What Costs Should You Expect For Credit Card Processing
There are usually three sets of costs involved when choosing a credit card processor. These include:
- Rates. These are the processing fees that you pay for each transaction. Rates are typically a percentage of the total sale amount. In addition to the rate, card processors charge you a few cents on top of the per-transaction rate.;
- Fees. Processors charge account service fees. Most processors charge these fees monthly, which are reflected on your statement; others, though, may be levied quarterly or annually.;
- Equipment costs. This is usually a one-time expense for the hardware needed to accept credit cards. We recommend buying processing equipment upfront whenever possible. Many processors offer leasing , but it’s typically associated in this industry with exorbitant costs.
Best Credit Card Processing Companies: Top 5 Payment Processors Of 2021
*This is not a financial advice article. Refer to a professional for financial advice.
Finding the best credit card processing company is crucial for the long-term survival of any business. Whether you’re accepting payments in-person or online, the best credit card processing services can lower your payment processing rates while also expanding payment options for your customers.
But with over 1,000 credit card processing services to choose from, with each company claiming to be the best, how do you know which payment processing solution is right for your unique business?
To help you decide, we reviewed 23 of the top payment processing companies to see which ones offer the lowest fees, best features, most security, and top-notch customer service.
After countless hours of research, we narrowed down the list of top credit card processors to five companies that rated the highest.
If you’re ready to lower your payment processing rates and expand payment options for your customers, here are the five best credit card processing companies of 2021.
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The True Cost Of Mobile Card Readers
To give you an idea of how much each product will cost your business to accept mobile payments, we calculated the transactions and monthly fees for each plan. As you can see, PayAnywhere is the clear winner in terms of costespecially if your average transaction amounts are low.
Note that we didnt include ROAMpay or Stax in the tables below. Because ROAMpay doesnt clearly define its fees publicly and Stax’s costs depend on variable credit card company merchant fees, neither company could be accurately compared in this format.
S To Credit Card Processing
Regardless of whether you receive card payments in person or online, the transaction process typically involves these basic steps:
- The customer swipes, inserts or taps their credit card or mobile device, or enters their credit card number, to input their information into the payment processor.
- The payment processor communicates with the cards issuing bank to ensure available funds or credit limit, and detect potential fraud.
- If the bank approves the transaction, the payment processor debits the customers account and credits your merchant account with the transaction amount.
The difference among various ways to accept credit card payments is mainly in how you input card information on the front end.
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Other Fees To Be Aware Of
Note that there are plenty of other credit card processing fees to be aware of. For example, you may face initial fees when you sign up for a credit card processing company that will provide you with terminals that help you process your transactions.
Other fees you could face are all over the place but may include fees from your credit card processor each time a customer disputes a charge, fees for chargebacks, fees for non-sufficient funds to pay your credit card payment processor and more.
Recurring Credit Card Processing Fees
Apart from the standard fees you pay per transaction, most credit card processors charge maintenance fees. Nevertheless, the best credit card processors charge very few fees and no additional fees for processing mobile payments.
The usual credit card recurring fees include a PCI compliance fee, a monthly fee, and a gateway fee for those who accept online payments.;
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Do I Need A Chip Reader
To protect your business and customers, you should adopt EMV-enabled readers as soon as possible. Although not all issued cards are 100% chip ready, their use is growing.
Chip cards are harder to counterfeit, which means customers are at a lower risk of fraud. In 2015, the rules governing who is liable in cases of in-store credit card fraud shifted from the credit card companies to businesses that dont adopt the EMV-reading standard.2 So youll be liable for a counterfeit purchase if its made using a chip card, but if your business uses EMV readers, your risk in counterfeit cases is reduced. Its a win-win!
How Mobile Credit Cards Are Processed
Basically, mobile card payments can be taken by using an app downloaded to a smart device. By swiping a card in a small payment machine, customers can still enter their PIN number and confirm the payment amount, but after that, the smart device takes over and contacts the merchant’s service provider just like a conventional PDQ would, only over the internet.
With such an innovation, even receipts can be emailed to clients post-sale, so the entire process becomes paperless, a far cry from the earliest days of credit cards.
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Processing a transaction via credit card is now faster than ever before. The same quick security checks that are applied when processing a credit card are also being applied to debit cards as they are now a method of payment on PDQs. Either one can be a means of payment via a mobile card service, providing great flexibility in the choice of payment and location of sale.
