Choosing the best credit card processing solution is crucial in the dynamic world of small and medium-sized businesses (SMBs). It’s not just about accepting payments; it’s about finding a reliable, cost-effective partner that aligns with your business needs. This article aims to simplify your choice with a carefully curated list of the best credit card processing companies tailored explicitly for SMBs.
Methodology
To help small and medium-sized businesses (SMBs) choose the best credit card processing company, we evaluated 27 top providers across 867 data points to develop a ranked list. We assessed each credit card processor’s general features, fees, service and support, payment options, mobile apps and user reviews and ratings. We then assigned our Editors’ Score to the top nine options from our ranked list. Read our full methodology here.
Stripe
Best credit card processing company for SMBs
Why we picked it
Stripe stands out as a top choice for SMBs seeking a robust and versatile credit card processor. Known for its innovation and predictable pricing, Stripe caters to a broad range of e-commerce needs. It’s a preferred payment processor for platforms like Shopify, WooCommerce and WordPress, and is used by well-known brands such as Amazon, Instacart and Zoom.
Stripe’s pricing model is transparent, with a standard rate of 2.9% + 30 cents per successful card charge for online transactions and slightly lower rates for in-person payments. This flat-rate system is especially convenient for businesses with limited transaction volumes, although it may become costlier as your business grows.
Stripe’s strengths include its excellent developer tools, advanced reporting and support for international transactions and multicurrency payments. It’s an ideal choice for businesses with a global customer base. Stripe offers 24/7 customer support, including phone, chat and email support, with technical support available as well as a comprehensive knowledge base.
It’s important to note that Stripe may not be suitable for high-risk industries and requires some technical skills for implementation. Account stability issues have also been noted as a drawback, as Stripe has a history of placing holds on accounts while reviewing suspected terms of service violations or terminating the account altogether. (These holds are normal among third-party payment processors but it’s worth noting this is among the most common complaints about Stripe.)
Small businesses using Stripe will be pleased to find features like invoicing, customer management and advanced security tools. Stripe also supports a variety of payment methods, including credit cards, ACH payments and cryptocurrency processing, making it a flexible option for different business models. The cost for Stripe’s hardware (like card readers) is competitive, adding to its appeal for in-person transactions. While Stripe’s predictable pricing and extensive features make it an attractive option, SMBs should consider their specific needs, technical capabilities and growth trajectory when choosing Stripe as their credit card processing service.
Pros
- Predictable flat-rate pricing
- Comprehensive e-commerce solution
- Top security measures, including advanced encryption
Cons
- Some concerns about account holds
- Needs developer expertise for implementation and customization
- Limited in-person payment options
Who should use it
SMBs looking for a broad range of flexible and customizable features for credit card payment processing should take a look at Stripe. It offers a comprehensive suite of tools, advanced security, advanced reporting and support for international transactions and multiple currencies. Be aware it will require some technical skills to take full advantage of the customization offered.
Square
Best for in-person transactions
Why we picked it
Square is a top credit card processor for SMBs and particularly excels at in-person transactions thanks to its extensive selection of hardware and accessories and its flexible built-in POS software. Square offers comprehensive, feature-rich payment solutions without a monthly fee, although Plus and Premium plans are available. (These tiers come with a monthly fee; however, Square does offer a 30-day free trial of Square Retail Plus, normally priced at $89 per month, per location.)
With its easy setup and predictable pricing, Square is an attractive option for new or smaller merchants. Square’s processing rates are transparent, with a standard rate of 2.6% + 10 cents for in-person transactions and 2.9% + 30 cents for online transactions. These rates apply across various plans, including Square POS, Square Appointments, Square for Retail and Square for Restaurants, each tailored to specific business needs.
Square’s platform is easy to use and offers impressive integrations, including “buy now, pay later” with Afterpay and cryptocurrency processing through the latest Cash App integration. Robust compliance with PCI (Payment Card Industry) standards is also assured with all Square plans, managing payment security from end to end. Its hardware and software solutions are well-suited for small businesses, with affordable chip card readers and seamless integration with Square’s range of POS systems. Square also ensures quick access to funds (one to two business days) with no hidden fees, which is crucial for SMBs.
