Looking to reduce processing fees for your small business? Our list of providers with the lowest credit card processing fees will help you find your best option.
Chris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.
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Chris MotolaChris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.
Senior Staff Writer
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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, and currently resides in Paso Robles, California.
REVIEWED 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, and currently resides in Paso Robles, California.
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Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
As a small business owner, saving money where you can is crucial, and credit card processing is no exception. So you’re probably interested in finding the cheapest credit card processing companies that you can get without sacrificing quality or security.
Lowering your credit card processing fees means you can keep your overhead costs from ballooning. Thankfully, some of the cheapest credit card processing companies also offer reliable customer service, great hardware, and a variety of plans for any industry.
Keep reading to find the lowest-cost merchant services for your small business. Check out our best small business credit card processing services for some alternatives that offer great rates and everything else you need in a payment processor as well.
What Does It Mean To Have The Lowest Credit Card Processing Fees?
When searching for the lowest credit card processing fees for small businesses, you’ll quickly discover that comparing apples-to-apples between many payment processors is hard. That’s because there’s a lot of variation in how these companies charge for their services. Understanding these differences can help you choose the processor that’s cheaper for you, even if it’s not the cheapest for every business.
Here are the two main types of credit card processing fees to bear in mind when it comes to cost. These aren’t the only fees you’ll encounter but the ones you’ll face most consistently.
Generally speaking, newer and smaller businesses will want to minimize administrative fees, while growing and more established businesses will want to prioritize minimizing transaction fees.
Administrative Fees
These are fees that are charged, usually monthly, to keep your account open. Not every processor charges administrative fees.
Does that mean you should always choose a processor with no administrative fees?
If only it were that easy. While you don’t want to pay administrative fees if you can avoid them, many payment processors that offer a good economy of scale for high-volume merchants do charge administrative fees.
Administrative fees are standard with processors offering interchange-plus pricing and even more so with subscription pricing. Both of these pricing models are excellent for high-volume businesses.
Transaction Fees
These are fees that you pay every time a customer swipes their card. You’ll want these to be as low as possible.
As with administrative fees, though, you don’t want to get tunnel vision. Many third-party processors that offer excellent value to small and seasonal businesses have relatively high, flat-rate processing fees. On the other hand, they have few to no administrative fees.
The 8 Cheapest Credit Card Processing Companies For Small Business
When looking for the cheapest merchant services, your business model, transaction size, and the type of card used all affect payments. But the type of fee structure and monthly fee will ultimately have the biggest effect on lowering your credit card processing fees.
Get a free card swiper from Square at no cost when you create a free account. Claim your card reader.
Pros
Predictable flat-rate pricing
Affordable readers
A robust free feature set
Cons
Account stability issues
Not suitable for high-risk industries
Why We Chose Square For Cheapest Credit Card Processing
Square is one of the easiest entry points for any business into the credit card processing market. With affordable hardware, easy-to-understand flat rate processing, and an expansive set of free features, including reporting, invoicing, inventory management, tokenized credit card payments, email marketing, and no monthly fees, Square is a great all-around value.
While Square isn’t necessarily the cheapest credit card processing company on a per-transaction basis, it offers small and seasonal businesses the ability to process credit cards with essentially zero monthly overhead. Additionally, Square has some of the most affordable hardware options for small businesses.
Square Features
Square offers some of the most comprehensive features you can get from a payment processor. Features include:
Aggregated account for credit and debit card processing
Mobile card reader (magstripe-only) included with an account
EMV and NFC-capable card readers are available
Square Register POS system available
ACH processing included with every account
Square Online Store for eCommerce businesses
Basic Square Invoices feature included at no extra cost
Analytics and reporting available through Square Dashboard
Square Pricing
No setup or application fees
$0/month for Square Free account ($29+/month for Square Plus accounts)
2.6% + $0.10/card-present transaction
2.9% + $0.30/online transaction
3.5% + $0.15/manually keyed-in transaction
2.9% + $0.30/invoice paid via credit or debit card
3.5% + $0.15/invoice paid via card on file
1%/ACH transaction (minimum $1 charge)
No ACH reject or chargeback fees
Square Contactless & Chip Reader: $49 each
Square Stand With Contactless & Chip Reader: $169
Square Terminal: $299
Square Register: $799 (or $39/month for 24 months)
Get a free Clover Go card reader from National Processing when you sign up. Claim your card reader.
Pros
Cheap interchange-plus pricing
Low-cost ACH payment processing
Good online reputation
Cons
Early termination fee charged in some cases
A long-term contract is required to get a free terminal
Why We Chose National Processing For Cheapest Credit Card Processing
National Processing has something not many merchant account providers can boast about: an excellent public reputation.
