Square Logo Square
  • Advanced merchant terminals
  • No monthly fee
  • Competitive pricing
Visit Square

Processing payments is one of the most essential parts of running a business. If customers can’t pay the way that they want to pay, then chances are they won’t be regular customers in the future. Often, customers have no choice but to pay with their business credit card in order to separate business and personal expenses. People want convenience, flexibility, and choice when it comes to paying for their goods and services.

While cold hard cash is nice to have in hand, it’s becoming a less common way for people to pay. In fact, only 24% of transactions in the United States are done on a cash basis. This number is even lower in countries that have adopted cashless payments more quickly, which points to the future of how businesses and customers will interact. As such, it’s pretty safe to say that physical cash is on its way out.

This presents an obvious problem for businesses without credit card processors. If customers are carrying and using less cash, then the market for cash-only businesses is shrinking. Not only that, some people don’t even carry their debit or credit cards anymore opting instead to use their smartphones with contactless payment methods like Apple Pay or Google Pay.

So, how can small business owners stay ahead of the trend and ensure that they aren’t missing out on sales?

The simple answer is to find the best credit card processor and begin offering card transactions.

In the past, many business owners were hesitant to adopt mobile credit card processing capabilities because:

  1. Cash was still king
  2. Getting approved for a merchant account was a hassle
  3. Credit card processing fees ate away at their profit margin.

Times have changed, however. Now that cash is becoming less popular, credit card processing has become more convenient, affordable, and less high-risk, as the advent of chip cards has made paying with a card safer for both the customer and business alike.

With so many different payment methods available today, accepting a wide variety of payment options is essential for businesses that want to deliver high-quality customer service. In other words, credit card processing capabilities are an essential part of the overall customer experience.

This article will break down the finer details of what credit card processing is, why small businesses should accept credit card payments, and recommendations of the best credit card processing companies.

Why do businesses need credit card processing companies?

So, why exactly does a business need to use credit card service providers?

  1. A customer can’t hand over their credit card and take their purchase with them. Funds must be exchanged somehow, and that’s where a credit card processing provider steps in. They do all of the behind-the-scenes work to process payments and ensure that the funds are exchanged and appear in a businesses’ bank account in a timely fashion. This fast payment remittance is important, especially for small and medium businesses that rely on their monthly cash flow to fund operations, stock their shelves, and pay staff.
  2. Credit card processing providers eliminate the complexities of managing payments and do the heavy lifting. This means businesses can focus on what they do best, which is taking care of the actual day-to-day logistics of the business.
  3. Cashless transactions already make up a majority of payments in the United States, and that gap is only expected to continue to widen. A business that feels they can get by today with only accepting cash may find that is no longer true in just a few short years. By accepting accept credit cards and other cashless payment options now, businesses will be ready for the future, as opposed to scrambling to find a solution as sales begin to decline.
  4. The growth of e-commerce and online transactions also adds a new dimension to paying for goods and services. Many businesses are now moving into the online space either as the main focus of their business or to complement their brick-and-mortar operations. Obviously, accepting cash for online payments during checkout isn’t a realistic solution. Online shopping is dominated by credit cards and, for businesses that want to be present on the Internet, finding a credit card processing company to work with is an essential step in getting up and running.
  5. Ultimately, it all boils down to better customer service and increased sales. If a business is flexible and adaptable with the types of payment processing options it accepts, it will have a larger pool of potential customers. If it’s too rigid and refuses to adopt modern payment solutions or a point of sale system, it may find its sales declining as customers turn to businesses that will serve them in the way they wish to be served.

When do businesses need credit card processing companies?

The need for a credit card processing company could arise at any point in a business’ life cycle. With that said, there are defining moments when a business needs to stop and strongly consider working with a credit card processing provider in order to continue growing.

If a business is brand new

One of the most obvious times when a business will have a need for credit card processing is when they are just starting out. These businesses have no existing relationships with payment processors and need to get their operation off the ground. The need is especially important for new online businesses as a vast majority of their payments will come from customers using credit cards.

An established business with an established base of clients may be able to get away with only accepting cash if that’s what its customers have become accustomed to. A new business doesn’t have the luxury of a dedicated client base and, as such, must try to appeal to all customers, as well as their payment option of choice.

If an existing contract is up

Another important moment where businesses may identify the need for a credit card processing company is if it already has a processing provider but its contract is coming up for renewal. This is a great time to review costs, the needs of the business, the changing habits of consumers, and the features available. Reviewing options for credit card processing companies is like reviewing cell phone plans. When the plan is up for renewal, most look around for a better pricing structure (possibly a monthly subscription) and better features to suit its needs.

