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Tame Your Credit Card Processing Costs With One Of These 7 Free Merchant Accounts & Payment Processors

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Credit card processing fees and other costs business owners incur surrounding payments can frustrate even the most even-tempered among us. That’s because what’s involved can quickly balloon your bottom line. From monthly fees and payment security costs — not to mention the actual cost involved to process a credit card payment –, there’s a lot to keep straight.

When we built this list, we naturally looked for options free of the dreaded monthly merchant account service charge, but we also looked for options that give you a louder bang for your buck when it comes to added features. As you might expect, nothing is ever completely free in the payments industry, but with these options, you can certainly avoid the “junk” fees and recurring monthly charges that bloat your bill. And that’s a win!

Let’s slim down the bottom line while not sacrificing quality. Yes, it’s possible. Behold, the best credit card processing companies with zero monthly fees and some of the best ancillary features you’ll find in the biz.

Learn More About Our Top Picks

Company Summary Next Steps
Square offers predictable processing rates, a free POS with basic reporting, and a full suite of tools to help you manage your small business, including employee management, reporting tools, a free web front, and invoicing. You can also build on even more options if you want them, which provides greater flexibility to only pay for what you need. Square seamlessly syncs across all devices and users, so you can rest assured your inventory at your dashboard stays up to date.

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Chase Merchant Services offers small business owners a dedicated merchant account, has few complaints relative to its size, and offers a flat-rate processing plan with no monthly fee. Chase checking account holders can enjoy next-day funding at no extra charge.

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Stripe is an excellent choice suited best for small eCommerce businesses. While Stripe is built with the developer in mind, you'll find loads of integration options and subscription tools that allow you to fully customize your customer experience without always needing advanced technical expertise.

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One of the most recognizable names in payment processing, PayPal has the market on payments democratization and customer trust. You'll get simplicity and ease of use, along with a free POS and flat-rate pricing โ€” not to mention a payment button you can place virtually anywhere.

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Clover offers a wide range of apps that make it super simple to scale, not to mention how intuitive it is to set up from day one. Clover is one of the biggest names in the payments industry, and they've built robust features and pricing that appeal to a wide range of business models.

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Other Featured Options:

  • Intuit Merchant Services: QuickBooks Payments is the ideal option for small businesses that already use QuickBooks. QuickBooks allows you to seamlessly offer ACH and e-check payment options to your customers at no extra charge.
  • Shopify Payments: Powered by Stripe, Shopify offers flat-rate pricing and a host of tools to get your eCommerce business up and running with a polished finish. With a wide range of plug-ins at your fingertips, you'll likely find what you need to piece together the best value for your business.

Read more below to learn why we chose these options.

Setting the Record Straight About Free Merchant Services

Understanding some of the nuances when it comes to merchant services can help you as a business owner. When we use the term traditional merchant account,ย we are referring to a dedicated account that is created directly with the processing company. Typically, these types of accounts are only available to businesses that process at higher volumes, which leaves out a lot of small businesses, frankly.

For businesses that process less than $10K in credit card transactions a month, costs can be high with traditional merchant accounts, and the hoops involved in signing up can seem out of scale as well. Enter third-party processors, the companies that have disrupted the typical business-as-usual options in the payment industry. These companies provide everyone from startups, mom-and-pop shops, online sellers, and other entrepreneurs a viable solution to start taking credit card payments.

So what is a third-party processor? A third-party processor runs a giant merchant account that aggregates business accounts as sub-users. This model makes it much easier for nearly anyone to sign up for an account because it circumvents the need to set up a dedicated account per user. Some processors even let you start taking payments on the same day you sign up.

While this model does make it possible for millions of more businesses to actually get started with an account that would otherwise be out of reach, it’s not without drawbacks. Third-party processors are easy to sign up for initially, but in many ways, they demonstrate less risk tolerance over the long term.ย  If they sniff anything fishy, they dole out an account hold or termination, and often without warning.

This is why I adamantly recommend that all business owners read their contracts to avoid some of the more common pitfalls. For some great tips on this topic, check out our post How To Keep Your Payment Processor From Holding Funds Or Terminating Your Account.ย While it sounds dramatic and certainly can be for an affected business, rest assured that these account issues happen in only a small portion of business accounts overall.

Bear in mind that traditional merchant accounts can also freeze funds — they’re just less likely to do so.

So Can You Actually Get A Free Merchant Account?

All of the companies in this post are free from the monthly service fees required just to keep your account open. (Though as with any processing company, you will pay a small percentage on every card you process.) Our top picks have easy to understand rates, no sign-up fees or binding contracts, and lots of great business tools for very little to no cost at all. Some of them are merchant accounts, while some are third party processors.

