Home Small Business Cheapest Credit Card Processing For Small Business In 2023

Cheapest Credit Card Processing For Small Business In 2023

Accepting credit card payments can be a boon for business. Yet, in 2022, U.S. companies paid $160.70 billion in card processing fees, according to a Nilson Report. Comparing rates between payment service providers can help your organization save money. The best cheap credit card processing companies offer transparent pricing and discounts based on transaction volume.

We evaluated dozens of credit card processors by reviewing their fees for credit cards, including in-person, mobile and online payments. Our assessment included over 20 hours of researching user feedback and interacting with customer service agents. We considered flat rate pricing versus interchange plus pricing and looked for hidden fees. Additionally, we spoke with experts to learn how small businesses could lower processing fees and negotiate rates with their merchant account provider.


  • Square

    : Best credit card processing company


  • Paysafe

    : Best for high-risk businesses


  • Helcim

    : Best for volume-based discounts

Why trust our small business experts

Our team of experts evaluates hundreds of business products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.

  • 27 companies reviewed.
  • 11 hours of product testing.
  • 1,674 data points analyzed.

Methodology

We extensively research the key competitors within an industry to determine the best products and services for your business. Our experts identify the factors that matter most to business owners, including pricing, features and customer support, to ensure that our recommendations offer well-rounded products that will meet the needs of various small businesses. 

We collect extensive data to narrow our best list to reputable, easy-to-use products with stand-out features at a reasonable price point. And we look at user reviews to ensure that business owners like you are satisfied with our top picks’ services. We use the same rubric to assess companies within a particular space so you can confidently follow our blueprint to the best cheap credit card processing of 2023.

The best cheap credit card processing companies have positive user reviews on customer review sites. Credit card processing companies should provide customers with fast and reliable support. Using a combination of phone support, live chat and knowledge bases, customers should be able to quickly resolve issues 24/7. 

Credit card processing should be available to most business types (including high-risk merchants), affordably priced compared to competitors and various equipment options should be available to accept payments in various scenarios. Pricing should be competitive. Cheap credit card processing should minimize businesses’ fees to accept credit cards. Monthly fees should result in lower transaction fees. Volume-based discounts should benefit high-transaction businesses. And chargeback fees should be minimized.

The best cheap credit card processing companies should offer free hardware to accept payments. Equipment and processing should uphold strict payment privacy and security standards. And the processor should guarantee PCI compliance.

All credit card processing companies should expand on a basic feature set that includes mobile apps, reporting dashboards, invoicing, data exports, contactless payments and software integrations.

Best cheap credit card processing companies of 2023

Cheapest credit card processing companies comparison

Final verdict

The cheapest credit card processing companies keep administrative costs low. They work with small businesses to determine the payment structure that suits their industry, average ticket size and sales volume. Since rates vary based on these factors (and others), payment processing fees differ between providers and can change over time.

Cheap credit card processor differences

Credit card networks, such as Visa and Mastercard, establish interchange fees, and all payment processors send an agreed-upon amount to the cardholder’s issuing bank. These fees are subject to change every six months. 

However, our research shows that merchant account providers offer different payment structures, customer support and hardware options. Below, we overview how the cheapest credit card processing companies differ.

Pricing models

Credit card processing services with lower costs on credit card transactions (often touted as “no markup”) typically charge monthly subscription fees. In this case, merchants pay a variable interchange fee to the credit card companies. In contrast, with flat rate pricing, a business pays the same rate to accept credit card payments, whether American Express or Mastercard. In addition, many credit card processors use an interchange-plus pricing model by adding a service fee on top of the interchange rate credit card networks charge.

One-time and monthly fees

Payment processing companies may charge various fees, increasing the overall cost of maintaining merchant accounts. These may include batch, PCI compliance or contract early termination fees. Other common charges are payment gateway and chargeback fees. Additionally, some providers add a monthly fee to monitor high-risk merchants. 

Hardware and software options

The cheapest credit card processing services may offer free or low-cost equipment, like a mobile credit card reader or countertop credit card machine. Most providers have other hardware solutions, such as cash registers, point-of-sale (POS) systems and printers. 

Many payment processing companies provide additional software for online stores or brick-and-mortar businesses. These options consist of customer relationship management (CRM) software, payroll processing solutions and payment gateways.

Customer support

Customer service levels vary among credit card processing companies. Generally, they provide support during business hours. Some offer 24/7 customer care. Most merchant account providers have several communication channels, including email, live chat and phone support.

