For small businesses that want to accept credit cards, finding a processor is the first step. The best credit card processing company depends on which features are most important to your business. NerdWallet looked at factors such as:
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Speed of setup.
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Flexibility to accept payments in-person, online or both.
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How quickly you receive funds.
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Strength of customer support.
Here are our top picks.
NerdWallet’s top credit card processing companies below fall into two major categories:
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Merchant account providers: With providers that offer merchant accounts, which are special bank accounts that hold funds from card payments, you have to go through an approval process to open an account and start accepting credit card payments. These accounts are generally more scalable and competitively priced than accounts offered by payment service providers.
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Payment service providers: Payment service providers aggregate transactions from multiple companies in a merchant account. Setup is significantly faster than with a merchant account provider. While the upfront vetting process is less rigorous, businesses can face more ongoing scrutiny over transactions than they would with a merchant account. This can result in more frequent account freezes if the provider perceives that a business is not complying with the terms of service.
They also follow one of two pricing models:
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Interchange-plus pricing: Transaction fees include the interchange rate, which is set by the card networks (such as Visa or Mastercard) and varies based on the type of card used and your business type, plus a markup determined by the processor.
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Flat-rate pricing: Transaction fees are the same flat rate for all payments accepted a certain way; for instance, the same rate would apply to all in-person card payments and a different rate could apply to all online transactions.
In general, a merchant account with interchange-plus pricing is more cost-effective for businesses with high sales volumes. Businesses with lower sales volumes are generally better off with a PSP because of the easy setup and straightforward pricing.
Best overall: Helcim
Type: Merchant account provider.
Price: Volume-dependent. For merchants processing in-person retail payments with monthly sales of $25,000 or less, cost includes interchange rate plus Helcim’s markup of 0.3% plus 8 cents per transaction. For example, a business paying this rate would pay a total of 1.8% plus 8 cents if the interchange rate was 1.5%.
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Quick setup; approvals usually take a day.
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In-house customer support available seven days a week.
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Offers volume-based discounts automatically.
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Syncs directly with QuickBooks Online.
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Deposits are available within two business days; same-day deposit option not available.
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Card reader is not included with your plan; can be purchased for $199 per unit.
Why we like it: Helcim is a standout choice for credit card processing because it checks off many boxes. Setup is quick. Helcim gives you the ability to accept credit cards in-person, online, through an app or over the phone. The pricing model is transparent, with no hidden fees. The company has well-rated customer support as well as comprehensive support resources on its site. You receive automatic volume discounts as your business grows and transactions increase. Helcim uses interchange-plus pricing with volume-based discounts, making it a particularly cost-effective option for businesses with high monthly sales.
Best all-in-one option: Square
Type: Payment service provider.
Price: For in-person payments, standard processing fee is 2.6% plus 10 cents per transaction.
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Quick setup.
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Offers all-in-one system, including hardware, point-of-sale software, a payment gateway and payment processing.
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Funds available instantly for a fee of 1.5% of the amount.
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Customer support available from 6 a.m. to 6 p.m. PT, seven days a week; 24/7 customer support is available for some subscriptions.
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Integrates with QuickBooks Online and Xero accounting software through a third-party app.
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Doesn’t work on Windows devices.
Why we like it: Square is a strong overall choice for credit card processing because its flat-rate pricing model is simple to understand and allows you to budget for a fixed monthly cost, though your actual cost may be higher than what you’d pay with interchange-plus pricing. Unlike Helcim, Square offers the option to access your funds instantly for a fee.
Square also stands apart from the competition because of its end-to-end payment processing solution. This means it handles most aspects of a credit card transaction, so you don’t need to purchase a payment gateway (a payment processing portal) or point-of-sale system from separate providers.
Best for membership-style pricing: Stax (formerly Fattmerchant)
Type: Merchant account provider.
Price: Monthly subscriptions start at $99. For in-person transactions, processing fee is 8 cents per transaction plus interchange fee; for keyed-in transactions, it’s 15 cents per transaction plus interchange fee.
