The 5 Best Small Business Credit Card Processing Companies
Unless your small business consists of running a lemonade stand on the corner of your street, sooner or later you’re going to need to accept credit and debit cards as payment in order to compete in today’s marketplace. Customers are increasingly relying on their “plastic” to make purchases, and consequently carrying less cash. eCommerce – something that barely existed twenty years ago – is now a serious competitor to physical retail stores. The more recent advent of smartphones, and the mobile payment features that are being added to them, promise to take this evolution even further by allowing consumers to leave both their plastic and their cash at home.
While we’re still a long way away from a truly cashless society, the options for processing credit and debit card payments have increased dramatically in just the past few years, and the set-up costs have come down to the point that even the smallest business can afford to offer this option. While accepting credit cards has traditionally required a hefty investment in card-reading terminals and expensive point-of sale (POS) systems, today’s options leverage smartphone technology and cloud-based data storage to provide the same capabilities in a lighter, more affordable, and more mobile package.
In 2009, Twitter founder Jack Dorsey introduced Square, the first service that allowed merchants to accept credit card payments using their smartphones. Square included a card reader which, when attached to a smartphone, could read the magnetic strip information on a customer’s credit or debit card. The Square app provided an interface between the card reader and the merchant’s account for tracking transactions. While Square is still the leading player in the field of mobile payments today, it also has a lot more competition. Today’s small business owner has a large variety of providers to choose from. While all offer the same core function (i.e., credit and debit card processing), each provider also offers unique features and options that differentiate it from its’ competitors.
So, which one is right for you? The answer is going to depend on the nature and size of your business. Do you operate out of a traditional brick-and-mortar establishment? Do you sell online, either exclusively or in conjunction with a physical business location? Is your business a full-time occupation with a large volume of sales, or is it just a part-time side gig? Below, we’ve rounded up our top picks among the current crop of card-processing services, and summarized what we like (and don’t like) about each of them. Whether you’re running a large retail store or just selling fresh produce out of the back of your truck at the local famer’s market, there’s a card-processing service that’s right for you.
Dharma Merchant Services
Dharma Merchant Services takes its name from the term dharma, which is found in several Eastern religions. While it can mean many different things and there is no direct translation, it roughly refers to a “right way of living.” The folks at Dharma take this seriously, offering a full spectrum of credit card processing services for a fair and reasonable price. Their fee structures are transparent – interchange-plus pricing is used exclusively and there are no annual fees. They also don’t charge account setup fees, early termination fees, or PCI compliance fees. Dharma is unique in the world of credit card processing companies in that they donate a whopping 50% of their profits to charity, living up to their motto “Commerce with Compassion.”
In addition to merchant accounts, Dharma offers a variety of wired and wireless countertop terminals for in-store use. Their terminals are EMV-compliant and also support Apple Pay. Dharma supports mobile swiping through Authorize.net, and also uses ShopKeep, one of our favorite iPad-based POS systems. Authorize.net can also support online and mobile payments, and integrates with QuickBooks.
Dharma easily offers the fairest and most transparent fee structure in the industry. In addition to a flat $10.00 per month fee for store front and eCommerce accounts, transactions are billed according to an interchange-plus cost model. In-person transactions are charged 0.25% above cost, plus $0.10 per transaction, while eCommerce transactions are charged 0.35% above cost, plus $0.10 per transaction. Other additional fees (such as Address Verification Fees) are clearly spelled out on Dharma’s website.
While there is no minimum monthly volume requirement, Dharma openly acknowledges that their full-service merchant accounts don’t make financial sense for low-volume businesses processing less than $10,000 per month in transactions. If your business falls into that category, they recommend either PayPal or Square.
- Full range of services and equipment for both storefront and eCommerce businesses
- Great customer support
- Transparent pricing with no additional fees
- Discounted rates for non-profits
- Not a good fit for low-volume (less than $10,000 per month) accounts
For more information about Dharma, see our complete review here.
Another one of our favorite providers, CDGcommerce has been around since 1998 – long enough to have figured out what it takes to run a successful processing company and keep customers happy. CDG stands out from the crowd by not charging you any of the nickel-and-dime hidden fees that most other companies in the industry are notorious for. Their merchant accounts come with no account setup fees, no PCI compliance fees, no monthly minimums, and month-to-month billing with no early termination fees.
A basic merchant account with CDGcommerce costs only $10.00 per month, and includes free use of their proprietary Quantum payment gateway/virtual terminal (a free Authorize.Net gateway is also available as an alternative). Depending on your needs, you can add additional features like their cdg360 security package, which provides $100,000 in data breach/theft protection, PCI-DSS vulnerability scans, customized security alerts, and a number of other features – all for $15.00 per month.
While we normally highly recommend buying your credit card terminals outright instead of leasing them, we’ve made an exception for CDG. Rather than lock you into an expensive, four-year lease, CDG only charges $79 per year for terminal insurance. Wireless terminals will also require a $20.00 per month data plan and an additional $0.05 per transaction processing fee. This is a much better deal than a standard terminal lease, which can end up costing your thousands of dollars over the full term of the lease.