Our recommendation

Square is our choice as a low-fee credit card processing service. Its transparent pricing and competitive transaction fees are ideal for seasonal contractors and small businesses. It has no startup costs (offering a free credit card reader), no monthly fee and offers custom quotes for companies with higher transaction-volume sales. 

While Square is the best cheap credit card processor, some alternatives have lower credit card transaction fees. The trade-off is that you may pay a monthly subscription or variable rates, depending on the credit card the consumer uses. However, if your company sells high-dollar items or consistently processes large sales volumes, you may save money by going with National Processing or ProMerchant.

What to look for when choosing the lowest-cost credit card processing company

To choose the best cheap credit card processor, you must understand your unique business requirements. Take stock of the payment methods your customers prefer (and use the most), the types of hardware you need and your transaction volume. 

Marshal Davis, President of Ascendly Marketing, says, “While low rates are tempting, I’ve learned the hard way that price isn’t everything. Some merchants are quick to freeze your account over minor issues or are terrible at handling chargebacks. I’ve found that a holistic approach to choosing a merchant is far more beneficial in the long run.” Therefore, avoid focusing only on transaction fees. 

After deciding which pricing structure (flat rate pricing, interchange plus, membership or monthly subscription fees) is right for your small business, evaluate credit card processing companies by considering the following factors.

Merchant account and payment processing features

Besides allowing your company to accept credit cards, payment processors offer various tools and features. Some, like National Processing, stick with the basics — virtual terminals and a cash discount program — whereas Square has a complete POS system with everything a small business needs to sell online or in person. 

Compare credit card processing companies by looking at available features, such as:

  • Payment processing reporting and analytics.
  • Invoicing templates and software.
  • Payment management mobile apps.
  • Inventory management tools.
  • Email marketing tools.
  • Cash discount or credit card surcharge programs. 
  • ACH and check payment processing capabilities.
  • Online store or web hosting for e-commerce sales.
  • QR code or tokenized credit card payments. 
  • Credit card processing anti-fraud protection tools.
  • E-commerce payment gateways.
  • Countertop and mobile credit card readers.
  • APIs and developer tools.
  • Support for international payments.
  • POS hardware and software.
  • Accounting, POS and online store integrations.

Payment service provider contract terms

The best credit card processing services allow month-to-month agreements without setup fees. However, some require long-term contracts for payment processing or hardware to get the lowest rates. Others charge hefty early termination fees. 

Before committing to buy, ask the payment processor’s representative if you can access a sample contract and for additional information about cancellation fees and leasing or buying equipment. 

Administrative and transaction fees

Grant Aldrich, founder and CEO of Preppy, says, “Carefully evaluating and negotiating the pricing structure will allow you to secure the lowest-cost processor based on your business’s transaction volume and needs.” 

However, it’s a good idea to see if you can review sample statements before signing up with a credit card processor. On top of interchange-plus and flat-rate fees, many payment processors charge additional fees that show up as surprise charges on monthly statements. They include chargeback, equipment, monthly minimum and PCI compliance fees. 

Aldrich recommends that business owners “pay close attention to the interchange rates, monthly fees and any hidden charges. Don’t hesitate to negotiate; processors are often willing to adjust rates to win your business.”

One way to discover hidden fees is by carefully reading your payment processors terms of service. Here, you will read about how PCI compliance and chargeback fees are handled, for example, and ways you can avoid or mitigate these additional charges.

Ease of use and customer service

Many card processing services put processes or features in place that lend to ease of use during setup and beyond. National processing offers free reprogramming of existing equipment, whereas Paysafe has payment links so customers can access bills by email or text. Only ProMerchant and National Processing have 24/7 customer service, but several companies provide additional support during implementation, community forums and product guides.

Payment processor reputation and business user feedback

When looking for credit card processing companies, ask your professional network for recommendations, especially those in your industry. Certain providers like National Processing have plans for health and wellness, restaurant and retail sectors. Speak to vendors about their experience with companies similar to yours. 

Also, check out comparison guides like this one and our rating of the best credit card processing companies of 2023, mobile app reviews and user reviews on sites like TrustPilot and Capterra.

Average payment processor costs

Standard credit card processing fees generally range from 1.5% to 3.5% with a fixed fee per transaction of 10¢ to 50¢. Credit card payment processors with monthly fees may charge lower credit card processing fees, with subscriptions starting at $5.95. 

However, companies with low-volume or irregular sales may not receive the cheapest credit card processing rates. They may, for example, be required to pay a monthly fee even if they only offer seasonal services. This is one reason Square topped our list. It has moderate transaction fees but no monthly charges. 

