7 Best Small Business Credit Card Processing Software Options in 2022

(Last Updated On: 09/21/2022)

Affiliate Disclaimer: Our product review team dedicates hours of research, fact-checking and testing to recommend the best solutions to business owners. We earn from qualifying purchases through our links, but this does not influence our evaluations. Why trust our reviews?

Written by Software Expert Hamza Shahid

The best credit card processing software for small businesses provide business owners with the flexibility to grow, ease in accepting payments, and essentials such as a payment gateway and merchant account, so they can manage vendors and keep track of accounts. Here are the top 7 companies we reviewed based on their pricing, features, and tools that will work best for small businesses.

Our Experts’ Choice Square Credit Card Processing
Square POS Terminal For small businesses, Square is the best credit card processor because it has a low-risk entry point to accept debit and credit cards. It has

  • Flat rate pricing
  • Month-to-month contracts,
  • Affordable POS software and hardware.
  • Fingerprint reader

$336 from Amazon

Since Square has a low-risk entry point for accepting debit and credit cards, we selected it as the best credit card processor for small businesses. No long-term commitments or monthly or annual fees are charged; you only pay for the processing you use. It can be used by businesses of all sizes, including very small ones and individuals, including freelancers, gig workers, independent contractors, and sole proprietors – and the processing equipment is very small and inexpensive. All you need is a smartphone or tablet with a card reader and an app to start accepting payments.

Don’t have time to look through all of the products and features? Here’s a quick list of our recommended tools and guides.

A Quick Overview of the 7 Best Small Business Credit Card Processing Software Options

How We Evaluated

To determine which payment processing software is best for small businesses, we evaluated features, pricing, ease of use, and the ability to accept offline payments during internet outages. Our analysis also included real customer experiences.

We searched for credit card machines with built-in payment processors that accept contactless payments, such as Apple Pay and Google Pay. Furthermore, we preferred credit card machines with cloud-based software for sending invoices, tracking inventory, and inventory, and managing payroll, email marketing, and loyalty programs.

Our decision was also influenced by pricing. In addition to looking at the overall cost of ownership, we preferred credit card machines that didn’t charge monthly fees.

Another important factor was the ease of use. A user-friendly interface and app were important factors when selecting credit card machines.

Lastly, we considered whether offline payments could be accepted by the credit card machine if the Internet was down. These are on top of our standard considerations for choosing a POS system. 

Credit Card Processing for Small Business Owners

In 2018, 28% of payments were made using credit cards, and 87% were made with debit cards. Businesses can accept payments by credit card and debit card using credit card machines. It is a huge benefit since it allows customers to use any card they want and it allows businesses to get paid quickly. We’ve done the research for you to help you find the right credit card processing system for your business.

1. Square: Best Overall Small Business Credit Card Processing Pick

Features

Square Credit Card ProcessingSquare is a popular choice for small and newly-established businesses, including those who only accept non-cash payments occasionally. From a mobile-only payments processing solution, Square has evolved into a full-featured payments ecosystem with the following major features:

  • Dedicated Solutions for Many Business Types
  • Easy Application Process
  • Simple Setup and Processing
  • Point-of-Sale Software
  • Free Online Storefront
  • Chargeback Protection
  • Referral Program
  • Small Business Financing

Pros

  • No monthly fees
  • Predictable flat-rate pricing
  • Ideal for low-volume merchants
  • All-in-one payments system

Cons

  • Account stability issues
  • Does not accept most high-risk industries 
  • There are some features that are more expensive for mid-sized businesses
  • 3.5% + 15¢ charge for keyed-in transactions
  • Plans differ in terms of support

Why Choose Square?

A popular e-commerce platform, Square is best for:

  • Small and medium-sized businesses
  • E-commerce businesses
  • Startup companies
  • Restaurants and bars
  • Health and fitness
  • Beauty professionals
  • Home and repair
  • Other professional services

Square Pricing:

The Square POS system is free to install, but it charges a percentage per transaction, usually 2.6% + 10 for swipes or taps, or 3.5% + 15 for keyed-in card numbers. For growing businesses, it offers a sleek and smart payment solution.

