The Best Credit Card Processors For Retail Businesses
Some processors are good. Others are extraordinarily bad. And you probably don’t have time to go through all our reviews to figure out which is which.
Should you just give up and accept only cash instead? Not really. That usually isn’t a good option. According to a recent survey by payment processing giant TSYS, consumers continue to prefer using credit and debit cards over cash. Going into more detail, for in-store purchases (restaurants, supermarkets, gas pump, etc.), consumers prefer debit over credit.
But, with so many processors, how do you pick the one that’s right for you? We at Merchant Maverick believe that the best processor for one type of business is not always the best for another type of business. In this article, we’ll highlight a few great processors for just the retail sector, so at least you have a good place to start in your search.
Note, though, that by “retail,” we mean selling to end-user consumers from a physical location/brick-and-mortar store. (If you sell goods or services online, check out this article instead.) As such, we’ll discuss not only the services the processors offer, but your hardware choices as well.
Let us say this again: There is no such thing as a perfect merchant account provider for all businesses. Nonetheless, if you run a retail business, you really can’t go wrong with any of the companies profiled below.
Other Featured Options:
- Durango Merchant Services: Serves high-risk merchants in the retail sector. You'll have a dedicated account manager to help you with all your processing needs.
- PaymentCloud: Another high-risk processor working with merchants in the retail sector. Sometimes, they can find you a backend processor that charge interchange-plus pricing, so be sure to ask for it.
- Square: Third-party processor best suited for retail businesses with smaller processing volume or seasonal businesses. Excellent technology, much of it free with an open account.
Read more below to learn why we chose these options.
Why Do You Need A Retail Merchant Account?
When we say a merchant account, we mean that you sign up with a traditional payment processor that will set you up with a type of bank account used specifically for payment card processing.
While there might be reasons to go with a payment service provider/third-party processor like Square (which we will discuss below), you’re usually better off with a traditional merchant account provider. They are often better able to tweak their services to the specific needs of a retail business. In particular, they can set you up to take PIN debits, which offers lower processing fees than a credit-based debit. Given the popularity of debit cards for in-store purchases, being able to offer PIN debit to your customers might save you a lot of processing costs and still keep your customers happy.
Better customer service is another reason we think you might be happier with a traditional merchant account provider focused on the retail sector. Some of the processors below will even assign a dedicated agent to help you set up your account and handle follow-up issues afterwards. Others have well-trained representatives who understand the specific issues of a retail merchant. With a third party processor, you are less likely to get the individualized service and support you might need when things go wrong. And they inevitably will.
The Best Credit Card Processing Companies For Retailers
We’ve identified the following criteria in evaluating our best retail merchant account providers. All the providers listed below scored very high on each of these criteria.
Here’s what we looked at:
- Hardware: At a minimum, a retail merchant is going to need a credit card terminal. While most traditional merchant account providers will lock you into an expensive, four-year terminal lease, the companies below will either sell you a terminal outright, allow you to rent one for a reasonable fee, or even provide you with a free terminal as long as you keep your account open. The terminals from these providers are EMV-compliant and most are NFC-capable. Should you want a POS system or mobile payment capability, you can get that too.
- Sales & Advertising: Unlike some of the more problematic processors, the providers below aren’t shy about disclosing the costs associated with their services (or at least discuss the variables that go into pricing). They all have excellent, informative websites that lay out in detail what you’ll be paying.
- Pricing: There are quite a few pricing models in the payment processing world. Our best merchant account providers offer processing rates that are based on either an interchange-plus pricing model or a subscription plan. The best providers in the industry also offer low, reasonable fees. They won’t charge you for things like setting up your account or providing a paper statement each month.
- Contracts: For many years, the standard practice in the processing industry has been to sign merchants up for a three-year contract, with an automatic renewal clause that extends the contract for additional one-year periods. Contracts also included an early termination fee. As a result, it was difficult for a merchant to close an account and switch to a competing provider without incurring a substantial penalty. Our top retail providers, however, will set you up with a month-to-month contract, and none of them will charge you an early termination fee (high-risk providers are a little different). While you’ll be free to close your account without penalty at any time, these top providers are willing to bet that you won’t want to.
- Customer Support: Traditionally, while merchant account providers promise 24/7 telephone support, the quality of that support had always been problematic. We often hear of long holds, uninformed customer service representatives who can’t help, and calls being routed to overseas calling centers after standard US working hours that are staffed with workers with no authority to settle problems. Our top providers manage to solve this issue. All of them have a reputation for providing top-notch customer support and service. They also offer a knowledgebase on their websites to help you diagnose (and possibly solve) common problems on your own.