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Honorable Mentions: Looking For One Of These Merchant Services In Canada
There are a lot of other available merchant services in Canada that are high-quality but missed being in our top contenders either because theyre better suited to large companies that can negotiate their rates more easily, or they have some limitations/specializations that make them more niche. If youre looking for a large processor to provide the best service and lowest costs to your large business, we recommend Chase Merchant Services;and Moneris Solutions. For small business owners, particularly eCommerce merchants, we recommend Stripe Payments and PayPal. While they arent homegrown companies, they come with a lot of name recognition and a reputation for quality service and fair prices.
What Mpos Features Do You Absolutely Need
Most mPOS systems cant do half of what a full fledged POS, so be wary. mPOS apps offered as an add-on product for another system often tend to be more full-featured than standalones, but even they arent complete replacements. However, you can gauge how advanced a system is by the features offered.
Baseline features the sort of thing you should expect to see in every mPOS. Thats not to say you will see it in all mPOS apps. But generally speaking, a solid entry-level mPOS will support all of the following, at minimum:
- Offline Mode
- Customizable Reporting
Most mPOS systems arent designed to handle complex inventory needs, especially not for large inventories. Likewise, most dont support an extensive array of hardware. Compatibility with receipt printers, cash drawers, and barcode scanners tends to be;limited. So keep both of these factors in mind as you evaluate an app.
On the other hand, not everyone needs every feature a mobile payments app might offer. So be realistic about what you do need and want, and dont be suckered in by a feature youll never use.
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Choosing The Best Services
Next, we created a comprehensive list of more than 100 credit card processors suitable for small businesses. Our list included those mentioned by the small business owners we spoke to, the processors we were familiar with and those that contacted us asking to be considered. In addition to these providers, we looked at credit card processing companies that appeared on reputable online sources, such as merchant services review sites and business websites.
How Mobile Credit Card Processing Adds Value
Mobile credit card processing makes good fiscal sense for most business types and sizes. Here are the benefits for all industries:
FPT Operating Company LLC is a registered ISO/MSP of of Synovus Bank Columbus GA
Prolific Business Solutions is a registered ISO of Wells Fargo Bank, N.A. Concord, CA.
LTD Merchant Services is a registered ISO of Synovus Bank Columbus GA; Wells Fargo Bank, N.A. Concord, CA; Esquire Bank N.A. Jericho, NY;
Granite Payment Alliance is a registered ISO of Esquire Bank N.A. Jericho, NY.
Philadelphia Processing is a registered ISO of Wells Fargo Bank, N.A. Concord, CA and an ISO/MSP of HSBC USA, N.A. Buffalo, NY.
AMCP Payments Intermediate Company LLC is a registered ISO / MSP of Esquire Bank N.A. Jericho, NY.
AMCP Payments Intermediate Company LLC is doing business as Talus Pay, Talus Payments, Prolific Business Solutions, LTD Merchant Services, MSP Consulting, Granite Payment Alliance, Philadelphia Processing, City National Bank Merchant Services and Merchant Bank Partners.
The trademark and logo are owned by Clover Network, INC, a First Data company.
All other trademarks, service marks and trade names referenced in this material are the property of their respective owners.
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Cheapest Credit Card Processing Companies For Small Businesses
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list ofour partnersandhere’s how we make money.
Whether youve just decided to start taking credit cards or youve been doing so for a while and feel like its too expensive, you might be wondering: What’s the cheapest credit card processing company?
Unfortunately, with all of the complexities of credit card processing and;merchant services, there is no simple answer to this question. With merchant account providers vs. payment service providers to consider, as well as a variety of processing rates, terminal options and additional fees, it may take you time to sort through your options and eventually decide on the processor and solution thats right for you.
The best way to streamline your search process is to decide ahead of time what youre looking for in a credit card processor and what specific capabilities or tools you need. Do you need a dedicated;merchant account? Will you be accepting payments in-person, online, or both? You can narrow down your choices based on these requirements and then go about determining which provider, on the whole, will offer the cheapest payment processing for your business.
