6 Great First Data Competitors & Alternatives That Work For Small Businesses

Square is a startup that many years ago set out to disrupt the credit card processing industry. It has no relationship with First Data and, in fact, represents a new business model for processing payment cards.

Square is a third-party processor, which means it comes with all the good (quick signup) and the bad (account holds and freezes) of that business model. It does have a suite of robust software that helps you analyze your sales, manage your employees, keep up with your inventory, and more. If you like First Data's Clover equipment, you should look into Square (in fact, Clover was probably inspired by Square, if you look at the style of the product design.)

Some of Square's features come with its basic service, others you'll have to pay extra for. 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 dealing with equipment leases. Be aware, though, that because Square hardware is proprietary, you won't be able to reuse it if you change processors.

Square currently charges 2.6% + $0.10 per transaction for most transactions, making it more predictable for a business to figure out profit margins for every sale. But this simple pricing must cover Square's costs for each transaction, so, depending on your monthly volume and average ticket size, you could be paying Square more than you need to and might be able to get a better deal from a merchant account provider.

We find Square better suited for stores with physical locations than purely eCommerce businesses.

PaymentCloud is mostly a high-risk specialist, though it does take standard risk merchants. High-risk processors work a little differently than standard-risk processors. The company contacts a number of acquirers to find the ones willing to take the risk of working in your industry and picks from those to get you the best deal possible. This means PaymentCloud may have a business relationship with First Data, but because it works with multiple back-end processors, you can probably specifically ask that First Data be excluded.

PaymentCloud currently provides no pricing information on its website. Ordinarily, we don't like this practice, but it is common among high-risk merchant account providers. High-risk processing rates are exceedingly variable and will differ from one merchant to the next, so it is impractical to disclose any numbers publicly. However, we do know that if your business is high-risk, you're more likely to be offered tiered pricing. If your business is standard-risk, you might be able to get the more transparent interchange-plus pricing from PaymentCloud.

PaymentCloud has excellent customer service, as you are assigned an account manager from the very start, and this person is your go-to for all questions/issues moving forward. Afterward, you receive intensive follow-up support, and the company advocates for you if you have issues with the acquirer. So no matter which back-end processor processes your payment cards, you'll likely have a very pleasant working experience with PaymentCloud.

As already discussed, one of the best clues for whether a processor works with First Data at the back end is whether the processor sells Clover equipment. Stax by Fattmerchant doesn't offer Clover, so it's fairly safe to assume that it's not a First Data reseller.

Stax is one of the few providers in the industry to offer membership (also called subscription-based) pricing. This model eliminates the percentage markup over interchange in exchange for a higher monthly subscription fee. Account fees are also consolidated into a single monthly fee, making your costs more stable and predictable.

Stax currently has two membership tiers for payment processing: one for those that process less than $5,000,000 per year ($99/month) and one for those that process more than $5,000,000 per year (custom quote-based pricing). Stax's in-house analytics platform, Stax Pay, includes a virtual terminal, invoicing, ACH payments, and more. Stax Pay is offered in three different subscription tiers, pricing for which is $49/month, $89/month, and $129/month, respectively. Certain features (such as Text2Pay and recurring billing) require a higher-tier subscription.

One atypical thing about Stax is that it offers its core services (terminals, mobile POS, shopping cart, integrations, and API) on an à la carte basis. (Some features, such as invoicing, inventory, and the virtual terminal, do overlap because they're included as part of the Stax Pay platform.)

However, after running the numbers and talking to business owners, Stax does offer an extremely good value for many merchants as long as you process more than $10,000 in card sales every month. Stax also isn't very cost-effective for small businesses that want an all-in-one payment platform. So while using Stax can give you the potential for lots of savings, run your numbers carefully before signing up with the company. If you realize you made a mistake a few months after you sign with Stax, you can cancel any time without incurring an early termination fee.

If you think Stax might be for you, be sure to read our full review for more details.

Helcim sells its own branded card reader, which suggests that, even if the company works with First Data as a back-end processor, it likely also works with others. So at least you can request a non-First Data back-end processor from Helcim.