With these criteria in mind, here are our favorite merchant account providers for retail businesses. We list them in no particular order of preference, and if you’re interested in one or more of the providers, be sure to check out the detailed review for that provider to learn more.
1. National Processing
- Interchange-plus pricing standard
- Offers month-to-month billing with no early termination fee (ETF)
- A good option for budget-conscious merchants
- Long-term contract with early termination fee required in exchange for free terminal
National Processing offers just the basics, but offers it well. It sells a full line of Clover equipment, which means that not only do you have access to stylish equipment with a minimalist design, but you’ll also have access to the Clover POS software to help you with inventory management, employee management, marketing materials (e.g. gift cards), and so forth.
Note if you need to rent equipment from National Processing, you will have to sign a contract with a termination fee for specific circumstances, but if you have your own equipment or buy the equipment outright from National Processing, you can connect up through a month-to-month processing plan with no early termination penalty.
National Processing offers interchange-plus pricing, and its website provides a meaningful explanation of actual interchange rates and a complete list of standard account fees — all extremely helpful to merchants who are considering them as the next processor. National Processing is so interested in working with retail merchants that it even has a special Retail Plan that includes:
- $10 per month account fee
- Interchange + 0.20% + $0.10 per transaction
- Optional free Clover Go terminal
- $75,000 monthly processing volume limit
National Processing offers excellent customer service and technical support, as shown by many positive customer reviews.
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2. Payment Depot
- Transparent membership pricing
- True month-to-month billing
- No application or setup fees
- Next-day funding available
- Good customer support
- US-based merchants only
- Not suited for high-risk merchants
Payment Depot uses a pricing model called membership pricing. With this pricing model, there’s no percentage-based markup charge. Instead, other than the wholesale costs that go to the credit card networks and banks (not to Payment Depot), you just pay a fixed, predictable monthly fee for access to the credit card processing networks alongside a small $0.05 – $0.15 fee on each transaction. Your membership fee covers everything else. You can pay the membership fee month-to-month, but you’ll receive a discount if you pay for the entire year all at once.
There are four tiers of membership levels: Basic, Most Popular, Best Value, and Premier. Each category is based on maximum processing volume, and the membership fee ranges from $49 to $199. Except for the Basic tier, you get free equipment with your membership. As an example, the Most Popular tier has the following pricing:
- $79 monthly fee
- Interchange + 0% + $0.10 per transaction
- $75,000 monthly maximum processing volume
- Virtual terminal and a payment gateway included
- Countertop terminal or mobile card reader included
- Data breach protection included
- Premium/prioritized customer support included
Payment Depot offers a variety of hardware choices, including Clover hardware and software, so you have access to POS software that help you run other aspects of your business.
Aside from the value provided, Payment Depot’s reputation for open, honest sales practices and excellent customer support put it ahead of many of its competitors using this relatively new pricing model. Unfortunately, Payment Depot’s membership pricing is available only to US-based merchants, and they do not accept high-risk merchants.
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- Transparent cost-plus/membership pricing
- Next-day funding
- Free analytics dashboard and tools
- No early termination fee
- Proprietary POS system named Omni
- US-based merchants only
Fattmerchant, like Payment Depot, also uses the membership pricing model. As a result, with Fattmerchant, your processing cost per month becomes highly predictable, and, if you hit the sweet spot in processing volume within each plan, you’ll get a built-in volume discount. Fattmerchant’s membership rate starts from $99/month for businesses that process up to $500,000 annually. In addition to this membership fee, you’ll pay $0.12 per transaction (swiped) or $0.15 per transaction (keyed) plus the interchange rate.
With Fattmerchant, you’ll have a variety of hardware to choose from, including Dejavoo terminals and the Chipper BT or Chipper 2X BT for mobile processing. Unlike most of the other merchants we profile in this article, Fattmerchant offers its own POS system called Omni.
Omni has a centralized web portal and a customer database. It also performs inventory functions, sends out invoices, and gathers various sales and financial data to present various reports to the merchant. As a POS system, Omni isn’t as robust as say, Square, but it does what it needs to do and does it well.
Fattmerchant offers a month-to-month contract with no early termination fee. Our research also reveals no alarming trend in customer complaints and, in fact, we see some glowing reviews.
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Dharma Merchant Services
- Interchange-plus pricing offered exclusively
- No annual fee or monthly minimum
- Month-to-month billing with no early termination fees
- Discounted pricing for qualified nonprofit companies
- Outstanding sales transparency and highly ethical business practices
- Not recommended for businesses processing less than $10,000 per month
- No support for high-risk or international merchants
If you run a nonprofit and/or are extremely socially conscious, you might want to consider Dharma as your next processor. They offer special pricing for nonprofits and donate some of their profit to good causes.
