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The Cheapest Credit Card Processing Companies

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Business owners today know that it’s more important than ever to be able to accept credit cards. Customers carry less cash and rely on credit and debit cards for the majority of their purchases. If you’re an eCommerce merchant selling online, taking “plastic” is just about your only option. Unfortunately, you usually can’t accept credit cards unless you have a merchant account, and merchant accounts aren’t free. In fact, they can be very expensive – especially for a small business – if you choose the wrong provider.

The credit card processing industry is bewildering, especially for a first-time business owner. There are dozens of companies providing processing services, and each of them offers different processing rates, fees, and contract terms. A provider that provides a good deal for a very small business might be prohibitively expensive for a larger one, and vice versa. Naturally, merchants want to cut through the confusion and get a quick answer to the question “Which one is the cheapest?”

There’s nothing wrong with wanting to save money, especially for a new business that has to count every penny. However, if you look up “cheap” in the Merriam-Webster Dictionary, you’ll note that while cheap can mean “charging or obtainable at a low price,” it can also mean “of inferior quality or worth.” If you’ve ever been disappointed with a product purchase when you thought you were getting a good deal, you know that these two definitions often go together.

Here’s a quick look at some of our favorite low-cost credit card processors. Some are free to use. You just pay for the transactions you process. We don’t cover all of these in-depth in this post, but you can check out our complete reviews for all the details.

Row HeaderPayment DepotSquareChase Merchant ServicesPaylineData

Payment Depot

Square Payments

Chase Merchant Services

Payline

Shopify

National Processing

Fattmerchant

Payment Depot merchant services review

Chase merchant services review logo

Review

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Review

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Review

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Review

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Best Choice For

All-Purpose, Large-ticket, Clover POS

Small-ticket, Canada, Mobile, eCommerce

New businesses, Small businesses, Chase customers

All businesses, Mobile, Retail

eCommerce, Mobile

Canada, Restaurants

Large-ticket, All-in-one, Recurring billing

POS and Other Features Included

Yes

Yes

Contact for details

YesYesNoYes

Rate Matching/ Negotiable

Yes

No

Contact for details

YesNoYesYes

Pricing Structure

Interchange-Plus

Flat RateFlat RateInterchange-PlusFlat RateInterchange-PlusSubscription

Retail Rates

0.00% + $0.15 markup

2.75%1.99% + $0.15 debit
2.99% + $0.15 credit
0.20% + $0.102.70%

0.20% + $0.10 markup

0.00% + $0.08

Basic Monthly Fee

$49

$0$0$10$9$9.95$99

Before we delve into specific processors, there are two important points that you need to understand:

  1. The company offering the lowest processing rates or fees isn’t necessarily the cheapest. The total percentage of the credit card sales you’ll have to fork over to your merchant account provider isn’t an easy thing to calculate in advance with any precision. Variable processing rates and hidden (or at least unanticipated) fees can easily result in you paying much more than you thought you were going to for processing. Companies offering flat-rate pricing fare much better in this regard, as their simple pricing structure makes it relatively easy to estimate your monthly processing costs.
  2. The “cheapest” processor isn’t necessarily the best one for your business. While you naturally want to be able to accept credit cards while paying the least amount of money for the privilege, companies offering the lowest rates often cut corners in other aspects of their service to make those low rates possible. Poor customer service, for example, is a common problem among the least-expensive processors. If you want the best overall, you might also check out our top picks for small business credit card processing.

Types Of Providers

With the advent of new, low-cost providers, there are now two broad categories of companies providing credit card processing services. These include traditional (or full-service) merchant account providers and payment services providers, which offer credit card processing but without some of the features of a full-service merchant account. It’s very important that you understand the difference between the two.

Payment Service Providers (PSPs)

Payment service providers can process your credit card transactions, but they don’t provide you with a unique merchant ID number for your business. Instead, your account is aggregated together with accounts from other merchants. This lowers the cost for things like monthly account fees and PCI compliance, but it also means that your account is much more vulnerable to being suddenly frozen or shut down at the slightest hint of fraud. Getting your account working again is complicated by the fact that most PSPs provide little in the way of one-on-one customer service. For a very small business, a PSP may very well be more affordable than a full-service merchant account, especially since you won’t have to pay so many recurring fees just to keep your account open. Be aware, however, that you’ll constantly be running the risk of suddenly losing access to your account and not being able to accept credit cards at all with a PSP. If your business processes a high number of credit card transactions on a daily basis, the loss of business you’ll incur if your account is frozen is quite high. Popular PSPs include PayPal, Square (see our review), and Stripe.

