5 Best Credit Card Processing Companies For Startups In 2024
All of these processors are well suited for startups, are easy to sign up for, and have no contracts, but none of them take on high-risk businesses.
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WRITTEN & RESEARCHED BY
Senior Staff Writer
Last updated onUpdated
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REVIEWED BY
Senior Staff Writer
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
Choosing credit card processing for startups can be challenging since there are so many options on the market.
We reviewed dozens of credit card processing companies for startups based on costs, contract length, POS hardware options, and online payment options to help you choose the best credit card processing company for your startup.
Learn More About Our Top Picks
| Company | Best For | Next StepsBest For |
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CDGcommerce
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Square
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Stripe Payments
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Helcim
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Dharma Merchant Services
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| Show Fewer Options |
Read more below to learn why we chose these options.
Table of Contents [hide][show]
- How Does Credit Card Processing Work For Startups?
- 5 Best Credit Card Processing Companies For Startups
- CDGcommerce: Best Hybrid Model
- Square: Best For Startups With Physical Locations
- Stripe Payments: Best For eCommerce Businesses
- Helcim: Most Scalable Option
- Dharma Merchant Services: Best For Businesses With Larger Sales Volumes
- What To Watch Out For When Searching For A Credit Card Processing Company
- Which Credit Card Processor Is The Best Fit For My Startup?
- FAQs: Credit Card Processing For Startups
Table of Contents
- How Does Credit Card Processing Work For Startups?
- 5 Best Credit Card Processing Companies For Startups
- Compare The Best Payment Processing Companies For Startups
- CDGcommerce: Best Hybrid Model
- CDGcommerce
- CDGcommerce Pricing
- CDGcommerce Features
- Square: Best For Startups With Physical Locations
- Square
- Square Pricing
- Square Features
- Stripe Payments: Best For eCommerce Businesses
- Stripe Payments
- Stripe Pricing
- Stripe Features
- Helcim: Most Scalable Option
- Helcim
- Helcim Pricing
- Helcim Features
- Dharma Merchant Services: Best For Businesses With Larger Sales Volumes
- Dharma Merchant Services
- Dharma Merchant Services Pricing
- Dharma Merchant Services Features
- Payment Processing Rating Methodology
- What To Watch Out For When Searching For A Credit Card Processing Company
- Which Credit Card Processor Is The Best Fit For My Startup?
- FAQs: Credit Card Processing For Startups
How Does Credit Card Processing Work For Startups?
Credit card processing, also called payment processing, is a way for startups to take digital payment types such as debit and credit cards, digital wallets like Google Pay, eChecks, and even cryptocurrency.
There are three types of credit card processing providers: traditional merchant account providers, payment service providers, and hybrid payment processing providers.
Let’s quickly go over some business and pricing models used by payment processors and which one may be right for your startup.
5 Best Credit Card Processing Companies For Startups
Credit card processing companies for startups have easy signups, affordable processing fees, month-to-month billing, and POS hardware purchasing options.
The best credit card processing companies for startups include:
- CDGcommerce: Best Hybrid Model
- Square: Best For Startups With Physical Locations
- Stripe Payments: Best For eCommerce Businesses
- Helcim: Most Scalable Option
- Dharma Merchant Services: Best For Businesses With Larger Sales Volumes
Compare The Best Payment Processing Companies For Startups
| Account Types Offered | Ideal For | Monthly Fees | Flat-Rate Payment Processing | Interchange-Plus Payment Processing | |
|---|---|---|---|---|---|
| CDGcommerce | Hybrid | Midsize/large businesses, nonprofits, high-risk | $0-$199 | ||
| Square | Payment Services | In-person transactions | $0-$60 | ||
| Stripe | Payment Services | eCommerce | $0 | ||
| Helcim | Merchant | B2B/B2G and service businesses | $0 | ||
| Dharma | Merchant | Nonprofits, large businesses | $15 |
CDGcommerce: Best Hybrid Model
Pros
- Interchange-plus and subscription billing available
- Free payment gateway and virtual terminal
- Month-to-month billing with limited fees
- Excellent customer service and support
Cons
- Only available to US-based merchants
- Flat-rate payment processing rates are high
Why We Chose CDGcommerce As The Best Hybrid Model
We chose CDGcommerce as the best hybrid model credit card processing company for startups because of its pricing flexibility, scalability, and comprehensive feature set with lots of freebies. You can sign up with CDGcommerce and start processing quickly, just like a third-party payment processor, but you can eventually get a merchant account through them as well. CDGcommerce offers three types of pricing plans, each optimized for the growth stage of your business.
CDGcommerce has the hardware and software to cover the processing needs of businesses with a physical store and an online store, plus processing services that can work with a variety of third-party hardware and software.
You also get the option to buy POS hardware outright, free payment gateway options for eCommerce via the company's proprietary Quantum Gateway or Authorize.Net, and a virtual terminal.
