Table of Contents Hide
- What Is Credit Card Processing?
- Best Credit Card Processing for Small Business
- Why Does my Business Need Credit Card Processing?
- Which Method of Processing Credit Cards is the Most Affordable for Small Businesses?
- How Can Small Businesses Avoid Credit Card Processing Fees?
- How Do I Avoid Monthly Credit Card Processing Fees for a Small Business?
- Is Square or stripe better?
- Why You Shouldn’t Use Venmo for Business?
- Can You Pass Credit Card Fees to Consumers?
- Who Pays the Credit Card Processing Fee?
- Credit Card Processing for Small Business FAQs
- Does PayPal charge a fee for businesses?
- Can I take credit card payments with Square?
- Is Stripe the same as Square?
Whether you’re a brick-and-mortar store or an online operation, you need to be able to accept credit cards to stay competitive. To take credit card payments, however, you will need to hire a credit card processing business. Choosing the best credit card processor for your company can be a daunting task. Companies may employ flat-rate pricing, which can be more accommodating to firms that process fewer credit card transactions, or transaction-based pricing, which can be cheaper for businesses that process more purchases. We’ve done the research for you and compiled a list of the top 10 credit card processing businesses.
What Is Credit Card Processing?
The credit card processor acts as an intermediary between the card issuer and the merchant. A client makes a purchase by having money moved from their credit card company to the bank account of the store. This can be done over the phone, over the mail, or even online.
Best Credit Card Processing for Small Business
You should compare your business requirements with the fees associated with accepting credit cards to find the best credit card processing provider for your company. Credit card processing for small business services can be found at a wide range of prices and features. The finest ones have reasonable prices that are easy to understand, charge few or no fees, have adaptable payment plans, and can grow with your company.
The best credit card processors, in our opinion, are those that allow you to accept many different types of credit card payments, offer robust e-commerce and reporting features, and promptly deposit your credit card sales proceeds into your bank account. Even if they aren’t the cheapest, many services offer useful additions that make them attractive to SMBs. There are a lot of credit card processors out there, so it’s important to do your research before choosing one. Credit card for small business processing companies offers a wide range of prices and services. The best ones offer transparent and affordable pricing, few or no fees, flexible terms, and the option to expand as your business expands.
We found that the best credit card processors allow for multiple payment types, supply e-commerce, have reporting capabilities, and transfer earnings from credit card sales promptly. Even though they’re not the cheapest, these companies offer useful features that help their services stand out to small businesses. Check out these 10 top-notch options for processing credit cards for small businesses:
#1. Merchant One
Every company, regardless of its credit history, must have the ability to accept credit cards. As one of the most streamlined credit card processors, Merchant One clearly gets this. Business owners won’t have to wait around for weeks to get approval on a new application as they could with some other credit card processors since the average acceptance time is just 24 hours. Even if your company has a bad credit score, you still need a credit card processor. Merchant One seems to grasp this because it’s one of the top credit card processors for easy approval. There is no need for merchants to wait around for weeks or months to get approved as new applicants, as the average approval time is just 24 hours.
Credit card processing solutions from Merchant One include a number of different POS and processing options. Merchant One is there to help whether you’re selling things in person or online. When evaluating your application, Merchant One is one of the few credit card processors to consider factors other than your credit score. Merchant One claims to have a 98% approval record and says it’s eager to work with any organization.
Stax by Fattmerchant is a wonderful solution for established small enterprises with substantial annual revenues. The firm does not mandate a long-term commitment but rather charges a monthly subscription fee. The prices are different for each plan, but they are all designed for organizations with larger annual revenues of up to $500,000. Stax provides flexible pricing for businesses with annual revenues over $500,000. In addition to the regular monthly subscription price, Stax additionally levies processing fees proportional to the total amount of transactions.
Large-volume merchants can save a lot of money because of Stax’s pricing model. However, Stax is likely to be too pricey for enterprises with annual revenue of less than $500,000. In light of this information, your Stax representative may suggest alternative credit card processors if your business processes a limited volume of transactions.
#3. Payment Depot
Choosing the wrong credit card processor can soon become prohibitively expensive for small firms that process a significant volume of card transactions. We chose Payment Depot as our go-to for low fees because of their membership-based pricing and wholesale rates, which help you keep processing costs to a minimum.
Payment Depot charges its customers a set monthly fee plus a small transaction fee. There is no upcharge, monthly cost, or commitment required. If you handle a lot of payments, your company could save a lot of money by using this credit card processor.
Small business owners, especially those in the retail industry, who value flat-rate pricing highly can also consider Clover. There are two different price points available for Clover. Businesses with yearly credit card sales of less than $50,000 will benefit most from Register Lite. That package costs $9.95 a month, a competitive price compared with those of other providers we investigated. When making a purchase in person, your fee will be 2.7% plus 10 cents, while online purchases will be 3.5% plus 10 cents.