Traditional Merchant Accounts

Traditional merchant accounts include a number of features you won’t find with most PSPs. The primary distinction is that you will be assigned a merchant identification number that is unique to your business. This number automatically identifies you to processors, issuing banks, and credit card associations. While it might not sound like much, having a unique merchant ID number helps to lower the risk of fraud and improves the stability of your account. While you still might have to endure a hold on funds for an unusually large transaction, the chances of your account being completely frozen for no apparent reason are much less than they are with a PSP. Merchant account providers also offer a host of ancillary services, including PCI security scans, customizable payment gateways for online payments, support for ACH (eCheck) payments, and many others. These bells and whistles don’t come cheap, of course. You’ll pay more in monthly fees than you will for an account with a PSP. However, you’ll also pay lower processing rates, especially if your merchant account provider offers interchange-plus pricing. For many medium-sized and larger businesses, a full-service merchant account will actually be less expensive than a PSP.

See More Options…

How We Chose The Cheapest Processors

We used a number of criteria to determine which processors offered the lowest overall costs and the best service in most situations, including the following:

  • Pricing: Since we’re profiling the cheapest processors in the industry, it should come as no surprise that pricing would be our top criterion. It isn’t that simple, however. Pricing can be very complex, and there are a lot of variables to analyze in making a cost comparison between one provider and another. Fortunately, flat-rate pricing is relatively easy to analyze, as there’s usually little or no variability in the processing rates. Interchange-plus pricing, on the other hand, is very complex, as there are a bewildering number of possible rates charged under the “interchange” portion of the processing rate formula. To get a better idea of just how complicated processing rates can be, check out our article, The Complete Guide to Credit Card Processing Rates & Fees.
  • Contracts: No one wants to be stuck in a long-term contract with an expensive early termination fee if you close your account early, but that’s what many traditional merchant account providers will offer you. All the companies profiled here – including both PSPs and full-service merchant account providers – offer month-to-month contracts. You can close your account and switch to a different provider any time you want, and with no penalty.
  • Hardware: Unless you’re running an eCommerce-only business, you’re going to need some equipment to process your customers’ credit cards. Many of the companies profiled here offer a variety of EMV-compliant credit card terminals, POS systems, and mobile card swipers. Equipment is offered for sale at competitive prices – sometimes it’s even free! You can also buy your own equipment and have it reprogrammed to work with your provider’s service. Note that Stripe is eCommerce-only and PayPal only offers a mobile payment solution through their ancillary service, PayPal Here.
  • eCommerce Support: Buying online continues to overtake traditional retail shopping, and all our profiled providers offer support for eCommerce. This includes both a payment gateway to send payment data to the processor and a virtual terminal to allow you to enter transactions on your computer or mobile device. Each provider also offers options for integrating your website with online shopping carts and developer tools for customizing the interface between your site and their services.
  • Customer Support: While every provider offers customer support and service, some do a much better job at it than others. We looked for vendors that provided 24/7 telephone support, as well as an online knowledgebase that allows merchants to troubleshoot common problems on their own. As we’ve noted, some PSPs don’t provide very good customer support at all. That’s one of the trade-offs you’ll have to be aware of if you want to go with the “cheapest” option for credit card processing.

Remember, there isn’t a single processor out there that can offer the lowest costs to every merchant. What might be a very inexpensive solution for you might not be such a good deal for someone else. Also, paying the least amount of money for processing won’t be of much use to you if you have to worry about your account suddenly being frozen or shut down, or if the customer service behind your account isn’t adequate to solve technical problems for you when they arise. That said, here are our ten top choices for the cheapest credit card processing companies:

1) Payment Depot

Payment Depot is a merchant account provider headquartered in Orange, California. The company has been in business since 2013 and is best known for its use of subscription or membership-based pricing, a spinoff of the interchange-plus model. While it isn’t the only provider in the industry to offer this type of pricing, 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.

So, how does it work? Most providers offering interchange-plus pricing will charge “interchange + markup” rates, with the markup including both a small percentage of the sale and a per-transaction fee. You’ll also incur several monthly and annual fees for individual services, such as PCI compliance and account statements. In contrast, Payment Depot’s model combines all your monthly fees into a single monthly subscription ranging from $49.00 to $199.00 per month, depending on which plan you choose. You’ll also pay lower processing rates, with the elimination of the percentage markup. Your rates will be the interchange rate, plus a per-transaction fee that varies between $0.15 and $0.05 per transaction, depending on your pricing plan.

Payment Depot merchant services review

Cheapest All-Purpose Credit Card Processor

The Essentials:
✓ No early termination fees
✓ Transparent subscription-based pass-through pricing
✓ 0% markup equals big savings on large transactions
✓ Proven track record
Other selling points include:
• Free virtual terminal
• Free gateway
• Free card reader with most plans
• Variety of plans to suit most businesses
Visit the Payment Depot website
Read our Payment Depot review

Payment Depot accounts are month-to-month, but you can also save money on your subscription fees by paying them annually instead of monthly. Annual subscriptions are protected with a 90-day satisfaction guarantee, so merchants who are not satisfied with their service within the first 90 days will be refunded their membership fees (not interchange fees or transaction fees, of course). This is a fair, reasonable offer, and should give you some peace of mind.

