The Best Credit Card Processor
Best for Startups and Small-Ticket Transactions
Best for Big-Ticket Transactions
Best Online Payment Integration
Best Full E-Commerce Platform
Best for Non-Profits
Square’s flat-rate pricing is best for companies doing small transactions (think $10 or less). With no monthly fees and full-featured packages, it’s also great for brand new businesses.
Payment Depot’s wholesale pricing benefits established companies that can afford larger monthly dues. It’s also slightly more affordable than Square for tickets over $10 — but a bit less comprehensive in its services.
PayPal is ultra-easy to integrate with any online store; just add the “checkout” button and you’re ready to sell. Bonus: customers recognize and trust the PayPal name, which adds to your site’s credibility.
Shopify has a similar checkout experience to PayPal’s, but that’s just the start. For a monthly fee, it also offers a complete website-building platform that will help you create a successful online store.
Dharma offers reduced processing rates for non-profits. It’s also known for building strong, lasting partnerships with businesses and giving part of its profits back to the community.
The Best Credit Card Processor
- Square -
Best for Startups and Small-Ticket Transactions
- Payment Depot -
Best for Big-Ticket Transactions
- PayPal -
Best Online Payment Integration
- Shopify Lite -
Best Full E-Commerce Platform
- Dharma Merchant Services -
Best for Non-Profits
In an industry known for confusing contracts and surprise fees, the best credit card processors shine for having fair and transparent pricing. The financial advisors and business owners we spoke with also praised processors that are easy to work with and provide excellent customer support. We sifted through over a hundred credit card processing companies and found five that meet all these criteria. Our top picks offer competitive rates, helpful customer resources, and — depending on your business model — some nice perks to boot.
“Small business owners should look at costs and fees when choosing a credit card processor, how much time it will take to set up said processor, which payments can be accepted, and the level of customer service in order to make the best choice.”
Square charges competitive per-swipe rates and has no monthly fees, so it’s the right choice for new businesses that need to keep their overhead low. It’s also great for businesses selling small-ticket items, since Square only charges a small percentage of each transaction and no added “flat fees” (those ten-cent-or-so flat fees will take a bigger toll on your profit margin if you’re mainly charging $4 lattes).
Payment Depot, on the other hand, is a perfect choice for big-ticket items. This membership-based service costs between $30 and $100 per month depending on your subscription. But for each transaction, businesses pay only a flat fee of $0.05 to $0.15— much smaller than any percentage-based fee would be. That means you’ll pay the same $0.15 whether you’re charging a $50 sweatshirt or a $500 road bike.
PayPal should be your go-to for setting up online payments. Adding the PayPal checkout button to your site is free and easy, and customers with existing PayPal accounts will be able to check out in a single click. Along with being convenient for your customers, PayPal is affordable for you: it charges 2.9% + $0.30 for online transactions, which is the best rate among top processing companies.
Shopify offers an end-to-end e-commerce package. Unlike PayPal, it’s not just a card processor: it’s a full e-commerce platform that will help you build and design your online store as well as accept online payments. Shopify’s full suite of services starts at $30 per month, and its online processing rates are on par with PayPal’s (2.9% + $0.30).
Dharma Merchant Services is committed to keeping costs low for non-profits so that more money goes toward supporting your cause (rather than lining the pockets of your credit card processor). Membership with Dharma is only $10 per month, and it offers reduced processing rates for non-profits that rival Payment Depot’s wholesale pricing. To top it off, Dharma itself makes sizeable annual donations to nonprofit organizations.
Since credit card processing is a little convoluted, we took some time to cover the most important terms and concepts in our Credit Card Processing 101 section. This is a good place to start if you’re new to the industry or need a refresher; it’ll help explain why we chose the companies we did. If you’re on the other end of the spectrum — a retail veteran just looking to upgrade systems or save some money — feel free to skip straight to Our Credit Card Processor Reviews.
How We Found the Best Credit Card Processors
Your first question is probably “Which credit card processor has the lowest fees?” (It was ours, too). Unfortunately, credit card processing isn't so cut and dry. It’s an industry known for non-transparency and surprise charges. Many companies appear to offer the best rates, only to reveal after you’ve signed a contract that they’re riddled with hidden fees.