If a business is expanding

Businesses expanding operations into a new space, like startup online sales, for example, may also need to look into credit card processing companies. Another example of expanding into a new space would be if a business is launching a mobile operation in addition to its fixed, brick-and-mortar operation. A food truck is a great example of a type of business where credit card processing needs may change. In addition to needing a fixed, point of sale terminal, it may also need a mobile terminal, which means using a credit card processing provider that can deliver both.

If looking for more features to suit needs

Finally, there are some credit card processing companies that provide services beyond just mobile processing. Several companies have integrated services that are PCI compliant, can manage online stores, inventory, and customer marketing.  Others are seamlessly compatible with accounting platforms like Quickbooks.  This is ideal for small or medium businesses with limited resources for managing all of this with separate solutions.

Finding a single, unified product can help simplify overall business operations. If a business needs help bringing all of its payment systems together then finding the right payment processing company is incredibly useful.

It’s important to note that not all credit card processing companies can deliver on this. Therefore, it’s important to identify all business needs and shop around for the best processing solution.

Check out our guide on How to Accept Credit Card Payments Online

What should businesses look for when choosing a credit card processing company?

Not all credit card processing companies are built the same. Some cater to businesses looking for low fees or mobile solutions while others emphasize their additional features, like online store management. What works best for one business may not be the right solution for another.

Trustworthy, PCI Compliant

Obviously, the most basic aspect of credit card processing is actually processing and remitting payments, as well as maintaining PCI compliance. This is not a feature to overlook. Some credit card processing companies may provide support for credit card companies like Discover and American Express, in addition to the essentials like Visa and Mastercard. Others may only support Visa and Mastercard.


How payments are taken is also important. Does a company’s mobile card reader work with Android as well as Apple phones? Can users pay with NFC methods like Apple Pay or Google Pay? Does the company support EMV for added security? What about ACH? Are there mobile or online options available? Not all payment types may be necessary for your business, but a final decision can’t be made until the needs of your business and the services provided by the processing company have been considered and compared.


As previously mentioned, some companies provide all-in-one features beyond just credit card processing. This is important for a business owner to consider. Of course, these features often come at an additional cost, but they can help streamline business operations and potentially lower total costs in comparison to using multiple different companies for the same types of services.

For example, an online business may want to choose a credit card processing company that also provides an e-commerce store, inventory management, and marketing tools. A local restaurant, on the other hand, wouldn’t have a need for that same range of services. For new businesses or startups, these additional features can be a great opportunity to address multiple needs at once. Established businesses may also find that they can reduce costs by bundling services provided by several different companies into one complete solution.

Reliable customer support

Customer support is another important feature to look for when choosing a credit card processing company. If experiencing issues, a business needs to know that it can get back up and running quickly. Live online chat or 24/7 phone support are important features to consider. After all, if a credit card processing service fails to work it may end up turning away sales. This leads to a poor experience for customers and could have long-term effects on a business’s reputation. One lost sale due to payment processing issues could eventually equal dozens of lost sales over the long term, as customers begin to choose other options when spending their money.

Of course, the most important feature when it comes to credit card processing is the cost. After all, a business still needs to turn a profit after collecting payment.

What is the pricing for credit card processing?

The cost of processing credit cards may be the deciding factor for many businesses. After all, if a payment processor offers a wide range of features but its rates are significantly higher, those fees can eat away at profit margins fast enough to make the additional features worthless.

There are a number of different pricing models that credit card processors use.

  • At a basic level, all credit card processors charge some sort of per-transaction fee.
  • Some processors collect a flat rate, plus a percentage of the sale.
  • Others will only collect a percentage of the sale.

There is no immediate advantage or disadvantage to either option. It largely boils down to the average sale.

  • If a business sells big-ticket items it may benefit more by paying a flat fee plus a lower percentage per sale.
  • If one sells lower-cost items it may benefit most by paying a percentage for each transaction, even if that percentage is a little higher.

In addition to transaction fees, there are other costs to consider.

Some credit card processing companies charge monthly or annual fees to use their service. In most cases, these fees translate into lower fees per transaction, but a business will have to determine if its volume of sales justifies the fee.

  • In some cases, businesses that do less than $5,000 in card sales may be better served by paying higher transaction fees instead of a monthly fee that comes with lower transaction fees.
  • High volume businesses, on the other hand, may benefit from a higher up-front fee that offers lower transaction fees.

Again, the benefits of different pricing structures will largely boil down to the individual needs and realities of a business.

Another cost to consider is whether there are any fees for renting or buying equipment. Credit card processing companies will either provide equipment for free and charge a monthly rental fee or charge upfront for payment terminals. In some cases, terminals can cost hundreds of dollars each. For businesses that need several terminals, this becomes a significant cost to incur before a single payment is processed.