Remember, however, that averages may vary by industry. Some industries incur higher monthly fees because they belong to high-risk industries. For example, Square does not service certain industries it deems as high risk, such as identity theft protection services or mail order pharmacies. Companies within these industries may have to go with a higher priced provider as a result. 

Strategies to reduce credit card processing costs

Even with the cheapest credit card processing services, monthly fees can take a toll on your bottom line. Use these tips to decrease your credit card processing costs.

Negotiate with credit card processors regularly

Providers want to keep you happy and the longer you’ve been in business, the more leverage you have. Davis says, “I set a reminder in my phone to negotiate rates with my credit card processor every six months. Believe it or not, they’ve lowered the pricing every time I’ve asked. It’s a simple yet effective way to keep costs in check.”

Reduce chargeback fees

When merchants accept payments, inevitably, some customers dispute transactions with their credit card providers instead of following your refund process. This is more common in certain industries and especially for businesses that take online payments. However, credit card processing companies may classify your business as high-risk if you incur too many chargeback fees, increasing your transaction fees. 

To keep chargebacks at a minimum, develop a clear refund and return policy and display it prominently on your product pages, FAQ sections and shopping carts. Make it easy for customers to communicate with your business and reply promptly. Also, remember to review your provider’s dispute process to see how they support your business. Some handle chargebacks on your behalf while others require you to manage them.

Process payments nightly

Many payment processing fees are set in stone — like interchange rates. But you can control others. 

Ian Wright, Managing Director at BusinessFinancing.co.uk, says, “Busy business owners also leave themselves open to fees if they don’t settle their transactions at the end of each day. It’s always tempting to get home quickly at closing time, but the fees added for leaving this simple work till the next day can stack up over the course of a year. It’s a small change that can make a big difference.”

Review statements and credit card processing fees regularly

Even if you’re satisfied with your payment processor, looking over your statements is a good business practice. Occasionally, providers raise prices or add unexpected charges. In addition, understanding how payments break down (ACH, debit card and credit card transaction fees, for example) and which credit card networks your customers use most can help you design effective (and cost-saving) promotions.

Join a merchant services provider’s surcharge program

Many payment processors, such as Helcim and National Processing, offer zero-cost surcharge programs that allow you to automatically pass on credit card processing fees to customers. 

However, small businesses must weigh the pros and cons carefully to ensure the risks of annoying customers don’t outweigh the benefits of lowering the costs of accepting credit card payments. In addition, in some states, charging customers to use a credit card is illegal.

Offer cash discounts

As an alternative to a surcharge program, merchants that accept in-person payments can price all goods at a higher rate and offer cash discounts. This method can decrease your credit card processing fees and is often permitted even in states where charging customers to use a credit card is not. However, the cash-discount method can cause friction. Your customers may see higher price tags on items and not understand or want to take part in the cash discount program. 

Train employees on best practices for accepting payments

Card present (in-person) payments are less likely to be disputed. Yet, your staff should follow best practices to reduce fraud. Such practices include:

  • Setting up your credit card processing system to collect as much customer information as is allowed, including the customer’s billing address and ZIP code.
  • Requiring employees to verify the customer’s identity with a government-issued ID.
  • Supplying a paper or digital receipt so charge disputes can be countered with proof of a purchase.
  • Asking customers to pay with their cards using the chip reader instead of swiping the card to reduce your business’s liability should fraud occur.

Frequently asked questions (FAQs)

Square’s flat rate pricing and no monthly fees is an affordable option for a small business with a low sales volume or seasonal customers. However, a merchant services provider offering interchange-plus pricing may be a better solution for companies with high-volume sales. For example, ProMerchant provides a lower interchange-plus rate and a monthly fee to better accommodate companies with higher consistent transaction volumes per month.

While you can’t avoid paying credit card processing fees, you can lower your rates by negotiating with merchant account providers, avoiding hidden charges and choosing the correct pricing structure. Sometimes, you can pass processing fees to customers or reward them for using debit cards or cash instead of credit cards.

The price you pay per transaction depends on the pricing structure. With flat rate pricing, the merchant account provider charges a fee based on where your customer pays, such as card present or keyed (card-not-present) transaction fees. Other determining factors include the business’s industry and transaction volumes. 

In contrast, with an interchange-plus pricing structure, the rate varies by credit card network (American Express, Discover, Mastercard or Visa), type of credit card (rewards, cash back, student and so forth) and payment location (online versus in-person payments).