Best Credit Card Processing for Small Businesses (2024)

Square vs. Braintree vs. Stax:

Square, Braintree, and Stax by Fattmerchant are all excellent credit card processing companies that offer transparent rates for their services. They are also all PCI compliant with strong fraud detection security measures.

Square is an all-in-one POS and credit card processing company that uses one flat, per transaction rate, no matter what kind of card is used in the transaction. Square also offers integrated in-store and online commerce. In comparison, Braintree is best suited for e-commerce transactions and does not integrate with in-store payments.

However, Braintree is similar to Square in that it also offers a flat per-transaction rate but Braintree's rate remains the more costly option, with its transaction fee costing $0.39 more than Square.

Stax also differs from Square and Braintree in that it has a monthly subscription fee as well as a per-transaction fee. This monthly fee does, however, remove any merchant markup on the credit card companies' transaction fees. Also unlike its competitors, Stax is best suited for mid to large-sized companies.

Square is our top pick because it offers transparent rates for different modes of payment, including invoice transactions, card-on-file transactions, and virtual terminal transactions. It also gives users three different choices for accessing their funds and is a complete solution for POS and credit card processing.

How to Choose the Best Credit Card Processing Company:

1. Consider the type of credit card processor you want to work with.

Credit card processing companies offer different pricing structures: tiered pricing, blended pricing, interchange-plus, and membership pricing. You will need to determine the pricing structure that is best for your company.

Tiered pricing structures have low rates for qualified transactions, but unqualified transactions will have much higher rates. There are often also hidden fees with tiered pricing. Blended pricing works in almost the same way as tiered pricing, except that there is one flat rate for transactions. However, this rate will be bundled with markup fees and processing costs.

Interchange-plus pricing is one of the most transparent pricing structures and shows the interchange (how much goes to the banks and card networks) and the markup for the processing company. Membership fees are flat monthly rates that allow clients access to wholesale banking and card network fees.

We would not suggest using a company with a tiered pricing structure due to the lack of transparency in fees. We would recommend using a company with blended, interchange-plus, or membership pricing.

2. Decide which equipment you need to accept payments.

Depending on the type of payments you want to accept, you will need different types of equipment. Brick-and-mortar locations benefit from countertop check-out terminals. Restaurants, cafes, fairs, markets, and industries that require employees to travel frequently will need mobile card readers if they want to accept and process credit card payments on the spot.

Some companies also provide processing services for both in-store and online markets. If you already have a website or POS system, you will need a credit card processor that integrates well with your current system.

5. Call around for quotes.

There are quite a few companies that post their rates online, but there are also a lot that don't. Call at least three companies and ask in-depth questions about their rates and fees.

You may need to specifically request interchange-plus rates as some companies will only quote you their markup fees, which will be added to the interchange rate. Additionally, with blended pricing, you will not be able to see what the company's markup fees are, making it difficult to know exactly how much you're paying the company. Requesting the interchange-plus rate is the best way to see exactly what you will be paying and to whom.

Also, you will want to ask about any fees the company does not disclose on its website. This includes monthly fees, batch fees, PCI compliance fees, chargeback fees, gateway fees, and network fees. Some companies also have non-standard fees, like setup or application fees, quarterly technology fees, online reporting fees, postage or handling fees, audit fees, and access fees. You should avoid companies with non-standard fees.

Payment Processing Trends to Watch:

Cash payments are decreasing in usage, down from 89% to 77% worldwide, while alternative options are on the rise. The focus is shifting to contactless payments with near-field communication technology so that customers can simply tap or wave their cards near a card reader.

Contactless payments are expanding into allowing merchants to accept mobile wallet payments from companies such as Apple Pay, Google Pay, and Samsung Pay. There are also payments from watches, wearables, or fobs.

Security measures are also evolving, with the addition of EMV technology as the new standard. EMV chips also mean that signature authentication has become practically obsolete, but a new trend to watch for could be biometric authentication.

Fingerprints are already being used to unlock smartphones and authenticate mobile payments and mobile bank transfers, so they may expand into other areas to make transactions more accurate and secure.

A future trend for payment processing may also include artificial intelligence to detect and stop fraud.

Which credit card processing company is cheapest for small business?