Dharma has some of the best advertising practices and sales transparency we’ve seen anywhere in the industry. The company uses interchange-plus pricing exclusively, and all accounts feature month-to-month billing with no early termination fees (but they do charge $25 for account closure). It also has no account application fees, no annual fees, and no monthly minimums. Dharma also won’t charge you any PCI compliance fees or batch fees, and it advertises all of its standard rate and fee information on its website.
Dharma offers a variety of card terminals. This includes a full line of Clover equipment, which means the Clover POS software could be available to you, if you wish to use it. The equipment offered is for sale, so Dharma avoids the problematic equipment leasing game. If you need a loan to buy the equipment, check out one of our articles on equipment financing to get you started.
Dharma separates its services offerings into business segments. For the retail rate, you pay:
- $20 monthly fee
- Interchange + 0.15% + $0.07 per transaction
- Numerous incidental fees (e.g., chargebacks, etc.) — all disclosed on Dharma’s website
Lastly, Dharma receives good reviews from its customers. You can also expect high-quality, friendly, personalized service and support from the Dharma team.
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5. Payline Data
- Transparent interchange-plus pricing
- No early termination fee
- Nonprofit discounts available
- Not available for international merchants
Payline Data is a good choice for small to medium-sized businesses, and its pricing plan is suitable for the retail industry in many ways. It offers the following to all its merchants:
- Interchange-plus pricing
- Month-to-month billing with no long-term contracts and no early termination fee (ETF)
- Standardized (and fully disclosed) pricing plans based on the types of transactions your business makes
- Excellent customer service and support
For retail merchants whose transactions are mostly in-person (i.e. card present), Payline’s pricing is:
- Interchange + 0.2% + $0.10 per transaction
This is a good rate for small to medium-sized businesses, as it includes a free equipment offer. In addition, if you’re a registered 501(c)(3) nonprofit, you can receive additional discounted pricing. (Payline is also socially conscious in other ways, as it donates part of its profits to worthy causes.)
Payline offers the Clover POS hardware (stationary and mobile) for its merchants, but they have other options too if you want simpler hardware. Payline can often connect to other POS software if you already are using a different system. As mentioned earlier, Payline’s card-present pricing plan includes the option for a “free” terminal (but you must return the equipment if you cancel service with Payline).
Payline Data has an excellent reputation for technical support and customer service. While they do use independent sales agents–often a signal for deceptive sales practices–Payline’s agents are well trained and well supervised.
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6. Durango Merchant Services
Durango Merchant Services
- Specialists in placing high-risk merchants
- Offers offshore accounts for international merchants
- Fair pricing and contract terms
- Dedicated account manager for customer service
- Early termination fee in some cases
We include Durango in our Best Of list because we know retail merchants can be high-risk merchants too, and most of our recommendations so far do not work with high-risk merchants. The high-risk category often includes shady providers, but Durango stands apart as a reputable, honest, and fair provider who can help you get a merchant account. And if you’re a merchant outside the US, Durango offers international merchant accounts that include currency conversion services, support multi-currency accounts, and provides additional fraud prevention services.
As a high-risk merchant, you will probably have to pay more for each transaction, sign a longer-term contract (usually three years with an automatic renewal clause), and be subject to early termination fees. You might have to live with a tiered pricing plan (which we do not like) and deal with a rolling reserve fund. Despite this, Durango still offers some discounts. They won’t charge you an account set-up fee. Because they might have to contact several back end processors to find one that will take you, the waiver is a definite bonus.
Durango offers a variety of terminals, PIN pads, and mobile card swipers for sale. The company’s equipment lineup is quite robust and includes both countertop terminals and mobile readers. Durango does not seem to offer a POS system connected to its other hardware, however.
As to sales and customer service, Durango is great. It assigns a dedicated account manager to each account. While this means that your agent might not be there to help you during off-hours, they definitely will understand your needs better than a random customer support representative.
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- Good for high-risk businesses
- No account setup fee
- No monthly minimum for low-risk
- Free credit card terminal
- Excellent customer support
- No publicly disclosed pricing
PaymentCloud serves both high-risk and average-risk businesses. Currently, in the high-risk space, PaymentCloud serves merchants selling nutraceuticals and supplements, guns and firearms, cigarettes and tobacco, vape and e-cigarettes, hunting and outdoor equipment, just to mention a few.