Helcim has recently tweaked its interchange-plus subscription model closer to a third-party processing model, which means you can sign up with Helcim and start processing within minutes. Eventually, though, it will move you to a merchant account instead of staying in some sort of pooled account like with a third-party processor.

Helcim's pricing is similar to Square, with no monthly account fee, no monthly minimum, and no PCI compliance fee. Interchange-plus pricing is used exclusively, with discounted rates available to higher-volume businesses. All accounts come with all the online and in-person payment tools you need to start processing right away. Although there are no regular monthly fees, you will still be responsible for some incidental fees, including a $15 per-instance chargeback fee. However, Helcim will refund this fee if you prevail in the chargeback investigation. On the per-transaction processing fee, Helcim first divides these into two types: in-person transactions or online transactions. Under each type, you have seven tiers of successively lower processing fees. Please see our full review for details.

On hardware and software, if you have a physical store and need a card reader, Helcim offers a card reader that can sync to your smartphone, tablet, or workstation. All the data is automatically transmitted to Helcim so that you can later view your business's analytics. 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. You won't have to worry about compatibility problems, as Helcim provides all these services in a single, integrated product.

Helcim provides excellent customer service, so when issues arise, we fully expect the company to help you resolve problems quickly and to your satisfaction.

If you're still convinced that going with a big, direct processor is better (and you limit your large processor hate to First Data only), then you might want to take a look at Chase Payment Solutions. Chase is almost as big as First Data, but it does have a good reputation and gives a fair price. It also seems to treat smaller companies better than First Data, offering several pricing structures and no termination fees if you don't need a "free" terminal from Chase.

Chase no longer discloses any of its processing rates on its website, but the company offers a choice of either flat-rate pricing or interchange-plus. Its flat-rate pricing plan is designed for small businesses, and the rates are comparable to those charged by Square. If you want interchange-plus pricing, you'll have to ask for it, and you'll probably also have to meet a certain (undisclosed) minimum monthly processing volume. Note that the flat-rate pricing plan does not include a monthly account fee, while you'll likely have to pay an extra charge for the lower interchange-plus rates.

With Chase, you can either buy your terminal outright from the company or have your existing equipment reprogrammed to work with its processing network. You also have the option of including a "free" terminal with your account, but you'll have to sign a long-term contract in exchange. Canadian merchants also have the option of renting their equipment on a month-to-month basis. Pricing is not disclosed, so shop around online before buying a terminal from Chase. Chase lists tap-to-pay support as "coming soon" on its website, so if you decide to go with Chase, be sure to ask when it will enable tap-to-pay if this payment method is important to you.

A free virtual terminal and gateway come with your Chase account. If you prefer mobile processing with your smartphone or tablet, a mobile reader is also available for purchase or as your "free" reader. If you're a B2B merchant, Chase can also help you set up to take Level II and Level III data to help you save processing costs.

Overall, Chase has a respectable reputation and fair business practices.

One trend in the payment processing industry is to offer a full suite of hardware and software to take payment card information and then use that data to help the merchant see all sorts of sales-related data. CDGcommerce offers such solutions from PastePay, Vital, and Echo. Clover is noticeably absent, which suggests that CDGcommerce either does not use First Data as a back-end processor or that, at the very least, First Data is not a primary partner.

CDGcommerce is a merchant account provider that uses a hybrid business model. 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 the company as well. CDGcommerce offers three types of pricing plans, each optimized for the size/growth stage of your business.

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. 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 does not charge account setup fees, PCI compliance fees, or monthly minimums.

If you need card readers, you can buy the devices outright. For eCommerce, you get your choice of free payment gateways that include Authorize.Net or the company's proprietary Quantum Gateway. There are no setup fees, monthly fees, or per-transaction fees for the use of the gateways. You get a virtual terminal at no extra charge as well as detailed online reporting. Other services, such as invoicing, subscription billing, and similar options, are also available for an added fee.

CDGcommerce offers excellent customer service and will likely go above and beyond the service provided by its competitors to help you work through issues.