Why Signing Up For Credit Card Processing Online Could Save You Money

With only light background checking on some of the largest payment brands, you’ll find that it is a jungle out there when it comes to high-pressure sales tactics. It’s not uncommon for a small business owner to find they are shackled to a 3-year contract with rates that weren’t fully disclosed in initial sales conversations. What we always suggest is that no matter what, you should take the time to read and understand your contract. Doing so can save you from a world of hurt.

Back before the Internet was the central hub of communication that it is now, most merchant account providers had large teams of salespeople contacting companies to pitch their products. Some were in-house, while some were independent sales reps working on commission. But maintaining an army of salespeople comes with a lot of overhead — which no doubt fed into the costs associated with getting a merchant account.

Third-party processors like PayPal and Square have changed that by allowing anyone to get set up with credit card processing by signing up online, with the ability to be approved almost instantly. These processors didn’t need to have legions of sales reps — their customers came to them, which allowed them to save money. The fact that these internet businesses didn’t have a lot of overhead helped them when they were first starting, but now in 2020, it’s just expected that they offer this sort of convenience.

Traditional merchant account providers are taking notice, and the more innovative among them have switched to a mostly online presence. You can even sign up for your merchant account online. You’ll know exactly what rates you pay, what services you’ll get, and how long your agreement is — without having to negotiate with a salesperson. Generally speaking, many of our favorite merchant account providers have adopted this model, with clear, interchange-plus pricing and month-to-month agreements.

So whether you want a third-party processor or a merchant account, keep in mind that signing up online might get you the best deal on credit card processing.

What we really love about these picks are the upfront costs and options that you don’t have to dig to find. Transparency is a huge issue within the payment processing industry, and these picks deliver clarity from the get-go, with no high-pressure sales tactics or bait-and-switch rates anywhere in sight.

The Best Places To Get Credit Card Processing With No Monthly Fee

You’ve got a lot of options in credit card processing, but the selection doesn’t have to be overwhelming. Below, you’ll find options for free merchant services with no monthly fee, affordable processing rates, built-in payment security, and many worthwhile features that can scale with you as you grow. I also encourage you to check out the full reviews to help you hammer out your own top-pick list that makes sense for your small business.

1. Square

Square



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Square is one of our favorites because it offers a sweet spot of low fees and many freebies that just seem to grow each year. For instance, with a basic account you can now get simple employee management, inventory management, and reporting, set up a website and accept payment online, and a lot more. I like that you can build your email list with every transaction and have options to add email marketing services that make it easier to follow up with your customers. It’s also great that you don’t have to run with any “out-of-the-box” website designs, as they provide a lot of free developer tools, too.

Square Fast Facts

  • Type of processor: Third-party
  • Rates: 2.6% + $0.10 for any card that is swiped, dipped, or tapped during the transaction, 3.5% + $0.15 for keyed-in transactions, and 2.9% + $0.30 for online transactions, including invoices and eCommerce sales
  • Other Costs: 1% of the transfer amount for same-day deposits, plus additional options such as Square for Retail and Square for Restaurants with advanced inventory and reporting starting at $60/mo.
  • What We like: Square has an impressive feature set, a plethora of completely free tools, and predictable flat-rate pricing that’s ideal for low-volume users. The dashboard is intuitive and makes it easy to see the most important information at first glance.

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2. Chase Merchant Services

Chase Merchant Services



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chase bank credit cards

Chase Merchant Services is a great option if you want a traditional merchant account while keeping the recurring monthly account fee at bay. Additionally, Chase processing comes with a great toolbox for small businesses like free online reporting, gift card programs, and eCheck (ACH) processing.

Chase Merchant Services Fast Facts

  • Type of processor: Traditional merchant account
  • Rates: Chase does not exactly disclose rates, which is not at all uncommon with traditional merchant accounts. Your rates may vary depending on your business size and processing volume. That being said, the small business flat-rate plan offers 2.6% + $0.10 per transaction for card-present transactions and 3.5% + $0.10 per transaction for card-not-present transactions. Interchange-plus plans may also be available.
  • Other Costs: While not a cost exactly, you should be aware that their “free” credit card terminal requires signing a long-term contract. Additionally, you will have to pay $10/mo if you go with an interchange-plus rate plan.
  • What We Like: In the world of large processors, Chase stands out with relatively fewer complaints compared to its size. You’ll get next-day funding if you’re a Chase business checking customer, and you won’t be pressured into an unforgiving leasing agreement for the equipment. Additionally, you may be able to negotiate better rates and contract terms.

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3. Stripe

Stripe Payments



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While you may not be familiar with the name, Stripe is behind the eCommerce and processing presence of some of the biggest brands around, including Under Armor, Lyft, Wish, and more. Stripe is truly an innovator in the online space and offers immeasurable potential in customization, affordable business intelligence, fraud protection, and much more. We’ve just scratched the surface in these fast facts, so be sure to check out the review for more information on what awaits.

