availability
Dedicated Merchant Account
PCI Compliance
High-Risk Accounts
International Accounts
Can accommodate Canadian businesses
Contactless Payments
ACH Processing
Digital Wallet Acceptance
EBT Acceptance
Virtual Terminal
Mobile POS Reader & App
No proprietary app, but integrates with popular mobile systems
Hosted Online Store
Hosted checkouts
Payment Links
Payment Gateway Integrations
Shopping Cart Integrations
POS Integrations
BNPL Integrations
API Documentation
Currency Conversion
Recurring Billing
Invoicing
Cash Discount Program
Cryptocurrency Processing
Payment Nerds Pricing
Payment Nerds’ pricing is simple and straightforward, with no monthly fee and flat-rate transaction fees:
Item
Value
Pricing Starts At
$0/month
Contract Length
Month-to-month
Processing Model
Flat-rate
Card-present Transaction Fee
1.59-2.59% + $0.03
eCommerce Transaction Fee
1.59-2.59% + $0.03
Keyed-in Transaction Fee
2.09-3.09% + $0.03
Equipment Cost
$0+
Payment Nerds transaction fees vary depending on your company’s risk level:
For low-risk businesses. This category includes businesses with stable revenue and lower chargeback rates — e.g., retail, professional services, manufacturing.
For medium-risk businesses. This category includes businesses moderate chargeback rates or operate in sectors with some regulatory complexities — e.g., auto parts, beauty products, subscription services.
For high-risk businesses. This includes businesses with elevated chargeback risks and regulatory hurdles — e.g., crypto traders, debt collectors, adult entertainers.
For startup businesses. This includes newer businesses that don’t have a lengthy track record to show revenue history, and businesses applying for first-time merchant accounts.
Transaction fees are higher in certain situations:
Payment Nerds Extra Costs
Price
Manually Entered Cards
+0.5% per transaction
International Cards
+1% per transaction
Currency Conversion
+1.5% per transaction
Payment Nerds Is Best For ...
High-risk businesses and startups
Enterprise businesses in need of customizable payment solutions
Integrating multiple sales channels
Low-risk businesses in retail, restaurant, & service industries
Exclusive Promo: Get your first month free with Stax. Learn More
Pros
Membership pricing with a 0% per-transaction markup rate
High-volume businesses will save money
Month-to-month billing with no long-term contracts or early termination fees
Offers full-line of Clover POS hardware
Cons
Expensive for very low-volume businesses
US merchants only
Not suited for high-risk businesses
Why We Chose Stax
Stax offers a type of processing called membership pricing in which you only pay a single monthly membership fee, the interchange fee, and just a few extra cents on each transaction.
Though it’s not for everyone, membership pricing is an amazing deal, as long as you process a certain amount each month -- Stax estimates that as long as you process about $8,000 each month, you’ll save money.
Stax Features
Stax offers one of the most complete integrated payments platforms we’ve seen. Stax merchant accounts include advanced eCommerce capabilities, mobile processing, subscription billing, inventory management, advanced invoicing and billing, and more.
Stax offers Clover POS equipment, and various other smart terminals and mobile readers. However, a lot of eCommerce businesses also use Stax, thanks to its excellent pricing for online transactions.
Stax Pricing
Stax offers month-to-month billing with no long-term contracts or early termination fees.
Other than the monthly fee and interchange fee, which you’ll pay with any processor, Stax’s per-transaction markup is just $0.08 + interchange fee per transaction for card-present transactions, and $0.15 + interchange fee per transaction for online and keyed-in transactions.
Here’s what you can expect for the monthly fee:
Process under $150/year (up to $12,500/month), and you’ll pay $99/month
Process $150K-$250K/year (up to $20,833/month), and you’ll pay $139/month
Process $250K-$500K/year (up to $41,667/month), and you’ll pay $199/month
Process over $500K/year, and you’ll need to negotiate a custom quote
Stax Is Best For ...
eCommerce businesses
Software-as-a-service platforms
Any retail business that wants to use Clover with membership pricing
Offshore merchant accounts available for some high-risk industries
Cons
No pricing disclosures
Why We Chose Durango Merchant Services
If you have complex processing needs, look no further than Durango Merchant Services. While Durango works with some low-risk businesses, it specializes in hard-to-place businesses in a wide variety of high-risk industries. Durango works with over a dozen banks and back-end processors to help you find the right option for your business.
In the high-risk processing industry, it's easy to find bad players. But Durango is one of the few that is reputable, ethical, and transparent. It has an exceptional public reputation and provides great customer support through its dedicated account managers.
