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The 5 Best Credit Card Processing Companies For New Businesses & Startups

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.

    Davina Ward
  • UPDATED

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 companies for startups can be challenging since there are so many credit card processing options on the market.

We reviewed the credit card processing costs, contract length, hardware options, and more of over a dozen credit card processing companies to select the best credit card processing companies for new businesses.

Keep reading for a breakdown of the best credit card processing companies for startups.

Learn More About Our Top Picks

CompanyBest ForNext StepsBest For
Square

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  • Best for brick & mortar startups
  • Flat-free processing starting at 2.6% + $0.10
  • Multiple POS hardware options
  • Best for brick & mortar startups
  • Flat-free processing starting at 2.6% + $0.10
  • Multiple POS hardware options

Visit Site

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CDGcommerce

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  • Best overall credit card processing company for startups
  • Multiple processing plan options
  • Support for some high-risk industries
  • Best overall credit card processing company for startups
  • Multiple processing plan options
  • Support for some high-risk industries

Visit Site

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Stripe Payments

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  • Best for eCommerce businesses
  • Flat-rate processing at 2.9% + $0.30/online transaction
  • Strong support for international payments
  • Best for eCommerce businesses
  • Flat-rate processing at 2.9% + $0.30/online transaction
  • Strong support for international payments

Visit Site

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Helcim

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  • Best for scalability
  • Interchange-plus pricing
  • Excellent customer service
  • Best for scalability
  • Interchange-plus pricing
  • Excellent customer service

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Dharma Merchant Services

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  • Best for startups processing over $10,000/month
  • Interchange-plus pricing
  • Strong support for non-profit organizations
  • Best for startups processing over $10,000/month
  • Interchange-plus pricing
  • Strong support for non-profit organizations

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Read more below to learn why we chose these options.

Table of Contents

Choosing The Right Credit Card Processing Model For Your New Business

To compile our list, we picked a mix of third-party processors, traditional merchant account providers, and hybrid providers. Before we move on, and because you’re new to credit card processing, let’s quickly go over some business/pricing models used by payment processors.

Traditional Merchant Account Provider

The traditional merchant account provider model requires you to give a lot of your company’s and your personal financial records just to apply for an account. It might be a little difficult for a new company to get approved, but once you are, your credit card processing tends to go fairly smoothly.

This model also has the most variation in pricing, so you can either get a great deal or a really bad one. If your bank tries to sell you its payment card processing services, they tend to be selling an account with a bad deal with a contract that you won’t be able to get out of for several years.

You can accept credit card payments without a merchant account, however.

Payment Services Provider (PSP)

Payment services providers (PSPs) or third-party payment processors are relatively new business models for the processing industry. With this model, you can sign up and start processing right away, but because they don’t do a credit check on you or your business, they’re extremely cautious about the money moved through them.

That means if you do something out of the ordinary in your processing (e.g., get a large order), you may not be able to avoid a merchant account hold and won’t be able to withdraw money. In extreme cases, they might even suddenly terminate your account.

As to pricing, they’re probably near the higher end, but this one price covers a lot of miscellaneous items that a merchant account provider tends to nickel-and-dime you for.

Also, with this model, you aren’t required to process a minimum amount every month through them (unlike with most merchant account providers). They also tend to give you a fairly robust suite of free software/services.

The best online payment processors are usually month-to-month agreements, so if you find that you don’t like doing business with them, you can leave any time.

Hybrid Model

Some processors have recently begun to use a hybrid model that combines the quick approval of a third-party processor with the stability of a merchant account. After signing up, a merchant can start processing but likely will have a per-transaction/per-day dollar limit.

At some point, you’ll have to provide your financial records, but the processor will also help your business build a financial history related to card processing so that, eventually, you’ll have enough of a record to get a merchant account. Typically, the processor will charge one rate for the quick-signup type of processing and a different rate after you move to a merchant account.

While this new model sounds ideal in many ways, we’re still gathering data on how well it works. However, the processors we recommend below that are using this model are highly rated for their merchant account business. So if you decide to try this business model, you’ll be working with reputable companies with a great customer service team that we know will do their best to help you set everything up.

The Five Best Credit Card Processing Companies For Startups

Credit card processing companies for startups have easy signups, affordable processing fees, month-to-month billing, and hardware purchasing. The best credit card processing companies for startups include Square, Stripe, CDGcommerce, Helcim, and Dharma Merchant Services.

