Friday, December 2, 2022

What’s The Best Credit Card Processor For Small Businesses

Don't Miss

Accept Credit Card Payments

The 7 Best Credit Card Readers For Small Business

Once your merchant account is set up, youre ready to accept credit card payments. This can be as simple as logging into a software product or entering your customers payment information. Whatever solution you choose for your business, should be simple and easy to use.

In some cases, youll need to set up your equipment Whatever solution you choose for your business, should be simple and easy to use.

If you dont like the payment processing services youre receiving after a few months, it should be easy to switch processors unless you signed into a contract. Many contracts will have a hefty termination fee you have to pay in order to cancel. Try to get the fee waived or simply choose a processor that doesnt have contracts.

When It Comes To Credit Card Processing What Are The Steps Involved

Processing a credit card payment is the same for most product categories and business types. It starts with the customer selecting an item to purchase. The credit card he or she is paying with is then swiped, scanned or inputted into a payment terminal. The data is then transmitted to be approved. Once it goes through the authorization, which happens in seconds, the transaction will either go through or be declined. If there are enough funds to cover it, the transaction is authorized and completed. The merchant closes out all the credit card transactions at the end of the day. The credit card processor’s acquiring bank then gets to work collecting the money from the credit card issuers. The sales are then deposited into the merchant’s bank account, typically in two days or less.

What Are The Biggest Differences Between Transnational Payments And Paypal

As a small business owner, third-party payment processors might seem like a more cost effective option in the short-term. But, like many third-party payment processors, Paypal lacks the merchant services and other industry-standard features, integrations, payment securities and fraud protections that small businesses need to survive.

You know that making a decision on a credit card processor isnt just about cost, its about the best value for the cost. So what are the biggest differences between TransNational Payments and Paypal, and which you should choose for your small business credit card processing?

Also Check:

Best Credit Card Payment Processor 202: Top Picks

Here we take a look at some of the industry’s more popular credit and debit card processors.

Whether accepting payments online or in-person, a reliable credit card processing service is essential to the livelihood of a small business. Payment processors serve as the link between a business and the banks, issuers, and credit card networks during every transaction.

As a business owner, you’re not required to understand the ins and outs of credit card processing to be successful — few people outside of the world of banking and finance can make sense of the technical structure that makes up the payments chain. But it’s important to know what factors to consider when comparing the bevy of credit card processing services out there in the market.

Here we take a look at some of the industry’s more popular credit and debit card processors, and then we break down some of the key considerations to keep in mind when choosing a provider.

Why Should Small Businesses Avoid Tiered Pricing When Selecting A Credit Card Processor


Some credit card processors will charge you on a tiered pricing basis. This means they bundle the interchange rate, assessment fees and markups into different plans. This isn’t that transparent because they don’t break out what each cost is. That makes it more difficult to shop. Around to ensure you are getting the best deal.

You May Like: Cabelas Visa Activation

Best For Mobile Credit Card Processing: Square

Square is king among mobile credit card processors, due to its simplicity, low per-swipe costs, and elegant readers. Like Stripe, Square allows your company to get up and running relatively quickly. You can get your first reader at no cost, and subsequent ones will range from $30 to $170.

Monthly Fee
2.75% None

Square works will with most Apple iOS and Android devices. Vendors can easily hook up a magstripe or chip reader to a device using a headphone jack or Apples Lightning port. Square offers a rich feature set, including software for managing employees and sales. For example, you can set individual employee passcodes that will help you track individual sales numbers. The POS can also track employee check-in and check-out times.

  • Good for: Those looking for cheap and reliable mobile card readers, and simple fixed swipe fees
  • Bad for: Large companies processing more than $10/$20k per month

What Are Card Processing Services

Though it appears simple from the outside, credit card processing is complicated. This is because various entities are involved in this payment processing method. From you collecting credit card information to the acquiring bank account getting funds, a number of moving parts are inherent in the process. A credit card processing service enables you to accept credit cards in your business without any hassle as payment options.

Companies offering card processing services work as mediators between customers, merchants, and financial institutions, making payment processing seamless.

When you decide to start accepting credit cards in your business, you have two options one is a merchant account, and another is a card payment processor.