However, SMBs should be aware of some drawbacks. Like many companies, Square can be prone to account stability issues, particularly for businesses that are deemed high risk because of their credit history. If you’re considering Square, you should review its withholding policies. Square streamlines account setup by not using a traditional underwriting process. However, this streamlined setup can mean delayed access to funds when a hold is placed on funds from your first large transaction (or any unusually large transactions), as Square automatically flags these transactions as risky.
Pros
- Predictable flat-rate pricing
- Offers a range of free tools and software for payment acceptance and business management
- Quick and easy to start with no complex contracts
Cons
- Some concerns regarding account holds
- Not for high-risk industries
- May not be cost-effective for businesses with higher volumes
Who should use it
With its built-in POS software and free magstripe card reader, Square is a great choice for businesses that need to conduct in-person transactions, including mobile businesses like food trucks. Small and new businesses can quickly get their payment processing up and running with Square’s no-monthly-fee basic plan and easy setup.
Helcim
Best for cheap payment processing
Why we picked it
Helcim’s credit card processing services feature a transparent interchange-plus pricing model, offered to all merchants, regardless of their processing volume. This pricing structure separates the interchange rate paid to credit card associations and issuing banks from the provider’s markup, offering clarity and potentially lower costs for higher-volume businesses. It also eliminates many common fees like account setup, monthly account, PCI compliance and statement fees, which is a significant benefit for small businesses mindful of cost efficiency.
Additionally, Helcim automatically decreases the markup as your business processes higher volumes. It also offers a way to pass credit card processing fees on to your customers through surcharges and convenience fees.
Helcim supports various payment methods, including credit and debit card processing, ACH transfers and international payments. Additionally, it offers proprietary hardware like the Helcim Card Reader, capable of handling in-person transactions with support for magstripe, EMV, NFC-based payments and syncing with various devices to function as a POS system. The Helcim Card Reader is priced at $99 per unit.
Helcim offers excellent customer support, with telephone and email assistance and an extensive online knowledge base for troubleshooting and setting up services. However, potential users should know that Helcim doesn’t accept high-risk merchants and may be more expensive for very low-volume businesses.
Pros
- Transparent fees that are generally cost-effective compared to other credit card processors
- Free suite of business tools for inventory and customer management
- Supports various payment options for online and in-person payments
Cons
- Limited third-party integrations
- Cost benefits not ideal for low-volume merchants
- Fairly extensive list of prohibited high-risk and other businesses
Who should use it
Helcim’s transparent pricing and limited fees are among its key selling points, making it an attractive option for businesses looking for inexpensive payment processing. Its volume discounts are also automatic. Helcim has five tiers of margins that it adds to the basic interchange fee, ranging from 0.50% + 25 cents for a monthly online credit card volume of $50,000 or less to 0.15% + 15 cents for a monthly online credit card volume exceeding $1 million.
Stax by Fattmerchant
Best for high-volume businesses
Why we picked it
Stax by Fattmerchant stands out in the credit card processing market due to its unique pricing structure and comprehensive service offerings. It provides merchant accounts, payment terminals, a mobile processing app and an integrated platform (Stax Pay) suitable for a broad range of businesses, especially e-commerce. Stax’s distinctive feature is its membership pricing model, where merchants pay a monthly fee with 0% markup on interchange rates, making it an attractive option for high-volume businesses.
Stax’s subscription prices are determined by your business’s processing volume ($99/mo for processing up to $250,000/year, $199/mo for processing $250,000 to $500,000/year, and custom pricing for processing over $500,000/year). It also offers features like enhanced reporting, invoicing and recurring payments. While the pricing is straightforward, it may not be economical for small businesses that process less than $10,000 monthly. Smaller businesses or those with sporadic sales might find more value in processors with lower fixed costs or pay-as-you-go models.
Key pros of Stax include transparent membership pricing with no transaction markup, next-day funding add-on options, an integrated payment processing platform, month-to-month billing without long-term contracts and QuickBooks integration. However, it’s worth noting that user reviews in recent years have included dissatisfaction with reporting and customer service.
Pros
- Comprehensive payment platform with various services
- Transparent monthly membership pricing without transaction markup
- Compatibility with QuickBooks for easier financial management
Cons
- Less suitable for businesses with low transaction volumes
- Reports of problems with billing and customer service
- Added cost for level two processing, ACH processing and next-day funding
Who should use it
With a flat monthly subscription price and 0% interchange markup, Stax can save money for high-volume businesses. Its site touts that companies can save up to 40% on credit card processing. With monthly charges starting at $99, however, it might not be as good an option for businesses with low transaction volumes.