For more information about this company, contact them now or see our in-depth Payment Depot review.

2) Square Payments

Everyone has heard of Square (see our review) by now. With its free Square Reader, app-based payment system, and simple pricing structure, it’s one of the most popular processing services on the market for small businesses. Square’s pay-as-you-go system allows businesses that ordinarily couldn’t afford a merchant account to accept credit cards.

Square’s Most Popular Services

ReadereCommerceRetailFood Service
Free App & ReaderSquare eCommerceSquare for RetailSquare for Restaurants
Get StartedGet StartedGet StartedGet Started
Free, general-purpose POS software and reader for iOS and AndroidEasy integration with popular platforms plus API for customizationSpecialized software for more complex retail storesSpecialized software for full-service restaurants
$0/month$0/month$60/month$60/month
Always FreeAlways FreeFree TrialFree Trial

Retail businesses love Square for its low-priced card readers, which replace traditional credit card terminals with a smartphone-based system that’s both affordable and mobile. In addition to a card reader, you’ll need the free Square app, a smartphone, and an Internet connection. Square’s original card reader is free, and you’ll receive one when you open your account. However, it can only read magstripe cards and requires a headphone jack to function. Most users will want to shell out a few extra bucks for a newer, EMV-compliant reader. The Square Contactless and Chip Reader is only $49.00, and supports both EMV and NFC-based payment methods. It also uses Bluetooth to connect to your smartphone or tablet – no headphone jack required. If you’d prefer not to be dependent on your smartphone for processing, Square also offers more sophisticated hardware options. Square Terminal ($399) and Square Register ($999) provide a host of additional features and offer true point-of-sale (POS) functionality.

 

Cheapest Mobile Credit Card Processing Company

The Essentials:
✓ $0 monthly fee
✓ 2.75% for all card-present transactions
✓ Free POS app
✓ Free magstripe credit card reader
Proprietary software suite includes:
• Point-of-Sale (POS) software
• Inventory management
• Mobile app
• Virtual terminal
• Invoicing/billing
• API for custom solutions
Visit the Square website
Read our Square review

Square’s pricing structure used to be very simple, but it’s gotten more complicated as the company’s hardware features have expanded. Nonetheless, it’s still pretty simple, with a basic flat-rate structure that offers consistent, predictable pricing. There are no monthly fees whatsoever for a basic account, and none of the types of “hidden” fees that traditional merchant account providers like to tack on. While some advanced features require a monthly subscription, these are entirely optional, and most businesses probably won’t need them. Here’s an overview of Square’s most common processing rates:

  • Square Point of Sale (With Mobile Card Reader): 2.75% per card-present transaction
  • Square Register: 2.5% + $0.10 per card-present transaction
  • Square Terminal: 2.6% + $0.10 per card-present transaction
  • Square For Retail POS: 2.5% + $0.10 per card-present transaction
  • Square for Restaurants POS: 2.6% + $0.10 per card-present transaction
  • Square Appointments (Individual User): 2.75% per card-present transaction
  • Square Appointments (For Teams): 2.5% + $0.10 per card-present transaction
  • Keyed-In and Card on File Transactions: 3.5% + $0.15 per transaction
  • eCommerce Transactions & Invoices: 2.9% + $0.30 per transaction

That’s it! You don’t have to worry about non-qualified transactions, batch fees, or anything else. Funds are deposited into the user’s account within 1-2 business days in most cases. Billing is month-to-month, so you don’t have to worry about long-term contracts and early termination fees. You can quit anytime you want without penalty.

This all sounds great – and it is – if you’re a small business owner that has to watch every penny and can’t afford to shell out a significant amount of money every month just to have a merchant account. For a larger business, however, Square’s pricing actually isn’t the best deal available. Flat-rate pricing is deliberately on the high side because it has to cover all the other services that most providers bill you separately for. At a certain point (roughly over $5,000 per month in processing volume for most users), you’re actually better off going with a full-service merchant account provider that offers interchange-plus pricing. Yes, you’ll have to pay those pesky account fees, but your processing rates will be so much lower you’ll save money overall.

Besides high processing rates, Square has a few other drawbacks. We’ve already mentioned that your account is much more likely to be frozen or terminated unexpectedly, but what makes this situation worse is that Square’s customer service isn’t so great. The company didn’t even have telephone support for several years after it launched, though it does now. Unfortunately, it’s only available during business hours, and the large number of complaints about it suggests that the quality of support you’ll receive if you call in with a problem is inconsistent at best.

