The Best Credit Card Processing Companies For Small Business
Trying to choose the best credit card processing company can be overwhelming. This is especially true when you are a new small business owner who has never even heard of a “merchant account” before — but the truth is that even seasoned CEOs can get dizzy while researching the payment processing industry. (Trust us, we’ve spoken to them.) There are so many processing companies; they all seem to be doing more or less the same thing, and they all have both glowing testimonials and terrible complaints. How are you supposed to choose the best company under these circumstances? Who can you trust?
We get it. We’ve been reviewing credit card processing companies for years. We hear from dozens of small business owners every day all trying to answer the same question: Which merchant services solution is the best of my business?
And our answer is always the same: It depends
Unfortunately, there is no simple answer to this question. But over the years we’ve found that there are some good guidelines to follow. Using these guidelines, we’ve created this list of the best small business credit card processing companies, whittling down the field of providers to a manageable number. Some of these payment processors are good for eCommerce via your website, while others are best for mobile payments on your smartphone. Some work for retail with a credit card machine, or for phone orders with a virtual terminal. There are processors on the list for large transactions, for iPad POS, and for high-risk businesses. (I told you, when it comes to the best payment processor for your business, it depends.) All of them follow some simple rules that we live by here at Merchant Maverick, which we’ll discuss in detail below.
Here’s a quick look at our list of the highest-ranking credit card processing companies for small businesses. (They’re great for medium and large business too, for the record.) Scroll down for in-depth discussions.
Other Featured Options:
- Dharma Merchant Services: Dharma Merchant Services takes its name from the term dharma, which roughly translates to a "right way of living." The folks at Dharma take this seriously, offering a full range of credit card processing services for a fair and reasonable price alongside some of the most in-depth and accurate educational material we've ever seen.
- CDGcommerce: If you run a startup, CDGcommerce can onboard you quickly and let you start processing almost right away. For businesses that process between $1,000-$10,000 per month, you get a plan with flat-rate pricing plus a fixed monthly fee. They offer interchange-plus pricing plans to businesses processing over $10,000 per month.
Read more below to learn why we chose these options.
Credit Card Processing For Small Businesses: What You Need To Know
Small businesses looking for credit card processors need to stay focused and flexible. Know what you need at this stage in your business. Even if you have the perfect processor right now, don’t hesitate to switch processors if you outgrow what your current processor can do for you.
If you don’t know much about credit card processing, here are some resources to check out before you go any further.
- The Beginner’s Guide To Payment Processing
- The Complete Guide To Credit Card Processing Fees & Rates
- Trading Ease For Transparency With Interchange-Plus
- PCI Compliance Fees: A Fair Processing Charge Or A Junk Fee
- Does Your Merchant Account Have An Early Termination Fee?
How to Choose the Best Credit Card Processing Company
When it comes to picking the best credit card company for your business, it helps to follow these four simple rules, which we relied on heavily to formulate our list of best credit card processors. You can use them in your search as well.
Rule 1: Transparency is the best policy
For a credit card processor to make it onto our list of recommendations, there can be no hidden fees and no surprises. That’s why we insist that our featured merchant account providers use a pricing system that separates wholesale from markup cost (interchange-plus, aka “pass-through” pricing). The interchange rates are set by the credit card brands (Visa and Mastercard foremost) and are the same for every credit card processor. It’s the markup that really matters here. In addition to using this cost-plus pricing model, all our top picks make in-depth fee disclosures upfront. All of our top-rated processing companies will also meet or beat your current rate if it’s lower than their advertised price. And all new businesses are guaranteed a fair starting rate thanks to the standardized public rate disclosures.
Rule 2: No pressure, no commitment
We do not tolerate high-pressure sales tactics or long-term commitments. Some salespeople will say anything to get you to sign the dotted line — and then will force you to pay hundreds or thousands of dollars when the company doesn’t live up to its promises. We only recommend companies that employ honest, respectful sales reps and offer service with no long-term contract commitments (with the exception of high-risk processors). You should be able to accept credit cards without making a deal with the devil.
Rule 3: Look for value and savings
Some credit card processing companies only give you barebones service, but they do so at rock-bottom prices. Others charge a bit more, but provide valuable software as part of the service. Which is best for you? That depends on your budget and your wants/needs. The cheapest credit card processor isn’t always the best. Likewise, you don’t always get what you pay for. It’s important to determine the value of a merchant account for your particular business needs. The topic of credit card processing fees is way too broad for us to cover completely in this post, but, if you’re interested, we have an in-depth resource that explains everything you could ever want to know about card payment processing rates and fees.
Rule 4: Reputation matters
We carefully consider every complaint we find to figure out what went wrong. We then weigh these conclusions against the number of businesses the credit card processor services to make decisions about which companies we feel comfortable recommending. Our top-rated merchant account providers have extremely low complaint counts and numerous independent reviews validating good practices. A proven track record of satisfaction is imperative for us.