CDG also offers very competitive processing rates. All of their pricing is interchange-plus and disclosed on their website. Here are their current rates:
- Online: interchange + 0.30% + $0.15 per transaction
- Retail: interchange + 0.25% + $0.10 per transaction
- Mobile: interchange + 0.25% + $0.10 per transaction
- Non-profit: interchange + 0.20% + $0.10 per transaction
With features like this, CDGcommerce hasn’t generated too many complaints from dissatisfied customers over the years. They are, however, the only company we’ve seen where the CEO has personally stepped in to address the few complaints that have occasionally tricked in. Thanks to CDG’s excellent customer service and support, however, he hasn’t had to do this very often.
- Interchange-plus pricing
- Month-to-month billing with no long-term contracts or early termination fees
- Free virtual terminal/payment gateway
- Excellent customer service
- Only available to US-based merchants
For a more detailed look at CDGcommerce, be sure to check out our full review.
“Trust, transparency, and fair pricing” is Helcim’s motto, and they live up to it by providing the most up-front, clearly-explained pricing structure of any of the credit card processing companies we’ve reviewed here. A Canadian company, they also have an office in Seattle and provide full support to US-based merchants.
Helcim offers a full gamut of services and equipment for both storefront and online businesses. Their website features a variety of EMV-compliant credit card terminals, starting at $199. Terminals with NFC capability for Apple Pay support start at $329. Unlike many of their competitors, they encourage US customers to buy their terminals outright, rather than renting or leasing. Helcim will reprogram your current equipment for free if it’s up-to-date. Unfortunately, Canadian EMV-compliant terminals are not designed to be transferred or resold, so Canadian customers will have to use the rental option or buy a new machine. Renting on a month-to-month basis (which is not the same as leasing) is usually the best option for Canadian merchants.
Helcim supports eCommerce through their Helcim Virtual Terminal, a 100% web-based solution that processes both online and manual payments on your computer, generating receipts that can be emailed or printed. This includes a web-based virtual terminal, payment gateway with API, support for recurring billing, billing information vault storage, e-invoicing, shopping cart integration, and hosted payment pages. No additional hardware or software is required. Best of all, you get all these features for a flat $25.00 per month fee.
Mobile payments are supported through the VirtualMerchant Mobile app for iOS and Android. This comes with a free universal card reader that plugs into your smartphone’s audio jack (additional readers are $45 each). There’s also a flat $30.00 monthly fee for an unlimited number of users.
Helcim uses a Cost+ pricing model, which includes a monthly subscription fee and interchange-plus pricing for each transaction. Retail users pay $12.00 per month, while eCommerce users pay $25.00 per month for the Helcim Virtual Terminal service. Support for mobile payments requires a $30.00 per month subscription. In addition to the per-transaction interchange rate charged by the issuing credit card company, Helcim charges 0.18% + $0.08 per transaction over the interchange rate for retail and mobile payments. Online transactions are charged 0.36% + $0.25 per transaction, plus the applicable interchange rate. Helcim doesn’t charge fees for account setup or termination, and PCI compliance is included in the monthly subscription fee. Helcim’s website includes a detailed explanation of their fees, plus some truly eye-opening disclosures about how their bank-owned competitors are ripping you off with hidden fees and long-term contracts.
- Extremely transparent fee structure
- Excellent customer support
- Very competitive rates for businesses processing over $2,500 per month
- Not suited for very small businesses processing less than $2,500 per month
- eCommerce rates are higher for Canadian customers
For more information, see our complete review here.
Payline Data covers all the bases for small business transactions, from mobile and online payments to in-store sales. They offer easy-to-understand pricing plans that are very affordable, especially for low-volume sellers. However, the company’s website fully explains all of the extra features and their associated costs, so you know up front what you’ll have to pay. Payline also stands out from the crowd for their corporate philosophy of charitable giving and support for non-profits through discounted pricing and their “Commercial Co-Venture” program.
For traditional, in-store credit card transactions, Payline offers a variety of EMV-compliant credit card terminals. They also offer a virtual terminal, along with a USB-connected device that allows you to process credit card transactions from any Internet-connected computer. Payline Gateway ties your physical hardware to your online account, allowing online transactions and automatically generating detailed analytical reports. Payline also offers NFC-capable terminals that support Apple Pay (at no additional cost).
Payline’s standard merchant accounts cost a flat $15.00 per month and feature interchange-plus pricing. Billing is month-to-month, with no long-term contracts or early termination fees. Retail pricing is interchange % + 0.2% + $0.10 per transaction. Online pricing is interchange % + 0.35% + $0.10 per transaction. If your business processes more than $80,000 per month, enterprise pricing with lower rates is available.
For eCommerce merchants, Payline also offers a variety of bundled pricing plans that include features you’ll need to setup and run an online business. Options include a Standard plan featuring flat rate pricing for small businesses and startups, and Professional and Enterprise plans for larger, more established businesses. The latter two plans feature interchange-plus pricing and numerous bells and whistles that aren’t included in the Standard plan, such as web hosting and website setup.