Additional accessories like receipt printers or POS systems may also be available at an additional cost. Every business is different, so it’s important to identify needs before committing to any purchases or rentals of equipment.

Finally, a business needs to understand the terms and conditions of the agreement with its payment processor. Some credit card processing companies will require a contract for their services. If the business decides to cancel the agreement, the cancellation fee can be significant, so be aware of these types of hidden fees, since they could amount to the equivalent of tens of thousands of dollars in transaction fees.

Pay attention to a company’s policy on interchange rates, as well, since depending on the card a customer uses, a business could end up paying more than bargained for in interchange fees. Before signing the dotted line, do due diligence to ensure that the credit card processing service will meet needs and, if needs change, what the costs will be to change things in the future.

Best credit card processing companies

Now that you understand the important features and costs to consider when choosing a credit card processing provider, let’s take a look at the best names in the industry so that you make an informed choice for your business.


Square logo

Square is arguably the best-known name in payment processing today. Their magstripe and chip readers that plug into mobile devices are recognizable anywhere and helped kickstart the mobile payment industry.

Square has evolved to be about more than just mobile payments, however. Their merchant terminals are professional and sleek with countless advanced options, including custom POS systems, inventory management, and custom payment prompts for their customers.

Plus, Square goes beyond just basic card processing with e-commerce support including a store building platform, niche products for restaurants or retailers, and invoicing options for customers.

With no monthly fee for their basic service and a very competitive rate, Square is ideal if you’re just starting out and need to keep costs low.

National Processing

national processing logo 200x81 1

National Processing is a payment processor that’s geared towards small to medium-sized business owners. Its feature set is small but more than enough for businesses looking for a flexible and affordable payment processor.

The payment plans are industry-specific and cater to retail, restaurants, and eCommerce businesses. Higher-level plans are suited for businesses processing a very high volume of transactions.

Most plans also come equipped with a free POS, mobile reader, or terminal. You may purchase your own equipment or use the provided equipment as long as you have a plan. However, there is a cancellation fee for plans that utilize the free terminal and POS and end up terminating accounts early.

National Processing shines with its commitment to transparency. It’s one of the few credit card processors that includes its complete pricing breakdown, transaction pricing examples, along with hidden fees that might arise.

Not only that, but the prices are incredibly cheap, which makes it an attractive option to business owners on a budget. Finally, it has a stellar reputation online, both in the eyes of consumers and with the BBB.

See our full review of National processing here.


Helcim logo

If you’re looking for flexibility and transparency with great rates, Helcim may be one of the best mobile credit card options on the market. The company does not lock businesses into long-term contracts, which also means there is no penalty to cancel the agreement.

low monthly fee includes credit card processing with clear, low rates, online payment gateways, manual credit card processing using their desktop software, mobile payment options, and e-commerce shopping cart integration. Non-profits can enjoy reduced fees as well.

Of course, with no contract in place, you’ll need to pay for terminals upfront, which can run as high as $549 each. Helcim admits that they are not the most cost-effective solution for businesses that do less than $1,500 in monthly sales.


PayPal logo

For online shoppers, PayPal is a trusted name that has been around for years. This makes it an obvious option if you’re looking to process credit card payments online. Their transaction fees are higher than some other processors, but there are plans available with no monthly fee.  Plus, getting started with PayPal payments is simple.

Users can also integrate PayPal into compatible POS systems for brick and mortar sales, plus PayPal Here offers mobile payment processing as well. The short-term loan service offered by PayPal gives businesses simple financing options, in addition to regular payment solutions, which offer customers an additional way to pay for goods even if they don’t have cash on hand right away.

The company also has a fair policy on chargebacks, reviewing each customer dispute before taking action. However, if you have a high volume of sales – more than $10,000 – you may find the transaction fees for PayPal to be too high and another option may prove to be more cost-effective.


Stripe logo

Stripe is another very well-known name in the payment processing industry. If you currently use e-commerce services, you may already be familiar with Stripe, since it’s one of the default payment processing providers for some of the most popular services available.

It’s important to note, however, that Stripe is for more than just e-commerce stores and digital payments. Stripe can be integrated with compatible POS systems and their credit card terminals are more affordable than other options at just $299 for the most expensive model.

Stripe offers transparent pricing, and transaction fees are clear and easy to understand. Advanced features, however, do require some technical know-how to get running.

First Data (Clover)

First Data logo

First Data isn’t a household name like Square, but it is one of the most popular payment processing providers in the business. This is partially because First Data allows resellers to use their backend services in order to provide service to customers. When signing up for First Data, you will be required to sign a contract and lease the equipment, which can be expensive.

In addition, termination fees are significant. First Data does provide quality features including payment terminals, e-commerce payment gateways, mobile terminals, and even a website builder for new e-commerce stores.