In order to suss out what really makes a credit card processor “the best,” we spoke with more than 30 merchants and small business owners about their experiences using these systems. Of course, low fees are high on the list — but numbers don’t tell the whole story. Different pricing models (that may look more or less pricey at face value) will benefit different business models in the long run. On top of that, the range of services and quality of support a company offers are often just as important as its rates. The best choice for you will depend on your business model, the volume of sales you’ll be processing, and the features you need from your system.
To start, we compiled a list of every credit card processor we could find that operates in the US: 103 companies total. We covered our bases, making sure that big names like Square and PayPal were present, as well as lesser-known options like Helcim and Swiftpay. Then, taking our experts’ advice, we dug into fee structures, evaluated service options, and tested out customer service channels to find the companies with the best all-around processing systems.
We only considered companies that are up-front and transparent about their fees.
Most companies still use “tiered” or “bucket” pricing, which was the original way to assess fees for credit card processing. Briefly, here’s how it works: Every payment your business accepts is lumped into a “tier” determined by the processing company. Each tier has a set fee, which includes interchange rates, card assessment fees, and the processor’s markup. The catch? There’s absolutely no transparency about how payments are grouped or how much the markup is for each tier. That means the processor can scrape as much profit as they want off the top, and you’ll have no way of knowing whether (or rather, how much) you’re overpaying.
Thankfully the card processing industry has started trending towards more transparency in recent years. Disruptor companies, like Square and Payment Depot, have set a new standard for pricing transparency. They clearly list current interchange rates and state their markups — so when you receive your monthly bill, you’ll know exactly how much you’re paying to the processor, the card-issuing banks, and the credit card companies.
Processors that have ditched tiered pricing can offer a couple of different pricing models. The two main options are interchange-plus and flat-rate pricing. You can read more about these below, but the important thing to know is that both are upfront about fees and much more fairly priced than tiered rates would be. We cut all the companies that still use the opaque and expensive model of tiered pricing.
We required processors to accept a variety of payment types.
We looked for systems that accept all major card types; including Visa, MasterCard, Discover, and AmEx. That way, you’ll never have to turn down a sale just because your processor won’t take the customer’s card. We also required companies to offer equipment that accepts EMV or “chip cards.” EMV is the new standard in fraud protection; not using it puts your business at risk of accepting (and having to repay) false charges.
In addition, we only considered processors that accept payments both online and in-person. It’s true that many companies will focus heavily on one or the other — and we’ve chosen top picks that offer exclusive perks for both business models — but as long as your processor accepts both types, it’ll have the means to expand along with your business. Like we said: sales opportunities should never be limited by a lack of flexibility on your card processor’s part.
We zeroed in on the companies with the best customer support.
In an industry as complex as credit card processing, getting your questions answered is key. You may need help choosing the right package, getting your equipment set up, settling a disputed charge, and so on — and your processing company should be there for you when you do. With that in mind, we evaluated all of our contenders for their customer support tools and availability. We looked for a reliable website with clear terms of service, FAQs and quality education materials, and ample channels for reaching a live rep.
Our top picks are some of the most helpful and responsive companies on the market. They all have easily navigable, plainly-worded websites that make it simple to find the answers you need. Depending on your business, you may also want to consider a company that offers 24/7 live chat or phone support. For a company that’s open at odd hours — say, a bar or late-night restaurant — it’s helpful to have access to your processing company outside the business day in case something goes wrong.
|Helpful FAQ||Quality Learning Center||24/7 Phone Support||Live Chat|
Finally, we evaluated each contender’s pricing model and features.
After narrowing down our list based on pricing models, payment methods, and customer service, we were left with 14 credit card processors. They all offer the foundational qualities you’ll need to keep your business competitive. To find the best of the best, we went a bit further; digging into fine print to find the companies with an edge on price, services, and convenience. Our top picks offer a mixed bag of benefits. From small sales to big ones, online to offline, mega corporation to non-profit, there’s a credit card processor that will compliment your business and maximize profits.