Square: Best For Startups With Physical Locations
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 with no monthly fees
- Ideal for low-volume merchants
- All-in-one payments system
- Affordable chip readers
Cons
- Account stability issues
- Proprietary hardware
Why We Chose Square For Startups With Physical Locations
We chose Square for startups with physical locations because Square POS software and hardware options, affordable payment processing fees, and ease of use can help new businesses easily accept card payments in person without locking them into long-term contracts. You can also take payments through a free Square Online store, monitor your inventory, and manage your employees through a free or low-cost Square plan.
Square offers a variety of POS hardware options for mobile and in-store use. This includes the $69 Square card reader and more expensive registers. All Square hardware is proprietary, so you can't use it if you move to a different credit card processing company.
While Square is a great option for startups, it's possible to outgrow. It may be best to stick to Square's basic features and avoid buying too many add-on services to save money if you decide to switch processors later on.
Related: Read our Square POS review for more information on what Square can offer for retail, restaurant, and service industries.
Stripe Payments: Best For eCommerce Businesses
Pros
- Excellent developer tools
- Predictable flat-rate pricing
- Advanced reporting tools
- Excellent marketplace and subscription tools
Cons
- Account stability issues
- Needs technical skill to implement
Why We Chose Stripe For eCommerce Businesses
We chose Stripe because we feel that its flat-rate pricing, transparent fees, easy signup, and extensive support for international payments make it a great option for startups operating eCommerce shops.
Compared to Square, Stripe is better for an online/eCommerce business because it has a robust number of integrations for use at your web store's checkout or in-app purchases. However, this also means that, unless you're a programmer yourself, you may need to hire someone to help you integrate anything from Stripe.
Stripe also has an international reach, able to take or convert international currencies to US dollars. If you plan to start an online-only business and know that you want a sophisticated-looking web store that you're willing to hire someone to build, Stripe can be highly customized to support your preferred payment flows.
Get Started With Stripe Payments
Helcim: Most Scalable Option
Pros
- Interchange-plus processing rates used exclusively
- No long-term contracts
- Excellent customer support
- Lower payment processing fees on B2B/B2G transactions
Cons
- Not available to high-risk merchants
- Basic inventory management
- Not many third-party business software integrations
Why We Chose Helcim As The Most Scalable Option
We believe Helcim is the most scalable payment processing option because every business, no matter the size, gets a free merchant account with transparent interchange-plus payment processing rates that automatically decrease as your monthly sales volumes increase.
There are no monthly, annual, or PCI compliance fees with Helcim accounts. You also get access to all of Helcim's software for free, including its POS software, invoice builder, online store builder, cash discount program, and new AI-powered transaction data capture, which will help you lower your payment processing fees on B2B and B2G transactions (more on this later.) Plus, Helcim offers an extremely affordable mobile POS system, the Helcim Smart Terminal.
Unlike many competing providers, Helcim provides excellent customer service. So, even when issues arise, we fully expect them to help you resolve problems quickly and to your satisfaction.
Related: Read our Helcim POS app review to help you decide whether this free POS system is right for your business.
Dharma Merchant Services: Best For Businesses With Larger Sales Volumes
Pros
- Interchange-plus pricing offered exclusively
- No early termination fees, monthly minimums, or early termination fees
- Discounted processing rates for non-profits
- Month-to-month billing
Cons
- Not recommended for businesses processing less than $10,000/month
- No support for high-risk international merchants
Why We Chose Dharma Merchant Services For Businesses With Larger Sales Volumes
Dharma is one of our favorite merchant account providers for startups because of its long-standing reputation for fair and reasonable prices and commitment to educating merchants about the world of payment processing.
As with all the recommended processors in this article, Dharma has no long-term contracts/early termination penalties. You can buy equipment outright if you run a physical store, and it provides a free virtual terminal. The company has excellent customer service as well, to help you through rough spots as you get everything up and running.
Dharma donates a significant percentage of its profits to charity and is one of the best credit card processors for nonprofits.
Like Helcim, Dharma is not built for low sales volumes. The company has a general cost estimator on its website to help you get a rough estimation of your total fees that you can compare to other payment processors to get an idea of when you should switch to Dharma.
Get Started With Dharma Merchant Services
Payment Processing Rating Methodology
Merchant Maverick has been researching the payment processing industry since 2009. Our writers have reviewed hundreds of credit card processors, merchant account services, and mobile payment apps, evaluating each provider carefully on several different metrics.
When comparing different payment processing companies and applications to one another, we consider numerous data points. Our experts start by comparing credit card processing rates, the presence of additional fees, contract length, sales practices, and the presence or absence of additional features and services, like point of sale software. Each provider is judged on its own merits and how well it stacks up to industry standards; then it is weighed against the other providers on the list.
We spend an average of 10-15 hours researching and updating each one of our lists, making sure every company or application included meets our internal standards for quality and reputation. Any list of recommended payment processors on our site might contain a mix of standard merchant accounts, third-party payment processors, mobile payment devices, and high-risk payment processors, depending on what our expert feels is the best fit for certain scenarios or business types.