1. Square: Best Credit Card Processing Company For Startups With Physical Locations

Square


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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

We chose Square for startups with brick-and-mortar locations because Square’s POS hardware options, affordable payment processing fees, and ease of use can help new businesses easily accept card payments without locking them into long-term contracts.

Further, Square’s robust software suite makes it easy for you to analyze your new business’s sales, manage your employees, keep up with your inventory, set up a Square Online Store, and more.

Square offers a variety of hardware options for mobile or store use. You can purchase the terminals and point of sale stations outright instead of having to deal with equipment leases. Be aware, though, that because Square hardware is proprietary, you won’t be able to reuse it if you change processors.

While Square is a great option for startups, it’s definitely 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.

Square Pricing

Square’s flat-rate pricing starts at 2.6% + $0.10 for swiped, dipped, or tapped card transactions. You’ll pay 3.5% + $0.15 for keyed-in transactions and 2.9% + $0.30 for online transactions. For same-day deposits with Square, you’ll be charged 1.75%.

Square also offers custom pricing for businesses processing over $250,000 in annual sales with a $15.00 or over-average ticket size. You’ll also have the option to purchase Square’s hardware or add-on features.

There’s no monthly minimum amount you must charge through Square.

Square Features

For startups with brick-and-mortar locations, Square offers a solid entry into the world of payment processing. Here’s a look at Square’s most notable payment processing features:

  • Robust analytics and reporting dashboard
  • Multiple Square POS hardware options
  • Square Online Store for online businesses
  • Card readers that can read both  NFC and EMV chips
  • ACH processing
  • Afterpay and cryptocurrency payment acceptance
  • PCI compliance
  • Create and verify new accounts in the same day

Get Started With Square

Read our in-depth review

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2. CDGcommerce: Best Overall Credit Card Processing Company For Startups

CDGcommerce


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Pros

  • Flexible and reasonable priced business model
  • 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

Why We Chose CDGcommerce For Startups

We chose CDGcommerce as the best overall credit card processing company for startups because of its pricing flexibility, scalability, and comprehensive feature set with lots of freebies.

CDGcommerce is a merchant account provider using the hybrid business model discussed earlier. You can sign up with CDGcommerce and start processing quickly, just like a third-party processor, but you can eventually get a merchant account through them as well. CDGcommerce offers three types of pricing plans, each optimized for the size/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 hardware outright, free payment gateway options for eCommerce via the company’s proprietary Quantum Gateway or Authorize.Net, and a virtual terminal.

CDGcommerce Pricing

CDGcommerce offers multiple plan tiers depending on your business’s processing volume. Smaller businesses processing less than $10,000 per month will be on a flat-rate plan that’s similar to what Square offers but has the added advantage of giving you a true full-service merchant account that’s far less likely to suffer a hold, freeze, or termination.

For merchants processing between $10,000 and $200,000 per month, CDGcommerce offers an interchange-plus pricing plan that represents one of the best values we’ve seen from any provider. Large businesses processing over $200,000 per month can get a membership-based pricing plan that eliminates the per-transaction percentage fee in exchange for a single monthly subscription fee.

CDGcommerce has also eliminated many of the excessive fees that other providers charge, including account setup fees, PCI compliance fees, and monthly minimums. The company charges no fees beyond the transaction fee and a fixed monthly or yearly fee. Other services, such as invoicing, subscription billing, and similar options, are also available for an added fee.

CDGcommerce Features

New businesses will find that CDGcommerce offers comprehensive processing services, including those for eCommerce and brick-and-mortar businesses. Here’s a look at CDGcommerce’s services and features:

  • Offers membership, interchange-plus, and flat-rate pricing
  • Full-service merchant accounts
  • Free virtual terminal (with annual maintenance fee of $79)
  • $100,000 breach protection plan options
  • Customer management and tracking reports
  • Integrated scheduling and appointment setting tools
  • Support for nonprofit donations and campaigns
  • Customer loyalty management, including promotional texts and emails
  • Built-in customer invoicing

Get Started With CDGcommerce

Read our in-depth review

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3. Stripe: Best Credit Card Processing Company For eCommerce Startups

Stripe Payments


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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 Startups

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’d 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.

Stripe Pricing

As to pricing, Stripe charges 2.9% + $0.30 per transaction. This is flat-rate pricing with month-to-month billing and no long-term contracts.