The Best Credit Card Processors at a Glance
|Pricing Model||Monthly Fee||Fee Per In-Person Swipe||Fee Per Online Charge|
|Square||Flat-Rate||$0||2.75%||2.9% + $0.30|
|Payment Depot||Interchange-Plus||$29 - $99||Interchange +
$0.05 - $0.15
$0.05 - $0.15
|PayPal||Flat-Rate||$0 - $30||2.7%||2.9% + $0.30|
|Shopify||Flat-Rate||$9 - $300||2.7%||2.9% + $0.30|
|Dharma Merchant Services||Interchange-Plus||$10||Interchange + 0.20% + $0.10*||Interchange + 0.30% + $0.15*|
*Reduced non-profit rates
Our Credit Card Processing Reviews
If you know one name in credit card processing, it’s probably Square. The company (formerly known as Squareup) shook the industry by being one of the first card processors to throw tiered pricing out the window. Instead, it charges customers 2.75% “per swipe, dip, or tap,” or 3.5% + 15 cents for a keyed-in transaction — regardless of card type or transaction size. Interchange and markup are already built in to those prices. Beyond that, there’s no bundling, upcharges, or hidden monthly fees — so there won’t be any surprises on your bill.
Square’s pricing model is best suited to startups and sellers of low-priced items. That “no monthly fee” point is huge for businesses just getting off the ground. If your profits are slim, even low monthly fees like Shopify Lite’s $9 per month can bite (and that doesn’t begin to touch Payment Depot’s starting tier at $29 per month). Square allows you to start taking payments immediately, without having to factor a monthly membership into your budget.
The other big selling point? Almost every transaction (excluding keyed-in payments) is charged a percentage without a flat fee added on top. Most flat fees are between $0.05 and $0.15 per swipe. But when you’re selling small-ticket items, like a $2 postcard or a $4 cup of coffee, they start to matter. For example, Square’s percentage means you’ll be sure to only pay $0.05 for that postcard sale. When profit margins are small to begin with, those few extra cents make a much bigger impact.
Square was one of the first processors to use cheap and transparent pricing, but it’s no longer the only one. Our other top picks all offer competitive rates, and some even outshine Square in certain areas (we’ll get to that in a minute). However, Square still has a few tricks up its sleeve. Most importantly: it’s still the most full-featured and well-integrated platform we could find. The company has developed a complete commerce package; including card processing, point of sale, and its own line of affordable equipment. Compared to a company like PayPal — which partners with third-party POS and hardware providers — Square makes it extra simple to get up and running by keeping everything in one place.
To simplify things even further, Square has a full line of integrated business software to go with its processing system. It offers payroll solutions, accounting software, inventory management, email marketing, and more. Pretty much any software needed to run a business is either made by Square or can be linked to it, eliminating a lot of manual bookkeeping and administrative work.
Praise for Square is pretty glowing across the board, as it should be. Square offers a uniquely affordable and accessible platform, especially for new businesses. And even when it’s the marginally more expensive option, Square’s standout services may tip the scale in its favor.
"For startups, it’s not really about price comparisons; it’s about finding companies that will give them merchant status. It’s way too hard to find that."
That said, there are a couple of scenarios where Square may not be the best bet. Businesses selling large-ticket items will likely prefer traditional interchange-plus pricing or a subscription-based model like Payment Depot’s. Square doesn’t offer the best rates for online-only retailers either. If you’re in the e-commerce biz, we recommend checking out Shopify or Paypal.
Payment Depot is hands-down the best bet for businesses selling big-ticket items or doing huge volumes of sales. This membership-based service offers staggeringly low, flat transaction fees: interchange plus $0.05 to $0.15 (depending on your subscription). Unlike other processors, Payment Depot doesn’t charge a percentage markup — meaning the company makes the same $0.05 to $0.15 whether your customer is swiping on a $6 or $600 purchase.
Payment Depot makes up for its low transaction fees by charging monthly membership fees, which range from $29 to $99. As we said before, these subscription costs might feel hefty to a new business. But for established merchants, they’ll hardly make a dent — and the more you pay in monthly dues, the less you pay in per-transaction fees. For high-volume businesses, the larger monthly cost is more than made up-for by per-swipe savings. This is why Payment Depot is favored by huge corporations like Sprint, Subway, and Super 8.