National Processing focuses on core services — credit/debit card processing and ACH at competitive rates — which makes it an excellent choice for businesses that don’t need the software suites and extended services offered by many of its competitors.
At $9.95, National Processing’s monthly fee is lower than you’ll typically see from payment processors offering interchange-plus pricing. Better yet, businesses that outgrow entry-level plans can switch to subscription processing to take advantage of high-volume discounts.
Additionally, businesses that want to encourage cash transactions can use National Processing’s cash discount program, which costs $39.95 per month.
National Processing Features
National Processing offers a lean but solid feature set.
“Free” credit card terminal available
Offers ACH and echeck processing as an add-on
Offers mobile processing with a Clover Go card reader
Offers a choice between either interchange-plus or membership pricing plans
No long-term contract if processing hardware is purchased outright
Exclusive Promo: PaymentCloud will give you $200 if they can't beat your current rate. Get Your Quote
Pros
Specializes in high-risk businesses
Reasonable rates
Excellent customer service
Cons
Pricing varies by back-end processor
Why We Chose PaymentCloud For Cheapest Credit Card Processing
High-risk credit card processing can be one of the seedier segments of the industry, as small businesses with limited credit card processing options can easily be taken advantage of.
Businesses categorized as high-risk can have a hard time finding reasonable processing rates, so we’re fans of PaymentCloud. Specializing in high-risk credit card processing and offering top-notch customer support, this company consistently delivers excellent value. While high-risk businesses should still expect to pay more than a typical low-risk business, PaymentCloud doesn’t charge an exorbitant markup past the interchange fee.
The company keeps costs low by partnering with bigger banks to maximize the odds of your approval and ongoing stability.
PaymentCloud Hardware & Software
PaymentCloud offers a well-rounded feature set for high-risk businesses:
Why We Chose Host Merchant Services For Cheapest Credit Card Processing
Host Merchant Services is notable for the wide variety of businesses it can accommodate, including high-risk businesses (which should expect higher fees, of course).
Host Merchant Services provides full merchant accounts, so even though you’ll be paying a small monthly fee, you’ll get your own stable account in return, reducing the likelihood of experiencing account holds or freezes. Host Merchant Services has a reputation for excellent customer service and cost-effective pricing for businesses doing over $10,000 per month in transactions. Restaurants, in particular, can enjoy a lower transaction rate.
Host Merchant Services Features
Despite its small size, Host Merchant Services offers a full range of products and services and fully transparent pricing. Here are the 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
Why We Chose Dharma Merchant Services For Cheapest Credit Card Processing
Dharma Merchant Services is among the best payment processors for mature businesses, specifically those doing over $10,000 a month in transactions. It is also one of the best credit card processing companies for nonprofits.
Dharma won’t charge you PCI compliance fees, batch fees, AVS fees, setup, or early termination fees.
As it’s a month-to-month service, you’ll have many windows to cancel your Dharma Merchant Services account without any penalties. The monthly fee is small, ranging between $20-$25 (plus an additional $10 if you want to add a payment gateway), and high-volume businesses get a discount on their transactions.
Additionally, Dharma offers a B2B program that offers discounted rates for businesses processing Level 2 or 3 data. It costs an additional $20 per month, but you’ll save money if your company processes many of these transactions.
Dharma Merchant Services Features
Dharma offers one of the most complete feature sets you could hope for from a traditional merchant services provider:
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
Why We Chose Helcim For Cheapest Credit Card Processing
Helcim defies much of the conventional wisdom of payment processing, offering a combination of competitive processing rates, no monthly fees, expansive functionality, and cheap hardware. And it has a respectable international reach to boot.
Helcim’s POS system runs on most devices, which indicates its focus on low-cost solutions over expensive hardware.
Helcim offers cost-effective interchange-plus pricing and has no monthly fee, an almost unheard-of combination in this industry. Contracts are month-to-month, with no early termination fee, nor are there any setup fees, PCI compliance fees, or monthly minimums.
High-volume businesses get discounts on their transaction costs.
Helcim Features
Helcim is one of the cheapest ways to get a full merchant account. It’s no slouch when it comes to features either:
Full-service merchant account
Proprietary Helcim Card Reader for in-person payments
Helcim Payments app for mobile processing
Virtual terminal included with each account
Helcim POS software (requires tablet, laptop, or desktop computer)
Access to Helcim API for customized credit card payments
Why We Chose Stripe For Cheapest Credit Card Processing
What is Stripe, and how does it work? Like Square, Stripe offers a low-risk entry point for businesses to start taking credit cards. Idle Stripe accounts cost users nothing, so seasonal businesses need not worry about overhead costs.
Tech-savvy businesses will be able to wring the most value out of Stripe, which offers best-in-class developer tools with exhaustive documentation. Stripe also provides extensive support for international transactions and multiple currency support, making it a great option for businesses that sell across borders.