Durango Merchant Services Features
Here’s what to expect when you work with Durango:
High-risk merchant accounts
International merchant accounts
Mobile payments through the iProcess app
Proprietary payment gateway
Shopping cart integrations
eCheck processing
Cryptocurrency processing
Dejavoo terminals & card readers for in-person processing
Durango Merchant Services Pricing
Unfortunately, Durango does not disclose much about pricing upfront. However, this isn’t uncommon when it comes to high-risk processors, as many factors can influence pricing.
Durango does disclose that there is a fee of $10/month. It also uses interchange-plus and tiered pricing, although specific rates aren’t disclosed.
Get a free card swiper from Square at no cost when you create a free account. Claim your card reader.
Pros
No monthly fees
Predictable flat-rate pricing
Ideal for low-volume merchants
All-in-one payments system
Cons
Account stability issues
Does not accept most high-risk industries
Why We Chose Square
Square's ultra-simple online signup process and general lack of recurring fees or long-term contractual commitments make it the easiest and most affordable option for new business owners to begin accepting credit card payments. And since Square's flat-rate pricing system can actually be more expensive than a full-service merchant account at higher processing volumes, the system works best for startups with low sales volumes.
Square's product lineup covers all the bases for retail and restaurant businesses, although some features aren't as customizable or advanced as you can find elsewhere.
Square Features
Square has evolved from a basic, mobile-only processing solution to a full-featured payments ecosystem and now includes the following major features:
Aggregated account for credit and debit card processing
Mobile card reader (magstripe-only) included with each account
Basic Square Invoices feature included at no extra cost
Analytics and reporting available through Square Dashboard
Square Pricing
Square charges various fees on various plans, but its core processing services are free. Here are some things to know about Square pricing:
No setup or application fees
$0/month for Square Free account
2.5-2.6% + $0.10-$0.15/card-present transaction
2.9% + $0.30/online transaction
3.5% + $0.15/manually keyed-in transaction
2.9-3.3% + $0.30 /invoice (on free plan)
1% (min. $1)/ACH transaction
No ACH reject or chargeback fees
Note that Square keeps costs low by aggregating accounts together rather than issuing each user a unique Merchant ID number. Because of this, you won’t get a true full-service merchant account, but you will likely be quicklyapproved for an account. The trade-off is that there’s a higher chance that your account will be frozen or terminated without notice if fraud is suspected.
Square Is Best For ...
Low-volume businesses in retail or eCommerce
Food service businesses with small average ticket size
Available directly or through a large network of ISOs
Cons
Long-term contract may be required
Hardware cannot be reprogrammed
Not all Clover resellers are reputable
Why We Chose Clover
Clover’s sleek POS hardware features the latest in payments technology, including wireless connectivity, color touchscreens, and an app market that allows you to expand the capabilities of your Clover device. In addition to industry-leading processing hardware, Clover offers credit card processing services through Clover Payments, offering flat-rate processing and reasonable monthly software fees.
Note that Clover hardware cannot be reprogrammed to use with a different merchant account.
Clover Features
Clover Payments offers basic credit card processing services and support for a few alternate payment methods. Here are the highlights:
Offers flat-rate pricing (custom pricing available for high-volume businesses)
3.5% + $0.10 per transaction/card-not-present transaction (through Clover Payments)
Variable processing fees (through Fiserv or Fiserv ISO)
Variable monthly and annual fees (through Fiserv or Fiserv ISO)
$0 – $84.95/month software subscription fee (for one device; monthly fee depends on software plan)
Note that while you can also obtain Clover’s terminals and POS systems through parent company Fiserv or its vast network of resellers, pricing, and contract terms will be highly variable.
For a more detailed breakdown of Clover’s various features and pricing options, please see our complete Clover pricing guide.
Airwallex is an excellent choice for businesses that deal with international payments. By cutting out the middleman, Airwallex makes it easy to complete international transactions without excessive or hidden fees.
While you won't find some of the features you'd find with other processors (such as support for in-person transactions), Airwallex is designed as a global payments and financial platform for international eCommerce sellers. In addition to streamlined global payments, Airwallex's platform boasts additional features like expense management tools and corporate cards.
Airwallex Features
Airwallex has a great set of features for global businesses, including:
Local currency accounts to receive funds in 20+ currencies
Global transfers to 150+ countries
Loval acquiring
Batch transfers
Customized approval workflows
API for developers
Payment plug-ins for shopping cart software
Real-time spend management
Corporate cards to manage employee spend
Integrations with other business apps & software
Airwallex Pricing
Airwallex does not have any monthly or annual fees. Processing rates are 2.80% + $0.30 for domestic cards and 4.30% + $0.30 for international cards. Custom solutions, including interchange-plus pricing, are also available.
