The 30-Second Review

Credit card processing contracts have a (deserved) reputation for being confusing and ridden with hidden fees. We talked with 30 merchants who've been through the process and found five of best credit card processors, which all offer transparent fees and stellar customer service — and won't lock you into long-term contracts.

Best for Large Transactions

Payment Depot has a number of big-name, national clients under its belt, like Subway and Arco. It backs up its range of pricing plans with solid customer support and transparent pricing, making it a great choice — especially for companies dealing with larger transactions.

Other Top Picks
  • January 24, 2018 - We’ve made light changes to our methodology to clarify how we found our top picks and what we love about them. We continue to recommend Payment Depot, Square, Shopify Lite, PayPal, and Dharma as the best credit card processors.

The Best Credit Card Processors

First, the bad news: Between the pages and pages of fine print and the distracing promos that promise the “best” rate (until you read said fine print), the credit card processing industry is complicated enough to make seasoned merchants break out in a cold sweat. And, unfortunately, there is truly no single best credit card processor. Every business has unique needs.

But after interviewing 30 merchants and small-business owners, we found that transparent pricing, customer service, and a range of useful equipment options were consistently the qualities that our experts craved, regardless of business size or type. And our top picks deliver on these qualities, while offering additional perks that will appeal to a handful of niche needs.

We look at all of our top picks in more detail below, but here’s a quick rundown: We liked Payment Depot for business that regularly complete transactions in the hundreds and thousands of dollars. Shopify Lite is our favorite if you need both retail and ecommerce solutions from the same provider, while PayPal continues to have an edge if you’re focused primarily on ecommerce. Square offers the friendliest terms (and highest approval rate) for young businesses, and Dharma Merchant Services is a great option for established non-profits (read: those likely to charge more than $10,000 per year in transactions). You’ll still need to read your rates carefully, but if you’re looking for a transparent, helpful credit card process, the five providers above represent the best starting place.

Our Picks for the Best Credit Card Processors

Best for Large Transactions

Payment DepotPayment Depot impressed us with its solid selection of membership plans, pricing transparency, and customer support.

Payment Depot is the go-to for some major national retailers: Super 8, Subway, Arco, Dominoes. It has a few different membership plans with monthly and per-transaction fees that vary depending on your volume of transactions: to process up to $20,000 each month, you would pay a monthly fee of $29 and a per-transaction fee of 25 cents + interchange. If you process more payments, you pay a higher monthly fee (as much as $99), but get a lower per-transaction fee (as little as 5 cents + interchange).

Best Credit Card Processor Payment Depot

If you’ve shopped at one of Payment Depot’s retail clients, you may have come across hardware like this VeriFone VX 820.

All its other costs are referred to as “wholesale,” meaning they’re simply interchange costs set by the credit card companies and banks — no markups here. This type of structure, paying only an additional per-transaction fee, is especially attractive to sellers of higher-priced goods and services.

"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."

Best for Newcomers

SquareSquare has managed an admirable level of name recognition among credit card processors, in part thanks to its sleek hardware and startup-friendly services.

Square is the most (and only?) name-recognized processor out there, with a full line of proprietary equipment that looks designed by Apple diehards: sleek and hip. While its services can accommodate more robust businesses, it’s especially attractive to newer, smaller merchants that may not have the credit history and assets to get started with other processors.

"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."
Rieva Lesonsky

Square also stands out because it doesn’t charge a swipe fee, just one flat rate for services. Payment Depot, by contrast, has a more typical fee structure that includes interchange plus a set transaction fee for every card you swipe. Square’s fee structure is likely to appeal to merchants sellings goods at a low price point, whether produce at the farmers market, or coffee and baked goods. After all, if you have to pay a swipe fee for every $2.50 muffin that you process, it can have a noticeable impact on your bottom line.

Of course, in some business scenarios, Square’s flat rate fee can average out to a higher cost than interchange plus might offer, but this will be true mostly for merchants with moderately high average transactions — think $20 or $30 versus $2 or $3.