Payment Depot Subscription Tiers
|Transaction limit per month||Monthly membership fee||Charge per transaction||Free equipment included|
|“Most Popular”||$75,000||$49||$0.10||Gateway & Mobile Reader|
|“Best Value”||$200,000||$69||$0.07||Gateway, Mobile Reader, & Terminal|
|“Premier”||Unlimited||$99||$0.05||Gateway, Mobile Reader, Terminal, & Free terminal upgrade every two years|
The other big difference between Square and Payment Depot is their approach to equipment and software. Whereas Square comes with its own POS, proprietary equipment, and software solutions, Payment Depot relies on third party suppliers for all these features. Most of its packages come with a free mobile card reader (like Square’s), but they don’t come with the same readymade, customizable point of sale system. For a full-featured POS like the one Square offers — with photos, terminal customization, customer database, etc — Payment Depot customers will have to purchase separate Clover brand equipment; which ranges in price from $450 to $1,300.
That said, Payment Depot offers another perk here for established businesses: if you already have a terminal or other payment processor, the company will reprogram your existing equipment totally free of charge. Companies looking to save money by switching processors will appreciate that they don’t have to purchase new equipment in order to use Payment Depot.
Thanks to its ultra-transparent pricing and unique “wholesale” pricing structure, Payment Depot earns high praise from users. Its site boasts positive testimony from large and small business owners alike, and the entrepreneurs we spoke with were on the same page.
"I’m a huge Payment Depot fan. I think their transparency is outstanding. The only vendors this company would not be great for are those with small transactions, like a coffee shop or breakfast cafe. I have large transactions, and my credit card charges went from 3.5 percent to 1.6 percent by switching to Payment Depot. With my past processor, each month I was paying them almost 2 percent of my profits."
Who else isn’t Payment Depot for? As we said earlier, Square’s pricing is friendlier toward small-ticket items, and its streamlined equipment and software solutions are ideal for new businesses. Those that rely heavily or exclusively on ecommerce may prefer an online-focused provider like Shopify or Paypal; and Dharma has special perks that make it better for non-profits. For most other businesses, though, we highly recommend Payment Depot.
PayPal is one of the most popular credit card processors — even though most people have never physically swiped their card with it. That’s because PayPal deals almost exclusively in online payments. Likely you’ll associate its name with eBay, which has owned PayPal since 2002; but in 2015, the company broke off as its own entity and now offers its specialized ecommerce services to outside businesses.
PayPal offers retailers fair pricing: 2.9% + $0.30 for any online transaction, and 2.7% for in-person transactions. These prices are equal to Square and Shopify’s online rates — but PayPal offers some ecommerce perks that these other companies don’t. First, it’s incredibly easy to use with your online store. All you need to do to start accepting payments is add the PayPal button to your site. It’s free and doesn’t require any fancy coding or shopping cart redesign. That means you can have your online store up and running within minutes.
There are other perks, too: PayPal is easily the most recognized name in ecommerce. It’s widely trusted, so customers won’t have any qualms about processing their credit card with your site. In addition, that one-click button offers fast and effortless checkout. Customers that already have a PayPal account won’t even have to enter their card information — a convenience factor which may make them more likely to shop with you.
It’s worth noting that PayPal’s free checkout button directs customers away from your site, to complete the purchase in a PayPal popup window. If you want the entire process to take place on your webpage, you’ll have to pay $30 per month for the PayPal Payments Pro package. That membership fee gets you on-site payments, a fully customizable checkout experience, and a virtual terminal for accepting phone payments.
While we love PayPal for online retailers, it’s not our top pick for in-person credit card processing. Although its card swipe rate is slightly lower than Square’s (2.7% compared to 2.75%), it doesn’t come with the same level of benefits. Square’s mobile reader is free while PayPal’s costs $15; Square’s chip reader costs $50 while PayPal’s costs $80; and most importantly, PayPal doesn’t come with the custom-made POS and software solutions that we loved from Square.
Also, like Payment Depot, PayPal’s equipment only provides for basic transactions and inventory management. For a more robust set of tools, you’ll have to upgrade to one of the third party POS servers that PayPal partners with. And if your brick-and-mortar store is doing high-volume, high-ticket sales, then Payment Depot will still be more affordable than PayPal’s 2.7% fee. That said, PayPal is hard to beat for online payments. It matches our other top picks for online processing fees, and is uniquely easy to integrate with any website. It also boasts a level of name recognition and customer convenience that other processors can’t yet match.