If your yearly credit card sales are over $50,000, you may want to consider the more expensive Register plan, which costs $39.95 each month. The standard transaction cost for in-store transactions is 2.3% plus 10 cents, while the fee for online and keyed-in sales is 3.5% plus 10 cents.
In order to accommodate future expansion, a credit card processor is required for some formerly “small” businesses. With its competitive pricing, free e-commerce app, and flexible point-of-sale (POS) software that can grow with your business, Square stands out as our top choice for successful startups and established enterprises alike.
Square distinguishes out for its low-flat-rate pricing model. For card-not-present transactions, the firm charges 3.5% plus 15 cents, whereas the in-person rate is 2.6% plus 10 cents. When customers make a purchase using your online store, Square online checkout, e-commerce API, or an invoice, you’ll be charged 2.9% plus 30 cents. There is no chargeback fee, monthly fee, gateway fee, setup fee, PCI compliance fee, early termination fee, or annual fee. (Chargeback fees are often quite high with most processors.)
Even the credit card processing app from Square was impressive to us. The POS software allows you to accept payments from almost anywhere, while also allowing you to keep tabs on stock, keep client records, and generate information about business performance. The app is compatible with both iOS and Android. Sales information can be merged with other accounting and management processes thanks to the system’s compatibility with a wide range of business programs.
If your organization processes more than $5,000 per month and you’re looking for better pricing than what flat-rate plans give, Helcim may be a choice for you. We choose Helcim because it gives interchange-plus pricing to all of its merchants and discloses its total rates and fees on its website, so you know precisely how much you’ll spend. Helcim is one of the few organizations that offers a rate lock, which ensures that its margin will not increase during the life of your account, and it also offers low rates and volume-based discounts. The fee a company must pay is proportional to its sales volume and the nature of its transactions. In general, a company’s profit margin will shrink as sales growth accelerates.
Helcim is truly an all-inclusive credit card processor. Besides standard options like accepting payments in person, over the phone, or via a mobile app, it also offers more sophisticated options like invoices, subscription payments, a hosted e-commerce platform, and payment sites, as well as online meal delivery.
There is no penalty for canceling within the first 30 days of service, and the company is available by phone anytime, day or night. Helcim also offers customer help via email, which makes the company a perfect alternative for businesses that may benefit from a broad range of customer support options.
Finding a credit card processor ready to work with you if you have a high-risk account might be challenging. This could be due to your industry or your credit score. The approval rate for ProMerchant is high, even among high-risk businesses. Therefore, regardless of the nature of your business, you should have a fair chance of being accepted.
Once you contact ProMerchant for a free estimate, the company will examine your business and offer the best plan for you. The application procedure is pretty basic, and most businesses will know whether they are authorized within 24 hours.
ProMerchant offers fully PCI-compliant hardware and software solutions. This ensures that the company maintains the highest levels of data security required by the financial services sector. An annual self-assessment and periodic scans of processing solutions are required to keep businesses PCI compliant. This procedure ensures that your customers’ information stays protected and decreases your liability
Chase is a credit card processor worth considering if you run an online store or accept PayPal payments. For the convenience of its customers, Chase, one of the largest banks in the United States, combines the roles of a bank and a processor. Direct processors, like Chase, allow you to cut out the middleman and negotiate favorable rates and terms for your business. Chase is not alone in providing flat-rate pricing options.
When it comes to accepting online payments, Chase Payment Solutions makes it easy for small businesses to accept PayPal. They also provide the highly regarded Orbital Virtual Terminal, which turns any computer into a credit card terminal for merchants. There is also the option of a card reader that may be linked via USB for even more ease of use. A card reader is an additional cost for merchants who use a virtual terminal.
Chase has made its mobile checkout app available for both Apple and Google users. The app’s compatibility with Bluetooth and EMV standards makes it a useful choice for entrepreneurs operating from home. Chase Payment Solutions’ free app may require a long-term contract, so read the fine print.
#8. National Processing
Because of their cheaper interchange-plus rates, National Processing is our choice as the most wallet-friendly payment processor. Additionally, the rate-lock guarantee prevents any unanticipated increases in fees for credit card processing.
A potential drawback of National Processing is the presence of a termination fee. Clients can escape the charge by providing evidence of a lower rate from another credit card processor, which National Processing may then match. If you shut down, you won’t have to pay the cost either. If the company can’t lower your rate, they’ll give you $500. National Processing does not charge any sort of yearly or monthly membership fee.