There is an additional charge for Square hardware. In order to get started, you can get a free iPad-compatible card reader. For a contactless, chip, or Apple Pay card reader, you’ll need to pay $49 – plus additional costs for stands and Square registers.

Hardware Cost

Square Reader for Magstripe Chip Square Reader for Contactless and other chips Square Stand with Chip Reader Square POS
Free $49 $199 $1000

 

Software Cost

Square Reader App Square Reader for Retail Square Stand with Chip Reader Square POS
Transaction fee is 2.75% per swipe or tap. $60 plus 2.75% per swipe or tap. Transaction fee is 2.75% per swipe or tap. A transaction fee is 2.6%+10 ¢ per swipe or tap.

 

Customer Reviews

Since Square serves such a large number of new businesses, Squareup reviews from customers are generally positive.  Square complaints do have a common theme that pertains to merchant services, and that is funding holds. As a result, you will begin to notice a few other trends when you investigate Square complaints across other sites across the internet.  Square merchants have been accused of scamming customers numerous times. The Square Cash App, for instance, receives quite a few reviews and complaints. A square business review’s number of complaints cannot be relied upon as an indicator of the quality of service. The majority of people are happy and reflect that in Square reviews. Here are the main things people like:

  • Robust features
  • Simple design
  • Low fees
  • Easy to open accounts

2. National Processing: Best for Low-Cost ACH/E-Check Processing

National Processing Credit Card ProcessorFounded in Orem, Utah, National Processing offers credit card processing and other services to small and medium-sized businesses. In exchange-plus pricing, the company charges a flat margin over the interchange rate for its customers. Those businesses that charge more than $10,000 in fees per month are entitled to a $500 price-match guarantee. National Processing offers a variety of plans for businesses of all sizes.

Features

National Processing offers a bevy of features and services that make it an attractive credit card processing provider.

  • Mobile Processing
  • Virtual Terminal
  • ACH Processing
  • QuickBooks Integration
  • Merchant Account 

Pros

  • POS systems and terminals from Clover
  • Works with high risk merchant
  • No long-term contracts, month-to-month billing
  • Exchange-plus pricing and membership pricing are available exclusively
  • Payment processing for eChecks and ACHs at low prices
  • Online reputation that is excellent
  • Budget-conscious merchants will find this option to be a good choice

Cons

  • Free” equipment may require a long-term contract
  • Early termination fee charged for “free” equipment

Why Choose National Processing:

National Processing is best for:

  • Those who are in search of low-cost credit card and eCheck/ACH processing
  • People who do not want to sign long-term contracts
  • If your business would like some free equipment with your plan
  • People who don’t want to pay a monthly fee
  • Online comparison of all additional hardware costs for businesses
  • Those seeking to avoid early termination fees

National Processing Pricing:

Plan Monthly Fee Payment Processing Fee
Restaurant  $9.95. Interchange plus 0.14% plus 7 cents.
Retail $9.95. Interchange plus 0.18% plus 10 cents.
Ecommerce $9.95. Interchange plus 0.29% plus 15 cents.
Cash Discount $39.95. None; the cost is passed to the customer.
Non-Profit $9.95. Interchange plus 0.12% plus 6 cents.
ACH Processing $15. Interchange plus 48 cents per transaction and 1.5% for individual transactions over $5,000.
Subscription $59. Interchange plus 9 cents.
Subscription Plus $199. Interchange plus 9 cents.

 

Customer Reviews

The number of positive comments that National Processing has received from merchants is far greater than the number of complaints. It is important to note that no matter what processor we recommend, we cannot guarantee that you will not experience any problems. However, you are unlikely to experience any problems with the company’s service after you have signed up.