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0% markup charged on top of interchange fees.
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Same-day funding available for 1% fee.
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Lowest-tier plan includes a free terminal or mobile reader.
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In-house customer support available 24/7.
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Longer setup time than a payment service provider, typically 48 hours.
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Not all pricing plans include QuickBooks Online sync.
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Doesn’t offer services to businesses in certain industries.
Why we like it: Stax offers plans starting at $99 per month that give businesses access to 0% markup on interchange fees, plus a low fixed fee per transaction. This pricing model can easily save businesses enough money to justify the monthly fee, especially if they have high sales volumes. Same-day funding for an additional fee and in-house 24/7 customer support also make Stax a solid choice.
Best for e-commerce businesses: Stripe
Type: Payment service provider.
Price: 2.9% plus 30 cents per transaction.
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Quick setup.
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24/7 phone, chat and email support available.
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Syncs with QuickBooks Online.
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Instant payout option available for 1% fee (minimum fee of 50 cents).
Why we like it: Stripe stands out from the competition because its suite of developer-friendly tools allows you to customize the online payment experience for your e-commerce business. It enables your business to accept a wide range of online payment methods, including mobile wallets like Alipay, Apple Pay and Google Pay. Stripe also lets you offer financing options to customers through buy-now-pay-later companies like Klarna and Afterpay.
Best for flat-rate pricing: PayPal
Type: Payment service provider.
Price: For in-person transactions, processing fee is 2.29% plus 9 cents per transaction; for online transactions, it’s 2.59% plus 49 cents per transaction.
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Quick setup.
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Allows customers to pay via money transfer apps PayPal or Venmo.
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Integrates with QuickBooks Online.
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Offers a free payment gateway option.
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PayPal Zettle card reader not included for free with your plan; must be purchased separately.
Why we like it: PayPal’s in-person credit card processing fee of 2.29% plus 9 cents per transaction makes it a relatively low-cost option for businesses interested in flat-rate pricing. The company is best known for its consumer product, but it also offers credit card processing, a POS system and online checkout services that don’t require your customers to have a PayPal account. PayPal owns Venmo, which means it’s the only payment processing company that allows you to accept payments using the money transfer app.
Best for high-volume sales: Payment Depot
Type: Merchant account provider.
Price: Plans start at $79 per month (for up to $50,000 a month in processing). Processing fee is 15 cents per transaction plus interchange rate for the Starter plan.
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0% markup charged on top of interchange fees.
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Some pricing plans include free hardware.
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Well-rated in-house customer support.
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Integrates with QuickBooks Online.
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Approval usually takes 24 hours, which is longer than some competitors.
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Doesn’t offer a same-day funding option; only next-day.
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In-house customer support is only available on weekdays.
Why we like it: Payment Depot doesn’t charge a markup on top of interchange fees. Instead, it charges a fixed fee (15 cents per transaction for the Starter plan, for instance) for each payment and a monthly subscription fee, making it a cost-effective option — especially for businesses that can qualify for the lowest rates by processing $300,000 or more per month. Payment Depot’s lowest-tier plan has a cheaper monthly fee than Stax, and its customer support is well-rated on most review websites.
Best for high-risk businesses: PaymentCloud
Type: Merchant account provider.
Price: Quote-based.
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Provides merchant accounts to high-risk businesses, such as those that have elevated rates of card fraud or credit card chargebacks, or those that sell age-restricted products.
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24/7 customer support available.
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Integrates with QuickBooks Online.
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Pricing is not transparent.
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You can generally get approved within 48 hours, but it can take longer depending on how quickly you submit the required documents.
Why we like it: PaymentCloud caters to small businesses that work in high-risk industries that some payment processors don’t serve. This includes businesses selling age-restricted products like tobacco and firearms, businesses, such as electronics resellers, that have high chargeback rates, or those that may face a higher risk of fraud, such as finance companies. PaymentCloud also provides round-the-clock customer support for businesses in these industries. Pricing depends on the level of risk involved in your business.
This post was originally published on Nerd Wallet