But is it really the cheapest way to go? Well, it depends. For a very small business that doesn’t have a high processing volume, Square’s lack of account fees and predictable pricing can make it very affordable. On the other hand, a larger business with a high processing volume will end up paying much more under those flat-rate prices than it would with an interchange-plus pricing plan.

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. The trade-off is that there’s a much higher chance that your account will be frozen or terminated without notice if fraud is suspected. This might be a minor inconvenience to a retail business that mostly deals in cash and only occasionally takes credit cards, but it’s catastrophic to an eCommerce business where cash isn’t an option.

For a more detailed look at Square, be sure to check out our full review.

3) Payline Data

Payline Data (see our review) covers all the bases for small business transactions, from mobile and online payments to in-store sales. They offer easy-to-understand pricing plans that are very affordable, especially for low-volume sellers, and the company’s website fully explains all of the extra features and their associated costs, so you know up front what you’ll have to pay. Payline also stands out from the crowd for its corporate philosophy of charitable giving and support for non-profits through discounted pricing and its “Commercial Co-Venture” program.

 

Cheapest Merchant Account Provider

The Essentials:
✓ No early termination fees
✓ Transparent interchange-plus pass-through pricing
✓ Outstanding $10 monthly fee option
✓ Exceptional eCommerce shopping cart compatibility
Proprietary software suite includes:
• Excellent mobile processing app
• Easy integration API for customization
• Virtual terminal
• Billing management
Visit the Payline website
Read our Payline review

For brand-new or mobile businesses, Payline Start is the most affordable plan. There’s only a $10.00 monthly fee, and pass-through markup rates are set at interchange + 0.20% + $0.10 per transaction. In addition to the free virtual terminal, you’ll also receive a free Ingenico GX5 card reader and the Payline Mobile app to go with it. The company’s Payline Connect plan is ideal for eCommerce or mail order/telephone order businesses. You’ll pay just $10.00 per month, plus an additional $10.00 per month if you need a payment gateway. Interchange-plus rates are set at interchange + 0.30% + $0.20 per transaction. Both plans include PCI compliance and American Express processing at no additional charge and feature month-to-month billing with no early termination fees. For larger businesses, lower rates are available through the company’s Enterprise Pricing program.

For more information, see our complete Payline Data review.

4) Shopify

eCommerce merchants have unique needs and will probably prefer a solution that’s geared more toward them. Shopify (see our review) provides just about every feature you might need to run an online business, including credit card processing.

The company offers a wide range of pricing plans, ranging from $9.00 per month for their bare-bones Shopify Lite plan to $299 per month for the Advanced Shopify plan. For credit card processing, you can choose between using either a third-party payment gateway or Shopify’s own Shopify Payments feature. With Shopify Payments, you’ll have a very basic flat-rate pricing plan. Rates start at 2.90% + $0.30 per transaction for online transactions and 2.70% for in-person transactions. Discounts on these rates are available if you sign up for one of the company’s more expensive monthly plans. If you choose to use a third-party gateway, you’ll have to pay a Shopify Transaction Fee for each transaction in addition to whatever your gateway provider charges you. Shopify Transaction Fees start at 2.0% per transaction for the least-expensive monthly plans and can be as low as 0.5% per transaction for the most expensive plans.

In selecting which plan is best for your business, you’ll want to carefully evaluate the processing costs associated with each plan, as well as how important the additional features are to your business. The Shopify Lite plan, for example, doesn’t include an online store or telephone customer support. You’ll be able to sell in person, via Facebook, or using “buy” buttons on existing websites, but that’s it. You’ll also have to rely on email and chat for any customer service issues that come up.

Cheapest eCommerce Payment Services Provider

The Essentials:
✓ Free 14-day trial offered
✓ Plans start at $9.00 per month
✓ Online rates start at 2.90% + $0.30 per transaction
✓ Month-to-month billing
Proprietary software suite includes:
• Online store
• Predictable flat-rate pricing
• Fraud analysis tools
• Shopify POS app
Visit the Shopify website
Read our Shopify review

For most merchants, the Basic Shopify Plan ($29.00 per month) is probably the best way to start. You’ll still pay the highest processing rates (or the highest Shopify Transaction Fees), but you’ll get an online store with unlimited products, 24/7 telephone customer support, and a host of other useful features. When your business outgrows the constraints of that plan, it’s easy to upgrade to the next-highest level of service. Shopify doesn’t impose any long-term contracts or charge any early termination fees. However, you can get a pricing discount of 10% by paying for one year (or 20% for two years) in advance.

For more details on all of Shopify’s numerous features, please see our complete review.