The BBB has accredited National Processing since 2008, and the company currently has an A+ rating. During the past three years, the company has received only two complaints. Based on 160 reviews, Google reviewers have rated the company 4.5 out of 5 stars.

3. PaymentCloud: Best for High-Risk & Ecommerce Merchants 

PaymentCloud Inc. offers payment processing solutions for e-commerce, MOTO, and other high-risk businesses. PaymentCloud boasts excellent customer service and one of the easiest high-risk merchant account providers. By using this account, you will be able to accept credit cards, ACH, e-checks, and cryptocurrency payments at the point of sale, via mobile apps, or online.

Features

With PaymentCloud, you can find payment services for low-risk, medium-risk, and high-risk businesses, with features and offerings tailored to each company’s history and specific industry issues. Below are some of the features of PaymentCloud 

  • ACH Payment Processing
  • Contactless NFC
  • Credit Card Processing
  • CRM
  • Cryptocurrency Processing
  • Data Security
  • Debit/Credit Card Processing
  • eCommerce Management
  • Electronic Payments
  • Electronic Signature
  • In-Person Payments
  • Mobile Access
  • Mobile Card Reader
  • Mobile Commerce
  • Mobile Payments 

Pros

  • High-risk specialists
  • Few public complaints
  • No account setup fee
  • No monthly minimums

Cons

  • No publicly disclosed pricing
  • Low-risk merchants can probably find a better deal

Why Choose PaymentCloud?

PaymentCloud is ideal for:

  • High-risk businesses
  • In-person payment processing
  • Hands-on assistance for merchants

PaymentCloud Pricing

  • No account setup fee
  • No monthly minimum (low-risk accounts)
  • Interchange + 0.05%-0.30% + $0.08-$0.10 per transaction (low-risk accounts)
  • Processing rates vary by acquiring bank/back-end processor (high-risk accounts)
  • $15/month account fee (low-risk accounts)
  • Account fees vary by the acquiring bank/back-end processor (high-risk accounts)

Customer Review

Over the course of PaymentCloud’s nine-year history, it has received relatively little feedback online. In addition, we haven’t found a BBB profile for this merchant and we haven’t found much negative feedback about it elsewhere.

An owner of a business complained about the non-disclosure of a large ETF and a greater rate than promised. An additional merchant complained about PaymentCloud’s poor customer service after an account was held. As far as I’m concerned, the company provided a reasonable response, so I’m not in a position to assign ultimate blame either way.

The complaints are isolated. When several merchants complain about the same issue, the situation would become alarming. There is almost always an angry customer or two who complains about merchant account providers. High-risk providers tend to attract more complaints because of their business model.

4. Clover: Best for POS Integration

In 2011, Clover was founded in Sunnyvale, California. Its products include point-of-sale systems (POS), payment processing, customer engagement, and employee management. Clover offers a variety of POS terminals and accessories for customers to choose from, as well as a virtual terminal for taking payments without hardware. There are several countries outside the United States where Clover is available, including the United Kingdom, Austria, Germany, Ireland, Argentina, and Canada.

Features

You can accept credit cards and online orders through Clover – without having to shop around for separate POS and credit card processing vendors. It has following features:

  • Merchant Account
  • Fast Processing
  • Reporting
  • Payments
  • Customer Management
  • Gift Cards
  • E-Commerce
  • Merchant Cash Advance

Pros

  • Excellent POS hardware
  • Expandable via Clover App Market
  • Available directly or through a large network of ISOs

Cons

  • Requires monthly software subscription fee
  • Hardware cannot be reprogrammed
  • Expensive for most small businesses

Why Choose Clover?

Clover is the best option for businesses such as:

  • Restaurants
  • Retail Outlets
  • Professional services

Get a Quote from Clover Now

Clover Pricing

For credit card processing and POS systems, Clover offers three software plans.

