Best Credit Card Processing Companies of 2024

Credit card processors are a must-have for businesses accepting cards, and picking the right one could mean saving a lot of money.

Written By: Elsier Otachi Business Strategy Insider and Senior Analyst Verified Check With Border Verified Check With Border Editor Reviewed

This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

Business Strategy Insider and Senior Editor

We performed a deep dive into the industry and compiled a curated list of the best credit card processors for every business type and size. Our reviews include summaries of the pros and cons, costs and standout features. Top picks include household names such as Clover and Square, but also lesser-known gems such as Stax and Merchant One. Browse our reviews to find the best credit card processor for your business.

Best for POS Hardware

Links to Clover Credit Card Processing

Best for Easy Approval

Links to Merchant One

Best for High-Risk Businesses

North Payments logo

Links to North Payments

Visit Site Compare Quotes Best for High-Revenue Businesses Best All-Inclusive Credit Card Processor

Links to Helcim

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Why You Should Trust Us

At Business News Daily, we’ve spent years researching and testing the financial tools and services entrepreneurs need to manage their money and grow their businesses. Our team of small business finance specialists conducts independent evaluations of leading financial service providers to determine which provide the most value. We also regularly consult with finance experts, including accountants, bookkeepers, payroll managers, payment experts and tax professionals, to stay on top of the latest finance trends impacting small businesses. And every review we publish is evaluated by our editorial staff to ensure objectivity, accuracy and fairness are at the core of our decision-making. Learn more about our editorial guidelines.

How We Decided

To select the best credit card processors, our team of small business finance experts conducted dozens of hours of research and testing, including live demonstrations and Q&A sessions with company representatives. We compared the pricing models and fees of the leading service providers on the market to determine how each provider stacked up for businesses with various sales volumes and average.

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To select the best credit card processors, our team of small business finance experts conducted dozens of hours of research and testing, including live demonstrations and Q&A sessions with company representatives. We compared the pricing models and fees of the leading service providers on the market to determine how each provider stacked up for businesses with various sales volumes and average transaction sizes. Additionally, we considered the cost of options like payment gateways, available integrations with point-of-sale systems and the availability of hardware, such as credit card scanners. Finally, we reviewed customer feedback about each of the service providers we considered to help inform our best picks.

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How We Decided

To select the best credit card processors, our team of small business finance experts conducted dozens of hours of research and testing, including live demonstrations and Q&A sessions with company representatives. We compared the pricing models and fees of the leading service providers on the market to determine how each provider stacked up for businesses with various sales volumes and average transaction sizes. Additionally, we considered the cost of options like payment gateways, available integrations with point-of-sale systems and the availability of hardware, such as credit card scanners. Finally, we reviewed customer feedback about each of the service providers we considered to help inform our best picks.

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Are you a small business owner confused by the dizzying array of credit card processing fees, rates and features? Fear not, because Business News Daily’s team is on your side.

Credit Card Processing diagram

What Is Credit Card Processing?

Credit card processing refers to the steps involved in transferring funds from a customer’s credit card account to a merchant’s account during a transaction. The processor acts as a bridge between the merchant and the credit card network, verifying the details of the transaction and ultimately transferring funds.

Best Credit Card Processors

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Compare Our Best Picks

Our Top Picks for 2024 Clover Credit Card Processing Merchant One North Payments

North Payments logo

Payment Depot PayPal Credit Card Processing

PayPal company logo

National Processing

Sekure logo

Flagship Merchant Services

High revenue businesses

$6.95 + $99 annual fee

Requires a quote

contact for quote

contact for a quote

from 2.3% + 10 cents

from 0.12% + 6 cents

contact for quote

contact for a quote

Within 2 business days

Next business day

Within 2 business days

Within 2 business days

Within 2 business days

2 to 5 business days

Within 2 business days

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Our Reviews

Editor's Rating: 9.1/10

Why We Chose It

Clover is well-known among small businesses for its best-in-class POS hardware, which is resold by many competing processors. We think this speaks to the quality of Clover’s products. You can choose from a range of POS devices, including card readers, terminals and handheld devices. The in-house hardware works seamlessly with Clover’s software and is ready to use right out of the box.