Get To Know Your Options For Merchant Service Providers
With a plethora of payment processors, it can be difficult to find the one that best suits your business before you sign on the dotted line. However, its important to make sure that your payment processor aligns with your unique business needs. This document highlights the Top Payment Processors in Canada to help you begin the process of choosing a provider that is best for you. The following criteria will be used to summarize the different capabilities of each processor:
Range of products
Simple, intuitive, and modern products
Accessible, reliable, and quality support
When evaluating the Top Payment Processors in Canada, there are a couple things to keep in mind.;No matter the type or size of your business, you need a merchant account to accept credit cards. Some processors set you up with your own merchant account, while others add your business to a shared account. With your own merchant account, there will be different types of fees, but you will get customized and often times more competitive rates and plans. You will also have access to a wider range of payment channels/products which will enable you to do business in more ways and in more places. Businesses that are processing at least $40k per year from credit cards will almost always benefit from their own merchant account.
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Supports New And Mobile Payment Technologies
- Many customer support channels available.
- Outstanding hardware options.
- Can run in offline mode.
- Account freezes may occur with rapidly growing businesses due to the appearance of fraudulent activity.
- Lacks modules for reporting or inventory management.
- Larger organizations may have to pay high fees.
- Pricing and fees clearly outlined on the website.
- No outbound sales team.
How We Chose The Best Credit Card Processing Companies
To narrow our credit processors list to only seven, we looked at dozens of reputable merchant providers. To make our top list, providers had to be PCI-compliant and accept all standard credit cards. For providers servicing high-volume accounts, 24/7 customer service was a must.
However, we know business owners need more than just one more service. Integrations with your software are key, which is why we looked at processors that offer syncing capabilities with your CMS, accounting, and POS systems.;
We narrowed our list further by assessing total cost differences between companies with subscriptions or transaction fees while balancing out the benefits of extra services or software options, like inventory management software. Furthermore, we combed through data to uncover details about processing times and ease of setup.
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Best Credit Card Processing For Restaurants: Dharma Merchant Services Or Square
Depending on the volume of sales at your restaurant, we recommend using either Square or Dharma Merchant Services both companies that we already featured in categories above. Dharma is better if your restaurant processes over $10,000 in sales each month, and for smaller volumes we find Square to be more affordable.
Dharma offers a special rate plan for restaurants with a slightly smaller mark-up than its other solutions. You pay interchange + 0.20% + $0.07 with each sale, compared to the 0.25% + $0.10 fee paid by regular storefronts. Dharma provides Clover Mobile readers for restaurants that can track inventory, allow customers to set tips and have detailed reporting for managers who want to run analysis on their sales.
Square, though more expensive per-swipe, offers significantly cheaper card readers and no monthly fees. These lower overhead costs make it a better solution for smaller restaurants and coffee shops.
- Square is good for: Small restaurants and coffee shops
- Dharma Merchant Services is good for: Restaurants transacting more than $10,000 per month
What Is Credit Card Processing And How Does It Work
Credit card processing enables businesses to securely receive payments made through credit, debit, gift, or even loyalty cards.
In the past, the ability to accept card-based sales involved a one-size-fits-all approach, characterized by complex configurations and long delays in the authorization. Today, multiple payment processing options exist, most of which meet specific business needs.
For instance, online credit card processors that an eCommerce merchant may consider are very different from merchant services for a brick-and-mortar retailer and vice versa.
Ultimately, variety in merchant services is a plus since business owners can locate the best payment solutions for their needs. The many options available can be overwhelming.
So, it is important to choose a trustworthy partner who can take you through the entire process from choosing a credit card terminal to processing payments quickly and securely.
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How To Choose A Credit Card Processor
In simple terms, here are two main options when it comes to choosing a credit card processing service:
- general processing
- merchant account
The difference between the two is key to deciding which is the best option for you.
The General Processing option means that the credit card processor effectively acts as a middleman between you and the banks. They take care of all transactions and authorizations, as they move money from the customer’s bank account to your processing account.;
This is generally a good option for start-ups, small businesses, and relatively low-volume sales, ie, thousands rather than tends of thousands in turnover per month.
For this general service expect to pay transaction fees of between 2.5% – 3.5% for online purchases, though this can go higher for keyed in credit card payments you might take over the phone or in store. There may also be higher transaction fees for digital purchases.
The Merchant Account option means that the credit card processor still acts as a middleman – but while they take care of transactions and authorizations, they move money directly from the customer’s bank account to yours. This offers a couple of key advantages:
- lower transaction fees
- no with-holding of funds
Even still, some providers will offer both types of service, so you can start with their general processing platform, then upgrade to a merchant account later, if needed.