Additional fees include $15 – $25 for SWIFT transfers and 0.5% – 1% above interbank exchange rates for FX conversions.
Airwallex Is Best For...
eCommerce businesses that don’t process in-person transactions
Global businesses that want to save money
Low-risk businesses
International businesses that want additional business tools, such as spend management
“Free” credit card terminal requires a long-term contract
High chargeback fees
Not cost-effective for high-volume businesses
Why We Chose Chase Payment Solutions
Merchant services from large banks and direct processors often end up being very poor deals for small businesses due to high processing rates, numerous additional fees, and long-term contracts. Chase Payments Solutions, however, is a notable exception. The company offers all the same small business-friendly features as our other top choices, including month-to-month billing, flat-rate pricing, and very low fees.
Chase Payments Solutions offers small business owners a surprisingly good deal on credit card processing. If you sign up for the company’s standard plan, you’ll receive a full-service merchant account with flat-rate pricing and an array of products and services to run your business. If you buy your hardware outright, you’ll enjoy a month-to-month contract with no long-term commitment and no early termination fee. However, if you want to accept online payments, you’ll need to pay a monthly fee:
No monthly fee for standard account
$9.95+/monthh for eCommerce
2.6% + $0.10/card-present transaction
2.9% + $0.25/online transaction
3.5% + $0.10/keyed-in transaction
Custom pricing also available
No PCI compliance fee
No gateway fee
Equipment: $99-$499
$10/chargeback
Chase Is Best For ...
Businesses that like Square’s pricing & services but want a full-service merchant account
Low-risk, low-volume startups
Businesses that bank with Chase
Businesses that need mobile processing & eCommerce
Get a free Clover Go card reader from National Processing when you sign up. Claim your card reader.
Pros
Offers flat-rate pricing
Low-cost ACH & echeck processing available
No long-term contract if equipment purchased outright
Excellent online reputation
Cons
“Free” processing equipment may require a long-term contract
May charge an early termination fee for “free” equipment
Why We Chose National Processing
National Processing provides extensive pricing disclosures on its website, making it easy for merchants to calculate their costs in advance. The company currently offers three basic and advanced plans for small businesses that utilize flat-rate pricing. For merchants processing over $30,000/month, a custom pricing option is also available.
National Processing also has a great reputation for customer service, a rarity in the payments industry.
National Processing Features
National Processing offers great service and pricing to small businesses. Key features include the following:
Offers full-service merchant accounts
“Free” credit card reader or terminal available
Offers ACH and eCheck processing as an add-on
Offers flat-rate pricing (or custom pricing for merchants processing over $30,000/month)
Offers a variety of Clover and PAX terminals and POS systems
No long-term contract if processing hardware is purchased outright
Choice of proprietary National Processing Gateway or Authorize.Net
One point of caution with National Processing is that the “free” equipment offered with some of these plans also comes with long-term contract obligations, so make sure you know what you’re getting into if you decide to go that route. Fortunately, the company offers many exceptions to its early termination penalties if you promptly return any “free” equipment. You usually won’t have to worry about getting hit with an ETF if you close or sell your business. In fact, National Processing will usually only charge you an ETF if you cancel service to switch to a competitor.
National Processing Pricing
$9.95-$19+/monthaccount fee (Basic In-Person, Basic eCommerce, or Advanced plans)
No monthly fee for cash discounting program (optional)
Month-to-month billing with no early termination fees
No monthly minimums
Offers Clover POS with interchange-plus pricing
Cons
Can be expensive for low-volume merchants
Can be expensive for high-risk merchants
Why We Chose Host Merchant Services
Host Merchant Services' transparent interchange-plus pricing rates will save most high-volume businesses a significant amount of money. The company fully discloses its pricing on its website, eliminating the need to negotiate these terms when setting up your account. Host also doesn't require a long-term contract or charge an expensive early termination fee to close your account.
Note that while the company also accepts high-risk merchants, your pricing and contract terms will be different (and, ultimately, more expensive) if you fall into a high-risk category. Nonetheless, it's still a great choice for high- or low-risk merchants looking for a company with honest, transparent sales practices and great customer support.
Host Merchant Services Features
Host Merchant Services offers its own proprietary payment gateway and POS system, as well as a broad range of third-party alternatives. It’s also one of the few merchant services providers that include free web hosting for eCommerce businesses as a standard account feature. Prominent third-party features include the popular Authorize.Net payment gateway and the full line of Clover terminals and POS systems.