Clover POS devices

Clover offers a variety of POS devices. Source: Clover

We found that Clover’s POS software is equally robust. With Clover, you can easily take credit card payments and other digital payments. The company also provides tools for returns, digital receipts, quick tipping, inventory management, reporting and much more.

Clover ProsClover Cons
Variety of plans to choose from.Monthly subscription fees.
You are not charged per-employeeHigher processing fees than some competitors.
Best-in-class POS hardware.Hardware is pricier than alternatives

Key Details

Monthly pricing

Clover’s pricing structure depends on business type, as well as which software features and hardware that you choose.

StarterStandardAdvanced
Full-service dining$150$195$290
Quick-service dining$90$130$175
Retail shops$60$130$175
Professional services$14.95$50$120
Personal services$50$90$130
Home and field services$14.95$49$50

Processing fees

Clover’s processing fees depend on your plan and hardware bundle.

Hardware

Clover’s top-notch hardware line contains a variety of devices, including the following:

Read More Arrow Editor's Rating: 8.8/10

Why We Chose It

We included Merchant One on our list for its high approval rates compared with most other processors. The company accepts 98 percent of applicants, including high-risk merchants and those with low credit scores. Unlike many credit card processors, Merchant One doesn’t turn away businesses based on predetermined criteria. In fact, Merchant One asserts that any legitimate business is likely to be approved.

Merchant One virtual terminal

Merchant One provides several useful software tools, including a virtual terminal. Source: Merchant One

We also like that Merchant charges a low monthly fee and relatively low processing rates. The company will also throw in a handheld POS terminal for free when you sign up for credit card processing service. Merchant One boasts a 4.9/5 on Trustpilot, indicating a high level of customer satisfaction.

Merchant One ProsMerchant One Cons
Fast approvalEarly termination fees may apply
No PCI fees for new customersNo in-house hardware
24/7 supportThree-year contract is required

Key Details

Monthly pricing

Merchant One charges $6.95 a month, plus a $99 annual fee. Other monthly fees may apply, depending on the exact terms of your plan.

Processing fees

Merchant One’s processing rates differ based on the exact type of business

Hardware

Merchant One provides a POS device for free upon signup, as well as third-party devices for purchase.

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North Payments logo

Editor's Rating: 8.2/10 Visit Site Compare Quotes

Why We Chose It

North Payments stands out from other payment processors by offering a straightforward application process, fast approval, and complimentary equipment. What sets them apart even further is their willingness to support businesses in high-risk industries, along with their provision of next-day funding.

We found North Payments’ merchant portal, Payments Hub, particularly impressive. It allows you to monitor key metrics like gross sales, transactions, refunds, disputes, and other recent activities. Payments Hub also includes a virtual terminal, invoicing features, and additional tools. North Payments offers a wide selection of third-party POS devices, including various Payanywhere products. A notable feature is their EDGE cash discount program, which rewards customers who choose to pay with cash.

North Payments payment hub

Payments Hub’s virtual terminal allows you to key-in transactions. Source: North Payments

North Payments ProsNorth Payments Cons
Works with high-risk businessesRequires a quote for processing rates
Offers a cash discount program Lacking some key processing features
Quick and easy application processTermination fees and added charges may apply

Key Details

Monthly Pricing

North Payments requires a quote for specific pricing information, though we do know it offers a tiered pricing model that typically includes a small fixed fee per transaction. The fee depends on the type of transaction.

Processing fees

North Payments also requires a quote for processing fees. The company claims to offer rates as low as 0.29% per transaction, which is highly competitive. However, to determine which rates will apply to you and the fixed fees associated with them, you will need to contact the company.