Payline’s Standard plan costs $29.00 per month and charges a flat 2.9% +$0.30 per transaction processing rate. The plan includes a secure payment gateway and virtual terminal for manual order entry, as well as online shopping cart integration. You’ll have to provide your own web hosting and PCI security scans are only available as an option. Nonetheless, it’s a great economical choice for a small eCommerce business, especially if you’re just getting started.
The Professional plan costs $79 per month and features interchange-plus pricing, with rates starting as low as 0.49% per sale. You’ll want to get a quote before signing up, as your actual processing rates will usually be higher than the advertised “as low as” rate. In addition to all of the features of the Standard plan, the Professional plan also includes web hosting, website setup and customization, and PCI security scanning. It’s an excellent choice for an established business, whether you sell only online or in conjunction with a physical retail presence.
For really large businesses, the Enterprise Plan includes all of the same features as the Standard Plan, plus domain name registration. Interchange-plus processing rates start as low as 0.29% per sale. The Enterprise Plan costs $159 per month. It’s only cost-effective for a very large, established business.
Payline also offers additional optional features, such as an iPad-based POS system and support for mobile payments via smartphones. While these features cost extra, pricing is very competitive. See Payline’s website for details.
- Fair pricing with easy-to-understand contracts and no hidden fees.
- Great customer service, including phone and email support.
- Integrates with Apple Pay and other mobile wallet services.
- Month-to-month contracts with no early termination fees
- Currently only available in the USA and Canada.
For more information, see our complete review here.
Finally, there’s Square, the oldest and possibly most well-known company in the mobile payments industry. It’s important to note that although Square will allow you to process credit card transactions and run an eCommerce website, it doesn’t provide a full-service merchant account. Because of this, you won’t get a unique Merchant ID number or the kind of 24/7 customer service that normally comes with one. While it’s still an excellent choice for startups and smaller businesses, it’s a little too limited for larger, more established merchants.
Square was the first company to offer smartphone-based mobile payments when it launched back in 2009. Today, it has plenty of competitors, but its lack of a monthly fee, reasonable transaction fees, and robust features still make it a great choice, especially for low-volume sellers. Square replaces the traditional credit card terminal with a simple dongle that attaches to your smartphone or tablet and works in conjunction with Square’s mobile app to swipe credit or debit cards. Square supports retail locations, eCommerce, and (naturally) mobile payments.
The heart of Square’s system is its family of credit card readers. Square’s original card reader was free, but it could only read magstripe cards. While it’s still available, most users will want to get the new, EMV-compliant reader. Like the original reader, it plugs into the headphone jack of your smartphone and works in conjunction with the Square app. At only $29.00, it’s one of the more affordable EMV card readers available. Square also offers an upgraded card reader that reads EMV-enabled cards and supports uses NFC technology to support contactless payments such as Apple Pay, Android Pay, and others. The Square contactless reader communicates with your smartphone or tablet using Bluetooth, and costs $49.00.
Square account holders can also access the Square Dashboard, available online or via the Square Dashboard mobile app. This free service features a host of powerful features to manage your business, including inventory management, invoicing, and detailed analytical data.
Square’s simple pricing structure is one of its most attractive features. Every credit or debit card swipe incurs a 2.75% fee. If the transaction has to be entered manually, the fee increases to 3.5%, plus $0.15 per transaction. Funds are deposited into the user’s account within 1-2 business days, unless fraud is suspected.
Unfortunately, one of the downsides to using Square is that fraud frequently is suspected, at a rate that’s well above the industry average. This often results in sudden, unexplained account terminations and account holds of up to 180 days. There are multiple reasons for this, but one major factor is that Square accounts are aggregated together, rather than each account having its own unique Merchant ID number. To make matters worse, Square’s customer service hasn’t always been the best. Originally lacking any kind of phone support, Square has gradually improved in response to user complaints, and now offers both email and phone support. Their online knowledge base for self-help is also excellent.
To use Square, you’ll need to set up a free Square account, get a compatible card reader, and install the Square Reader app. The Square Reader mobile app requires either an iPhone, iPad or iPod touch running iOS 8.0 or higher, or an Android phone or tablet running Android 4.0.
- No monthly account fees.
- Free and low-cost card readers available.
- Free access to powerful business management and analytical tools via the web or smartphone app.
- No long-term contracts or early termination fees.
- No unique Merchant ID number for merchant accounts.
- Frequent account holds and account terminations.
For more information, see our complete review here.
Whether you’re trying to juggle multiple retail locations or just selling products online, one of the five services we’ve highlighted here should be a “best match” for your business. While each service has its own standout features, they all offer competitive rates, transparent pricing, and an easy, low-cost setup. Square is a solid contender for very small, low volume businesses, while Payline, Helcim, and CDGcommerce are better for larger retail establishments. If you’re running a non-profit, Dharma may very well be your best choice. In any event, all of these services will, in most cases, provide you with a better, more affordable service than you’re likely to get with any of the traditional, bank-owned credit card processing companies. You can also compare our top processors (except for Square) head-to-head using our Merchant Account Comparison Chart.