The credit card processor in question has three different pricing tiers, one each for brick-and-mortar stores, eating establishments, and online merchants. The rate lock guarantee is included in all three plans and costs $9.95 per month. The transaction fee is 0.14 percent plus 7 cents for eating establishments, 18 percent plus 10 cents for shopping, and 0.03 percent plus 15 cents for online purchases.
National Processing, unlike some other card processors, also charges a fee for PCI compliance. Although National Processing does not require its customers to sign long-term contracts, there is a fee for canceling service. If your company is sold or closed, or if National Processing is unable to meet or beat a competing credit card processing rate, the fee will be waived.
#9. Flagship Merchant Services
Flagship Merchant Services is a one-stop shop for all your payment processing needs, with no long-term commitments or hidden costs. Both an interchange-plus rate and a tiered price structure are available through the credit card processor.
Because of all the available choices, the tiered price structure can be difficult to understand. Flagship does not publish its prices online for either pricing plan; to obtain a quote, customers must get in touch with the company directly.
Accept credit card payments anywhere with the use of the credit card processing gear offered by Flagship Merchant Services. Flagship, for instance, offers both a basic credit card terminal with a built-in PIN pad, ideal for startups, and a more advanced point-of-sale (POS) system, which could be more useful for more established enterprises.
Merchant equipment from Clover and Verifone are among those sold by Flagship. By signing a three-year agreement with Flagship, you can get free equipment (a free Clover Mini credit card processing terminal). If you’d like to preserve your monthly service terms, it’s best to buy your card processing reader or terminal outright. You can use the sales data analysis tool that comes with your Flagship account.
When it comes to online purchases, Paysafe is the only option. You need a credit card processor that is familiar with e-commerce, can process a wide range of payments, is compatible with a wide number of point-of-sale devices, and can turn your smartphone into a mobile checkout device if you accept e-invoices or take orders online.
Paysafe stands out from other credit card processors since it allows you to accept cash payments for online purchases. Customers can pay cash with the 16-digit code provided by Paysafe’s eCash service. If you have this option, you can reach clients who were previously hesitant to make purchases online, or who just couldn’t. Customers without a credit card or bank account can be reached with Flagship’s eCash service, which is especially useful when selling to international clients.
If you need a POS system, you can get it through Paysafe. The company supplies Clover POS hardware, as well as the PAX A920 mobile tablet terminal. When using Paysafe, you don’t have to worry about paying extra for PCI compliance, unlike with many other processors. The ability to bill clients and accept regular payments is another handy feature.
Stripe is the ideal option for accepting credit card payments from your online customers since it integrates seamlessly with your current e-commerce platform and allows you to use pre-made checkout forms that can be tailored to your business’s aesthetic. It has transparent pricing with flat prices, no account fees for its basic services, and no contract. Also, Stripe’s services are extensible, so you may incorporate more sophisticated options as your company expands.
Stripe’s compatibility with so many different kinds of online storefronts, shopping carts, and accounting programs like QuickBooks is a major plus in our books. All you have to do is copy and paste the code for the premade shopping cart into your website. For business owners with more significant website-building capabilities, Stripe also provides substantial customization.
Why Does my Business Need Credit Card Processing?
According to research that was published in May 2021 by the American Bankers Association, there were more than 320 million credit card accounts that were active in the United States in the year 2020. This indicates that the overwhelming majority of persons in the United States have at least one account, if not more than one. Because credit cards are so widely used, businesses that are unable to accept these payments are missing out on a significant number of possible sales possibilities.
Which Method of Processing Credit Cards is the Most Affordable for Small Businesses?
The alternatives for processing credit cards at the lowest possible cost are highly variable and are determined by a number of parameters, such as the size of your organization, the transaction volume, and the average transaction size. A third-party processor such as Square is an option that is more financially advantageous for many low-volume small enterprises.
How Can Small Businesses Avoid Credit Card Processing Fees?
Keep reading for 8 tried-and-true methods that have helped people just like you save hundreds each month.
#1. Get the Right Plan For Your Business
Finding the correct provider for your company is the single most significant thing you can do to cut costs.
Your company may outgrow its present processing supplier as it experiences rapid expansion. Possibly a different one has a more reasonable pricing structure.
#2. Cut Down on Credit Card Fraud
Credit card theft is a real problem. The economy as a whole suffers, but businesses bear the brunt of it.
A chargeback fee, often between $15 and $50, is assessed whenever a client raises a charge dispute (plus loss of the sale). With just one fraud dispute, you could lose twice as much money as you made.
In addition, a significant volume of fraudulent transactions might lead to the business being classified as a “high-risk” enterprise. This translates to faster processing times.