Hardware

North Payments offers hardware starting at $9.95 per month. Equipment options include a range of third-party point-of-sale devices, including a PayAnywhere credit card reader with Bluetooth capabilities. This reader accepts EMV, magstripe and NFC contactless payments from mobile wallets. Similarly, North Payments offers PayAnywhere Smart Terminals, Smart Keypads, and Smart Flex devices. Finally, North Payments also offers the handheld Ingenico iCT 220 terminal.

Read More Arrow Editor's Rating: 9/10

Why We Chose It

Unlike many processors, Stax doesn’t take a percentage of the sale. Instead, it charges a monthly subscription fee that varies by transaction volume, along with a small flat fee per transaction. In our view, this makes Stax ideal for high-revenue businesses that would otherwise spend a fortune on processing fees.

Stax dashboard

Stax’s dashboard displays key business statistics. Source: Stax

Stax is also flexible about integration, allowing merchants to mix and match its credit card processing services with different hardware. Stax’s software features include invoicing, a mobile app, e-commerce storefront tools and more.

Stax ProsStax Cons
Software is equipment-agnosticNo in-house hardware
Doesn’t take a cut of revenueSome additional fees may be assessed
Free hardware for new customersMonthly fees are higher than competitors

Key Details

Monthly pricing

Stax offers three monthly subscription plans:

Service PlanPriceDescription
Growth$99Dashboard, track refunds, reports, virtual terminal
Pro$159All features in the Growth plan, plus advanced dashboard, additional reports, invoices, hosted checkout, customer management, third-party integrations
Ultimate$199All features of the previous plans, plus business analytics tools, recurring invoices, one-click shopping cart, catalog management, dedicated account manager

Processing fees

Stax charges a small flat fee per transaction, on top of normal interchange fees:

Hardware

Stax includes a free terminal or mobile reader with its membership. Third-party POS hardware is also available for purchase, with prices ranging from approximately $100 to $350 for devices such as the Dejavoo Z8, Z9 and Z11

Read More Arrow Editor's Rating: 9.4/10 Visit Site Compare Quotes

Why We Chose It

Helcim stood out as our top choice for businesses seeking a comprehensive solution for credit card processing and financial management. We like that Helcim offers POS software at no extra charge, empowering businesses to efficiently handle sales data, invoicing, subscriptions, payment links and hosted payment pages.

Helcim card reader

Helcim’s card reader is available in multiple colors. Source: Helcim

Helcim’s software is compatible with any device, offering merchants a flexible and cost-effective way to operate their businesses. Furthermore, we think that Helcim’s blend of affordable interchange-plus pricing and absence of monthly fees makes it an appealing option for small businesses aiming to maximize savings.

Helcim ProsHelcim Cons
No monthly feesFree hardware not included
Easy-to-use hardware built in-housePOS solution is limited in features
No contractsRates are higher than some competitors

Key Details

Monthly pricing

Helcim does not charge monthly fees.

Processing fees

Helcim offers businesses an interchange-plus pricing model, consisting of a small markup over the interchange rate, plus a small fixed fee.

Hardware

Helcim offers two POS devices designed in-house.

Read More Arrow Editor's Rating: 8.6/10

Why We Chose It

For small businesses that process many transactions, credit card processing fees can add up quickly. However, we think that Payment Depot’s membership-based pricing and wholesale rates can help keep processing costs in check.

Payment Depot SwipeSimple

Payment Depot offers SwipeSimple hardware, among other devices. Source: Payment Depot

With Payment Depot, customers pay a monthly subscription fee, plus a small flat fee per-transaction. We like that there are no setup fees, cancellation fees, monthly fees or long-term contracts. Businesses that process a high number of payments stand to save the most when working with Payment Depot. The company partners with third-party vendors to offer processing software and POS hardware.