Stripe may not be the cheapest game in town if you take advantage of all its features, but you’ll have a lot of control over what fees you do and don’t want to pay. That’s because many of Stripe’s advanced features — when not included in your basic account — use an à la carte pricing system that adds an extra fee to your transaction costs.
Stripe Features
Stripe is an eCommerce-focused payment processing platform that offers a wealth of tools to businesses on a month-to-month basis with no maintenance fees. Features include:
Stripe Payments integrated payments platform
Stripe Virtual Terminal
Stripe Radar anti-fraud protection
Stripe Terminal API & card readers for card-present transactions
ACH processing included with every account
Extensive library of APIs and developer tools
Broad support for international payments and local payment methods
Many ancillary services for establishing and running your business
Stripe Pricing
No monthly fees for a basic account
2.9% + $0.30/online credit/debit transaction (+0.5% for manually entered transactions)
2.7% + $0.05/in-person credit/debit transaction via Stripe Terminal
+1.5% for international cards
+1% for currency conversion (if required)
0.8%/ACH direct debit transaction ($5.00 maximum)
1.2%/ACH direct debit transaction (two-day settlement)
Free credit card terminal requires a long-term contract
Limited pricing information disclosed
Why We Chose Chase Payment Solutions For Cheapest Credit Card Processing
Chase Payment Solutions is one of the largest processors in the United States and is a direct processor. You won’t have to deal with any middlemen when using your merchant account, making it easier to resolve account issues and negotiate terms if needed.
Chase Merchant Services offers some of the cheapest flat-rate processing fees we’ve come across, to say nothing of the fact that it’s rare to see a large, direct processor go so far out of its way to cater to small businesses with low transaction volumes.
Chase has received remarkably few complaints from merchants for such a large company and has consistently earned positive reviews.
Chase Payment Solutions Features
Chase Payment Solutions offers a full range of products and services for most small online or retail businesses, including the following:
Full-service merchant account
Month-to-month billing with no long-term contracts
Choice of proprietary Orbital payment gateway or Authorize.Net
Virtual terminal included with each account
Chase Mobile app and QuickAccept card reader for mobile payments
Next-day funding for Chase business bank account holders
Choice of processing hardware, including Chase Smart Terminal or Ingenico or Verifone models
Level II/Level III credit card processing for B2B payments
Support for international payments
Chase Payment Solutions Pricing
2.6% + $0.10/card-present transaction
2.9% + $0.15/card-not-present transaction
3.5% + $0.10/keyed-in transaction
$0 monthly fee
No PCI compliance fee
No gateway fee
Chase QuickAccept contactless mobile card reader: $49.95
Methodology: How We Chose Our Picks For Cheapest Credit Card Processing
Merchant Maverick rates payment processors according to criteria that includes pricing, contract terms, feature sets, and customer reviews. The processors are then assigned an aggregate score that rates their overall performance relative to similar companies.
For this list, we put additional emphasis on cost considerations. As payment processor pricing is a very complex issue, we considered different small business scenarios and which payment processor would be cheapest under those circumstances. Keep in mind that a flat-rate processor with no monthly fee may be the cheapest option for a brand new or seasonal business, but an expensive one for a well-established, high-volume business. We recommend taking stock of your business’s specific needs and using our list as a starting point for your own research.
Is There A Way To Avoid Credit Card Processing Fees?
A popular way to deal with rising credit card processing costs has been to incentivize cash transactions. This can be done either by (1) offering a cash discount program, which can reduce the number of credit card transactions you have to make, or (2) passing some of the costs on to customers in the form of a credit card surcharge.
Functionally there isn’t much difference for merchants, but some states do make legal distinctions between the two. However, many payment processors now offer cash discounting and surcharging programs collectively under the umbrella name of “no fee credit card processing” or sometimes “free credit card processing.”
Downsides Of “Free” Credit Card Processing
Whether your state allows cash discounting or surcharging, these methods can be very effective in reducing your costs for credit card processing. However, it has some potential downsides.
First, it may anger some customers who expect the convenience of paying with a card with no additional fees. Depending on your industry and location, you could lose customers over the issue, especially if you’re competing against other businesses that can afford to eat credit card processing fees for breakfast.
Another issue is that you will need to do some work to maintain compliance with these zero-fee programs, such as posting signage in the appropriate locations. That usually includes at the register and sometimes at the point of entry to your shop.
5 Ways To Get The Cheapest Credit Card Processing For Small Business
Since not accepting credit cards is presumably out of the question, let’s look at ways to avoid spending too much on credit card processing.