Square also boasts a no-hassle, fee-free model for the rest of its services. Notably, merchants are allotted $250 a month in chargeback protection — if a customer disputes a charge, as long as you followed Square’s best practices, it’ll cover the first $250 no matter the outcome. (With Shopify, you’ll be paying a $9 monthly fee, and it not only doesn’t cover your for chargebacks, but also actually takes a $15 fee for each one.)

Square Best Credit Card Processor

Square’s retail hardware is easy to spot thanks to its sleek, minimalist design.

Square’s services were what stood out with several of the merchants we spoke with. Aside from having a clean, informative website with plenty of customer support, the Square smartphone app enables point-of-sale and inventory-management features, as well as payroll functions. “It’s extremely important to be able to integrate with software,” says Danita Harris, principal at Rated M Wine Infused Foods. “I keep inventory on Square, and can bill direct from Square or QuickBooks (converted from Xero). It makes my life much easier and more efficient.”

There are no monthly fees or equipment leasing fees — you just pay as you get paid. The little square card reader is free for the swipe version; the chip reader is just $49. And while we love Square for the little guys, if you’re a big merchant — say, with more than $250,000 in sales a year — it might still be your best bet. With that much in sales, Square is willing to negotiate with you on the swipe fee.

Best Online/Offline Integration

Shopify LiteShopify earned a spot on our list thanks to its outstanding mix of services for both online and offline transactions, but issues with debit card acceptance may be cause for concern.

We were shocked by how well Shopify provided for in-person credit card processing considering its primary business is helping merchants launch online stores. On the Lite plan, which runs $9 a month, in-person transaction costs are a competitive 2.7 percent flat rate — compared to Square’s 2.75 percent. If you’re charging more than $180 in transactions a month, you’ll make that $9 back and more.

The plan allows you to accept in-person credit cards of all types, or embed an online buy button and shopping cart onto your website or Facebook page. (Online charges ring up at 2.9 percent + 30 cents per transaction.) That’s for an unlimited number of products, with unlimited file storage, 24/7 support, and QuickBooks integration.

It even has a $19 card swiper and, like Square, offers the first one for free. If you want to take chip cards, that’ll set you back $129 or so for the reader. The biggest downside: Shopify doesn’t work with debit cards (though some debit cards can be processed just fine as credit cards). To officially accept debit cards, you’ll need to add an external terminal, and if you’re in an industry that can expect chargebacks, you should definitely go with Square.

"Shopify gave me the instant ability to process credit cards, had very competitive rates, and all my store operations data (including credit card processing) could be handled from one interface. That sort of functionality is incredibly helpful. However, industries that have high risk of chargebacks need to be aware that they’ll lose practically every chargeback since Shopify just doesn’t have the tools to help you win."

Best for Ecommerce

PayPalAn old name in the relatively new field of ecommerce, PayPal's convenience and customer support make it a solid choice for online businesses.

When it comes to the digital universe, PayPal has some distinct advantages — and not only because it’s been around the longest. Its convenience factor alone carries a lot of weight: “I use PayPal as my payment portal because it integrates easily with my website,” explains Shilonda Downing, founder of Virtual Work Team. “The benefits of PayPal are two fold: our clients who want to use their PayPal balance to pay us can do so with ease, and the funds in my PayPal account can be easily transferred to other business accounts.” Tim Thoelecke Jr., president of InOut Labs, a wellness testing firm that operates in both retail and commercial markets, had similar thoughts: “PayPal integrates with both my accounting software, Xero, and our e-commerce business. Workflow and avoiding double entry are important to me.”

Square Equipment for Best Credit Card Processor Review

In addition to its online services, PayPal also offers a card reader that plugs into a smartphone’s headphone jack.