Payment Depot ProsPayment Depot Cons
Transparent pricingNot available outside the U.S.
No contractSeasonal businesses may pay more when volume is down
Membership-based wholesale pricingNo in-house hardware

Key Details

Monthly pricing

Service PlanPriceDescription
Starter$59Dashboard, ACH processing, surcharge, analytics, backup processing, breach protection
Starter Plus$79Everything in the Starter plan, plys invoicing, recurring charges for subscriptions, text-to-pay, API, QuickBooks integration
Growth$99Everything in the previous plans, plus upgraded dashboard and analytics, import/export data, automatic updates to credit card expirations

Processing fees

Payment Depot’s processing fees depend on your monthly subscription plan:

Hardware

Payment Depot resells POS hardware from Clover, Dejavoo, First Data, Poynt, SwipeSimple and Vital Select (contact the company for a quote).

Read More Arrow Editor's Rating: 9.2/10 Compare Quotes

Why We Chose It

Square is well-known among small businesses for its user-friendly hardware and software. The service is ready to go right out of the box, which makes it our best pick for new businesses. While other processors tack on extra fees, Square keeps it simple with interchange-plus pricing. There are no monthly fees, although paid plans are available if you want more features. Square’s popular POS hardware and software are easy to use, and work smoothly with top e-commerce platforms and a variety of third-party business apps.

Square POS hardware

Square offers a variety of hardware that makes accepting payments simple. (Source; Square)

Square ProsSquare Cons
No monthly feesHardware is incompatible with other processors
User-friendly hardware and softwareProcessing fees are high
Free reader includedSquare is stricter with high-risk businesses

Key Details

Monthly pricing

Square does not charge monthly fees for the majority of its features. However, speciality features are available on a monthly subscription plan for retailers, restaurants and other service-based businesses. These plans range in price from $29 to $69 a month.

Processing fees

Square’s credit card processing fees depend on the type of transaction, with discounts for paid subscribers.

For online, invoice and recurring payments, you’ll pay one of the following transaction fees:

Hardware

Square offers a wide variety of hardware for purchase:

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PayPal company logo

Editor's Rating: 7.7/10 Visit Site Compare Quotes

Why We Chose It

PayPal is a familiar name in secure payments, and consumers have long trusted the platform to send money to friends, family and businesses. For merchants, PayPal represents a plug-and-play solution to begin accepting payments. One standout feature for us is PayPal’s “pay now” button, which makes it simple for customers to complete a transaction. The platform also offers QR code transactions and email transactions for card-not-present sales.

PayPal ProsPayPal Cons
Well-known brand among consumersNot suitable for brick-and-mortar businesses
Plug-and-play solution for e-commerceProcessing fees are higher than competitors
No monthly feesNo employee management tools

Key Details

Monthly pricing

PayPal does not charge monthly fees.

Processing fees

PayPal maintains an extensive fee schedule, depending on the transaction type. Most include a small flat fee on top of the percentage take. Here are the fees for some of the most common transactions:

Hardware

The new PayPal Zettle card reader retails for $29, while the terminal starts at $199.

Read More Arrow Editor's Rating: 8.3/10 Compare Quotes

Why We Chose It

National Processing’s brand revolves around offering businesses clear and affordable rates for credit card processing. We included the company as a great choice for budget-minded businesses because of its low and transparent rates. The company will lock in your rate for the duration of your contract, allowing you to plan your future budget. By utilizing interchange-plus pricing, National Processing helps businesses save on monthly processing fees, especially if their transaction volume is high.

National Processing register bundle

National Processing offers a register bundle that includes a cash drawer and other POS equipment. Source: National Processing

National Processing ProsNational Processing Cons
Low interchange-plus pricing for high-volume businessesEarly termination fees
Guaranteed rates for the duration of your termNo free equipment
Works with a variety of businessesSeveral incidental fees

Key Details

Monthly pricing and processing fees

National Processing bases its monthly fees and processing rates on your business type:

Monthly feeInterchange-plus price
Restaurant$9.950.14% + $0.07 above interchange
Retail$9.950.18% + $0.10 above interchange
E-commerce$9.950.29% + $0.15 above interchange
Nonprofit$9.950.12% + $0.06 above interchange
Cash discount$39.95N/A
ACH processing$150-1.5% + $0.48 above interchange
Subscription$590% + $0.09 above interchange
Subscription Plus (includes free terminal)$1990% + $0.05 above interchange

Hardware

National Processing resells a variety of POS hardware from third-party vendors. Prices can be obtained by contacting the company for a quote.