Merchant One
Why we picked it
Merchant One is well-suited for a wide range of businesses, offering a tiered pricing structure, various point-of-sale (POS) devices to fit different budgets and a payment gateway with extensive e-commerce integrations.
A key advantage of Merchant One is its high approval rate; it claims to approve 98% of applicants, including those with less-than-perfect credit. This particularly benefits new businesses or those previously turned away by other processors. Merchant One promises setup within 24 hours, further enhancing its appeal for businesses needing quick solutions. Additionally, it offers 24/7 customer support and dedicated account managers.
Merchant One employs a tiered interchange-plus model, charging a percentage markup on payments without additional transaction fees. There is also a monthly fee of $13.95, which covers various services, including the payment gateway and virtual terminal.
Potential users should be aware that Merchant One has been criticized for contract complexity and lack of transparency. For example, we found a number of merchant complaints about discrepancies between what was advertised and what was actually in their agreement’s fine print. As with any credit card processor, it’s crucial for merchants to thoroughly review their contracts to understand all fees and terms, as these may not be fully disclosed during the sales process.
Pros
- 98% approval, including for less-than-perfect credit
- Setup is possible within 24 hours
- Integrated payment gateway with e-commerce tools
Cons
- Reports of undisclosed fees and charges
- Concerns over misleading advertising and complex contract terms
- Tier structure can be confusing and may result in higher fees for some businesses
Who should use it
If you have a new business with a limited credit history or even a business with not the best credit, Merchant One is a provider you may want to consider. It claims to approve 98% of applicants, even some with “less-than-perfect” credit. Note that we were unable to confirm if that 98% approval rate includes businesses in high-risk industries, so it could be worth contacting the provider if you have related questions or concerns.
PayPal
Best for brand recognition
Why we picked it
PayPal is a renowned global payment processor offering online and in-person payment solutions. It provides a range of e-commerce tools, supports various payment methods and offers fraud and seller protection at no additional fee. Additionally, PayPal accepts over 100 types of currencies (even if customers don’t have an account with PayPal), making it a versatile choice for businesses with international transactions.
One of the most significant advantages of PayPal is its brand recognition, which can boost customer confidence and conversion rates. It offers a secure payment gateway, virtual terminal, invoicing capabilities and options for recurring billing and subscriptions. PayPal’s Pay Later feature allows customers to make interest-free installment payments, which is particularly beneficial for online businesses as it can increase sales and the average order value. However, businesses need to be aware that PayPal’s transaction fees are relatively high, and there are also costs associated with point-of-sale (POS) hardware.
PayPal supports a broad range of payment methods, including major debit and credit cards, ACH transfers, digital wallets and even cryptocurrency. However, its transparent pricing model can become complex when delving into the different fees for various types of transactions and payment methods. The positive is that, although complex, PayPal openly and thoroughly discloses all these fees on its website.
Overall, PayPal is a suitable choice for startups and small and medium-sized businesses (SMBs) with lower transaction volumes, offering ease of setup, a range of payment options and good e-commerce features. However, SMBs should consider the higher transaction fees and the potential costs of POS equipment and other add-ons when evaluating PayPal against other credit card processors.
Pros
- Familiar user interface and easy setup
- Compatible with most major business services; easily integrates with other solutions
- Accepts many different currencies
Cons
- Transaction rates aren’t ideal for high-volume merchants
- Comparatively few POS features
- Phone support only available during scheduled hours
Who should use it
A well-known payment processor found on many “best of” lists, PayPal is a solid choice for many SMBs. However, it can be particularly beneficial in giving consumers confidence in your business. The strength of the PayPal brand (it’s the second most trusted financial services brand per Morning Consult) can boost conversion rates and average order value, among other metrics.
Payline Data
Best for high-risk sectors
Why we picked it
Payline Data offers a comprehensive suite of tools for in-store and online credit card processing. Key features include transparent pricing, various hardware options and next-day deposits. Payline Data offers interchange-plus pricing, which can be more cost-effective and clear for owners managing expenses. The focus on affordable and straightforward pricing makes Payline Data an appealing option for businesses wary of complex fee structures.