Starter Plan

Following a 30-day trial, the Starter plan costs $9.95 per month. For in-person purchases, you’ll be charged 2.6% + $0.10, while for payments taken virtually or manually, you’ll be charged 3.5% + $0.10. With Clover, you’ll have access to the Clover App Market, track sales, run reports, institute item- or order-level discounts, and set employee permissions.

Standard Plan

Standard plans cost $39.95 a month and offer more advanced features. For in-person purchases, you’ll pay 2.3% + $0.10, for online purchases, and for keyed-in purchases, you’ll pay 3.5% + $0.10. The Starter plan includes inventory management tools, customer loyalty tools, and advanced reporting, as well as everything in the Starter plan. As well as sending orders to the kitchen, managing tables, connecting a weight scale, exchanging items, and tracking profitability, Clover also includes functions specifically geared toward restaurants and retailers. In order to use some of these features, Clover hardware may be required.

Advanced Plan

In-person purchases are subject to a 2.3% + $0.10 transaction fee, while online and keyed-in purchases are subject to a 3.5% + $0.10 transaction fee. You get access to more sophisticated POS hardware, including the Clover Flex, which allows the merchant to take orders from people in line with the same software capabilities as the Standard plan, but with quick-service restaurants, the software capabilities remain the same. In professional services, the software differs between the standard and advanced packages, but the hardware is the same.

Customer Review

There are mixed reviews about Clover POS. It is concerning that many negative Clover reviews complain about Clover merchant services and the company’s lack of transparency. The BBB doesn’t list Clover since Fiserv/First Data owns the company. I’ve heard most complaints about the upfront costs from customers and reviewers. For example, if you need more than one terminal, you could end up spending $2-3K right away. Even though leasing options are available, they cancel out one of the advantages tablet-based software generally has over locally-installed terminal systems.

Get a Quote from Clover Now

5. Stripe – Best for E-Commerce

The Stripe payment processing software allows companies – both big and small – to accept online payments quickly, easily, and securely. Besides accepting online payments, Stripe also offers credit card readers for accepting debit and credit card payments in store. Stripe Terminal is a relatively new offering from Stripe.

Features

stripe credit card processingWith a Stripe account, you can accept in-person payments with the Stripe card reader. An ideal solution for modern retailers, it allows you to manage both online and offline payments with just one solution. Here are some of its key features:

  • Stripe has the following features:
  • Unified Payments
  • Flexible API
  • Credit card readers that are pre-certified
  • Streamlined Logistics

Pros

  • Predictable flat-rate pricing
  • Excellent developer tools
  • Exceptional subscription tools
  • Advanced reporting tools
  • Multicurrency support

Cons

  • Account stability issues
  • Does not accept high-risk merchants
  • May need technical skills to implement

Why Choose Stripe?

Stripe is best for:

  • Businesses that want to accept the widest range of payment types.
  • Web developers and ecommerce specialists
  • Those who want to build their own ecommerce platform

Stripe Pricing

  • No monthly fees for a basic account
  • 2.9% + $0.30/online credit/debit transaction
  • 2.7% + $0.05/in-person credit/debit transaction via Stripe Terminal
  • +1% for international cards
  • +1% for currency conversion (if required)
  • 0.8%/ACH direct debit transaction ($5.00 maximum)
  • 1.2%/ACH direct debit transaction (two-day settlement)
  • $1.00/ACH credit payment
  • $1.50/instant bank account validation
  • Additional fees for optional add-on services

Customer Review

According to the Better Business Bureau, Stripe has an A+ rating, and in the last three years, 710 complaints have been resolved. 

Common complaints that have been resolved: 

  • Account Holds & Terminations
  • Unresponsive Customer Service
  • Not User-Friendly
  • Lack Of Fraud Protection
  • Scaling
  • Value Relative To Competition

6. Helcim: Best for International Business 

When it comes to small businesses, Helcim is an excellent choice since it has a low rate and no subscription fee. As a result of the interchange plus fee structure, companies with a high sales volume have a cost-effective option. Increasing the number of payments you process automatically triggers these discounts. The website clearly displays pricing information with volume discounts. Based on the amount of credit card transactions you make, you receive a customized rate. The average rate for online credit card transactions is 2.38% plus 25 cents.