If you don’t yet have an online store set up, then PayPal won’t be much use to you. Its checkout button assumes that you already have a website and shopping cart experience ready to go, and all you need is a payment processor. That won’t always be the case. For online retailers starting from scratch, we recommend Shopify. Unlike PayPal, Shopify is more than just a credit card processor; it’s a full-featured ecommerce platform. Its plans, starting at $30 per month, include web hosting, a URL and blog, an SSL certificate, website templates, marketing tools, and more — all in addition to the credit card processing service it provides.
"Shopify gave me the instant ability to process credit cards, had very competitive rates, and all my store operations (including credit card processing) could be handled from one interface. That sort of functionality is incredibly helpful.”
Although card processing isn’t its bread-and-butter, we’re impressed with Shopify’s offerings. Its rates are on par with our other top picks: 2.9% + $0.30 for an online transaction, and a flat rate of 2.7% for in-person transactions. The $30 to $300 monthly fee for full web hosting is more expensive than Payment Depot’s membership fee or PayPal’s “Pro” plan — but that's understandable, considering the wealth of extra features you’re paying for.
In terms of website-building, Shopify pulls out all the stops. It has an awesome selection of free templates and customizable features that make site design easy, even if it’s your first time creating a webpage. It offers marketing tools and a customer database to help you connect with shoppers and boost sales. It even has a useful knowledge base, “Ecommerce University,” to help business owners along the way.
While these features don’t have a direct bearing on Shopify’s card processing, they’re essential to ecommerce success as a whole. A poor website begets a poor shopping experience — which means customers won’t be tempted to buy in the first place. We appreciate Shopify’s end-to-end approach. By combining affordable card processing with a great website experience, it ensures a successful transaction for business owners and customers alike.
If all you need is payment processing (without the website building features), Shopify does offer a “Lite” option at a very affordable $9 per month. For those that already have a website up and running, adding Shopify Lite is simple. It has a ‘copy-and-paste’ checkout button similar to PayPal’s that you can drop in anywhere on the page. That said, the Lite checkout process isn’t as convenient as PayPal’s. Customers won’t have an existing account (like they might with PayPal), so you’re less likely to get those impulsive “single-click” purchases. For businesses that don’t need Shopify’s store-building tools, we still recommend PayPal for online processing.
Dharma Merchant Services offers reduced rates for non-profits: 0.20% + $0.10 for an in-store transaction (compared to 0.25% + $0.10 for for-profit companies), and 0.30% + $0.10 for online (instead of 0.35% + $0.10). Combined with interchange rates, you’re looking at charges between about 1% and 2.5% total, depending on card type. Dharma is committed to keeping its services affordable for non-profits. Its goal is to make sure the majority of revenue from donations and purchases goes towards your organization’s cause — rather than going into the pockets of your processing company.
In addition to keeping rates low for non-profits, Dharma has a sterling reputation for building strong relationships with its partners. Businesses that work with Dharma praise the company for its honest, helpful, and personalized customer service. Sherry Holub, Creative Director at JV Media Design, says, “We’ve been with Dharma Merchant Services for probably about seven years now. I liked all the information they provided upfront and the fact that they have been in the business for a long time. I’ve gotten great customer care and support from them over the years.”
Dharma is also committed to giving back. In 2017, the company donated over $100,000 to organizations supporting social justice, education, the environment, health, and welfare. For owners of many non-profits, it’s important to work with a company whose values align so closely with their own. Dharma delivers on that promise.
“As a national non-profit, it was important for us to not only partner with a MSP that could meet our needs, but one who also shared our commitment to giving back to the communities it serves. After looking at a number of competing providers, we selected Dharma Merchant Services and strongly recommend you do the same… Our experience has been nothing short of exemplary.”
In keeping with its reputation for transparency, Dharma is very honest about its target customer base. The company actively discourages new customers that transact less than $10,000 per month or have minimal credit history. Jeff Marcous, Chief Evolutionary Officer and co-founder of Dharma, explains that the high barrier of entry allows the company to focus its services and provide a higher level of customer service. “One of the primary goals of Dharma is to build a strong community,” he says, “and by setting the intention of being truly ‘present’ for our merchants, our loyalty and retention rate is quite high.”
It’ also worth noting that, depending on the size of transactions you’re processing, Payment Depot’s services may be marginally cheaper. Remember that Payment depot only charges a $0.05 to $0.15 flat fee on top of interchange, whereas Dharma tacks on the extra 0.2 - 0.3%. What’s important is to decide which company strikes the right balance for your non-profit — Payment Depot may be slightly more affordable, while Dharma boasts a bigger commitment to building relationships with non-profits and giving back to the community.