Also Check: Capital One Car Rental Insurance Coverage

Common Credit Card Processing Fees

Most credit card processing companies charge these recurring fees:

  • The monthly fee usually ranges from $5 to $15. It may be higher if it includes PCI compliance and gateway fees.
  • The monthly minimum fee is normally $25, though this usually means the amount you pay in processing costs, not the minimum dollar amount of sales you must process per month.
  • PCI compliance is $100 per year on average, though some companies may prorate it and charge it monthly, sometimes baking it into the monthly fee.
  • The payment gateway fee varies by the payment gateway you use. Most are charged monthly, though some companies also charge a small per-transaction fee.
  • Various network fees, such as Mastercard’s Merchant Location Fee and Visa’s Fixed Acquirer Network Fee, may be passed on to you as either monthly or annual fees.

These fees are also common but only charged per occurrence:

Reasons Small Businesses Should Use Credit Card Processing Services

Which Credit Card Processing is Cheapest For Small Business

Card payments are gaining more and more notoriety these days. While there are still offline businesses out there that stick to cash only, the truth is more and more people choose convenience and would rather pay by card, so they avoid such places.

When it comes to online commerce, there is no such thing as cash only. You will have to pay by card in one way or the other put your own card in or use an online payment platform, which is also linked to your card.

Now, if you are still not convinced, here is why you need to look for the best online payment processing for small business.

Quick payments

A card processing service will ease your interaction with customers. There are ten customers in front of you, and each of them pays by cash count money, count the change, it takes ages. Card readers make everything super simple, especially since most people rely on contactless technology these days.

Less fraud

Better reputation

Better statistics

Lots of options

More security

More profits

Good customer experience

Easy records

Beating the competition

Read Also: Cards That Use Transunion

Flexible Pricing And Transparent Cost Structures

Look for cost transparency when youre choosing a small business merchant services provider. Some processors may use complex industry language, skip underwriting and risk assessment or distract merchants with suspiciously low rates. Theres no confusion, however, about one of the most favorable pricing plans for businesses: Interchange Plus. With Interchange Plus, your small business receives the actual interchange rates . This model is competitive, transparent and the credit card processors profit margin remains the same regardless of a merchants volume. While Interchange Plus pricing may not be the best fit for your small business, an established merchant services provider will offer a variety of pricing structures so you get the solution you need.

What Is A High

A high-risk merchant account is used when theres a higher risk that a merchant will have chargebacks or could experience fraud. Some merchants wont work with high-risk businesses but other credit card processors will. The ones that do, typically charge more because of the risk. In addition to paying higher payment processing fees, high-risk merchants pay more in chargeback fees. They also have to undergo a more arduous application process.

Recommended Reading: Credit Card Companies That Use Transunion Only

Locating The Best Services

To find the best credit card processors for small businesses, we began by polling business owners about which credit card payment processing companies they use or have worked with. We also asked business owners what they liked and disliked about these vendors, and whether they would recommend them to other small businesses and why.

The Best Credit Card Processing Companies For Small Businesses In 2021

What Credit Card Processing Services Aren

We compared the hundreds of credit card processing companies in the US, looking for the lowest rates, the most transparent pricing, and the shortest, most manageable contracts. It all boiled down to just six credit card processing providers the absolute best for small US businesses.

So, who came out on top?

Well, we found Square to offer the best credit card processing for small businesses, particularly micro-merchants. Making up the best of the rest are Flagship Merchant Services, Helcim, Toast, Fattmerchant, and Clover.

Lets find out why.

Best small business credit card processing companies:

You May Like: Www.macy’

Making The Right Decision

Look for a credit card processing company that has a successful track record of providing merchant services to businesses like yours. The right one will have demonstrated the ability to grow, no matter what direction your business may turn.

We help protect businesses globally by offering secure transactions that minimize fraud and reduce risk. Connect with one of our payment experts today to learn more about how we can help your business process credit cards securely.

How Can You Avoid 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 that 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 a $2 one. The 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, where 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.

You May Like: Pay Cabela’s Mastercard

Startup Costs Fees And Equipment

In the payments industry, there is a sort of pyramid of providers. At the top are the credit card companies, which charge flat interchange fees to big processors such as First Data, Flagship, Global Payments, and Vantiv. These entities clear the credit card payments and, while some take individual customers, each works with intermediary services, including Independent Sales Organizations , which must register with a bank. Most of the services featured in this roundup are ISOs, including Cayan, National Bankcard, Sam’s Club Merchant Services, and others.