Payline Data also serves high-risk accounts including travel, tobacco and vitamins/supplements, and it’s one of the only companies that offers credit card processing for cannabis. Payline Data offers merchant accounts 24/7 customer support and dedicated account managers to assist with onboarding and training. It also has direct integrations with many shopping cart and POS systems and all versions of QuickBooks.
SMBs should be aware of a few considerations when opting for Payline Data. First, its plans for in-person and online processing are separate, so if you need both, you’ll pay two monthly fees. Payline is also unable to process international payments, so it’s not suited for international sales.
Payline Data is a strong choice for SMBs seeking a balance between cost, features and customer support. Still, businesses should weigh their specific needs and budget constraints when comparing it to other options on the market.
Pros
- No long-term contracts, providing flexibility for SMBs
- Supports high-risk merchants
- Partners with Verifi to offer anti-fraud features and specialized chargeback protection programs
Cons
- In-person and online processing require different plans
- Doesn’t support international transactions
- Higher interchange-plus rates than some competitors
Who should use it
It can be a challenge for businesses in high-risk industries to find quality payment processing services — many of the providers on our list don’t work with them. Payline Data, however, specifically supports these high-risk accounts. It serves such high-risk verticals as tobacco, credit repair, vitamins/supplements and even cannabis. Payline Data also has a high-risk support team to guide your business.
Why we picked it
While most credit card processors on our list are a combination of merchant account plus payment gateway, Authorize.net advertises its “payment gateway only” option for businesses with merchant accounts elsewhere. However, it recommends its all-in-one plan, which includes a merchant account and uses a flat-rate pricing model. Here, we’ll focus on the all-in-one plan to better compare this provider to the others on this list. This plan is notable for its robust security features, broad support for multiple currencies and absence of long-term contracts, offering month-to-month billing flexibility.
The platform excels in e-commerce support, offering seamless integration with popular e-commerce platforms, a user-friendly virtual terminal and features like “buy now” buttons for quick customer transactions. Additionally, it supports various payment methods, including credit and debit cards, digital wallets and e-checks (for a separate fee). Notably, being a Visa subsidiary, Authorize.net’s security protocols are top-notch.
However, some limitations exist, especially for businesses requiring versatile in-person payment options. Authorize.net’s in-person solution requires installing its virtual point-of-sale (VPOS) software onto your PC and connecting a supported/compatible card reader. It’s unclear which card readers are supported or compatible, but it’s clear that a Windows PC is required. This limitation could be a drawback for some businesses that frequently engage in card-present transactions. Additionally, while the platform’s flat-rate pricing of 2.9% + 30 cents per transaction is transparent, it may not be the most cost-effective solution for businesses with higher transaction volumes.
For small businesses considering Authorize.net’s all-in-one option, it’s essential to weigh the platform’s strong e-commerce and security capabilities against its limitations in supporting diverse in-person payment methods and potentially higher costs for high-volume businesses.
Pros
- Top-notch security and fraud protection measures
- Seamless integration with popular e-commerce platforms
- 24/7 customer support available via phone or online chat
Cons
- In-person payments need specific hardware
- Information about supported card reader models is unclear
- Flat-rate pricing model is potentially less cost-effective for businesses with high transaction volumes
Who should use it
Authorize.net is unique on our list for offering a payment gateway-only option in addition to a combined merchant account/payment gateway plan. So, if you already have a merchant account you like or that provides cheap rates and just need to add a payment gateway, consider Authorize.net
ProMerchant
Best for passing processing fees to customers
Why we picked it
ProMerchant provides a range of credit card processing services, including mobile and point-of-sale credit card processing, suitable for retail stores, restaurants, e-commerce businesses and more. It offers month-to-month agreements without long-term contracts, setup fees, application costs or cancellation fees. This approach is particularly advantageous for SMBs, providing peace of mind and eliminating the fear of being locked into lengthy commitments.
Of particular note is its two pricing models: an interchange-plus model (a fixed markup to the current interchange rates) and a zero-cost processing model for retailers and restaurants. The zero-cost model provides an overall $0 processing cost for businesses, allowing them to charge customers a flat percentage to cover the processing fees.