5) Chase Merchant Services

Chase Merchant Services is the merchant services subsidiary of mammoth JPMorgan Chase Bank, N.A. Originally established in 1985, the company is headquartered in Dallas, Texas. A European office is located in Dublin, Ireland. The company is one of the largest processors in the United States, serving 480,000 businesses and processing over $1 trillion annually. Naturally, they function as an acquiring bank, able to establish merchant relationships and process their own transactions. This type of business entity is also known as a direct processor, as you won’t have to deal with any middlemen when using your merchant account.

Chase merchant services review logo

Good Option for New Businesses

The Essentials:
✓ No early termination fees
✓ Simple flat-rate pricing
✓ No monthly fees
✓ No hidden fees
Chase business checking customers benefit from:
• Faster deposit times into Chase business checking accounts
Visit the Chase Merchant Services website
Read our Chase Merchant Services review

For such a large company, Chase has received remarkably few complaints from merchants. Their current total of 35 complaints with the BBB in the last three years represents a mere 0.007% of their customer base. This remarkably low rate has been consistent throughout our last few review updates and is a good indicator that the company trains their sales force well and generally provides quality customer service after the sale.

The standard rate offer from Chase is:

  • 1.99% + $0.15 for in-person debit card transactions
  • 2.99% + $0.15 for in-person credit card transactions
  • 2.90% + $0.25 for card-not-present

Chase now offers month-to-month billing with no long-term contracts or early termination fees as a standard feature. However, you might have to agree to a three-year contract if you include a “free” credit card terminal with your account. While we’d prefer to see interchange-plus pricing offered to all merchants, those with a sufficiently high monthly processing volume should be able to negotiate for interchange-plus rates that are significantly lower than those quoted above.

For a more detailed look at Chase Merchant Services, be sure to check out our full review.

Get started with Chase Merchant Services

6) CDGcommerce

No account setup fees. No PCI compliance fees. No gateway fees. No monthly minimums, either. There’s a lot of things that CDGcommerce (see our review) doesn’t charge you for, making them a very affordable option for small businesses and those just getting off the ground. They also offer month-to-month contracts with no early termination fee, so in the unlikely event that you aren’t happy with their service, you can close your account without penalty.

So, what do you pay for? Besides processing charges, you’ll only have to pay a $10.00 monthly account fee. This gets you both a full-service merchant account and a payment gateway. You can select either CDG’s own proprietary Quantum gateway or Authorize.Net. Either way, there’s no fee for using the gateway, and no additional per-transaction processing fee. While this is a great deal, you also have the option of adding the cdg360 security package for an extra $15.00 per month. It comes with customized security alerts, PCI-DSS vulnerability scans, and $100,000 in data breach/theft protection. It’s well worth paying a little extra for, especially for eCommerce merchants.

Good Option for Online Payment Processing

The Essentials:
✓ Month-to-month billing with no early termination fees
✓ Interchange-plus pricing available
✓ Credit card terminal available for $79 annual insurance fee
✓ Free payment gateway option with no monthly gateway fees
✓ Exceptional eCommerce shopping cart compatibility
Proprietary fraud prevention suite includes:
• Automatic high-risk order detection
• Dial Verify phone order verification
• Cardholder authentication (VbV/MSC)
• Chargeback Defender
• Easy integration and API for customization
Visit the CDGcommerce website
Read our CDGcommerce review

We don’t recommend leasing a credit card terminal, but CDG has a program that’s very different from traditional leases, and is actually a good deal. For only $79 per year (for terminal insurance), CDG will provide you with a terminal and keep it updated. This works out to $6.58 per month, a fraction of what most terminal leasing companies will charge you. If you need a wireless terminal, you’ll also have to pay $20.00 per month for wireless data and an additional $0.05 per transaction in processing fees.

You won’t need to negotiate with CDG to figure out your processing rates, as all their rate plans are fully disclosed on their website. The company offers a choice between Simplified and Advanced pricing plans, with Simplified pricing designed for merchants processing less than $10,000 per month, and Advanced pricing for those processing $10,000 or more per month. Here are their current rates:

Simplified Pricing:

  • Online: 1.95% + $0.30 per transaction (2.95% + $0.30 per non-qualified transaction (international, corporate cards and premium cards))
  • Retail (swipe): 1.70% + $0.25 per transaction (2.90% + $0.30 per non-qualified transaction (keyed-in sales, international and premium cards))
  • POS: 1.70% + $0.25 per transaction (2.90% + $0.30 per non-qualified transaction (keyed-in sales, international and premium cards))
  • Mobile: 1.70% + $0.25 per transaction (2.90% + $0.30 per non-qualified transaction (keyed-in sales, international and premium cards))

Advanced Pricing:

Qualified non-profits and businesses processing over $10,000 per month will receive the following interchange-plus processing rates:

  • $10,000 – $25,000: interchange + 0.30% + $0.10 per transaction
  • $25,001 – $50,000: interchange + 0.25% + $0.10 per transaction
  • $50,001 – $100,000: interchange + 0.20% + $0.10 per transaction
  • Non-profit: interchange + 0.20% + $0.10 per transaction (regardless of monthly processing volume)

Note that custom pricing is available for businesses processing over $100,000 per month. These rates will be substantially lower than the fixed rates quoted above.