Features

helcim credit card processingIt offers transparent, competitive pricing as well as an all-inclusive platform as a merchant services provider. You may not find it the most affordable option for small businesses with low sales volumes, but it’s an excellent choice for the majority of small businesses. Here are some of its features:

  • POS App
  • Hosted Online Store and Payment Pages
  • Online Food Ordering 
  • OR Code Payments
  • Virtual Terminal
  • Online Invoicing and Customer Portal
  • Integrations

Pros

  • No long-term contracts
  • Exclusive interchange-plus pricing
  • No monthly fees
  • Excellent customer support 

Cons

  • Does not accept high-risk businesses
  • Not suited for very low-volume businesses

Why Choose Helcim?

Get a Quote from Helcim Now

Helcim is considered the best credit card processor for: 

  • Established small businesses
  • Those who process more than $5,000 per month 
  • Those who want better rates and features than flat-rate plans provide. 

Helcim Pricing

As part of Helcim’s interchange-plus pricing structure, you pay 0.25% plus 8 cents per transaction above interchange for each transaction. Helcim charges a specific rate plus cents per transaction above interchange for businesses processing up to $25,000 in credit card sales per month. The interchange rate varies according to the card issuer, and can change over time.

  • 0.3% plus 8 cents per in-person transaction (in addition to interchange).
  • 0.5% plus 25 cents for each keyed and online transaction (in addition to interchange).

Your exact costs depend both on the type of transactions you process and your sales volume. E-commerce transactions are generally more expensive than those taken in person, since accepting payments online is more risky. In addition, Helcim offers volume-based processing discounts, which reduce your cost margin as your sales volume increases.

Get a Quote from Helcim Now

Customer Review 

Currently, Helcim has an A+ rating with the BBB, as it has been accredited by the organization since 2014. Over the past three years, the company has received only one complaint – a trend that has persisted throughout our annual review updates. Overall, we did not observe any issues that arose repeatedly enough to indicate a problem. Helcim responded to every complaint and offered to resolve the problem for the few merchants who did not have a perfect experience.

Several merchants complained about either not being approved for an account or having issues with the “fast and easy” account setup process. Merchants who are high-risk are not accepted by Helcim, as we have noted

Other review sites have also received overwhelmingly positive feedback from merchants. Our review of Helcim merchant services can be summarized as follows:

  • Trustpilot: 4.2/5 stars (117 reviews)
  • G2: 4.2/5 stars (14 reviews)
  • Capterra: 4.6/5 stars (19 reviews)

7. Stax by Fattmerchant: Best for High Volume Business

In 2014, Stax was founded in Florida to provide credit card processing services to businesses of all sizes. In addition to saving merchants up to 40% on credit card processing fees, the company offers a flat-fee subscription service called Stax Pay for small and midsized businesses. For low-volume and occasional merchants, monthly subscriptions cost up to $199. With the company’s “all-in-one” model, businesses of all types can customize their solutions to suit their needs.

Features

stax credit card processingHere’s what to know about Stax, a merchant service provider previously branded as Fattmerchant.

  • Credit Card Terminals
  • Security 
  • Customer Support
  • Mobile Payments
  • Customization and Integration

Pros

  • Businesses with high volumes can scale up their processing service and spread out fixed costs through flat-rate pricing and tiered plans.
  • In addition to telephone support and live chat, Stax offers email support and FAQs.
  • Subscription transactions can be set up and payment information can be stored.
  • Invoicing, report generation, and integration with most POS providers are included.

Cons

  • The high price may put the service out of reach for small businesses on a budget. 
  • No proprietary hardware is available, so you must purchase your own hardware.

Why Choose Stax by Fattmerchant?