Square Point of Sale and Intuit Quickbooks Payments are merchant services aggregators. Rather than providing you with a merchant account, these merchant services set you up with a sub-account under its master merchant account.

At the bottom of the pyramid are the business owners, who have to contend with two or three sets of fees: interchange fees from the credit card company and transaction fees from the processor and intermediary. There are a few different pricing structures available, and which one you choose depends on the number of transactions you clear each month, the sum of the credit card payments you receive, and the average amount of each transaction. A merchant who sells 10 pianos per month for $20K a pop has different needs than a coffee shop that accepts hundreds of swipes worth $10 each.

Stripe: Best Selection Of Tools And Features

Whats The Best Credit Card Processing For Small Business


  • For online payments: 2.9% plus 30 cents per transaction.

  • For in-person payments: 2.7% plus 5 cents per transaction.


  • More than 450 platforms and extensions available.


  • Not a good fit for brick-and-mortar businesses that require a more robust POS terminal.

  • Doesnt work with high-risk merchants.

Why we like it: With transparent, flat-rate pricing and no subscription fees, Stripe is one of the easiest payment processing solutions for online businesses. Although you may find an alternative provider with lower processing fees, its difficult to beat the lack of other fees, flexibility and included-payment tools within the company’s platform. The payment service provider offers its own invoicing, billing, business data and tax calculation features, too.

For more information, read NerdWallets review of Stripe.

Also Check: Discover It Secured Credit Card Deposit

Is Square Cheaper Than A Merchant Account

Yes, Square is a cheaper option than a merchant account for most businesses to process low to medium volumes of credit cards. However, a fully functional merchant with interchange-plus pricing will be a cheaper deal if you process a large volume of credit cards even though you pay additional annual and monthly fees for it.

Image: Depositphotos

A: Transnational Payments Is Tailored To Small Businessesb: Paypal Aggregates Small Businesses

Whether your small business is lower volume, high risk, has credit card processing history or none at all, TransNational Payments was created to help you accept payments whatever method best serves your small business! We ensure that you get connected to the merchant services you need by providing:

  • A free quote on the payment solutions that interest you
  • A cost savings analysis compared with ANY of your current providers
  • Helpful small business consultation on the best products for you
  • Industry-standard merchant verification
  • 30- or 45-day free trial of our products and services
  • A dedicated account manager for your small business
  • Expert installation for local merchants or live installation by phone
  • Free quote and 1 free month of Full Service Payroll for Small Businesses

At the end of the day, when deciding who youll partner with to process payments at your small business, make sure that you factor in the benefits and features not just cost and start time in your comparison!

Also Check: Credit Card Committee Review

Paypal Best Simple Solution For Small Business Payment Processing

  • Trusted well-known brand

PayPal has been a giant in the world of processing transactions for more than a decade. Theres a good chance that youve used PayPal in some form or another in your personal life.

While PayPal has always been known for its P2P payments, its also a great choice for businesses to use as a payment processing service.

You can use PayPal to accept payments both online or in-person. I highly recommend it for low-volume businesses to get paid online.

I recently wrote an article comparing PayPal vs. Stripe for ecommerce. While Stripe definitely has its fair share of advantages, the PayPal technology is much simpler. Its also extremely easy to set up. You wont need to worry about all of the developer features like you do with Stripe.

Lets take a closer look at PayPals processing fees:

  • Online payments and invoicing 2.9% + $0.30 per transaction
  • Mobile and in-store payments 2.7% per transaction
  • Manual entry transactions 3.5% + $0.15 per transaction

Pricing is nearly identical to Stripe.

One of the best parts about using PayPal as your online payment processor is that youll be able to accept PayPal, Venmo, and PayPal credits in addition to all major credit and debit cards. That flexibility is a huge boon for your customers.

This is a massive advantage over other payment processors, where you would need to integrate PayPal separately.

Whats The Difference Between Credit Card Processing And Point Of Sale

The 6 Best Credit Card Processing Companies of 2020

Point of sale, on the other hand, often includes credit card processing, but it also includes a number of other features relevant to making a sale, like inventory management, rewards programs, and employee tracking.

Many credit card processing companies, like Square, also offer a suite of point-of-sale features that are often needed for customer purchases.

Read Also: Chase Credit Card Cancellation Number

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 types of payments is increasingly important for nearly every type of business, as many customers don’t carry cash anymore.

More articles

Popular Articles