For additional details about Merchant Maverick’s review and rating processes, please refer to any or all of the following methodology pages:
- Credit card processor rating criteria
- High-risk merchant account rating criteria
- Credit card reader & mobile payment device rating criteria
15
Years reviewing payment processors
100+
Providers evaluated
25
Attributes and features assessed per vendor
40+
Years combined experience
What To Watch Out For When Searching For A Credit Card Processing Company
The credit card processing industry is complex, both in how the industry is organized and also in the way the services are packaged and sold to merchants. Because of its complicated pricing structure, it’s easy — both for the merchant and sometimes the sales staff — to become confused about how a merchant is charged. Many dangers spring naturally from the complexity of the situation itself.
However, because a large number of sales personnel in the industry are independent sales agents who don’t get paid until they sign a merchant and even might receive bonuses based on their number of signups — some folks are unscrupulous enough to try to trick you. We’ve seen a lot of complaints about that, both on our website and on sites such as the Better Business Bureau.
So with these things in mind, here are some dangers to be careful about when you pick your processor:
- Long-Term Contracts: As you operate, you’ll come across unexpected things, requiring you to adjust to keep your business going, and a long-term contract can complicate these adjustments. Fortunately, you’ll have plenty of processors with short-term contracts to choose from.
- Early Termination & Cancellation Fees: Processors may charge early termination fees in addition to cancellation fees. As a new business owner, you are especially vulnerable to having to terminate early, so be careful about early termination fees and ask about them if they’re not mentioned by the salesperson.
- Leasing Arrangements: Leasing hardware can lead to you paying several times the sale price for the equipment over the lease term. Some leases are not cancellable and are even longer than processing agreements with high buyout costs. You’d be better off with a small business startup loan so that you can buy the equipment
- Proprietary Hardware/Software: You may buy proprietary hardware and software from a processor, which means you won’t be able to reuse them if you switch processors. If you buy hardware or enter data into software, try to ensure that it’s not locked to other processors.
- Pushy Sales Agents: Always verify for yourself what the sales staff said and, if necessary, make them put everything down in writing and attach it to the contract — otherwise, you risk terms being those terms being nullified. If you detect any pressure sales tactics, think about finding another processor to work with. There’s no way to accept credit card payments instantly.
- Bad Customer Service: A pleasant and knowledgeable customer service person who can quickly help you resolve your problem is worth their weight in gold. Anything less can make an already bad situation worse. This is why we always pay attention to customer service when we rate processors on this website, so be sure to take this into account when considering your processor.
- Hidden Fees: The credit card associations (Visa, Mastercard, American Express, Discover, etc.) like to pass their costs downstream — usually, to you. Some of these costs, called assessment fees, are charged every time, but other fees are per-incident charges that you don’t see unless some triggering event happens. No business likes to be surprised by extra charges, so be sure to understand if/how you’re charged these fees before you sign with a processor.
- “Free” Anything: Free credit card processing is mostly a myth. In the credit card industry, watch out for “free” card terminals or readers because, often, they’re used to get you to sign a longer contract or purchase more services. This is not to say all free offers are bad — just make sure you read and understand the fine print.
- Misleading Pricing Structure: The majority of misleading pricing falls under “tiered pricing structure” plans that depend on what type of card your customers use and how they charge or plans with tons of miscellaneous charges that you won’t see until you get your first billing summary. (You don’t get an invoice with credit card processing. The processor has already taken all their charges before you’re allowed to take the money out.) If you offer a low-margin product or service, you must understand the pricing structure before you sign with a processor.
Which Credit Card Processor Is The Best Fit For My Startup?
When you’re starting a new business, there are just two paths you can follow when setting things up:
- Do the minimum to get the business up and running, so money can start coming in, then go back to make more permanent adjustments when you have the time, or
- Do everything right the first time
Any successful business will do both at various times for various things. The question is, which path should you follow for credit card processing?
The answer comes down to personal preference. With the way we picked our recommended processors for this article, you can take either approach without getting yourself into permanent trouble. These processors all have month-to-month contracts, so you can change processors at any time. They’re also all highly rated, so there’s very little chance that you’ll go wrong with any of them. And if you’re the do-it-right-the-first-time kind of person, we recommend you start with our guide to credit card processing rates and fees.
If you have any adventures (or misadventures) setting up your credit card processors, please share them below. We’d be interested in finding out whether our recommended processors worked out for you.
FAQs: Credit Card Processing For Startups
Davina Ward
Senior Staff Writer
Davina joined Merchant Maverick in 2022, covering small business payroll and accounting. She began writing for small businesses in 2018 and has since gained expertise in the SaaS industry. She earned her Bachelor’s of Arts in English Literature from SUNY Geneseo in 2018. She currently resides in New York.
View Davina Ward's professional experience on LinkedIn.
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