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Sekure logo

Editor's Rating: 8.9/10 Compare Quotes

Why We Chose It

Sekure is different from our other picks in that it acts as a credit card processing broker. The company will help connect you with a processor and negotiate credit card processing fees. With Sekure, you can choose from various payment methods and tailor a plan to fit your budget and transaction volume. We like that Sekure that guides you through the complexities of credit card processing. Whether you prefer interchange plus pricing, flat rate pricing, or a customized package, Sekure will find a suitable plan.

Sekure ProsSekure Cons
Variety of processing typesSekure is not responsible for bills and charges
Reimbursement of cancellation feesPricing information is not publicly available
Customized solution

Key Details

Monthly pricing

Contact Sekure for a customized quote.

Processing fees

Contact Sekure for a customized quote.

Hardware

Sekure collaborates with various POS system providers:

Read More Arrow Editor's Rating: 7.9/10 Compare Quotes

Why We Chose It

Small business owners don’t want to be locked into long-term contracts with exorbitant termination fees. We included Flagship Merchant Services on our list because it offers no long-term contracts and no cancellation fees.

Flagship Merchant Services is a full-service payment processing company that charges on a month-to-month basis and has no cancellation fees. The credit card processor offers two pricing models: the interchange-plus rate and a tiered pricing model.

Flagship ProsFlagship Cons
No long-term contractsRates are not posted publicly
No cancellation feesSome additional fees are assessed
Choice of interchange-plus and tiered processing ratesPCI compliance fee not included

Key Details

Monthly pricing

Contact the company for a quote.

Processing fees

Contact the company for a quote.

Hardware

Flagship offers free hardware for new vendors, and the company also resells hardware from a number of vendors, including Clover and Verifone.

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Credit Card Processing Rates

Credit card processing rates are typically expressed as a percentage of the sale plus a small per-transaction fee. Most rates average 2% to 4% of each transaction. The processor considers several factors to determine the processing fees it charges you, including your monthly processing volume, your average ticket size, your business’ industry and your processing history. It may also consider your business and personal credit.

The credit card processing industry is very competitive. Companies want to work with you, especially if you’ve been in business for a few years and process a high volume of payments each month. Many are open to negotiating a deal with you and advertise that they’re willing to meet or beat your current rates. But first, you need to understand what costs go into credit card processing rates and which are negotiable. All rates have three parts:

Here’s why you need to know this information:

Second, you need to identify which pricing model is best for your business. For most businesses, industry experts recommend interchange-plus pricing, but credit card processing companies prefer tiered pricing because they make more money with it. Some processors give you a choice of pricing models and may allow you to switch so that you can evaluate for yourself which one provides the best savings for your business. Here are the three most common:

Credit Card Processing Pricing Models

Tiered Pricing

This is the most common pricing model, but it’s widely criticized by industry experts because it’s not as transparent as interchange-plus pricing. It attempts to simplify the interchange table by combining interchange rates, assessment fees and markups and then sorting them into tiers. Tiered pricing is also referred to as “bundled pricing” or “bucket pricing.”

Most processors categorize these tiers as qualified, midqualified and nonqualified transactions, although some plans may have only two or up to six tiers, with separate rates for credit and debit cards. The factors that determine the transaction category include the type of card ― whether it’s debit or credit and if it’s a regular, rewards, corporate, government-issued or international card ― and how the transaction is processed, whether you accept the card in person using a card reader, accept it online or key it in manually.

Did You Know? Did you know Some processors have a special lower rate for PIN debit transactions.

Critics note a variance between processors as to which interchange rates fall into each tier, which makes it difficult to compare pricing between services. We found this to be true in our research as some processors categorize rewards cards as midqualified and others define them as nonqualified. This variance in tier categorization, sometimes referred to as “inconsistent buckets,” makes it difficult to determine how much you can expect to pay above the set costs for your processing:

Interchange-Plus Pricing

Most industry experts prefer this model because it promotes pricing transparency. The interchange-plus pricing model may also be called “pass-through pricing” or “cost-plus pricing,” because the processor passes the interchange rates and assessment fees to you at cost and adds a markup.