Credit Card Processing 101
What you need to know about rates and fees
The reason processing fees are so complicated is that there are multiple players involved. It’s not just you paying your processor — the credit card companies (like Visa and Mastercard) and the banks that issue credit cards get a cut of the profits, too. Each processor breaks down payments between these parties in a slightly different way.
In order to understand those different pricing models — the good, the bad, and which companies use which type — there are a few concepts that it helps to be familiar with.
Interchange Rates make up most of the cost of credit card processing. These are paid to the “issuing” bank (e.g. if you got your Visa debit card form Wells Fargo, this is Wells Fargo’s cut of the transaction). Interchange fees are set by the credit card companies (Visa, MasterCard, Discover Card), and are equal across all processing companies. That means a PayPal account is subject to the exact same interchange fees as a Square account, for example.
Card Assessment Fees go to the card companies themselves, so this is the cut for Visa or MasterCard. Like interchange fees, these are set by the card companies and will stay the same no matter which processor you choose. Card assessment fees are a small portion of the overall processing fee; generally around 0.13% (whereas interchange is usually 1-2%).
Markups are the fees added by your processor on top of interchange and assessment fees. This is how credit card processing companies make money. Markups vary widely by processor; some might have a low markup and a large monthly fee, or vice-versa. In any case, these fees should be clearly stated and easy to find. All of our top picks are upfront with pricing information, so you’ll always know how much they’re profiting from each swipe.
Pricing models explained
Pricing models to avoid:
Tiered/Bucket pricing is the outdated pricing structure that gave credit card processing its poor reputation. Tiered pricing allows processors to group payments into different levels, and charge a set fee at each level. Processors aren’t required to state the markup at each level, or how payments are sorted, so business owners have no way of knowing how much profit the processor is making for each swipe.
Pricing models to look for:
Interchange-Plus pricing is one of the more transparent pricing models that processors have adopted in recent years. Unlike tiered pricing, this model clearly breaks down fees per swipe. Customers are charged interchange “plus” the processor’s markup. For example, an interchange-plus rate might look like this: [Interchange] + 0.25% + $0.10
Meaning that for each swipe your business pays interchange (which goes to the issuing bank), plus 0.25% of the total charge and a flat fee of 10 cents (which go to the processor). Some companies use variations on this model. Payment Depot, for example, charges interchange plus a flat fee of $0.05 to $0.15, but does not take a percentage of each swipe.
Flat-Rate pricing takes a slightly different approach than interchange-plus. A flat-rate model charges one set fee that includes interchange, assessment fees, and the processors markup. Unlike the tiered model, flat-rate charges the exact same fee for every transaction, which means you always know how much you’ll be paying.
Interchange-Plus versus Flat-Rate pricing
Keep in mind that, although interchange rates are the same for every processor, they vary by card company and card type. For example, a Visa debit card might have a 0.05% + $0.22 rate while a Visa Rewards card could have a 1.65% + $0.10 rate. If you choose an interchange-plus model (like Dharma or Payment Depot), that means your costs will still fluctuate depending on the card types your customers swipe. For more predictable costs, try a flat-rate processor like Square or Shopify.
Why you need a chip card reader
In October of 2015, MasterCard and Visa both underwent a “liability shift.” According to that shift, if someone uses a chip card to make a fraudulent charge at your store and you didn’t use a chip reader, then you’re on the hook for it. On the flip side, if the fraud was caused by a swipe card, and you had a chip terminal, the bank would be on the hook for not issuing the right card.
If you’re buying your first terminal in 2018, it’s a good idea to spring for the chip reader. They usually cost a little extra — Square’s is $50, PayPal’s is $80, and Payment Depot’s is a hefty $300 — but having the right equipment means you won’t risk paying a lot more for fraudulent charges.
Before signing, take stock of your transactions
The right card processor for you depends on your business. Before signing on with any of our top picks, we recommend evaluating your transaction history to see which pricing model will benefit you the most. Take a look at your average charge per swipe, the types of cards you take most frequently, and your volume of sales online versus in-person. This information will be essential in helping you choose the right credit card processing company for your needs.