A tiered, flat-rate pricing model makes Stax our top credit card processor for businesses that generate more than $500,000. As well as offering numerous free integrations, Stax offers a range of hardware and point-of-sale (POS) systems. Additionally, the company offers add-ons, such as storing card information, tracking sales, and branding invoices, receipts, and websites.

Get a Quote from STAX Now

Stax by Fattmerchant Pricing 

  • $99-$199 monthly subscription fee (based on plan selected)
  • Interchange + $0.08/transaction (card-present)
  • Interchange + $0.15/transaction (keyed-in)
  • 1% per ACH transfer ($10 maximum)
  • Additional fees for optional add-ons (same-day funding, terminal protection, etc.)

Depending on your business, Stax’s subscription-based pricing can make a significant difference in your bottom line. The following pricing tiers are available from Stax.

Growth: With a $99 monthly fee, you will receive a free terminal or mobile reader, ACH processing, a dashboard and analytics (Lite version), quick payments, and backup processing capabilities.

Pro: In addition to a free terminal or mobile reader, ACH processing, free surcharging capabilities, a dashboard and analytics (Lite version), and quick payments and backup processing, $99 per month includes a free terminal or mobile reader.

Ultimate: All of the features of the Pro plan are included in the 199 per month plan, including recurring invoices and scheduled payments, automatic credit card updates, a one-click shopping cart setup with catalog management, advanced dashboards and reporting, data exports, and premier support.

Enterprise: Depending on the needs of each company, the pricing for this plan varies. It is recommended for businesses that generate over $1 million in transactions per year.

Customer Review

According to the Better Business Bureau, Stax has an A+ rating. In the past three years, the company has received 36 complaints, with 16 of those complaints occurring in the past year. The number of complaints received by the company has generally increased since it rebranded as Stax. 

The following are the most commonly mentioned issues that are resolved:

  • Billing issues
  • Customer service problems
  • Withheld funds
  • Hidden monthly fees

There are generally positive reviews of Stax online, with many merchants praising the company’s customer service. Furthermore, many merchants report savings as a result of implementing Stax. Many of these merchants are of the opinion that the concept behind Stax is a great one. A number of merchants have referred to the concept as “smart and timely” and have praised the company for being “ahead of the game.” I see words like “tech-savvy” and “user-friendly” as well as “forward-thinking.”

Get a Quote from STAX Now

Credit Card Processing for Small Business Owners: A Buyer’s Guide

In today’s world, it’s almost impossible to run a successful business without the ability to accept credit cards from your customers. As credit card use continues to rise, failing to accept credit cards will eventually harm business owners. Credit cards are becoming the primary method of payment for more and more consumers, so not being able to process these transactions will lead to some customers leaving your business and causing loss of potential profits.

It can be a really overwhelming process to choose a credit card processing company, but don’t worry! There are a lot of companies on the market to choose from. Using customer reviews, websites, payment plans, hardware options, and more, our team of review experts compiled our top 5 processor options in the current market.

How Can Payment Processing Software Help Small Businesses?

A few years ago, accepting credit cards was almost an unavoidable necessity for large corporations. However, small businesses have been able to get by with only accepting debit or cash for years. Just in the past 10-20 years, there has been a significant increase in the use of credit cards.

A study by Forbes showed that “Credit card debt grew from $660 billion in Q1 2013 to $930 billion in Q4 2019 (3)”. These numbers are only expected to uptick in the coming years, particularly by Millennials and Gen Z. What these numbers mean for you as a business owner is that even if you’ve been procrastinating for years, it’s finally time to invest in a credit card payment system. Your business is counting on it.

The following are some additional ways a card processor can help your business:

Maintain a secure customer database

Credit Card Processor companies offer the advantage of securely storing customer data so that you can manage customer relationships and marketing more effectively after an order has been placed.

Accessible 24/7

The majority of processing systems feature an online dashboard or a mobile application that allows business owners to manage payments, invoices, transactions, and customer information from anywhere and at any time.