In addition to more standard merchants, ProMerchant serves merchants in high-risk industries as well as those with less-than-perfect or not much credit. The application process is notably fast and straightforward, with approvals typically occurring within 72 hours. Additionally, ProMerchant provides overnight delivery of free hardware and round-the-clock customer support, enhancing its appeal to small-business owners who often work irregular hours and can’t afford to lose precious time.
However, ProMerchant does have limitations. As a relatively new company (founded in 2018), it lacks the extensive track record of more established credit card processing companies. Also, although its pricing models are transparent (interchange-plus or zero-cost processing), no specific rates or fees are listed on the website, requiring potential customers to contact the company directly for a quote. This lack of upfront pricing information can be inconvenient for businesses comparing different processors. On the other hand, a custom quote from a personalized support team may be more helpful than an advertised estimate.
Despite these potential drawbacks, ProMerchant’s strengths in flexibility and strong customer support make it a compelling choice for small and medium-sized businesses looking for a reliable credit card processing solution.
Pros
- Willing to work with high-risk merchants and those with lower credit scores
- Offers monthly agreements without long-term contracts
- Fast and easy application process, typically with approval within 72 hours
Cons
- Lacks the extensive history of more established firms.
- Monthly fees required as part of both pricing plans
- Pricing not disclosed online
Who should use it
ProMerchant’s zero-cost processing plan may appeal to small retailers and restaurants looking to save money by passing processing fees on to customers. Although there are no processing costs for your business under this plan, there is a “small” monthly fee according to the provider site. As ProMerchant doesn’t publish any of its pricing, you’ll have to call for more information on that fee and other details.
Compare top credit card processing companies
What is a credit card processing company?
When your business accepts credit card payments, a credit card processing company is your essential partner in ensuring each transaction is smooth and secure. Here’s how it works: When a customer pays with a credit card, the processing company steps in to verify that the transaction is legitimate and the customer has the necessary funds. This means quickly getting approval from the customer’s credit card issuer.
After approval, the processing company facilitates the money transfer from the customer’s bank to your business account. Though this happens almost instantly, it involves coordination with various parties: your bank, the credit card network (like Visa or Mastercard) and the customer’s bank. The processing company also ensures that every transaction meets strict security standards to protect sensitive credit card information. For their role in each transaction, these companies usually charge a fee, either a flat rate per transaction or a percentage of the sale amount.
Benefits of credit card processing companies?
As a business owner, embracing credit card payments can significantly enhance your customer’s experience and your business’s efficiency. Credit card processing companies not only simplify transactions but also bring a host of benefits to your business. Here’s a quick look at some key advantages:
- Increased sales opportunities: Accepting credit cards opens your business to more customers, including those who prefer cashless transactions, potentially boosting sales.
- Enhanced customer convenience: Offering various payment options, including credit cards, caters to customer preferences and can improve their shopping experience.
- Faster payment processing: Transactions are processed quickly with credit cards, ensuring prompt payment and improving cash flow for your business.
- Secure transactions: Credit card processors adhere to stringent security standards, protecting sensitive customer information and reducing the risk of fraud.
- Streamlined accounting: Using a credit card processor simplifies tracking sales and managing finances, providing clear, consolidated records of all transactions.
- Access to online sales: With a credit card processor, you can easily tap into the growing e-commerce market, allowing your business to sell products or services online.
Each of these benefits plays a crucial role in maintaining and growing your business in today’s increasingly digital and cashless economy.
Essential credit card processing features
Choosing the right credit card processing partner for your business is critical for streamlining transactions and enhancing customer satisfaction. The best processors handle transactions smoothly and offer features that align with your business needs. When evaluating potential providers, consider these key features:
- Competitive pricing structure: Look for transparent pricing with no hidden fees, offering a balance between affordable rates and value for services provided.
- Security and compliance: Ensure the processor adheres to PCI-DSS standards, providing top-notch security measures to protect both your business and customer data.
- Versatile payment acceptance: The ability to accept various forms of payment, including all major credit cards, contactless payments and mobile wallet transactions, caters to a broader customer base.
- Seamless integration: The processing system should easily integrate with your existing POS system, accounting software and other business tools, ensuring smooth operations.
- Reliable customer support: Access to responsive and knowledgeable customer service is vital, especially for promptly addressing transaction issues or technical problems.