During the initial application and underwriting process, PaymentCloud takes an extremely hands-on approach, and that’s why it has a high success rate placing high-risk merchants. After approval, it continues to work closely with its merchants for follow-up support. PaymentCloud gives you a dedicated account manager to take care of problems that may arise, and that’s probably why we don’t see many customer complaints on the internet.
PaymentCloud has a working relationship with many backend processors, and there’s no way to predict which one you’ll end up with. This is why PaymentCloud can’t publish processing rates on its website–each processor charges different rates. Factors affecting rates and account fees depend on business type, processing history, sales volume, credit history, and other issues. We do know that PaymentCloud offers both tiered and interchange-plus pricing models, so if you’re only offered a tiered rate, be sure to ask for an interchange-plus rate quote too.
Be prepared that your rates will be higher than those of an average risk merchant, that you’ll likely have to sign a multi-year contract with an early termination fee and an automatic renewal clause, and a monthly minimum processing charge of around $25. You’ll also probably have a strict processing limit, and you must establish a reserve account. Beyond this, though, PaymentCloud won’t charge you a PCI compliance fee, annual fee, application fee, or other junk fees. Sometimes, PaymentCloud can even find a backend processor willing to sign you as a month-to-month account and waive the early termination fee. So be sure to ask for these–you’ve got nothing to lose.
Turning to hardware, PaymentCloud will give you one free loaner terminal with your account, but you must return the terminal if/when you stop processing with PaymentCloud. PaymentCloud also sells terminals from several different manufacturers, if you wish to buy one outright. The terminals are all EMV-compliant and can support mobile wallets like Apple Pay and Google Pay through NFC.
You’ll have access to various POS systems if you process with PaymentCloud. However, since POS systems are offered through backend processors, which platforms are available to you depends on which backend processor PaymentCloud ultimately matches you up with. You’ll likely have a range of selections running between tablet-run POS systems (including mPOS systems) and full-sized POS terminals.
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- Predictable flat-rate pricing
- Ideal for low-volume merchants
- No monthly fees
- Impressive feature set
- Affordable chip card readers
- All-in-one payments system
- Available to Canadian merchants
- Account stability issues
- Not suitable for high-risk industries
We would be remiss if we did not mention Square in a list of processors who work with the retail segment. Unlike the other processors we’ve mentioned so far, Square is a third-party processor, which generally means you’ll get fast approval to become one of their merchants but later on might encounter account stability issues.
Square seems to want to be more than just a credit card processing company. Judging by its extensive software/services offerings, they seem to want to help you run the entire backend of your business, with credit card processing being merely a part of what they do provide. To that end, Square has adjusted its software to be marketed towards certain business segments, including retail.
Square’s retail product is called Square for Retail. Square adjusted its POS software to fit retail businesses with a large inventory. This iPad-exclusive system features an entirely redesigned user interface, optimized for searching and scanning. It also introduces three advanced reports that enhance Square’s inventory management.
Here are some quick facts about Square for Retail:
- Monthly Fee: Starting at $60/month
- Transaction Costs: 2.5% + $0.10
- Works on iPads
- Suitable for retailers (large ticket values ideal)
See our full Square for Retail review for more information.
Square has other services it sells to merchants. As may be important to retailers, these include:
- Loyalty: $45/month for one to 500 visits; $75/month for 501-1,500 visits; $105/month for 1,501-10,000 visits
- Email Marketing: $15/month for zero to 500 contacts; $25/month for 501-1,000 contacts; $35/month for 1,001-2,000 contacts
- Gift Cards: Per-card cost (starting at $2 per card and dropping as you order more)
As to hardware, Square sells its own, from a free card swiper for your mobile device to a full station loaded with Square POS software. Here’s a detailed guide to Square’s hardware.
With Square, there is no early termination fee or locked-in contract. Every add-on service is month-to-month, and there’s a 30-day free trial for each. Also note that, if you have financed hardware, those terms will apply regardless of whether you’re still using Square to process payments. But generally, Square offers a 30-day trial period for its hardware, and you can return the hardware with no penalty if you don’t like it.
We at Merchant Maverick like Square very much, but we also know that Square is not for everyone. Despite Square’s quick acceptance policy, there’s a long list of prohibited businesses, including “high-risk” products and services. If you fall into this category, you are better off with a merchant account. When you start processing higher volumes or take larger transactions, you might wish to consider a merchant account as well, which is the more stable option. But for a new merchant or a low-volume business, it’s hard to argue with the sheer value that Square presents. And even large businesses are finding value in staying with Square.