With very low account fees and competitive interchange-plus processing rates, CDGcommerce offers a great combination of price and value. If you’ve been using Square or PayPal and want to upgrade to a full-service merchant account, they’re an excellent option.

For more information on what CDGcommerce can offer your business, see our complete review.

7) Dharma Merchant Services

Headquartered in downtown Vancouver, Washington, Dharma Merchant Services (see our review) is far more socially responsible than just about any other merchant account provider in the industry. For you, that enlightened corporate philosophy translates into fair and transparent pricing, reasonable contract terms, and excellent customer support.

Because they don’t try to squeeze extra money out of struggling small business owners, you won’t have to pay an account setup fee or an annual fee. There’s no monthly minimum, either. You will pay a $20.00 monthly account fee, but that’s just about it. Other fees (most of which are per-occurrence, such as chargeback fees) are fully disclosed on their website. Like many of our other favorite processors, Dharma doesn’t have long-term contracts, either. Billing is month-to-month, and there’s no early termination fee if you close your account.

Dharma Merchant Services review

Good Option for Nonprofits and B2B Payments

The Essentials:
✓ Provides discounted rates for nonprofits
✓ Exceptional customer service
✓ Transparent interchange-plus pass-through pricing
✓ Proven track record with nonprofits
Free MX Merchant Software includes:
• Level 2 and level 3 data for lower interchange rates on B2B processing
• Virtual terminal
• Invoicing/billing
Visit the Dharma Merchant Services website
Read our Dharma Merchant Services review

The company uses interchange-plus pricing exclusively and lists their rates right on their website. Here’s their current processing rate information:

  • Storefront & POS: interchange + 0.15% + $0.07 per transaction
  • Virtual: interchange + 0.20% + $0.10 per transaction
  • Restaurant: interchange + 0.15% + $0.07 per transaction

If you need a terminal, Dharma will sell you either the First Data FD-130, Verifone Vx520, or the Poynt Smart Terminal. Need a POS system? Dharma offers the popular Clover Mini and Clover Station models. Equipment is sold outright rather than trapping you in an overpriced lease. If you need a mobile payments system, Dharma offers the free MX Merchant Express app for your iOS or Android smartphone or tablet. You’ll also need the Walker C2X mobile card reader ($99.00), which accepts magstripe, EMV, and NFC-based payment methods and connects via either Bluetooth or a headphone jack.

Dharma doesn’t have a minimum monthly volume requirement, but they do acknowledge that their fees and rates aren’t the lowest on the market for businesses that process less than $10,000 per month. You’re still free to sign up if you need a full-service merchant account, but they recommend either PayPal or Square (see our review) if you don’t.

For more information on Dharma Merchant Services, please check out our complete review.

Popular (But Less Reliable) Inexpensive Options

PayPal

Everyone has heard of PayPal (see our review). And just about everyone uses it. With an active user base of almost 200 million customers in 200 markets around the world, it’s a good bet that most of your customers use it, too. But can the company fill all your processing needs? The short answer is yes. PayPal has all the features you would need to run a business – either retail or eCommerce – using just their payment processing services and equipment. But would this be cost-effective? Here’s where it gets complicated. While the company offers flat-rate pricing and no monthly fees for its basic accounts, those flat-rate prices are kind of on the high side. Also, if you need features such as a virtual terminal, your account isn’t free. Instead, it’s $30.00 per month, plus your processing charges.

PayPal doesn’t offer true, full-service merchant accounts. Instead, they function as a payment service provider (PSP), which keeps costs relatively low, but also means that they’re quick on the trigger to freeze your account if they suspect that fraud has occurred. Like most PSPs, they don’t have long-term contracts and don’t charge early termination fees. Billing is month-to-month, and an account that doesn’t have a monthly fee is good for a business that only processes credit card transactions occasionally.

Did you know that PayPal integrates with Vend POS?

PayPal + Vend POS
Advanced POS software
Easy credit card processing integration
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PayPal’s basic rate for online transactions is 2.9% + $0.30 per transaction. International payments and transactions processed through their virtual terminal cost more, while registered charities and mobile payments get a discount. PayPal fully discloses their rates on their website, so you’ll always know in advance what you’ll be paying.