- Reporting and analytics tools: Comprehensive reporting features that provide insights into sales trends, transaction history and customer behavior can help you make informed business decisions.
These features form the backbone of a reliable and efficient credit card processing service, helping your business operate more effectively and providing a better customer experience.
How much does a credit card processor cost?
Understanding the cost of credit card processing is crucial for budgeting and choosing the right provider. The cost of credit card processing services can vary significantly based on the provider, the type of transactions your business processes and the volume of sales.
Typically, credit card processors charge a percentage of each transaction plus a fixed fee. For example, Stripe charges 2.9% + 30 cents per successful card charge for online transactions and 2.7% + 5 cents for in-person. Similarly, Square has a rate of 2.9% + 30 cents per online transaction and 2.6% + 10 cents for in-person.
On the other hand, companies like Helcim offer interchange-plus pricing, which means you pay the interchange rate set by credit card companies plus a small markup. Helcim’s average cost is around 0.3% + 8 cents on top of interchange for retail businesses. So, for example, if the interchange rate on your customer’s Visa debit card is 0.8% + 15 cents, you would pay that plus Helcim’s cost, for a total of 1.1% + 23 cents for the transaction.
When deciding between pricing plans, consider your sales volume and the nature of your transactions. A higher-volume business might benefit from a plan with lower transaction fees and a regular monthly fee instead, like Stax by Fattmerchant, which charges a monthly subscription starting at $99 plus direct-cost interchange fees. Conversely, for businesses with lower volumes or irregular sales, a plan with no monthly fee but higher transaction costs could be more cost-effective.
To reduce costs, evaluate your business’s specific needs. If you have a high volume of transactions, negotiating a lower transaction fee or opting for a plan with a monthly subscription could save money in the long run. Also, some providers offer discounts or lower rates for certain types of businesses or nonprofits.
Remember, while cost is a significant factor, it’s also essential to consider other aspects like customer support, integration capabilities and security features when choosing a credit card processor.
Other important considerations
When evaluating credit card processing companies, in addition to competitive pricing, security, versatile payment acceptance, seamless integration, reliable customer support and reporting tools, there are several other important considerations:
- Contract terms and flexibility: Pay attention to the length of the contract, early termination fees and any clauses that might lock you into unfavorable terms. Flexibility is vital, especially for small businesses that need to adapt quickly.
- Hardware and software needs: Consider whether you need specific hardware (like POS terminals) or software (e-commerce integration) and whether the processor can provide these at a reasonable cost.
- Transaction speed and reliability: Fast and reliable transaction processing is crucial for customer satisfaction and business efficiency. Ensure the processor has a strong track record in this area.
- Ease of use: The system should be user-friendly for your staff and customers, with an intuitive interface and straightforward transaction processes.
- Mobile payment capability: As mobile payments become increasingly popular, ensure that the processor supports mobile payment options like NFC (near field communication) technology.
- Global transaction support: If you do business internationally, look for a processor that can handle transactions in multiple currencies and adheres to international payment standards.
- Customization options: The ability to customize features and services to fit your specific business needs can be a significant advantage.
- Reputation and reviews: Research the processor’s reputation in the industry. Customer testimonials and reviews can provide valuable insights into its reliability and quality of service.
- Fraud prevention tools: Ensure the processor offers robust fraud detection and prevention tools to safeguard against unauthorized transactions.
- Scalability: The processing solution should be scalable to grow with your business, accommodating increased transaction volumes and additional functionalities as needed.
Methodology: How we choose the best credit card processing companies for small business
To help small and medium-sized businesses (SMBs) find the best credit card processors for their needs, we researched top credit card processing companies using a specific set of desired data points. After we collected this data, we narrowed our list to 16 unique companies based on six primary categories encompassing 45 different metrics. We weighted each metric based on what matters most for SMBs. Using the final score for each provider, we selected the nine that rose to the top for this list.
We then assigned each accounting software an Editors’ Score encompassing four key areas before converting final scores to a star rating out of five. This score doesn’t affect our selection methodology or assessment of key data points for ultimate list inclusion.