Avoid NSF

If a customer wants to use a credit card but is unable to do so, they can write a check as a backup. Receiving checks as a business owner is quite the headache. The chances of miscalculation or a check depositing late are always there, leading to non-sufficient funds. Your business can handle payments quickly and efficiently with credit card processors.

Integrations

The best processing systems have integrations that they work well with. Find out which system has integrations that work best for your business by reading our full review of top-rated systems. All of your data can be seamlessly streamlined into one place using a processing company, whether it’s Quickbooks, WooCommerce, or a CRM system.

Customer Satisfaction

Last but not least, happy customers are the key to any successful business. Having to turn away a customer because you can’t accept their credit card payment is disheartening for the business owner, but it’s also frustrating for the customer. Especially in the era of Google and Yelp reviews, a business can never recover from an unsatisfied customer or a bad review.

Choosing the Right Small Business Credit Card Processing Software for You

Choosing a credit card processing service involves choosing between two main options: general processing, and merchant accounts. Knowing the differences between the two is essential to making an informed decision.

A credit card processing company acts as a middleman between you and the banks, dealing with all transactions and authorizations as money flows from the customer’s bank account to yours.

In general, this is a good option for start-ups, small businesses, and businesses with relatively low turnover, such as a few thousand dollars rather than tens of thousands.

If you make a purchase online, expect to pay 2.5% – 3.5% in transaction fees, though if you make a payment over the phone or in person, transaction fees may go higher.

In a Merchant Account, the credit card processor takes care of transactions and authorizations, but they transfer funds directly from your client’s account to yours while they handle the transaction and authorization. In addition to lowering transaction fees, there will be no withholding of funds. Because your merchant account is held with a bank, the processor doesn’t have to authenticate funds on its own. As a result, you only pay interchange fees, which are typically around a few cents per transaction. This is much cheaper than percentage-based processing fees.

It means you don’t have to wait around for funds to (Eventually) clear for withdrawal since the money goes directly into your merchant bank account. For security reasons, some processing services may withhold payments for up to a few months in order to protect themselves from fraudulent transactions and chargebacks (when the customer disputes the payment and the credit card company forces a refund).

It is true that the merchant account option comes at a cost – usually around $30 per month for a merchant account. Because of this, it is much more suitable for businesses with high turnover or high-value transactions, since the monthly fee works out to be much cheaper than a few percentiles for transactions.

Banks, however, can still be skeptical about new companies and online sales, believing that they are riskier than normal retail shopping. Don’t be surprised if you have to prove yourself – and your trustworthiness – over a couple of years before you’re allowed to open a merchant account.

However, some providers offer both services, so you may be able to start with their general processing platform, then upgrade later.

Payment Processing for Small Business Owners – The Bottom Line


There is no better time to invest in a credit card processor for your business than now, whether you are a high-performing company or a local mom-and-pop shop. Choosing the right system for your business will allow you to manage and grow it from anywhere, anytime, on any device. These systems are now more affordable and accessible than ever.

We’ve highlighted a few providers that will likely be a “best match” for your business, whether you’re managing multiple retail locations or merely selling products online. While each company has its own standout features, they all offer competitive rates, transparent pricing, and an easy, low-cost setup. Users also praise them for their honest sales practices and outstanding customer service.

Frequently Asked Questions

1. Is credit card processing secure?

The most recent headlines have focused on data breaches at major retail chains, but small businesses are also vulnerable to credit card fraud. In order to improve credit card processing security measures, small businesses can do two things.

You need to comply with the Payment Card Industry Data Security Standard (PCI DSS) as a first step. To ensure that their transactions are as secure as possible, businesses must meet certain criteria created in 2006 by Visa, MasterCard, American Express, Discover and JCB.

Secondly, you need to upgrade your card reader so it can accept EMV (Europay, Mastercard and Visa) chip cards. There is usually a chip embedded in the end of most credit cards, and the technology to read it makes the transaction much more secure because the chip is hard to counterfeit.