While PayPal is designed primarily for eCommerce businesses, the company also supports retailers through integration with numerous third-party mobile POS systems and their own mobile payments system, PayPal Here. The latter now includes a Bluetooth-enabled EMV card reader. While many companies offer a free virtual terminal but charge a monthly fee for the payment gateway needed to use it, PayPal does just the opposite. Their PayFlow Payment Gateway comes with no monthly fee, but if you also need a virtual terminal, you’ll pay $30.00 per month for it. There’s also a small additional per-transaction processing charge.

While these are all great features, there are also some not-so-great things about PayPal that you should be aware of before you sign up. Customer support through their telephone support line is very inconsistent. Some customer service representatives are quite knowledgeable and helpful, while others are not. Fortunately, the company provides an online knowledgebase that should help you solve common problems on your own. As we’ve mentioned, sudden account holds or terminations are also a possibility. If you simply can’t afford to lose access to your account temporarily, consider a different option.

For some businesses, PayPal is really all you need. If you don’t need a virtual terminal or any of the other features of the $30 PayPal Payments Pro plan, you can avoid monthly fees altogether and operate on a pay-as-you-go basis. For larger businesses and those with more specialized needs, PayPal makes an excellent secondary payment option on top of your regular merchant account.

For more detailed information about PayPal, see our complete review.

Stripe Payments

Stripe logo

Just like Square is popular with small retail businesses, Stripe (see our review) is the darling of the eCommerce world. The company functions as a payment service provider (PSP), aggregating accounts and keeping costs low for their clients. There are no monthly fees, and their flat-rate processing plan is extremely simple.

Stripe is so focused on eCommerce that they don’t offer much of anything to retailers. There are no credit card terminals, POS systems, or even mobile payments systems for your smartphone or tablet. So, if you’re a retailer, you can skip right on ahead to the next section. Stripe is not for you.

eCommerce-only merchants, on the other hand, will find a very robust variety of services to help them sell online. Integration is the name of the game at Stripe, and their payments processing service works with just about every online shopping cart on the market. They also have a vast library of APIs that allow businesses to customize the interface between Stripe and their websites. If you’d like to sell your products through your own app as well as on your website, they offer an impressive in-app purchasing capability.

So, how much does all this techy goodness cost? The short answer is not much – at least under certain circumstances. Since all your transactions will be processed online without a physical card being swiped or dipped, Stripe charges a flat 2.9% + $0.30 for all credit and debit card transactions. eCheck (ACH) and Bitcoin payments are charged a mere 0.8% per transaction. This is the same rate that Square and PayPal also charge for online transactions. There are no additional account fees, although you will be charged $15.00 for each chargeback. Chargeback fees are unavoidable with any processor, but unlike most companies, Stripe will refund your money if the chargeback investigation comes out in your favor.

You also won’t have to worry about long-term contracts or early termination fees, as Stripe bills on a month-to-month basis. This is a useful feature for a growing eCommerce business, as Stripe’s flat-rate pricing suffers the same flaw that plagues Square and PayPal: for a high-volume business, their flat-rate pricing is actually more expensive than what a full-service merchant account could provide through interchange-plus pricing.

While Stripe has some very impressive features, it also has a few serious drawbacks. Like other payment service providers (PSPs), account holds and terminations occur frequently and without notice. Stripe uses a machine learning-enabled algorithm to scan accounts for possible fraud, and it’s definitely programmed to err on the side of caution. Fortunately, Stripe now offers 24/7 live chat and telephone service – a notable improvement from the days when email was your only option for support. This is a fairly recent change, and customer reviews so far have been mixed. Like most other companies, you’ll probably receive better customer service if you have a technical issue to deal with rather than a sudden account hold, freeze, or termination.

Despite its shortcomings, Stripe is a good choice for a new eCommerce venture. You’ll enjoy pay-as-you-go service with no monthly fees, and you won’t have to worry about long-term contracts. The company’s extensive library of developer tools can offer you options that you might not be able to find with other providers. Just be aware that when your business grows beyond a certain point, you’ll need the security and reliability of a full-service merchant account. You’ll also save money on processing charges by switching to interchange-plus pricing.

For more detailed information about Stripe’s products and services, see our complete review.

Final Thoughts

As you’ve probably noticed by now, pricing for credit card processing is a ridiculously complicated subject. With dozens of interchange rates and a wild assortment of fees, trying to figure out how much accepting credit cards is going to cost your business inevitably comes down to guesswork. While you can make a reasonable estimation based on your processing history and your business type, it’s not realistic to expect that you’ll be able to come up with a precise figure. Fortunately, the companies we’ve profiled here fully disclose their processing rates and fees, making the job of estimating your costs much easier.

We’ve only listed ten of the most popular and most affordable processors here, so be aware that the cheapest processor for your particular business might not be on this list. There are plenty of other providers out there who are also competing for your business!