Stripe also offers the option to purchase the hardware for in-person transactions outright instead of having to deal with leases that ultimately cost more. Best of all, because the hardware is not proprietary, you might be able to reuse it if you change processors.

In-person payments through Stripe Terminal cost 2.7% + $0.05 per transaction. Stripe’s other account add-ons and fees are well documented, so you’ll be able to estimate those costs before settling on Stripe.

Stripe Features

Stripe is one of the biggest players in the payments industry and has been for quite some time. During its long reign at the top, Stripe has accumulated a full suite of payments tools, software, and hardware for both brick-and-mortar and eCommerce businesses of all sizes. Here’s a look at some of Stripe’s standout features:

  • Flat-rate pricing and flexible pay-as-you-go billing
  • Developer tools and Stripe APIs for customizable payment flows
  • ACH payments processing on every account
  • Fully integrated Stripe Payments platform
  • Stripe Virtual Terminal for eCommerce
  • Anti-fraud protection through Stripe Radar
  • Optional instant payout
  • Range of unique payment options including Buy Now, Pay Later, international payments, and 3D Secure authentication

Get Started With Stripe Payments

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4. Helcim: Best Scalable Credit Card Processing Company For Startups

Helcim


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Pros

  • Interchange-plus processing rates used exclusively
  • No long-term contracts
  • Excellent customer support
  • Inventory management

Cons

  • Not available to high-risk merchants
  • Add-on features can be costly

Why We Chose Helcim For Startups

We recommend Helcim for startups as it’s one of the most scalable payment processing options on the market. Helcim accounts are easy to signup for, and a standard Helcim merchant account comes with no monthly account fee, no annual fee, and no PCI compliance fee. This gives startups access to all the online and in-person payment tools you need to start processing.

On hardware and software, if you have a physical store and need a card reader, Helcim offers a low-cost, all-in-one (EMV + NFC enabled) mobile card reader that can take payments in-store or on the go and sync across devices. For online stores, Helcim has a proprietary platform called Helcim Commerce, which comes free with your account.

The platform is a web-based, all-in-one product that combines your merchant account, payment gateway, payment processing hardware, and online shopping cart into a single product.

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.

Helcim Pricing

As to the per-transaction processing fee, Helcim first divides these into two types: in-person transactions or online transactions. Under each type, you have five tiers of successively lower processing fees. These tiers are based on a merchant’s processing volume, starting with $0-$25,000 per month to $1,000,001 or above per month.

This pricing structure is suited for growth and makes Helcim a strong processor option from startup to mature business stage.

You’ll only be responsible for incidental fees, including a $15 per-instance chargeback fee (which the company will refund to you if you prevail in the chargeback investigation). Note that there are monthly fees for some optional add-on services, such as next-day funding (currently $10 per month).

Helcim Features

In addition to its competitive pricing, Helcim offers a wealth of features that can serve your business in its infancy all the way through to its enterprise stages. Here’s a look at Helcim’s credit card processing features:

  • Free merchant account
  • Limited fees, including no monthly, setup, or PCI compliance fees
  • Transparent interchange-plug pricing, including incidental fees disclosure
  • Virtual terminal for online payments
  • Month-to-month billing with no long-term contracts
  • No charge for seasonal inactivity
  • Multiple payment options, including Helcim Payments app and Helcim card reader
  • Support for international transactions

Get Started With Helcim

Read our in-depth review

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5. Dharma Merchant Services: Best For Startups With A Processing Volume That Exceeds $10,000/Month

Dharma Merchant Services


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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 Startups

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.

However, if you’ll process $10,000 or less a month in the long-term Dharma might not be the best deal for you. You might be better off going with a third-party processor as your payment card processor.

Dharma Merchant Services Pricing

Dharma uses interchange-plus pricing, which is the most transparent type of pricing structure in the processing industry. The company doesn’t charge annual merchant service fees, account update fees, early termination fees, or PCI compliance fees.

It also doesn’t have a monthly minimum, which is good for seasonal businesses. The fees that Dharma does charge are fully disclosed on its website.