• Payment Depot.
• Payline Data.
• Square.
• Shopify.

What are the best payment processing companies?

• Square.
• Stax.
• Stripe.
• Braintree.
• Charge.com.
• Gravity Payments.
• Bill.com.
• Intuit GoPayment.
• PayPal.

How can a small business accept credit cards?

• Select a POS System.
• Select a Merchant Account.
• Select a Payment Gateway.
• Purchase Required Equipment.

How do I choose a credit card processing company?

• Decide which type of credit card processor you want to work with.
• Determine how you plan to accept card payments.
• Call three processors for quotes.
• Ask for interchange-plus rates.
• Find the lowest fees.
• Get a month-to-month contract.
• Buy processing equipment.

What does a payment processing company do?

Credit card processing companies allow small businesses to accept credit and debit cards securely. They are appointed by a merchant to manage transactions from various channels, such as credit cards and debit cards for merchant-acquiring banks.

What is a good effective rate for credit card processing?

Processing fees are typically a percentage per transaction, plus a flat fee, such as 2.2% + $0.25. There are also fees that can be added on such as compliance and chargeback fees. Fees vary by whether cards are accepted online or in person, based on average sale amount and several other factors.

Which companies are best for mobile credit card processing?

• Square.
• PayPal.
• Shopify.
• QuickBooks Payments.
• Merchant Anywhere.
• Braintree.

What will credit card payment processing cost my business?

There are a lot of variables, from whether you take payment online or in-person, whether you swipe or enter manually, the size of your average sale, and what type of business you are in. Finding the cheapest credit card processing for your business will require talking to processors directly, and nailing them down on fees.

What are merchant services?

Merchant services include a host of business financial services, such as POS systems, gift cards, check drafting, credit card processing merchant services, and more.

How can I decide on a credit card merchant?

Look at their ratings from customers, BBB ratings, and read payment processor reviews. There are some companies that have gotten reputations for hidden fees and bad customer service that you'll want to avoid.

Beyond that, see that they fit your business. Some companies are better for smaller ticket sales, others for mobile or online payments. Some are better for high-risk transactions or high ticket sales. It's difficult to name just one best credit card processing company for small businesses with so many variables.

Where do I get a credit card machine for small business?

Most companies offer credit card machines or devices that work with smartphones or tablets. Some of these devices are free, and some you'll need to pay for, depending on your business needs.

What are the best eCommerce credit card processing providers?

• Square.
• PayPal.
• Payline Data.
• Authorize.Net.
• Shopify.
• Stripe.
• Braintree.

What is high-risk credit card processing?

Businesses that have a high chargeback rate, are known for fraud, operate on the fringes of the law, have high average ticket sales, or are based off-shore may all be considered high risk, and may have to pay high fees, have trouble getting processing services at all, or have difficulty finding a credit card processing provider who will work with them.

Who has credit card processing for small businesses with no monthly fee included?

Shift, Square, Spark Pay, PayPal, EMS, and others don't require monthly fees, or at least offer plans without them. Depending on your business though, this may not be the best option for you. Some credit card processing services give discounted transaction fees in exchange for monthly payments.

Does credit card processing online always get charged per transaction?

Some online payment services like Helcim charge a flat monthly rate for e-commerce credit card processing, but most charge a small monthly fee in addition to a transaction fee.

If my business processes credit card payments online, can I also process debit cards?

Some debit cards can be processed by online merchant services if the debit card has a credit feature, but in most cases, you can only process debit cards in a physical store. An online merchant account works best with credit cards.

Can I set up payment processing on my website, or do I need to re-direct customers to an online payment processing site?

With website payment processing, you can integrate an online payment gateway into your online store. This makes website credit card processing much easier for your customers because they can complete their entire transaction on your site.

What are 3rd party credit card processing companies?

A 3rd party credit card company is just a company that performs credit card processing online for small businesses. Since most merchants don't have their own credit card payment solution, they turn to a 3rd party provider.

Can merchant services do more than online credit card processing?

Yes. While some companies only offer online payment processing services, many offer POS systems and other in-store solutions.

What are some online merchant account providers?

• Square.
• National Bankcard.
• PayPal.
• Payline Data.
• QuickBooks Payments.
• Stripe.
• Braintree.