To operate online, you need to accept credit cards. It’s that simple. But what’s not as simple is choosing the right online credit card processing for small business. Because of the onslaught of businesses operating online in the last couple of years, the industry has become much more competitive and honestly difficult to handle.
If you’re a new business owner or you’ve just started operating online, you could easily get overwhelmed by a large number of credit card processing companies available today. Worse yet, if you don’t know what to look for in credit card processing, you could get scammed by hidden fees or high costs.
In this guide, I share with you the top selections for online credit card processing for small business and share with you what to look for so you are an informed buyer.
What to look for in the best credit card processing companies
The terms, prices, and vast amount of information thrown at you when you’re looking for credit card processing companies are honestly overwhelming. But when broken down, you can see what you should focus on — where you should negotiate and when you should walk away and look for a different credit card processor.
Everyone worries about the price, and you should because the two pricing models work very differently and can make a big difference in your profits.
- Flat-fee pricing - You pay one fee for every transaction, no matter its amount or type of payment. This method makes it harder to determine your costs. Still, it is excellent for new businesses that don’t have a history and can’t get approved for their own merchant account. PayPal and Stripe are two common examples offering an aggregated account with no individual merchant account required.
- Interchange plus - This model charges the interchange fee (charged by the card issuer) plus a margin for the credit card processor. This method is more transparent and may save you money on processing fees since you pay the specific interchange fee for the transaction type. For example, debit card processing fees are much lower than credit card processing fees, so you’d save money on the costs.
Many credit card processing companies have hidden fees. They disclose the monthly subscription cost (if any) and the per-transaction fee but neglect to share the other fees you may pay for, including statement fees, PC compliance fees, or chargeback support.
Some companies even charge cancellation fees or startup fees. Ask to see all fees before signing any contracts.
Good customer service
The last thing you want is to have a problem collecting payments and have no one available from the credit card processing company to help you. Since online businesses run 24/7, you need a processor that offers around-the-clock support.
PCI compliance is crucial and overwhelming. If you do it wrong or ignore it, you could lose a lot of money in fees and penalties. The right credit card processing company will handle it for you, allowing you to focus on your business and not stress about the legalities of credit card processing.
If you need features beyond processing credit cards, see what each company offers. For example, do you need to store information for repeat purchases, offer discounts, accept gift cards, or need invoicing support?
Find out what each credit card processing company offers and see how it aligns with your goals and/or needs for your online business.
The top options for online credit card processing for small business
Top Pick: Square
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Square charges flat-rate pricing and is easy to get approved with since it’s an aggregated merchant account. Square offers free POS software and even a free mobile card reader if you also accept in-person payments.
Fees: 2.9% of the transaction plus $0.30
Stripe offers new businesses an easy and fast way to start collecting credit card payments online. Like Square, they charge flat-rate pricing, but they don’t have any extra or hidden fees. Merchants can accept over 12 different payment types and even accept international payments.
Fees: 2.9% of the transaction plus $0.30
Helcim started in Canada but expanded in the US in 2013. The long-standing company doesn’t charge a monthly fee but uses a pay-as-you-go structure. It works on any platform, including Windows, Mac, iOS, and Android, and you can even set up a free hosted store if you haven’t built your online store yet. If you already have a store, you can integrate Helcim into your website using its API interface.
Fees: Interchange plus pricing of 0.5% plus $0.25 per transaction
Stax by Fattmerchant
Stax may be a good fit for a business with a large volume of transactions. Because of the $99 monthly fee, you may not want it if you don’t process enough transactions to make it worth it. High volume merchants, though, benefit from the much lower profit margin on the interchange plus pricing. Stax can integrate with just about any payment gateway. They offer a lot of add-ons to make running a business even easier.
Fees: Membership fee of $99/month plus interchange + $0.15 per transaction
Payline Data is popular with small businesses, especially those that operate just online and don't have a brick-and-mortar store. It’s great for companies that fall into the high-risk category because they have a much higher approval rate of businesses considered high risk. If you operate in-person and online, though, you’ll pay a separate membership cost for each.
Fees: $20 monthly fee plus Interchange plus 0.4% + $0.20 per transaction
PayPal is a household name and often puts customers’ minds at ease when deciding if it’s safe to run their credit card on your site. It’s easy to integrate PayPal into any existing e-commerce store, and you can start for a $0 monthly fee unless you want to customize your checkout experience, which then costs an additional $30.
Fees: Interchange plus 2.9% plus $0.30 per transaction
National Processing offers credit card processing strictly. You won’t get the bells and whistles of a company like Stripe or Square, but sometimes that’s all a business needs. National Processing has great reviews, and it does what it promises — processes payments without hidden or hefty fees.
Fees: $10 monthly fee plus Interchange plus 0.30% + $0.15 per transaction
Finding the best online credit card processing for small businesses is a big job. You need a company that can handle the volume you will process at the most affordable prices. Shop around and see what options you have.
I can assure you that no two credit card processing companies are the same. Look at your options, decide which provides the features you need and the prices you want to pay.
The payment gateway is what “talks” between the customer’s bank and the merchant’s account. It is how you get your approval or denial, depending on the status of the customer’s account. You must have a payment gateway to accept online credit card payments.
The issuing bank is the bank that provided the customer’s credit card. This is also the bank that can approve or decline a transaction.
The merchant account is the small business’s account where the money is sent from the customer’s account to pay for a purchase.