Make Sure That Monthly Fee Is Worth It
Gone is the era where accepting credit cards meant paying a monthly administrative fee or signing a long-term contract. New businesses with low transaction volumes, particularly, should be wary of monthly fees, as they can easily become unnecessary. Third-party processors and similar services aimed at newer businesses can take monthly fees out of the equation entirely.
That doesn’t mean monthly fees are always bad, however. Higher-volume businesses can take advantage of pricing models such as interchange-plus and subscription pricing, which offer cheaper transactions in exchange for monthly fees.
Watch Out For Miscellaneous Fees
Like your cell phone service provider, credit card services can dream up almost any fees they want and bury them deep in your merchant services agreement. You want to have as few of these fees as possible.
Dealing with a credit card processor that is transparent and upfront about all of its costs can eliminate a lot of nasty surprises down the road. You can learn more about common fees, some legitimate and some not, with our merchant services fee guide.
Avoid Processors With Monthly Minimums
With monthly minimums, if you don’t process enough money in a given month to meet the minimum amount you have to pay your processor, you’ll be charged the difference between your monthly minimum and your actual processing fees for that month. Thankfully, most of our preferred providers don’t impose monthly minimums.
Seek Transparent Merchant Services
While this may not be possible for high-risk merchant account providers that price on a case-by-case basis, it’s generally best to work with a payment processor that lays all of its cards on the table. Hidden terms and clauses often obfuscate higher costs.
Don't Be Afraid To Negotiate With Your Current Provider
There’s a lot of competition in the merchant account provider space, which means you may have more leverage than you think you do when it comes to service costs. If you’re outgrowing your plan, check with your provider to see if they can offer you one that better fits your sales volume and the types of transactions your customers make.
With the cost of everything going up, it’s also important to know how inflation can affect businesses and find ways to mitigate those increases for your small business.
Final Thoughts: Getting The Cheapest Credit Card Processing You Can
The credit card processors we’ve profiled here provide great service at an affordable cost. However, some are better suited to particular types of businesses than others. Keep in mind your goals, and don’t be afraid to crunch some numbers and compare your top options. It’s not always obvious which company has the cheapest credit card processing until you work it out with your projected volume and average ticket size.
Which credit card processing is cheapest for small business?
The cheapest credit card processing options depend on several factors, including the size of your business, transaction volume, and the average size of your transactions. For many low-volume small businesses, a third-party processor such as Square is a cost-effective choice.
Does free credit card processing exist?
Truly free credit card processing — in the sense that businesses pay nothing for the service — doesn’t truly exist. However, some merchant services companies offer “zero-fee credit card processing” plans. These are nothing more than surcharge or cash discount programs that pass the cost of payment processing onto the customer.
If you want to use one of these “no-cost credit card processing” plans, proceed with caution. Learn more with our guide to free credit card processing.
What is a typical credit card processing fee?
Interchange and assessment fees range between 1.29% +$0.05 to 3.29% + $0.10. Credit card payment processing fees vary greatly between payment processors and are charged on top of interchange and assessment fees.
What is the least expensive way to take credit cards?
For low-volume businesses, the least expensive way to take credit cards is to use a third-party processor such as Square or Stripe that has no monthly fee.
For high-volume businesses, use a processor with interchange-plus or subscription pricing that reduces transaction fees at higher volumes.
How can a small business avoid credit card processing fees?
There’s no way to avoid credit card processing fees altogether. Small businesses can avoid or reduce their costs, however, by implementing a variety of strategies:
Processing payments as card-present whenever possible (no virtual terminals)
Adding NFC-enabled readers and terminals for tokenized payments
Adding a surcharge or cash discount program
Choosing a pricing structure that fits their business
Minimizing monthly and recurring fees
What states prohibit surcharges and convenience fees?
Connecticut and Massachusetts currently prohibit credit card surcharges.
Additionally, the following states have laws restricting surcharges on their books, but these are currently unenforceable:
California
Florida
Kansas
Maine
New York
Oklahoma
Texas
Utah
Can you negotiate processing fees?
Merchants can typically negotiate credit card processing fees to a certain extent. However, be wary of this process, especially if you’re trying to negotiate with an existing merchant services provider. Negotiating the terms of your current agreement often results in a new contract, potentially with a new multi-year agreement.
It’s better to choose a new credit card processing company to work with instead. Focus on negotiating specifics such as hardware costs, terms, specific fees, and optional features you may need.
How much does a credit card machine cost per month?
The monthly costs for a credit card machine can range from $0 to $60 or more depending on software chosen. Smart credit card terminals that run POS software often require subscription fees. However, some providers, such as Square, offer free software plans for their hardware. The monthly cost is in addition to any credit card processing fees incurred for sales.
In Summary: The 8 Cheapest Credit Card Processing Companies For Small Business
Chris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.
View Chris Motola's professional experience on LinkedIn.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
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.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
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