Dharma Merchant Services Features

Dharma Merchant Services is an all around solid contender in the payment processing industry and stands out as an affordable option with excellent customer service. However, Dharma Merchant Services also stands out for its impressive feature set, including:

  • Merchant accounts offered through TSYS or Fiserv
  • Wide variety of credit card terminals, including QuickPay virtual terminal
  • Clover POS system compatibility
  • Full-fledged credit card surcharging program
  • Interchange-plus pricing with month-to-month billing and no early termination fees
  • Excellent customer support
  • Discounted processing for qualified non-profit organizations, plus donation pages and event registration
  • Supports invoicing and recurring billing
  • B2B payment processing

Get Started With Dharma Merchant Services

Read our in-depth review

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Our Methodology For Choosing The Best Payment Processing Companies For Startups

In selecting the best credit card processing companies for startups, we reviewed over a dozen processing companies. We selected the top credit card processing companies for startups based on how well they meet the unique processing needs that are shared by all new businesses. Below are the processor qualities used to research:

  • Ease Of Termination/Month-To-Month Billing: A startup might have to change or tweak its business model a few times before finding the right niche, so not being tied to a long-term contract and having the flexibility to change processors quickly and without penalty is highly important.
  • Option To Purchase Equipment: Getting payment processing hardware (if you’re running a physical store) can be tricky. If you have too many units to buy, your costs can go up pretty fast, which makes equipment leasing a tempting choice. However, equipment leasing is almost always a bad idea.
  • Excellent Customer Service: A great customer service representative (whether dedicated or on a per-call basis) can make for a better experience. A processor with an excellent reputation in customer service is something to keep in mind when selecting your processor.
  • Easy Signup: Getting a merchant account can be complicated, especially for a startup. Fortunately, some processors allow you to sign up and start processing in minutes and won’t look at your or your business’s financial records. This is ideal for startups that may have to set up card processing quickly and/or new business owners who do not wish to show processors their personal financial records.
  • Transparent, Affordable Pricing (Both Rates & Fees): New business owners must estimate processing costs based on the various charges listed by the processor. This is more easily done when processors offer clear and detailed pricing to their customers.
  • Honest Marketing/Advertising: Honesty in marketing or advertising goes deeper than just disclosing the actual processing price. It’s a reflection of the company’s values. This is why we chose processors that deal with you in an honest way is important.

Keep in mind that none of the recommended processors here will take on high-risk businesses. However, there are plenty of high-risk merchant account providers available to choose from if your business falls within a high-risk industry.

Are You Ready To Shop For A Credit Card Processing Company? Nine Dangers To Be Aware Of

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 totally 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, it’s crucial that you understand the pricing structure before you sign with a processor.

Which Payment Processor Is The Best Fit For My New Business?

When you’re starting a new business, there are just two paths you can follow when setting things up:

  1. 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
  2. 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 the complete guide to credit card processing rates and fees.

If you have any adventures/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.

Credit Card Processing For Startups FAQs

How to add credit card processing for a new business?

To add credit card processing to your new business, you’ll need to sign up with a credit card processing company or full-service merchant account offering credit card processing.

Can I process credit cards for my new high-risk business?

Yes, there are many credit card processors that will accept new businesses within high-risk industries. Some of the best credit card processing companies for high-risk businesses include PaymentCloud, National Processing, Durango Merchant Services, Host Merchant Services, Soar Payments, and Easy Pay Direct.

How much does credit card processing cost?

Credit card processing costs vary greatly depending on the payment processor you choose, their pricing structure, and your monthly processing volume. However, the average credit card processing fee ranges from 1.46% + $0.05 to 2.96% + $0.10 per transaction.

What is the cheapest way to accept credit card payments?

The cheapest way to accept credit card payments is to utilize the services of a cheap payment card processor, such as Square, National Processing, PaymentCloud, Host Merchant Services, Dharma Merchant Services, Helcim, Stripe, and Chase Payment Solutions.

In Summary: The Five Best Credit Card Processing Companies For Startups

  1. Square:
    • Best for brick & mortar startups
    • Flat-free processing starting at 2.6% + $0.10
    • Multiple POS hardware options
  2. CDGcommerce:
    • Best overall credit card processing company for startups
    • Multiple processing plan options
    • Support for some high-risk industries
  3. Stripe Payments:
    • Best for eCommerce businesses
    • Flat-rate processing at 2.9% + $0.30/online transaction
    • Strong support for international payments
  4. Helcim:
    • Best for scalability
    • Interchange-plus pricing
    • Excellent customer service
  5. Dharma Merchant Services:
    • Best for startups processing over $10,000/month
    • Interchange-plus pricing
    • Strong support for non-profit organizations
Davina Ward

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.
Davina Ward
View Davina Ward's professional experience on LinkedIn.

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