That’s not so much to ask, is it? We don’t think so, and we never settle for less.
The 7 Best Small Business Credit Card Processing Companies
It’s hard to make superlative claims in an industry this large, but we truly believe these merchant services providers are the best around, especially when it comes to setting up accounts online and over the phone. Each has excellent products, services, marketing, and sales practices. Take a look and see what you think.
1. Payment Depot
Payment Depot has provided merchant accounts to businesses since 2013. It is best known for its use of subscription or membership-based pricing, which is a spinoff of the interchange-plus model. While it isn’t the only provider to offer this type of pricing, Payment Depot’s reputation for open, honest sales practices and excellent customer support puts it ahead of many of its competitors using this relatively new pricing model.
So, how does it work? Most providers offering interchange-plus pricing will charge “interchange + markup” rates, with the markup including both a small percentage of the sale and a per-transaction fee. You’ll also incur several monthly and annual fees for individual services, such as PCI compliance and account statements. In contrast, Payment Depot’s model combines all your monthly fees into a single monthly subscription ranging from $49.00 to $199.00 per month, depending on which plan you choose. You’ll also pay lower processing rates, with the elimination of the percentage markup. Your rates will be the interchange rate, plus a per-transaction fee that varies between $0.15 and $0.05 per transaction, depending on your pricing plan.
Payment Depot accounts are billed month-to-month, but you can also save money on your subscription fees by paying them annually instead of monthly. Annual subscriptions are protected with a 90-day satisfaction guarantee, so merchants who are not satisfied with their service within the first 90 days will be refunded their membership fees (not interchange fees or transaction fees, of course). This is a fair, reasonable offer, and should give you some peace of mind.
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We like Fattmerchant for every business type, but it really shines for eCommerce and card-not-present merchants. One of our favorite things about this company is its subscription pricing model. With this fee structure, you have a 0% mark up alongside a small per-transaction fee ($0.08 – $0.15) and a larger monthly fee ($99 and up). Don’t let that monthly fee discourage you.
The truth is that the 0% mark up saves most small businesses so much money that it more than pays for the monthly fee. This is especially true for eCommerce and other card-not-present business because Fattmerchant does not charge an inflated markup on these accounts. Just about every other merchant services provider, even our favorites, charge a lot extra for phone order and eCommerce businesses. Because you don’t pay a percentage markup on your processing volume, you save more as you process more. This is exactly how the markup process should work, in our opinion.
Still not convinced that it’s worth it? Well, Fattmerchant adds even more value to your account with high-quality invoicing and billing tools, customer management, virtual terminal, POS app, inventory management, detailed reporting analytics, and more. It’s a growing platform that is constantly improving and adding new features, so the value you get from the service will only grow over time. Even now, the tools Fattmerchant offers rival the offerings of the ever-popular Square Payments service. Fattmerchant’s invoicing and billing tools are the stand-out solutions of this service.
So whether you run a standard retail business, an online store, or a phone order business, or are a professional service provider (or just about any other seller), we recommend Fattmerchant as a good place to start your search. It’s our top all-in-one payment processor pick because of its versatility, predictability, reliability, and value for a wide range of business types.
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PaymentCloud specializes in setting up merchant accounts for high-risk businesses with a network of third-party processors and acquiring banks. While it can’t always place every merchant, the company has a higher success rate than many of its competitors. Best of all, PaymentCloud does the extra work required to accept a high-risk account without charging you any application or account setup fees.
Like almost all high-risk specialists, the company doesn’t disclose its processing rates or account fees. You’ll have to get a quote from its sales team and do a little negotiating to see how their offer stacks up against other providers.
PaymentCloud offers its retail merchants a free lease of an EMV-compliant credit card terminal. It also offers Authorize.Net as its payment gateway, although its system is compatible with other third-party gateways as well. Additionally, it provides a free virtual terminal with each account. While its line-up of products and services isn’t as robust as some other providers, it offers all the essentials you’ll need for a small or medium-sized business.
Feedback from a variety of consumer sites on the web, including our readers, have been overwhelmingly positive. Furthermore, when our other highly rated processors Dharma and Stripe can’t take certain high-risk merchants, they recommend PaymentCloud. To us, a recommendation from potential competitors in the same industry carries a great deal of weight. We give PaymentCloud a strong endorsement.
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4. National Processing
For the merchant who’s looking to save on costs, but still wants a full-service merchant account, the best option is National Processing. The company has a great reputation, with few complaints and quite a bit of praise from customers – something we don’t often see with merchant account providers.