Their transaction fees are competitive with some of the best in the industry as well, but the tiered pricing is not always clear like with other providers and depends on volume.


Shopify logo

Shopify is best known for its world-class e-commerce store service, which allows businesses to build and manage their own e-commerce store. Businesses who have done this also often opt to use Shopify’s payment processing service since it’s native to the platform. It’s important to note that Shopify payment processing can be used by more than just Shopify e-commerce store users, however.

Their POS terminals are modern and professional, plus their additional services like inventory management and marketing tools can bring together all aspects of your businesses’ operations, including brick and mortar stores, online selling, as well as mobile payments.

The fees for Shopify’s payment processing are competitive and high-volume businesses can enjoy reduced fees if they opt for a higher-tier plan, which includes the entire suite of Shopify products.

Flagship Merchant Services

Flagship Merchant Services logo

Flagship Merchant Services is a major player in the credit card processing industry. They offer a wide range of features that allow businesses of all sizes, across all industries, to begin accepting credit card and debit card payments. The up-front cost of Flagship Merchant Services is great with a free credit card reader provided and no setup fee for new users.

In addition, they also offer online payment gateways for e-commerce businesses as well as mobile payment options to help businesses address all areas of need for their business. There’s no cancellation penalty for ending service and the monthly fee is very reasonable.

Where Flagship Merchant Services falls behind the competition is their unclear, tiered pricing for transactions (although the company does have an interchange-plus pricing option) and subpar customer support outside normal business hours.

Dharma Merchant Services

Dharma logo

Dharma has a full-featured offering, with lower pricing than any other providers on this list. With no annual fees or contracts, Dharma has very friendly pricing if you’re looking for cost certainty. Their pricing is more suited for high-volume businesses that process upwards of $10,000 in sales per month. This obviously exceeds the sales of some small businesses and/or new businesses that are still ramping up to that level.

Dharma offers traditional payment terminals, as well as an online gateway for e-commerce stores. Their Kabbage financing offers merchants another way to help customers pay for their items by financing the purchase and making monthly payments. This additional option could help increase sales over and above the traditional credit or debit payment options available from other providers. 24/7 support and clear pricing round out Dharma’s list of benefits.


Fattmerchant logo

If you’re looking for low transaction fees and want to avoid monthly minimums, virtual terminal provider FattMerchant fits the bill with their 0% markup. This means that FattMerchant only passes on the actual cost of credit card processing to you, instead of marking up the cost. So, how do they keep costs so low? They charge a flat monthly fee, which starts at $99. While this fee is higher than some competitors with monthly fees, businesses with enough volume to justify the cost should see significant savings over time.

Like other providers, FattMerchant offers countertop terminals, mobile terminals, e-commerce gateways, as well as their advanced API for businesses that want to truly customize the experience.

With no annual contract or cancellation fees, FattMerchant offers leading flexibility and cost assurance.

Payment Depot

payment depot logo

Payment Depot is a merchant services provider based in Orange, California. They provide merchant accounts to handle payment processing, but they are not a true payment processor themselves. Instead, they partner with Fiserv and TSYS Merchant Solutions, two of the largest payment processors in the US. Payment Depot is the front-facing company that you will sign up for and deal with for customer service, but Fiserv and TSYS will actually be processing the credit card payments.

Payment Depot also offers credit card terminals, point-of-sale systems, online payment processing, and even small business funding via merchant cash advances. They are known for quality customer service, which is available 24/7.

The main advantage of Payment Depot is that they have a flat fee membership structure. You will pay $49 to $199 per month, plus $0.05 to $0.15 per transaction, depending on the package you choose. However, you won’t pay any marked-up percentage rates. Instead, you’ll pay the exact wholesale interchange fees that are charged directly by Visa, MasterCard, and the processing banks.

Most payment processors will mark up this rate, adding a small percentage to each transaction. Payment Depot provides the exact wholesale rate, making no money on each transaction. Instead, they charge a flat monthly fee.

This fee structure typically works best for companies that are processing a decent volume of transactions. In fact, typically the more you process, the more you will save with a company like Payment Depot.


  • Membership pricing structure helps most clients save money
  • On average, Payment Depot users save $400 per month on fees
  • Very transparent pricing structure with no hidden fees
  • Wholesale interchange rates with no markups
  • Offers POS systems, terminals, and other hardware
  • Some plans offer free equipment
  • No setup fee
  • No application fee
  • No cancellation fee
  • Month-to-month billing
  • Excellent customer support available 24/7


  • Only for US merchants – international businesses are not supported at this time
  • May not be cost-effective for companies with low sales volume
  • Does not accept “high risk” merchants

See the full review of Payment Depot here.