Do You Really Know About Credit Card Processing? U S. Small Business Administration

payment processing companies

Virtual terminals are helpful for phone sales or as a backup if a terminal or card reader isn’t working properly. Most payment processing companies provide a virtual terminal and some support card readers for physically swiping cards as well. Terminals, POS apps, store registers, online gateways and virtual terminals are a few of the many types of hardware and systems that enable card processing.


After verification, the funds are sent to the merchant bank, then forwarded to the merchant’s bank account minus the processing fees. Stax Payments is another subscription-based processing company. Compared to Payment Depot, it has higher monthly membership fees.

This is why credit card processing for small businesses is so important. However, choosing a provider that best fits your business needs can be challenging. A firm will normally pay 1.5% to 3.5% with each transaction’s total in credit card processing fees.

PayPal holds many PCI compliance certifications, including the Mastercard Site Data Protection Program and Visa Cardholder Information Security Program. Let’s take a look at some examples from popular payment processors from our list of the best credit card processing companies. Assessment fees are fees paid directly to the credit card network so that the merchant can use certain credit cards. When combined with the interchange fee, merchants refer to the total as a swipe fee. People will spend 80% more on their purchases when credit or debit cards are a payment option. In fact, about 60% of consumers prefer using their credit cards over cash because paying with cards is more convenient.

Lowest Card Processing Rates

Molly K. McLaughlin is a New York-based writer and editor with more than a decade of experience covering technology. She has tested and reviewed all sorts of software, mobile apps, and gadgets. Before launching her freelance business, Molly was an editor at PC Magazine, covering consumer electronics, followed by a stint at, a review website.

Dharma the 8 best bookkeeping apps for small business owners in 2021 Services charges nonprofits reduced monthly fees and processing rates, making it a top choice for these organizations. It’s also a certified B Corp, meaning it’s held to higher environmental and social standards. That’s a big plus for small businesses that pride themselves on working with socially responsible companies. The company also offers reduced rates for small businesses that process over $100,000 per month. Because credit card processing companies come with various pricing structures, no one provider is the cheapest for all businesses. The least-expensive choice depends on your industry, sales volume and typical transaction size.

However, it’s essential to include monthly fees, statement fees and add-on costs that your provider charges in your total processing cost. If your processing service charges $39 per month, your total processing cost is $137.25 ($98.25 + $39). As with interchange fees, assessment fees are collected by card processing companies during the transaction process.

The answer to this question varies depending on your volume. If you process a low number of transactions on a monthly basis, you may want to choose a processor that charges a low transaction fee such as Stripe or PayPal. If you have a higher volume, a subscription-based model such as Payment Depot where you pay a monthly fee in exchange for lower transaction rates may be a better fit.

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We try out the various features and functions of the packages, depending on what they’re aimed at, while keeping a close eye on efficiency. Security of transactions is naturally a major factor too, with all of our selected companies faring well as you’d expect. On top of all that, Helcim has now added QR code functionality for merchants who are using its Online Store, Hosted Payment Pages and Online Food Ordering features. Package with a per transaction rate of 10¢and daily batch fee 10¢ with no setup fee for both. Our expert reviewers spend hours testing and comparing products and services so you can choose the best for you. Quality of service is super important to your relationship with your processor.


It’s worth keeping that in mind if you’re currently considering a provider for the first time, or want to move to a new one. 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. Clover is cloud-based and also has a whole selection of hardware that will enable you to process credit card payments in a physical environment as well as remotely. Terminals are available in a variety of sizes and configurations. There’s an easy three-step system in place for processing payments via

Best for Large Volumes

Established in 2001, Merchant One is a credit card processing company that uses a traditional tiered fee structure. It offers the lowest monthly pricing we’ve come across so far at $6.95 per month, plus low processing rates. Merchant One’s competitive rates range from 0.29% to 1.55% for swiped transactions and 0.29% to 1.99% for keyed-in transactions.

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Since high-risk services charge rates according to risk, you won’t find fee information on PaymentCloud’s website. The company’s subscription-based service with no markup on interchange rates makes Fattmerchant perfect for businesses with large volumes. EMV is an internationally standardized method for making payments with microchip-enabled credit cards. EMV technology allows for greater security than traditional magstripe payments. Here’s your opportunity to learn about credit card payments from a 15 year veteran in the electronic payments industry. Maintaining strict control over cash flow is essential to running a small firm.

This means you don’t get your own dedicated merchant account. This makes it faster to get started, but there are some downsides, like risk of frozen funds. Learn more in our detailed guide on Square vs. merchant accounts. In business since 2015, PaymentCloud maintains a diverse customer base and offers solutions for in-store and online business needs. As a reputable credit processor, PaymentCloud delivers competitive rates while serving companies with trouble qualifying for other services, making it the winner in our high-risk category.

Payline Data

Or, you can pay more per month and have no upfront terminal or register costs. Stax also sells its own customizable countertop terminals and can seamlessly integrate its software with other terminals, as well as most POS systems and other business tools. The company also offers 24/7 access to its online knowledge base; phone, email and live chat support right from the Stax Platform, and concierge service with its higher-cost packages. 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.


Cardfellow recommends factoring in the number of transactions you’ll process each month to choose the type of plan you need, as too few or too many will be costly. In all cases, be sure to get a complete list of fees, and be sure the agreement doesn’t let the processor increase fees or charge new ones without notice. Build an online store or integrate Square’s payment processor into your existing website for 2.9% + 30¢ per transaction.

Payment Depot’s rates are incredibly low, so we wondered if the user experience suffered due to their service being so cheap. We did some digging into the user reviews of Payment Depot and found overwhelming positivity toward Payment Depot and its services. Get a free card swiper from Square at no cost when you create a free account. Interchange-plus pricing is growing in popularity, mainly thanks to the small business-friendly plans offered by Helcim, Payment Depot and Stax. The issuing bank pays the acquiring bank via the card network.

Credit card surcharges are fees charged for the use of credit cards. These are legal in most states, but there are some rules you have to follow. Convenience fees, on the other hand, are legal in all states. Card networks usually charge higher rates for keyed-in transactions because they pose higher risks. AVS helps reduce risks as it verifies the cardholder’s billing address. Therefore, you can get a lower interchange rate if you use AVS.

When a processing company offers transaction rates that account for interchange, that means they’ll be taking a cut over and above interchange rates. This pricing method tends to save your business money because it takes into account every credit card provider’s processing fees instead of just assessing a flat fee per transaction. Larger businesses tend to save the most money with an interchange-plus pricing plan that passes through the applicable interchange fees at cost and adds a small, fully-disclosed markup. For very high-volume businesses, a membership pricing plan can save even more money by eliminating the percentage-based markup in exchange for a fixed monthly subscription fee. A fourth option, tiered pricing, is similar to flat-rate pricing but usually results in higher overall costs for almost all merchants. A few, such as Square, Stripe and PayPal, charge no monthly fees for credit card processing services.

You will want to avoid merchant account hold, freeze, or terminations. 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. Most of the services featured in this roundup are ISOs, including Cayan, National Bankcard, Sam’s Club Merchant Services, and others. Whether you need credit card payment processing on the street or online, accepting credit cards and processing those payments is still complicated, though.

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