PayPal has a 2.9 percent + 30 cent online transaction fee, which is consistent with every other processor’s online rates. Plus, it has robust customer service and DIY help features on its website. Equipment is limited to either a chip card reader or mobile card reader — your first mobile card reader is free — making PayPal a tough sell for high-volume brick-and-mortar merchants looking for a full-on POS system or cash register, but online transactions remain PayPal’s bread and butter.

Best for Established Nonprofits

Dharma Merchant ServicesDharma Merchant Services could be a good fit for retail and commercial businesses, but nonprofits especially should take a look at its discounted rates.

While Dharma Merchant Services does the bulk of its work in the retail and commercial sector, it has a strong niche in nonprofit transactions — which are booming especially via online donations. Dharma, a B Corporation with subscriptions for $15 a month, offers reduced nonprofit rates. Like Payment Depot, Dharma doesn’t offer one lump rate for all transactions, so your ultimate costs would depend on each credit card’s interchange rate, which can vary upward of 2 percentage points depending on the card. For nonprofits, Dharma charges 0.20 percent + 10 cents + interchange for storefront operations; online it’s 0.30 percent + 15 cents + interchange. PayPal, by contrast, has a flat nonprofit fee of 2.2 percent + 30 cents that’s constant despite interchange fees.

Dharma scores well for having a clean, easily navigated website. It also provides excellent educational information on how interchange rates work (including links to the current official Visa and MasterCard rates), and it walks the merchant and nonprofit through transactional cost scenarios. “We took pricing questions off the table by transparently posting our pricing model on the website,” says Jeff Marcous, chief evolutionary officer and co-founder of Dharma.

Most notably, Dharma openly discourages new customers that transact less than $10,000 per month, or don’t have a long credit history. Marcous explains that for companies that fall below the $10K threshold, it’s in their best interests to go with an aggregator like Square or PayPal, adding that the barrier to entry allows Dharma to offer a high 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.”

"We've been with Dharma Merchant Services for probably about seven years now. I liked all of the information they provided upfront and the fact that they had been in the business for a long time. I've gotten great customer care and support from them over the years. The fees are very reasonable. If a client doesn't already have a merchant account provider chosen or is not using their bank, we will recommend Dharma."

Other Credit Card Processors to Consider

We’re confident that our top picks will serve the needs of most merchants. But there’s always the chance that your needs are more specific, so we’ve listed a few runners-up below. These credit card processors performed well in all our key areas, offering with transparent pricing, helpful customer support, and a range of equipment options. Nothing about them stood out, versus the features offered by our top picks, but if you’re interested in exploring more options, the list below is the best place to start.

Processor
Interchange Plus Pricing
Monthly Fees
Payment Depot (Top Pick)
Interchange + $0.05 to $0.25
Up to $99
Dharma Merchant Services (Top Pick)
Interchange + 0.2% + $0.10 to 0.35% + $0.15
N/A
Charge
Interchange + 0.25% + $0.15 and up
N/A
Fattmerchant
Interchange + $0.08 to $0.25
Up to $99
Helcim
Interchange + 0.15% + $0.08 to 0.36% + $0.25
Up to $30
Payline Data
Interchange + 0.2% + $0.10 to 0.65% + $0.15
Up to $15
Transparent Merchant Services
Interchange + $0.09 to $0.19
Up to $100

*Price ranges include discount rates for nonprofits (if applicable).

Processor
Flat-Rate Pricing
Monthly Fees
Square (Top Pick)
2.75% + $0 to 3.5% + $0.15
N/A
Shopify Lite (Top Pick)
2.2% + $0 to 2.9% + $0.30
Up to $179
Authorize.net
2.9% + $0.30 + $49 setup fee
Up to $25
CDG Commerce
1.70% + $0.25 to 1.95% + $0.30 (2.9% to 2.95% + $0.30 for non-qualified transactions)
Up to $10
PayPal (Top Pick)
2.2% + $0.30 to 3.5% + $0.15
N/A
QuickBooks Payments
1.6% + $0.25 to 3.4 % + $0.25
Up to $20
TransFirst
1.69% + $0.19 to 2.99% + $0.24
Up to $10

*Price ranges include discount rates for nonprofits (if applicable).