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What To Look For In A Retail Payment System
Your business is unique, which means its needs are unique as well. So, when you look for a retail payment system, be sure to think about your business’s needs first.
Do you have a lot of employees? Do you sell a lot of miscellaneous items such that you’ll need software with detailed inventory capabilities? Do you operate in a disadvantaged neighborhood where you might get a lot of SNAP participants for customers? Do you have a set of regular clients who might respond to an email campaign on a new sale? Do your customers change their minds a lot and return a lot of their purchases for refunds?
Depending on the nature of your business, you’ll answer these questions differently. You’ll also prioritize and match your needs to a processor’s service’s strengths and weaknesses differently. When you find the processor that matches your needs the best, then you’ll have found the best processor for your business.
Here are some other non-exclusive items for you to consider, when picking your perfect retail payment system. Leave us a comment if you can think of more!
- SNAP/EBT (depending on the economic background of your customers)
- Gift Cards
- Loyalty Programs (for repeat customers)
- Integration with POS (inventory management, employee management, sales data analysis and reporting)
- Accounting software integration (e.g. QuickBooks integration)
- Easy Refunds
Why Your Choice Of Credit Card Machine Matters For Retail
When it comes to credit card processing, the biggest difference between a brick-and-mortar merchant and an online merchant is that the brick-and-mortar merchant uses a credit card machine to take card information. Everything else works pretty much the same from the backend, once the information has been taken.
With credit (and debit) card machines, there are really just a few must-haves. First, the machine should be EMV-compliant so that you can avoid PCI compliance issues. The good news is that, with just a few exceptions (in the form of mPOS card swipers), pretty much all machines sold these days are EMV-compliant. Then, with the upward trend in using debit cards, you’ll need a PIN pad in order to take advantage of PIN debit, which costs less to process than credit card or credit-style debit transactions. Lastly, you might want your machine to be NFC-capable, to take advantage of the trend in mobile wallets such as Apple Pay or Google Pay.
Other than the above, which machine you finally pick often depends on your backend processor (e.g. Fiserv for Clover). The truth is, credit card machines pretty much look the same, and all have the standard functionalities. They might have different design aesthetics, but even the minimalist ones tend to look alike.
So why does your choice of credit card machine matter for retail? Because your choice of merchant account providers (and their backend processors) matter. Pick the provider that will give you the best balance between price and service, and your choice for machines will automatically narrow to the point that it becomes an easy pick.
Which Retail Credit Card Processor Is Right For You?
Retail businesses come in all shapes and sizes, and every business has its own unique needs. What works best for an auto parts store might not be so good for a bookstore. One thing we do know for sure, though: All of the merchant account providers we’ve profiled here offer much better service than traditional, bank-owned providers.
With the providers above, you’ll have affordable access to the credit card terminals and POS systems you need to run your business. You’ll also enjoy transparent interchange-plus pricing (except for with Fattmerchant and Payment Depot, which use subscription pricing, and Square, which is a third-party processor). Account fees are very low and clearly spelled out on each provider’s website. Best of all, unless you need a high-risk account, contracts are month-to-month with no early termination fee, so you’re free to switch providers if you find a better deal elsewhere.
Most of our top retail merchant account providers cater to medium-sized or larger businesses, typically those processing over $10,000 per month. If your business is smaller than that, a basic account is still a viable option with some of the processors profiled above. For really small or seasonal businesses, you might want to consider Square as a low-cost alternative.
If you’ve had any experience with any of our top merchant account providers for retail, please feel free to leave a comment below. You can also compare most of our top processors head-to-head using our Merchant Account Comparison Chart.
A Last Look At Our Top Picks
- National Processing
Summary - Merchant account provider with interchange pricing. Nothing fancy--just the basics for a great price.
- Payment Depot
Summary - Merchant account provider with membership pricing, allowing you to better control your processing costs.
Summary - Another merchant account provider with membership pricing. With their proprietary POS system Omni, you can run various analytics and reports to help your business grow.
- Dharma Merchant Services
Summary - Merchant account provider charging interchange-plus pricing. Gives great service, great pricing, and donates some of their earnings to good causes.
Summary - Another merchant account provider with interchange-plus pricing. Free loaner terminal for as long as you have an open account.
- Durango Merchant Services
Summary - Serves high-risk merchants in the retail sector. You'll have a dedicated account manager to help you with all your processing needs.
Summary - Another high-risk processor working with merchants in the retail sector. Sometimes, they can find you a backend processor that charge interchange-plus pricing, so be sure to ask for it.
Summary - Third-party processor best suited for retail businesses with smaller processing volume or seasonal businesses. Excellent technology, much of it free with an open account.