Here are some more highlights:
Full-service merchant accounts
Accepts most high-risk industries
Full line of countertop and mobile credit card terminals
“Free” terminal available to merchants processing over $20,000/month
Vital and SwipeSimple mobile processing solutions
Proprietary Bonsai POS system available
Clover and Vital POS systems available
Authorize.Net payment gateway
Proprietary HMSExpress payment gateway
Virtual terminal included
Web hosting included with an account
Cash discounting program available
Host Merchant Services Pricing
No application or setup fees
$0-$20/month account fee (no charge is for cash discounting program)
Month-to-month billing with no early termination fees
Free payment gateway and virtual terminal
Cons
Only available to US-based merchants
Some high-risk industries may not qualify (including CBD and cannabis products)
Why We Chose CDGcommerce
CDGcommerce, which focuses on eCommerce processing, offers some of the most transparent, flexible pricing of any merchant account provider we've found. Depending on your monthly processing volume, you can choose between flat-rate pricing with no monthly fee, interchange-plus pricing, or four membership pricing options.
The company also uses an online application process that can get you onboarded very quickly, which can be very handy for a new startup. (Note that if you're in one of the high-risk industries that CDGcommerce accepts, you'll want to undergo the more lengthy traditional underwriting process to avoid suddenly having your account shut down later.)
CDGcommerce Features
While the company’s services are geared more toward eCommerce businesses, it also provides a full range of offerings for retail merchants. The company also offers top-notch customer service and support. Key services include the following:
Offers full-service merchant accounts
A hybrid risk structure lowers the chance of a held transaction
High-risk processing (some industries)
Free terminal with each account (requires $79 annual maintenance fee)
Offers proprietary Quantum payment gateway or Authorize.Net
PastePay Cloud POS software
Includes virtual terminal
CDGcommerce Pricing
All of CDGcommerce’s pricing plans come with month-to-month contracts. There’s no long-term commitment and no early termination penalty for closing your account. CDGcommerce does not charge account setup fees, PCI compliance fees, or a monthly minimum. Here are some more details of CDGcommerce’s pricing:
Merchant Maverick has been researching the payment processing industry since 2009. Our writers have reviewed hundreds of credit card processors, merchant account services, and mobile payment apps, evaluating each provider carefully on several different metrics.
Weighted Rating Breakdown
Fees & Rates 35%
Contract 20%
Products & Services 15%
Sales & Advertising Transparency 15%
Customer Service 10%
User Reviews 5%
When comparing different payment processing companies and applications to one another, we consider numerous data points. Our experts start by comparing credit card processing rates, the presence of additional fees, contract length, sales practices, and the presence or absence of additional features and services, like point of sale software. Each provider is judged on its own merits and how well it stacks up to industry standards; then it is weighed against the other providers on the list.
We spend an average of 10-15 hours researching and updating each one of our lists, making sure every company or application included meets our internal standards for quality and reputation. Any list of recommended payment processors on our site might contain a mix of standard merchant accounts, third-party payment processors, mobile payment devices, and high-risk payment processors, depending on what our expert feels is the best fit for certain scenarios or business types.
For additional details about Merchant Maverick’s review and rating processes, please refer to any or all of the following methodology pages:
Credit card processing. — also commonly called “payment processing” — refers to the sequence of steps for approving and processing credit and debit card transactions. Merchants can accept payments in person, online, or by manually entering a customer’s card information. The credit card processing network checks for indicators of possible fraud and ensures that merchants get paid for approved transactions.
In today’s complex and competitive payments environment, almost all providers offer a variety of services in addition to basic credit card processing. These include a payment gateway for eCommerce transactions, a virtual terminal for manually keying in payments, and support for alternative payment methods such as digital wallets or QR codes.
How To Choose The Best Credit Card Payment Processing Company
Determining the best credit card processing company for your business involves evaluating many factors to narrow your search down as much as possible before reaching out to a provider’s sales department. Learn about the top things to look for in a merchant account:
Account Stability & Type Of Merchant Services
The first (and perhaps most important) factor to consider will be whether your business needs a full-service merchant account for payment processing or if you’d be better served by signing up with a payment service provider (PSP), such as Square. For very small or newly launched businesses, PSPs offer an easy and affordable way to begin accepting credit cards without the confusing pricing and extensive onboarding requirements of a full-service merchant account. At the same time, account stability can be a concern, as you’re more likely to experience sudden account issues. You will want to avoid merchant account holds, freezes, and terminations.