Here’s how our methodology breaks down:
General features (35%)
To assess the efficacy of credit card processors for SMBs, we developed a list of core features that useful processing tools should offer. Encompassing crucial functionality such as PCI compliance, contactless payments, invoicing, integrations and volume-based discounts, the heavy weighting of this category reflects a standard set of accounting needs for nearly every SMB.
Fees (30%)
Processing and other fees are critical components for SMBs deciding on a credit card processing company. Although with so many business-specific factors impacting which fee structure and rates are best — including transaction volume, transaction method and average transaction value — it’s hard to do an apples-to-apples comparison of this data. That said, in addition to transaction fees, we considered factors such as monthly and chargeback fees, the availability of free hardware and if the provider serves high-risk merchants.
Service and support (10%)
For this category, we wanted to find out how easy it is for users to get the support they need. We looked at if the credit card processing companies provide 24/7 support, as well as whether that support is via live chat or phone or available through an online knowledge base or help center.
Payment options (5%)
More and more consumers are using mobile wallet payment options such as Apple Pay and Google Pay, so we considered if those services are supported by these credit card processors. Additionally, we evaluated whether the providers offered point of sale (POS) integration.
Mobile app (5%)
Taking payments via mobile app is also a key need for many businesses, particularly small and new businesses. For this category, we determined whether the provider has mobile apps (for iOS and Android) and considered the apps’ ratings in the App Store and Google Play Store.
Customer reviews and ratings (5%)
Understanding how credit card processing software works in the real world — not just theoretically — is important in its evaluation. For this category, we looked at how customers of these products feel about them. Specifically, we considered the average rating for each provider from third-party user review sites, taking into account not just the rating but the total number of reviews.
Editors’ Score (10%)
Our Editors’ Score for the best accounting software for small businesses considered four key factors: included features, value for money, popularity and ease of use. After we ranked accounting software options using metrics associated with each of the above categories, we evaluated the products at the top of our ranked list and assigned each a score on a scale from terrible to excellent (each descriptor is associated with a numerical value). The final score (inclusive of our Editors’ Score) was then converted into a star rating (where zero stars is the lowest possible score, and five is the max).
Frequently asked questions (FAQs)
The cost of credit card processing for a small business varies based on the provider, transaction type and sales volume. Processors typically charge a percentage of each transaction plus a fixed fee — for example, 2.9% + 30 cents per transaction. This model can be advantageous for lower-volume businesses. Other processors charge lower transaction fees and charge a monthly subscription fee instead. (e.g., a $99 monthly subscription and zero markup on the set interchange fees for each transaction.) This model can better suit high-volume businesses. Your selection should consider sales volume, transaction nature, customer support and security features.
The cheapest way to take card payments varies drastically depending on sales volume and transaction type, as the pricing models of different credit card processing companies serve some businesses better than others. One cost-saving opportunity is to pass credit card fees to customers as surcharges if the option is legally available. (This practice is allowed in many countries, including the US, but you must adhere to specific regulations set by credit card networks and local laws — and some states have laws that restrict or prohibit these surcharges.)
We ranked Stripe as the best credit card processor for small businesses. Stripe offers a versatile and robust credit card processing solution, including a free mobile app for on-the-go dashboard access (available for both iPhone and Android devices). Its transparent pricing model and flat-rate system cater well to SMBs, especially those with limited transaction volumes. Stripe suits various e-commerce platforms and supports multiple payment methods, including credit/debit cards, ACH payments and cryptocurrency. It excels with its developer tools, international transaction capabilities and 24/7 customer support. (However, it’s not ideal for high-risk industries and requires some technical know-how for implementation.)
Small businesses can avoid credit card fees through various strategies:
- Legally pass on fees to customers as surcharges
- Absorb the fees into overall pricing
- Optimize payment processing practices to reduce unnecessary costs
- Select credit card processing services with lower fees
- Negotiate better rates with credit card processing companies
- Set minimum purchase amounts for credit card use to encourage cash transactions
- Offer discounts for cash payments
In the US and many other countries, companies can pass on credit card fees to customers (typically as a surcharge), but there are restrictions. These surcharges must comply with rules set by credit card networks and local laws. For example, merchants are often required to disclose the surcharge at the point of sale and on receipts, and there are limits on the surcharge amount. Some US states have laws restricting or prohibiting these surcharges. Your business must understand and follow the relevant rules in your jurisdiction to avoid legal issues or penalties.
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