The processor’s markup stays the same no matter what card type your customers pay with, so you can see how much you’re paying the processor. This makes it easier to spot savings when you’re comparing services. Also, many of the companies that offer interchange-plus pricing post their rates on their websites, which saves you time in gathering rates from the companies you’re interested in learning more about:

Square card reader

Some processors such as Square offer free equipment. Source: Square

Flat-Rate Pricing

This is the simplest pricing model. Most processors that use this model charge a fixed percentage rate for each sale, regardless of card type. Alternatively, some processors charge a fixed percentage rate and a per-transaction fee. There are usually different rates for cards accepted in person and online.

Mobile credit card processing companies commonly use this pricing model. There are typically no monthly or annual fees, making it a good option for small businesses that don’t process enough transactions to cover these costs. Most of the time, the only other fee is a chargeback fee, which is only triggered when a customer disputes a transaction.

Credit Card Processing Fees

In addition to processing rates, you’ll pay various fees to whichever credit card processor you choose. Some of these are one-time or per-occurrence fees and others are charged monthly or annually.

For a complete list and explanation of fees, including nonstandard fees that you should never pay, see our small business guide to credit card processing fees.

Common Credit Card Processing Fees

Most credit card processing companies charge these recurring fees:

These fees are also common but only charged per occurrence:

Fees to Avoid

Some processors charge a variety of miscellaneous fees in addition to the standard fees listed above. Some of the worst are cancellation fees, club or membership fees and fees for what the contract vaguely defines as “additional services.”

Hidden Fees

Again, it’s important to read the entire contract before you sign anything to make sure no fees are tucked away in the fine print. As you read the contract, note every fee it lists. Then, before you sign the contract, ask your sales rep what each fee is for, how much it costs, how frequently it’s charged and if it can be waived. If the sales rep agrees to waive a fee, be sure to get this in writing, either in the contract or as an addendum.

What Credit Card Processing Features Do You Need?

No matter which credit card processing service you select, you should expect it to provide the basic services that you need to accept payments. The processor should:

Square POS on a tablet

Make sure that the credit card processor is compatible with POS equipment that you need. Source: Square

In addition to these criteria, we considered the following factors to evaluate each processing company.

Benefits of Using Credit Card Processing

The main benefit of credit card processing is that it allows you to accept credit and debit cards and, in many instances, mobile wallets like Apple Pay and Google Pay. Acceptance of these payment types is increasingly important for nearly every type of business as many customers don’t carry cash anymore.

How Does Credit Card Processing Help With Business Finances?

In addition to preventing loss of business from customers who prefer to pay with cards, credit card processing helps you analyze your sales. Most services either connect with a POS system or provide an online dashboard that lets you run detailed reports on your sales. Many also integrate with accounting software, which saves you the effort of manually entering transaction data and reduces the risk of error due to manually entered data.

What Is Offline Credit Card Process and Why Does It Matter?

Online and contactless payment adoption rates are rising, but what happens if your internet goes down? Knowing that is a very real possibility, you should make sure your credit card processor can support you when you lose internet connectivity. That’s where offline credit card processing comes in. With offline processing, a customer still provides their payment card to the terminal, which encrypts and saves the card data. When your business is back online, the terminal sends the information to the merchant’s bank and card network. From the customer’s point of view, the transaction happened like normal.

Offline card processing isn’t only beneficial when the internet is down. It also enables you to accept payments outside your store. Most credit card processors, including the ones we reviewed, support offline card processing.

What Are the Other Benefits of Credit Card Processing?

Another important benefit is that credit card processors make it easy to accept payments across multiple sales channels:

Clover virtual terminal

Many credit card processors offer software tools, including virtual terminals. Source: Clover

Contracts

When you ask a processor to send you the contract to look over, the rep usually sends a “merchant application,” “merchant agreement,” or even a “pre-application form” for you to fill out. The term “application” is misleading, because it’s part of the contract and signing the application is signing the contract.