Full-service merchant accounts are more stable and offer many additional features, but they tend to be more expensive and take longer to set up. Your monthly processing volume will be the main factor in choosing between these two options. Generally, PSPs are a better choice if your processing volume is less than $5,000 per month. However, this “tipping point” can be anywhere from $1,500/month to $10,000/month, depending on the nature of your business and the processing rates your merchant account provider offers.
Fees & Pricing For Credit Card Processing
The credit card processing industry is notorious for charging merchants a bewildering variety of rates and fees for their services, often making it nearly impossible to estimate your costs in advance. Payment service providers eliminate much of this confusion by offering a combination of predictable flat-rate pricing and no monthly fees for basic services.
Merchant account providers, on the other hand, may use either tiered pricing, interchange-plus, or membership pricing. They also usually charge several recurring and incidental fees that can come as an unpleasant surprise if you haven’t thoroughly reviewed your contract in advance.
Tokenization & Card-Not-Present Processing Rates
eCommerce sales have surged in recent years, and incidents of fraud have surged with them. One critically important way to protect yourself is to implement credit card tokenization as a security feature on your website. You’ll reduce your chances of letting a fraudulent transaction slip through, and interchange rates and fees for tokenized payments are significantly lower than for other card-not-present transactions. Tokenization also works with card-present transactions, but requires a payment gateway to implement.
Speed & Flexibility Of Account Setup
New merchants are frequently frustrated with the length of time needed to get their merchant accounts approved and set up. Onboarding can take as long as several weeks, during which you’ll be unable to process any credit or debit card transactions. Technology and automation have improved this process dramatically in recent years, and in some cases, you can apply online and have your account approved overnight.
Payment service providers typically offer the quickest approval time, but they usually only accept low-risk businesses. Fast approval also increases the risk of account instability, as the detailed underwriting process is deferred until you start processing transactions. At the other end of the spectrum, high-risk merchant accounts can take as long as two or more weeks to approve and require much more information about you and your business.
Funding & Deposit Times
Getting the funds from your credit card sales deposited into your bank account quickly is important to any business — particularly if you’re dependent on a steady, day-to-day cash flow coming in. While the standard deposit time in the payments industry is two to four business days, many providers now offer next-day (or even same-day) funding. There’s usually an additional fee, so you’ll want to carefully evaluate whether you really need it before signing up for this service.
Selling Online & In Person
While most businesses have traditionally been either retail-only or eCommerce-only, today, it’s more common for a business to have both in-person and online sales channels. Regardless of how you make your sales, you’ll want the appropriate hardware and software to process transactions, provide analytical data, and help you run your day-to-day business operations.
While some small businesses can still get by with just a payment gateway or countertop credit card terminal, processing companies are increasingly offering integrated payment platforms that support in-person and online sales. These systems offer enhanced security, additional features such as scheduling and inventory management, and the ability to manage your business remotely from any internet-connected device with a browser.
How To Negotiate A Good Credit Card Processing Agreement
After you’ve chosen a credit card processor, the next step is to negotiate a good processing agreement with your provider. While you may not necessarily be able to negotiate lower processing fees—especially if you have a low sales volume or belong to a high-risk industry—you can still take certain precautions such as calculating your effective rate to ensure you negotiate a fair deal.
Start Accepting Credit Card Payments At Your Small Business
Once you’ve selected a processor and negotiated a fair merchant services contract, you are almost ready to start accepting credit card payments. But before you take your first sale, you will need to decide which channels you want to sell with—for example in-store, mobile, and/or online. You will also need to set up your processing hardware and point of sale software.
What is the most important consideration when choosing a payment processor?
Shannon has been writing for Merchant Maverick about small business software and financing since 2015. She started writing professionally about business topics in 2005. Shannon has been featured in the Washington Post, Reader's Digest, US News, MSN, Yahoo Finance, Business Insider, and other publications. She has a bachelor's degree in English from San Diego State University and currently resides in San Diego, California.
The most important consideration is the processor’s transparency. A reputable processor will clearly list their account fees and transaction fees on their website.
Frank has been writing about payment processing and business services since 2015. He is a retired Air Force officer and a former practicing attorney. He has a Bachelor of Science degree in Psychology from The Pennsylvania State University and a Juris Doctorate degree from the Ventura College of Law.
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Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
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Our Experts Recommend PaymentCloud 🏆PaymentCloud can help almost any business save on credit card processing.Whether you're looking to save money on processing or to get approved for a merchant account, PaymentCloud can help.Get StartedAt PaymentCloud
Whether you're looking to save money on processing or to get approved for a merchant account, PaymentCloud can help.
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