Did You Know?

Interchange rates are transparent, but they’re still unpredictable.

Check the InterchangeWant to dig into the math? Start by reviewing the interchange rates for both Visa and MasterCard.

It’s obvious but bears repeating: If the processor you choose uses interchange rates as well as its own rates, your costs will not be as predictable as a processor with one flat fee. That’s because each credit card and credit card type has a unique rate: A Visa debit card might have a 0.05 percent + 22 cent rate while a Visa Rewards card could have a 1.65 percent + 10 cent rate. (This is why many smaller businesses stereotypically do not accept American Express, which used to have much higher rates.) If you want to know what you’ll always be paying — no fluctuations based on card types — go for a transparent, flat-rate processor like Square, Shopify, or PayPal. If you’re after a potentially lower rate, go for interchange-plus models like Merchant Depot or Dharma Merchant Services.

If you don’t use an EMV chip card reader, you’re liable for fraudulent charges.

In October of 2015, MasterCard and Visa both underwent a “liability shift.” According to that shift, if you’re a merchant and someone uses a chip card to make a fraudulent charge — but you didn’t use a chip reader — you’re on the hook for it. That shift also means if the fraud was caused by a simple 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 2017, it’s a good idea to spring for the chip reader. It might be an extra few hundred dollars, but it means you’re not going to have to pony up potentially a lot more in fraudulent charges.

The market for digital wallets is growing.

Smartphone payment systems are the next step in the evolution of credit card processing. Business Insider estimates that by 2020, sales made via smartphone apps like Apple Pay and Android Pay will account for over $500 billion in revenue (versus 2016’s $75 billion). Brian Chen of the New York Times suggests that the adoption of chip-enabled cards may serve to speed up the digital wallet trend, since apps like Apple Pay offer near-instantaneous order processing.

Merchants looking to explore this market are most frequently interested in Apple Pay, according to the consulting firm Piper Jaffray, which found that of the 44 percent of merchants who are using or want to use mobile wallet solutions, 67 percent lean toward Apple Pay readers, with only 18 percent preferring Android Pay/Google Wallet, and a mere 8 percent preferring PayPal.

To adopt Apple Pay, you’ll need to buy an updated terminal. Is now the right time? That’s really your call.

Take Action

Take stock of your transactions. The first step in getting the right rate for your business is knowing how much your transactions are and how many of them you have in a month. Take a look at your average cost per transaction, but also look at the types of transaction. The process can be frustrating. “It’s pretty much impossible to figure out the cost for any given credit card transaction,” says Steven Silberberg, owner of Fitpacking, a weight-loss backpacking business. “If I do a card-not-present transaction, the fee is greater than a card-present transaction. If I don’t provide the CVV, the fees increase yet again. Foreign transactions also have a different rate, and Visa is different than MasterCard is different than Discover. A lot of times you just have to rely on the average rate over a billing period.”

Read the fine print. Any credit card processor worth working with will tell you its rates clearly, simply, and up front. There’s no reason to pay hidden fees, so don’t do it. Watch out for leased equipment (it’s usually not worth it) and multiyear contracts too. Many processors have no monthly fees and no commitments, so there’s no reason to sign up for something you’re not sure you really want or need.

Track your costs every six months. Don’t pay more when you could be paying less. Calculate the percent of sales you’re paying to your processors, then check the competition’s rates. If your sales are high, you might even be able to negotiate your rates with your current processor.

The Best Credit Card Processor: Summed Up

Credit Card Processor
Best For
Payment Depot
Large Transactions
Square
Newcomers
Shopify Lite
Online/Offline Integration
PayPal
Ecommerce
Dharma Merchant Services
Established Nonprofits