Although some applications include the terms and conditions and act as a full contract, most don’t. Some applications include links in the fine print to the terms and conditions and the program guide but, in most cases, you’ll have to ask your rep specifically for these additional documents.

You should read the full contract so you know exactly what you’re agreeing to and can verify the rates, fees and terms you were quoted:

Here are some factors to look for as you review contracts.

Term Length

The industry is shifting away from three-year contracts in favor of month-to-month agreements and all the best processors offer this as an option. A processor should be confident enough in the quality of its service and the competitive value of its pricing that it doesn’t require its customers to sign lengthy contracts.

The only exception that justifies a contract is if you accept free equipment, in which case it’s reasonable for a company to expect you to remain a customer long enough for it to recoup its costs. We recommend purchasing your equipment instead, to avoid long-term contracts, but if you decide to sign a contract for this reason, the contract term length shouldn’t be excessive and the contract shouldn’t renew automatically for additional lengthy terms.

FYI Did you know An excessive contract would span three years or longer and renew for additional two-year terms.

Even if the sales rep tells you that the service is a month-to-month plan with no cancellation fees, it’s still important for you to read the contract and make sure this information is consistent with what the contract says:

Automatic Renewals

If you do choose a company with a traditional three-year contract, be aware that these contracts typically renew automatically for additional one- or two-year terms. It’s worth your time to ask for a waiver that puts you on a month-to-month plan after the initial term ends.

Early Termination Fees

There’s usually a very short window before a term expires in which you can cancel your account without incurring an ETF. Most early cancellation fees are a few hundred dollars but some are very expensive.

Scour any contract you sign for “liquidated damages,” which is either a percentage or the full amount of the projected revenue the processor expected to make on your account. This is a very punitive fee that can be exorbitant. The ETF may be disguised as an “early deconversion fee” (EDF), so look for this term in the contract text as well.

Personal Guarantees

Most application forms include personal guarantee clauses that grant the processor the right to perform credit checks. This guarantee also gives the processor the right to collect money from you personally if your business is unable to meet its obligations for any reason.

Did You Know? Did you know

In addition to holding you personally responsible for all expenses, some of these clauses hold your successors and heirs responsible for your debt if you pass away.

Additional Service Clauses

These indicate that the processor may sign you up for various additional services that cost extra and you have a very short period (typically 30 days) to cancel or opt out. Again, you may be automatically enrolled in additional services and you must figure out what they are and how to cancel them or you will be charged for them.

Methodology

To choose the best credit card processors, our team of financial analysts and business operations specialists meticulously evaluated an initial pool of 101 credit card processors. After a rigorous narrowing process, we closely examined 35 companies. These processors were then assessed across 25 key criteria, which we used to select 10 best picks.

These criteria were grouped into categories and weighted based on which factors are typically most important to small business owners. Here’s a closer look at how we measured each service.

Through this comprehensive evaluation process, we not only identified trustworthy credit card processors, but also determined how each platform best serves specific business needs. By recognizing processors that excel in certain areas or cater to particular company types, we’ve created the “Best For” categories you see on this page. This ensures you can easily find the credit card processor that perfectly aligns with your unique business goals.

To learn more about our methodology, see our full editorial process.

Frequently Asked Questions

Is credit card processing secure?

As a small business owner, you must remain vigilant against credit card fraud. Though most headlines focus on data breaches at major retail chains, small businesses are vulnerable too. Small businesses can shore up their credit card processing security measures by doing two things.
The first step is to ensure that you comply with the Payment Card Industry Data Security Standard (PCI DSS). Created by Visa, Mastercard, American Express, Discover and JCB in 2006, this standard requires that businesses meet certain criteria to ensure their transactions are as secure as they can be.