Stripe Fast Facts

  • Type of processor: Third-party
  • Rates: Credit cards process at 2.9% + $0.30 and you can also process ACH payments for 0.8% (capped at $5).
  • Other Costs: You have plenty of options in additional tools, so keep cost in mind here. For instance, Connect is a marketplace tool that comes with per payout and monthly fees.
  • What We Like: Stripe offers robust features, including developer tools, advanced reporting tools, marketplace and subscription tools, as well as multi-currency support.

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4. PayPal

PayPal



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Is there any name more recognizable than PayPal? If your customers are leery about online payment security, PayPal offers a way for your customers to pay you without feeling like they are doling out their credit card information at every turn. These things matters big time when it comes to reducing cart abandonment. While PayPal can be iffy when it comes to technical and customer support, this giant in the payments industry is still worth considering for the name recognition alone.

PayPal Fast Facts

  • Type of Processor:ย Third-party
  • Rates:ย 2.9% + $0.30 for all online sales, card-present sales are 2.7% for swiped, dipped, and tapped. For keyed transactions, you’ll pay 3.5% + $0.15. Virtual terminal transactions cost 3.1% + $0.30 per transaction.
  • Other Costs:ย Just like Stripe, you’ll have a plethora of choices in optional software, but other than that, you’ll only have to worry about processing fees. For mass payouts, you’ll pay 2% using the online form with a $1 maximum or $0.25 payout using the API.
  • What We Like:ย PayPal is recognized by nearly every consumer with nearly 280 million active users, which makes it a smart move to add as an option to your checkout flow. We like that PayPal is very transparent with their pricing, but most of all, PayPal offers many different integration options for business owners to sync with your shopping cart, accounting, and shipping software.

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5. Clover

Clover POS



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Clover was acquired by one of the largest payment brands, First Data (now Fiserv). That being the case, this option is a traditional merchant account complete with dedicated account representatives. With its sleek POS equipment and software features, Clover’s solution is geared toward physical stores. We do want to mention that the POS app and payment processing are a package deal, which can be a drawback if you ever want to change equipment, so keep that in mind

Clover Fast Facts

  • Type of Processor: Merchant account
  • Rates:ย Processing rates are determined by the register package you choose. With Register Lite, you’ll pay 2.7% plus $0.10 per in-person transaction and 3.5% plus $0.10 for keyed-in transactions. Their Register Plan offers 2.3% plus $0.10 per in-person transaction and 3.5% plus $0.10 per keyed-in transaction.
  • Other Costs:ย Clover has different options in their monthly register plans; Register Lite Plan starts at $14/mo with the highest tier capping at $29/mo
  • What We Like: If you’re looking for an easy-to-setup option, Clover delivers. As with the other options on our “best of” list, Clover serves up small business owners with a plethora of options in its large app store. You’ll likely find an integration that suits your particular needs, with room to grow.

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6. Intuit QuickBooks Payments

Intuit Merchant Services



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QuickBooks GoPayment Review

QuickBooks GoPayment Site Capture 2019

QuickBooks Payments brings merchant services from one of the largest financial software companies in existence. I’m talking about Intuit, the company behind QuickBooks accounting software and TurboTax โ€” recognized by nearly every household in America. QuickBooks Payments works seamlessly with QuickBooks online for small businesses that want a way to centralize their accounting, payroll, and payments from customers and vendors.

QuickBooks Fast Facts

  • Type of Processor: Third party
  • Rates: 2.4% + $0.25 per transaction for credit and debit cards with no additional fees for ACH transfer. For invoices, PayPal, Apple Pay you’ll pay 2.9% + $0.25 per transaction. For keyed-in transactions, you’ll pay 3.4% + $0.25 per transaction.
  • Other Costs: You’ll need to be aware of the full spectrum of services and what those monthly charges are per month. Processing credit cards with your merchant account, however, will not cost you more monthly.
  • What We Like: If you are already a QuickBooks accounting customer we can see some benefit to QuickBooks Payments. That’s because the real value lies with the seamless integrations available for accounting and related ancillary services for QuickBooks customers.

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7. Shopify

Shopify Payments



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Shopify makes it easy to set up a fully functional eCommerce storefront, with options to expand and move up the tiered packages as your business grows. You do have some flexibility of processors with Shopify, but the least expensive and easiest to set up is Shopify Payments, their white label option that’s powered by Stripe. That’s because Shopify waives its shopping cart transaction fees for Shopify Payments users.