National Processing offers three interchange-plus rates, depending on the nature of your business:
- Retail: Interchange + 0.20% + $0.10 per transaction
- Restaurants: Interchange + 0.15% + $0.07 per transaction
- eCommerce: Interchange + 0.30% + $0.15 per transaction
- eCheck (ACH): $15/month and as low as $0.48 per transaction
National Processing is a great service for businesses that want low rates from a reliable company, but if you’re hoping for a massive free software suite like Square offers, with POS, analytics and such included, you might not find what you’re looking for. Keep in mind, however, that you could easily end up saving enough money with National Processing to buy all that software and more from whichever provider you want. Low costs and overall versatility make National Processing a great option for many businesses.
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5. Square Payments
Everyone has heard of Square by now. With its free Square Reader, app-based payment system, and simple pricing structure, it’s one of the most popular processing services on the market for small businesses. Square’s pay-as-you-go system allows businesses that ordinarily couldn’t afford a merchant account to accept credit cards.
Square keeps costs low by aggregating accounts together rather than issuing each user a unique Merchant ID number. Because of this, you won’t get a true full-service merchant account but you are much more likely to be approved for an account, and approved quickly. The trade-off is that there’s a much higher chance that your account will be frozen or terminated without notice if fraud is suspected. This might be a minor inconvenience to a retail business that mostly deals in cash and only occasionally takes credit cards, but it would be catastrophic to an eCommerce business where cash isn’t an option.
To summarize, Square offers a great deal under most circumstances, but use the service with caution. Scroll a few sections down for a more detailed discussion about whether Square is a good fit for your business.
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6. Dharma Merchant Services
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 range of credit card processing services for a fair and reasonable price alongside some of the most in-depth and accurate educational material we’ve ever seen.
Dharma’s fee structure is transparent – interchange-plus pricing is used exclusively, and there are no annual merchant service fees. This includes OptBlue pricing for accepting American Express transactions. They also don’t charge account update fees, early termination fees, PCI compliance fees, or have a monthly minimum. Fees that they do charge are fully disclosed on their website. This is a company that strives to do the right thing with all its business practices.
Dharma is unique in the world of credit card processing companies in that they donate a significant percentage of their profits to charity. Related to that, Dharma provides discounted rates for nonprofit businesses. Our guide for nonprofit payment processing discounts has more information for charities looking to save money on credit card acceptance. While many believe that nonprofits get the best rates with a software specialist like Blackbaud Merchant Services, Dharma provides much lower rates and better service.
Nonprofits that accept credit cards with Dharma pay a markup of only a 0.20% + $0.10 markup for virtual and 0.15% + $0.07 for in-person payments. And Dharma Merchant Services will meet or beat your current rate to win your business; rates are always negotiable in this industry. We recommend Dharma highly to nonprofits, but this company serves all merchants well — in fact, it’s on our list of the best retail credit card processing companies too.
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 Square.
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CDGcommerce was founded in 1998, and for more than twenty years, it has focused on merchant account services to small and medium-sized businesses. While their services are geared more toward eCommerce businesses, they also provide a full range of offerings for retail merchants. In addition, they have recently revamped their services offerings, with an aim towards bringing a smaller business aboard early and growing with it until it becomes a large merchant, offering services and pricing suited for all stages of a business’s lifetime.
If you run a startup, CDGcommerce can onboard you quickly and let you start processing almost right away. For businesses that process between $1,000-$10,000 per month, you get a plan with flat-rate pricing plus a fixed monthly fee. They offer interchange-plus pricing plans to businesses processing over $10,000 per month. For businesses that process over $200,000 per month, CDG offers direct wholesale pricing plus an annual membership.
CDG contracts are month-to-month, so you can cancel at any time without penalty. With all their plans, merchants are offered various aspects of a CDG-proprietary POS system called PastePay that allow for various business reporting and marketing solutions. For an additional subscription per month, you can access the full suite of PastePay functionalities. Lastly, CDGcommerce has eliminated many of the excessive fees that other providers charge, including account setup fees, PCI compliance fees, and monthly minimums.
With so many outstanding features, and coupled with an excellent customer service team, we recommend CDG very highly.
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Is Square Better Than A Merchant Account For Small Business?
If you’re a small business owner or are just starting out, you probably only process only small transactions ($15 or less average ticket size) — a couple of thousand dollars each month. Maybe you’re adamant about not paying any sort of monthly fees, even if you process somewhat above that amount. If so, Square might be the right fit for you.
|Free App & Reader||Square eCommerce||Square for Retail||Square for Restaurants|
|Get Started||Get Started||Get Started||Get Started|
|Free, general-purpose POS software and reader for iOS and Android||Easy integration with popular platforms plus API for customization||Specialized software for more complex retail stores||Specialized software for full-service restaurants|
|Always Free||Always Free||Free Trial||Free Trial|
Square currently charges 2.6% + $0.10 per card-present transaction. While this is a price increase from its old charges, for many small business owners–especially in retail or small food service businesses–it’s still an excellent value given the low cost and high-quality software that also comes with Square’s service. Larger businesses, however, can end up saving hundreds or thousands of dollars each month by not using Square. Lastly, high-risk businesses should avoid Square because it is incredibly risk-averse and will shut down your account and hold your money if you are high-risk.