The second action is to upgrade your card reader to accept EMV (Europay, Mastercard and Visa) chip cards. Most credit cards have a chip embedded in one end of the card, and having the technology to read that chip makes the transaction significantly more secure because the chip is harder to counterfeit than the standard magnetic strip.

How can you reduce credit card processing fees?

Credit card processing companies rely on fees to make their money, so there’s no way to completely eliminate credit card processing fees. If you feel you’re paying too much in fees, you can negotiate with credit card processors to reduce them. If you can accept cards in person instead of over the phone or online, you’ll also save money on fees.

Another option is to set a minimum transaction amount that customers must meet before they can pay with a credit card. By doing this, you can ensure you come out on top of the transaction, since it makes more financial sense to pay the fee on a $10 purchase than on a $2 one. Major credit card networks have rules about minimum transaction amounts, so verify that your policy complies with their rules.

Similarly, you can move the fee to your customers entirely by using cash discounts or surcharging. Many gas stations use this method, in which a gallon of gas is discounted if you pay with cash. Though this may cause potential customers to take their business elsewhere, it could encourage people who prefer paying with cash to frequent your store more often. If you go this route, check the credit card networks’ rules for surcharging to ensure you follow best practices.

How long can a merchant hold an authorization?

Authorization holds vary depending on the status of the transaction and the card issuer’s self-imposed time limits. For most transactions, a merchant has up to 30 days to clear an authorization hold, though some credit card companies, like Visa and Discover, have significantly shorter time limits before such authorizations “fall off” the account. If you fail to complete a transaction hold, you run the risk of the credit card processing company charging you a misuse fee.

How long does it take to settle credit card sales?

It typically takes 24 hours to three days to settle a credit card sale. The length of time depends on the merchant account provider and the type of merchant account you have. Thanks to advances in payment technology, the turnaround to clear credit card sales is faster than it used to be. If you choose a direct processor, like Chase — which is a combined processor and acquiring bank — you can expect shorter time frames.

Why do credit card processors offer high-risk merchant accounts?

Not all credit card processors work with every business. Industries that are prone to fraud and chargebacks may have a tougher time finding a company to process their sales. Some credit card processors work with high-risk businesses, but they charge more for their services, to mitigate some of the risk. They call their accounts high-risk merchant accounts and charge you more in processing and chargeback fees.

Which businesses do credit card processors consider high risk?

Tobacco and gambling are often perceived as high-risk businesses by credit card processors. Other industries a credit card processor may not work with include pawn shops, subscription services, alcohol sales and firearm dealers.

What to Expect in 2024

Consumers have high expectations for credit card payments, which means you should work with a credit card processor that helps you meet these standards. One requirement is a “fast, frictionless experience” that is also secure, according to 92% of the 7,000 North American and European consumers surveyed for an Ekata report.

One major development is the end of a class action lawsuit brought by small businesses against Visa and Mastercard. As part of the settlement agreement, the two processing giants have agreed to lower interchange fees, impose a five-year freeze on new rate increases and provide more flexibility for businesses to direct customers to their preferred payment methods.

Contactless and cashless payment methods are becoming increasingly popular. The events of the last few years have greatly influenced the economy and the way people make payments. According to PWC, global cashless payments are expected to nearly triple by 2030, and Grandview Research reports that contactless payments will grow 20% annually through the end of the decade. Business owners should expect increased demand for credit card processing as safety concerns and new technology continue to reduce cash-based transactions.

Services that allow consumers to pay for purchases in installments have also grown in popularity. So-called buy now, pay later (BNPL) has become a preferred payment method for a growing number of younger consumers. Notably, shoppers tend to spend more when going this route. We expect that cash-strapped consumers will continue to use this option.

In addition to a “fast, frictionless experience,” consumers expect their data to be secure. Although Visa found that EMV adoption has been highly effective in reducing incidents of card-present fraud, it is still rampant. Payment processing companies are projected to spend billions to detect and prevent fraud.

Progress in artificial intelligence (AI) is aiding small businesses in fortifying their security measures. AI algorithms can analyze transaction data, recognize patterns and promptly identify potential fraudulent activities in real time.

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