Shopify Fast Facts

  • Type of processor: Third-party
  • Rates: You’ll pay 2.9% + $0.30 per eCommerce sale, but this rate decreases if you choose a higher-tiered Shopify subscription. For in-person sales, you’ll pay 2.6% per transaction.
  • Other costs: Keep in mind that Shopify itself has tiered plans and each comes with their own set of features and monthly service fees for your web store. Shopify waives its typical commission fees per sale for Shopify Payments customers, and there are no additional monthly fees for Shopify processing.
  • What We Like: Shopify is an easy-to-set up option for your online shop because with Shopify Payments, there is no need to integrate a payment gateway and you’ll have very minimal setup to worry about. It’s as easy as enabling settings in the backend of your Shopify dashboard.

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Other Ways To Reduce Or Offset Your Processing Costs

You’ll always have some costs associated with processing credit cards. Processing companies incur all kinds of behind-the-scenes costs in keeping up with payment security, risk management, working with back-end processors, customer service costs and other overhead costs many merchants may not be aware exists.

That being said, you can reduce and offset the costs you incur as a business owner, too.ย  We often get questions about credit surcharges, and while there are somewhat complicated regulations, a common loophole is cash discounting. This setup is when a merchant charges a set rate for credit card payments but applies a discount to cash-only purchases. That way, the incentive is tied to paying with cash, and not necessarily officially penalizing the credit card usage itself.

Another way to offset costs is by charging a convenience fee. A convenience fee is charged if a customer chooses an “easier” way to pay than the typical way they provide. For instance, instead of paying for a ticket at the counter, you’d also be offered another way to pay online with a credit card. Convenience fees are typically associated with utilities, but we go into more detail about the types of businesses who can take advantage of them, as well as the rules, in our post, What Is A Convenience Fee?

It’s true that whether we like it or not, we’re moving to a largely cashless society where credit cards and digital wallets make it easier (and sometimes even more likely) that a customer will purchase from you both now and later. It’s understandable to want to discourage credit cards to reduce processing costs, but offering a variety of ways to pay is a great way to offer customers more ways to do business with you, and that’s a good thing!

The Bottom Line On Getting A Free Merchant Account

equity financing

Understanding how and why costs can build with processing credit cards is a vital aspect of doing business. Choosing a processing company with higher costs or a binding agreement that’s incompatible with your business can be detrimental. By now, you should be armed with more information when it comes to shopping around. You have learned that there is a difference between a monthly merchant account charge and the transaction fees that are inherent with any company you go with for your small business. You hopefully can spot some of the pitfalls like long-term leasing agreements and contracts that may bind you to a company longer than you’d like.

We are confident that of the companies on the list, Square offers the most tools for the money, but it still might not be the best option for your business model. Be sure to explore each on our list to get all your options on the table and then read our full reviews so that you can make that decision for yourself. Check out some more cheap credit card processing for even more budget-friendly solutions inn our post, Cheapest Card Processing Companies for 2020.

In Summary: The Best Places To Get Credit Card Processing With No Monthly Fee

  1. Square: Square offers predictable processing rates, a free POS with basic reporting, and a full suite of tools to help you manage your small business, including employee management, reporting tools, a free web front, and invoicing. You can also build on even more options if you want them, which provides greater flexibility to only pay for what you need. Square seamlessly syncs across all devices and users, so you can rest assured your inventory at your dashboard stays up to date.
  2. Chase Merchant Services: Chase Merchant Services offers small business owners a dedicated merchant account, has few complaints relative to its size, and offers a flat-rate processing plan with no monthly fee. Chase checking account holders can enjoy next-day funding at no extra charge.
  3. Stripe Payments: Stripe is an excellent choice suited best for small eCommerce businesses. While Stripe is built with the developer in mind, you'll find loads of integration options and subscription tools that allow you to fully customize your customer experience without always needing advanced technical expertise.
  4. PayPal: One of the most recognizable names in payment processing, PayPal has the market on payments democratization and customer trust. You'll get simplicity and ease of use, along with a free POS and flat-rate pricing โ€” not to mention a payment button you can place virtually anywhere.
  5. Clover POS: Clover offers a wide range of apps that make it super simple to scale, not to mention how intuitive it is to set up from day one. Clover is one of the biggest names in the payments industry, and they've built robust features and pricing that appeal to a wide range of business models.
  6. Intuit Merchant Services: QuickBooks Payments is the ideal option for small businesses that already use QuickBooks. QuickBooks allows you to seamlessly offer ACH and e-check payment options to your customers at no extra charge.
  7. Shopify Payments: Powered by Stripe, Shopify offers flat-rate pricing and a host of tools to get your eCommerce business up and running with a polished finish. With a wide range of plug-ins at your fingertips, you'll likely find what you need to piece together the best value for your business.
Emily Hale

Emily Hale

Emily is a writer, strategist, and freelance consultant based in Indianapolis. She is driven to create content that empowers her readers and her clients to make better choices in their business and their lives. When she's not in the thick of researching and developing blogs for Merchant Maverick, she likes to cook from scratch for her family or escape outdoors and meander through nature with her rescue pup.
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