Square, of course, offers its own line of payment card processing hardware. The hardware can run from free to thousands of dollars per machine. Each has its positives and negatives, so be sure to understand your business’s specific needs before deciding on a machine. We’ve written an article discussing the hardware in more detail, where we also make some recommendations.
Still can’t decide? Check out our in-depth post on reasons why Square may or may not be the best way for your business to accept credit card payments. You could even try both Square and a merchant account. Since none of our top merchant services providers lock you into long-term contracts, it’s safe to try it out for a few months with no major commitment. If you’re set on getting a Square-like option but you feel skeptical of Square as a company, we have a post dedicated to Square alternatives for you to consider.
Why Your Choice Of Credit Card Processing Machine Matters
Unless you run an eCommerce website, the credit card machine you use to take payments is an important part of your consideration when picking a processor. We have in-depth articles on how to pick a machine, but the short answer is that not only should you pay attention to the price and basic functionalities, you should think about hardware and software compatibility with multiple processors as well.
When you first look at credit card machines, you’ll be assaulted with a variety of new names such as readers, terminals, point-of-sale systems, and gateways. Some are completely free, and others cost over $1,000 each. We have articles to help you wade through various aspects of selecting machines, and we give advice on the best way to pay for them. Similarly, with eCommerce, we discuss gateways and virtual terminals so that your existing webstore can quickly integrate with whichever gateway or virtual terminal you finally select.
Throughout all this, the one thing to keep in mind is you should plan ahead. For instance, the Clover terminals are nice and modern looking, with advanced software installed for inventory management, sales analysis, marketing tools, and similar. While you can find many processors who sell Clover machines, the technology actually belongs to the direct processor Fiserv (formerly First Data) that many smaller processors connect to at the back end. So, even though Clover machines are slightly more flexible than, say, Square’s machines (which can only be used with Square), they do limit the number of processors you can ultimately use with the machine.
At the end of the day, our standard advice regarding hardware applies here: pick the best processor for you, and then pick the hardware. All can easily fall into place from there.
The Bottom Line On The Best Merchant Services For Small Business
Whether you’re trying to juggle multiple retail locations or just sell products online, one of the seven 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 easy, low-cost setup. While all of them perform more or less the same essential service (connecting an acquiring bank to an issuing bank), each brings its own value to the floor.
Square is a solid contender for very small, low volume businesses, while Fattmerchant, 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 compare our top processors (except for Square) head-to-head using our merchant account comparison chart. Those interested in mobile credit card processing specifically should consult our mobile chart. And those most interested in eCommerce tools can take a look at our shopping cart software comparison.
Here’s a final look at your options. We hope one of these will be the best choice for your small, medium-sized, or even enterprise business! Let us know how it goes.
A Last Look At Our Top Picks
- Payment Depot
Summary - Payment Depot is best known for its use of subscription or membership-based pricing, which is a spinoff of the interchange-plus model. Payment Depot’s reputation for open, honest sales practices and excellent customer support puts it ahead of many of its competitors.
Summary - We like Fattmerchant for every business type, but it really shines for eCommerce and card-not-present merchants. One of our favorite things about this company is its subscription pricing model. With this fee structure, you have a 0% mark up alongside a small per-transaction fee ($0.08 - $0.15) and a larger monthly fee ($99 and up).
Summary - PaymentCloud specializes in setting up merchant accounts for eCommerce and high-risk businesses with a network of third-party processors and acquiring banks. While it can’t always place every merchant, the company has a higher success rate than many of its competitors.
- National Processing
Summary - For the merchant who's looking to save on costs, but still wants a full-service merchant account, the best option is National Processing. The company has a great reputation, with few complaints and quite a bit of praise from customers – something we don’t often see with merchant account providers.
Summary - With its free Square Reader, app-based payment system, and simple pricing structure, it’s one of the most popular processing services on the market for small businesses. Square’s pay-as-you-go system allows businesses that ordinarily couldn’t afford a merchant account to accept credit cards.
- Dharma Merchant Services
Summary - Dharma Merchant Services takes its name from the term dharma, which roughly translates to a "right way of living." The folks at Dharma take this seriously, offering a full range of credit card processing services for a fair and reasonable price alongside some of the most in-depth and accurate educational material we've ever seen.
Summary - If you run a startup, CDGcommerce can onboard you quickly and let you start processing almost right away. For businesses that process between $1,000-$10,000 per month, you get a plan with flat-rate pricing plus a fixed monthly fee. They offer interchange-plus pricing plans to businesses processing over $10,000 per month.