Here are a few very general rules of thumb regarding merchant account pricing:

  • If your business has a low processing volume, you’ll want to find a provider with low monthly and annual fees. One of the most appealing aspects of Square, PayPal, or Stripe is that they don’t charge any monthly fees. This is a great feature if your business is seasonal or you only occasionally have a need to accept credit cards. Processing rates won’t be as important for low-volume merchants.
  • If your business has a high processing volume, fees aren’t as important, and you’ll want to get the lowest processing rates you can find. Paying one or more monthly fees for a merchant account is an insignificant expense for a larger business, but higher processing rates can make a serious dent in your profits.
  • Carefully analyze both the percentage rate and the per-transaction processing fee when evaluating rates. While you’d ideally like them both to be low, which one is more important will depend on your average transaction size. If you process a lot of smaller transactions, a $0.30 per transaction fee can add up quickly. On the other hand, if your transactions are usually larger, you won’t need to be as concerned with the per-transaction fee and should try to get the lowest percentage rate you can find.

All the companies we’ve profiled here provide excellent service at an affordable cost, but some are better suited to particular types of businesses than others. Square, for example, works best for very small retail businesses. Shopify, PayPal, and Stripe, on the other hand, are a better fit for small eCommerce merchants. Full-service merchant account providers like Helcim, CDGcommerce, and Dharma are more well-rounded, but CDG is a better fit for smaller businesses, while Helcim and Dharma work better with larger ones. For a side-by-side comparison of some of the companies listed here (and a few other excellent providers), please see our Merchant Account Comparison Chart.

A last look at your credit card processing options

Row HeaderPayment DepotSquareChase Merchant ServicesPaylineData

Payment Depot

Square Payments

Chase Merchant Services

Payline

Shopify

National Processing

Fattmerchant

Payment Depot merchant services review

Chase merchant services review logo

Review

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Review

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Review

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Review

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Review

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Best Choice For

All-Purpose, Large-ticket, Clover POS

Small-ticket, Canada, Mobile, eCommerce

New businesses, Small businesses, Chase customers

All businesses, Mobile, Retail

eCommerce, Mobile

Canada, Restaurants

Large-ticket, All-in-one, Recurring billing

POS and Other Features Included

Yes

Yes

Contact for details

YesYesNoYes

Rate Matching/ Negotiable

Yes

No

Contact for details

YesNoYesYes

Pricing Structure

Interchange-Plus

Flat RateFlat RateInterchange-PlusFlat RateInterchange-PlusSubscription

Retail Rates

0.00% + $0.15 markup

2.75%1.99% + $0.15 debit
2.99% + $0.15 credit
0.20% + $0.102.70%

0.20% + $0.10 markup

0.00% + $0.08

Basic Monthly Fee

$49

$0$0$10$9$9.95$99
Frank Kehl

Frank Kehl

Frank Kehl has been writing about merchant services, payment gateways, and international money transfer services since 2015. He has a Bachelor of Science degree from Penn State and a Juris Doctorate from the Ventura College of Law. After a long and enjoyable career of traveling around the world as an Air Force navigator, he’s comfortably settled down in the wine country town of Paso Robles in California’s scenic Central Coast region. He enjoys reading, photography, hiking, and numerous other outdoor pursuits.
Frank Kehl
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10 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Meg Glidden

    What about EVO?

      Jessica Dinsmore

      Hi Meg,
      You can read our EVO Review and see what you think of their pricing plans. They seem to differ greatly depending on agents and individual business needs. I hope that helps!

        Veri cardsys

        Wow! It is really good info! Thanks for sharing this post 🙂

          John Y

          Costco Business Services offer 1.9% online rate plus $0.25/transaction.

            MelsAntiqueJewelry.com

            That is not exactly correct. I have my merchant account through Costco and there pricing structure is the interchange-plus pricing. They tell you the rate is 1.99%, but it varies from 1.99 – 3.5% based on the credit card you are processing. Very rarely do you get one that is 1.99%. I am changing companies now because Costco is too expense and they have caused me to lose customers by ‘accidentally’ processing a charge twice, which takes months to get corrected and you can only do it through the mail!!!

              Jennifer Martin

              Thanks for the overview. Looks like you are way off though on the square rates.

                Frank Kehl

                Fixed. Thanks!

                  joseph longo

                  interested in an account

                    Jessica Dinsmore

                    Hi Joseph,

                    Our filtering tool can help you find the provider best suited for your business. Give it a try here.

                      Wayne Gungl

                      Great information – especially for those of us with a very small business. One other thing that might have been considered is that with PayPal, customers leave the site they are visiting and are transported to the PayPal site. With Stripe, and others, they can be set up so that the customer does not have the impression that they are leaving the merchant site. I am currently using PayPal, but would like to have customers stay on my site. To make that work, your merchant site must have a secure socket. All that being said, I appreciate the education!

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