The 5 Best Credit Card Processing Companies For New Businesses & 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’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.

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

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 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.

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

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.

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 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

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.

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).

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

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 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 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