2. If you don’t want to pay credit card fees, how can you avoid them?

It is impossible to eliminate credit card processing fees in its entirety because credit card processing companies rely on fees for their income. In addition to reducing fees, you’ll save money if you accept cards in person rather than over the phone or online. If you feel you are paying too much in fees, you can negotiate with your credit card processor to reduce them.

Customers can also pay with a credit card if they meet a minimum transaction amount. 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 on a $2 one. Check that your policy complies with the minimum transaction amounts set forth by the major credit card networks.

You can also move the fee entirely to your customers by offering cash discounts or surcharging. Several gas stations use this method, offering a discount on a gallon of gas when you pay with cash. Despite the possibility that potential customers will take their business elsewhere, this may encourage cash users to frequent your store more frequently. To ensure you follow best practices when surcharging, make sure you check the credit card networks’ rules.

3. Does credit card acceptance require a point-of-sale (POS) system for small businesses?

Small businesses can use POS systems to track inventory, process payments, and perform other business functions. As a result, a merchant’s POS provides receipts, adds in sales tax, accounts for promotions, and completes sales transactions. A number of payment processors, such as Square, offer proprietary POS systems that include terminals, cash registers, and card readers. Some payment processors also offer POS bundles. Businesses can process payments using their computers and mobile devices with credit card processors that integrate with third-party POS systems or program existing POS systems.

4. How do payment processors and credit card processors differ?

In credit card transactions, payment processors are sometimes called credit card processors. Payment processors facilitate credit card and debit card transactions.

5. Is it possible to process my own credit cards?

In order to process credit cards, you need a merchant account or third-party services. These companies have contracts with major credit cards and other payment providers. If you do not agree with a payment processor, you are not able to process transactions. A merchant or processing agreement usually prohibits you from submitting credit card charges for cards issued to business owners, principals, or family members who are not involved in the purchase. Getting cashback, paying employees, and purchasing inventory for your store shouldn’t be done with your personal credit card.

6. What is the cost of processing credit cards for consumers?

It is a common misconception that consumers pay credit card processing fees. However, some processors advertise surcharging programs that charge your customers for processing fees. Although these programs aren’t popular with consumers, they could be potentially risky. As mentioned above, the credit card networks have surcharge rules that need to be considered before implementing such a program.

7. An authorization can be held by a merchant for how long?

The credit card issuer’s self-imposed time limits and the status of the transaction determine the authorization hold. In most cases, a merchant has 30 days to clear an authorization hold, but some credit card companies, such as Visa and Discover, have much shorter time frames. In the event that you fail to complete a transaction hold, you may be charged for misuse of your credit card.

8. How much does it cost to process a credit card?

The interchange fee that card-issuing banks charge on every transaction made with their credit cards is one non-negotiable charge charged by credit card processors. There are a variety of fees charged by credit card processors. It is passed on to the merchant. Interchange fees vary by the type of credit card used by the customer, the type of transaction, and the amount purchased. The riskier the payment method, the higher interchange fees.

Merchants must pay the card networks an assessment fee or service fee, which they pass on to payment processors.

Depending on the credit card processing company, you may be able to negotiate the markup the payment processor charges for its services.

9. When choosing a credit card processor, what should I look for?

Consider the fees, terms of the contract, and service provided by the processor when looking for a credit card processor that is right for you and your business. When you have a problem with a payment processor, you don’t want to be stuck with one that doesn’t have live customer support. If you want to remain PCI compliant, you should find one that offers EMV-compatible card readers and accepts multiple payment methods as well.

10. How does credit card processing work?

A credit card transaction is the same for most product categories and business types. Customers select items to purchase, swipe, scan, or enter their credit card in a payment terminal, then transmit their data to be approved. Once the transaction has been authorized, which occurs in seconds, it will either be approved or denied. If there are sufficient funds, the transaction will be approved. Normally, it takes two to three days for the merchant to receive a deposit from the credit card processor’s bank for all credit card transactions that have been processed during the day.