#3. Use an Address Verification System
The AVS checks if the billing address given matches the one associated with the cardholder’s account. If they don’t coincide, the deal is off.
One of the most effective strategies to prevent credit card theft caused by stolen cards is to implement this feature during the checkout process.
Furthermore, there is a further advantage. In the event of a chargeback, evidence showing you have a full AVS match will work in your favor.
#4. Avoid Manual Entry
Perhaps you’ve experienced something like this before. After several failed attempts with a card that wouldn’t swipe (or whose chip wouldn’t scan), you’re forced to enter the details manually.
The processing times for transactions that are entered in by hand are the shortest. There is a greater possibility of fraud with these transactions because they are typically conducted without the physical presence of the cardholder.
When accepting credit cards in person, strive to minimize the need for data entry. Request an alternative form of payment from the customer if the card does not work.
#5. Negotiate With Your Processor
Have you heard that prices can be negotiated? But you must be aware of which fees are negotiable. Unfortunately, credit card networks’ interchange fees are non-negotiable.
You need to be a valuable customer in order to negotiate successfully. Your bargaining position will improve as your sales volume rises. It’s a fantastic opportunity to talk if your business has expanded since you joined up.
Having a solid background is also crucial. This entails never missing a payment and experiencing minimal chargebacks. When you’re a reliable customer, businesses are more willing to negotiate lower prices with you.
#6. Set a Credit Card Minimum Purchase
Paying for the smallest of items with a credit card might add up to a big problem for a local shop. Take, for example, a shopper’s $2 budget. On a $2 purchase, a processing fee of $0.34 would be deducted if the standard rate is 1.75% plus $0.30. It’s possible to go into the red on such a small buy if your margins are already razor-thin.
#7. Encourage Debit Card Payments
Since the risk of fraud is substantially reduced with debit cards, the interchange fees are much lower. Debit cards typically have an interchange rate of 0.5%, whereas credit cards are often 1.7%-2.0%.
With a debit card, you’ll pay only $0.10 on a $20 purchase, whereas credit cards will cost you $0.40. The sum of that difference is enormous.
It’s important to keep in mind that it’s against the law to impose a minimum purchase requirement for debit cards. However, if you offer a discount for debit and cash transactions, you can increase the frequency of such payment methods.
#8. Pass the Fee to Your Customers
In conclusion, there is a means by which processing fees can be reduced or eliminated entirely. even though we can’t say we totally endorse it. Moreover, it is not sanctioned by law in every state.
How Do I Avoid Monthly Credit Card Processing Fees for a Small Business?
One simple strategy to prevent interest is to pay off your monthly bill in whole, on time, every month. The interval between the close of your billing cycle and the day on which your credit card bill is due is known as the “grace period,” and it is a legal requirement that credit card companies provide it.
As mandated by the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, issuers must give their cardholders at least 21 days before interest is charged.
Is Square or stripe better?
The POS hardware and software solutions provided by Square are superior to those offered by Stripe, which is a better option for online retailers. Both of them integrate with tools provided by third parties. Overall, Stripe is superior when it comes to interacting with third-party applications. Both of them provide a diverse selection of customer service channels.
Why You Shouldn’t Use Venmo for Business?
As of January 2022, the Internal Revenue Service will begin to enforce stricter regulations on payments made using mobile applications such as Venmo, Cash App, and Zelle “to guarantee people using third-party payment networks are paying their fair share of taxes.”
The modification to the policy will have an effect on payments of at least $600 made for various goods and services. In addition to this, third-party payment networks like Venmo will be required to provide 1099-K forms to authorized merchants as well as regular Venmo customers for any transactions they process.
Can You Pass Credit Card Fees to Consumers?
Surcharges are discretionary costs that can be tacked on by a retailer to a customer’s total at checkout if they pay with a credit card. Surcharges are permitted as long as they do not violate any state laws prohibiting them. Companies who wish to add surcharges are obligated to adhere to certain rules in order to guarantee complete transparency.
Who Pays the Credit Card Processing Fee?
Processing costs for credit cards typically amount to about two percent of a transaction. The payment processing network requires the retailer to pay twenty dollars for each customer card used to make a purchase over one thousand dollars. It is important to keep in mind that 2% is merely an average, and the fees that are typically imposed on transactions made with American Express and Discover cards tend to be the highest.
Credit Card Processing for Small Business FAQs
Does PayPal charge a fee for businesses?
With the exception of currency translation fees, using PayPal to pay for a product or service is completely free.
Can I take credit card payments with Square?
All magstripe and chip cards issued in the United States, as well as the vast majority of international cards, will function with Square.
Is Stripe the same as Square?
Square offers a greater variety of POS and KDS hardware to businesses, while Stripe only offers two types of terminals.
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