Whether you run a brick-and-mortar retail store or an online-based business, you’ll more than likely need to accept a variety of payment methods—including credit cards and digital payments. After all, accepting these payment types has become a necessity of doing business—and the merchant services industry has grown substantially to accommodate this need. This being said, if you’re looking to accept any payments—other than cash—at your small business, you’ll need to explore different payment processing companies and find the one that will work best for your operations.
However, with the substantial number of options out there, each with their own features and pricing structure, you may not know where to start to find the best payment processor for your small business. To help you through the search process, therefore, we’ve created this guide. We’ll review the top payment processing companies out there and discuss what kind of businesses they’re best-suited for—so that you’ll have all of the information you need to decide what’s right for you.
First and foremost, let’s start with the basics: What is a payment processing company?
It may surprise some business owners to learn that payment processing companies can be completely separate from a point of sale system—even though many companies do bundle these services.
This being said, a payment processing company is an entity that allows you to accept credit cards and other similar payments from your customers and process those payments. A payment processing company, then, handles all of the behind-the-scenes processes that take place after your customer provides their card information (whether in-person or online) for a transaction.
So, whether your customer swipes their credit card or manually inputs their card information, the ensuing processes—like encrypting their information, routing the information to their own bank, and back to your business’s bank—are what payment processing generally entails—and therefore, is what is managed by payment processing companies.
Keep in mind, though, payment processing can look very different in practice, depending on how you’re accepting payments, what kind of payments you’re accepting, and of course, which payment processor you’re using. Therefore, as you look for the best payment processor for your small business, you’ll want to consider not only cost—but also how your business operates and how you’ll be taking payments—in order to determine which of the top payment processing companies will be able to meet your needs.
Before we break down our list of the top payment processing companies in detail, this chart gives an overview of what to expect:
|Payment Processing Company
|What It Costs
|What It Offers
Free to receive payments, with potential $20 fee for international wires in USD
Free payments and invoicing
Businesses that want low-cost, straightforward invoicing
$25 monthly, 2.9% + $0.30/transaction -OR- $25 monthly, $0.10/transaction + $0.10 daily batch fee
Secure online payment gateway
Businesses that need a simple payment gateway
2.9% + $0.30/transaction
Customizable online payment processing
Tech-savvy online businesses that want a customized solution
2.9% + $0.30/transaction
Customizable online payment processing
Online businesses that want a tried-and-true standard in online processing
Starts at $0/month and 2.9% + $0.25/transaction -OR- $16/month and 2.75% + $0.25/transaction
Payment processing with connection to QuickBooks
Businesses that want simple invoicing within their accounting software
Starts at 2.6% + $0.10/transaction
POS and payment processing
Businesses that want a POS-payment processing bundle
Starts at $14/month for software, plus 2.7% + $0.10/transaction
POS and payment processing
Businesses that want a POS-payment processing bundle with separate, fully functional devices
Starts at $49/month plus interchange + $0.15/transaction
Merchant account and customizable payment processing
Businesses that want a merchant account and a customized solution
Starts at $10/month plus interchange + 0.2% + $0.10/transaction
Merchant account and customizable payment processing
Businesses that want a merchant account, but more affordable monthly fee
Starts at $99/month plus interchange + $0.08/transaction
Merchant account and customizable payment processing
High-volume or larger businesses that want lowest possible transaction fees
With this overview in mind, let’s get down to the details—starting with the best payment processing companies that are designed specifically for online businesses. If you’re running an ecommerce business, you’ll find there are a variety of available solutions that allow you to accept payments online, including these four top options:
Veem is an online payment processing company that provides completely free online money wiring for business transactions.
With Veem you can invoice any business or customer and receive their payment through blockchain technology for free. You also can generate free, personalized pay links and send them to customers or businesses without having to generate an invoice. When receiving payments, the only time you’ll pay a fee is if you accept an international payment and want to keep it in USD—this will cost $20.
On the other hand, to send payments, it will cost just $1 to send payments within the U.S. and for international payments that require conversion from USD into local currency, the receiver will need to pay a $20 flat fee.
Additionally, by working with Veem you’ll have payment tracking; a dedicated account manager; the ability to integrate with software systems like QuickBooks, Xero, and Netsuite; and you won’t have an annual transfer volume limit.
Of all the payment processing companies on our list, Veem is one of the most accessible, affordable, and simple options for online payments.
Another of the best payment processors for small businesses who specifically need online payment services is Authorize.Net.
In contrast to Veem, Authorize.Net is actually a payment gateway provider—meaning they will allow your business to take and process payments from customers directly through your website, instead of having to send invoices or payment links.
With Authorize.Net you’ll be able to offer your customers a number of payment options, including credit and debit cards, e-checks, and digital payments, all within your website or ecommerce platform. This being said, Authorize.Net provides two options to access their service: all-in-one or payment gateway only.
If you already have a merchant account (the bank account required to accept credit card payments), you can sign up for their payment gateway only plan, which costs $25 a month, plus $0.10 per transaction and a daily batch fee of $0.10. On the other hand, if you don’t have a merchant account (you will need one in order to sign up for Authorize.Net), then you can opt for their combination plan, which includes a merchant account and a payment gateway. In this case, you’ll pay a $25 monthly fee and a per-transaction fee of 2.9% + $0.30.
The next option on our list of best payment processing companies, Stripe, is perhaps one of the fastest-growing and now largest payment processing companies in the online space. Designed particularly for online-based businesses, especially tech-savvy ones, Stripe is a payment processor that allows you to accept payments online in a variety of ways.
Using Stripe, you can accept credit cards, digital wallets, and international currencies by:
One of the biggest benefits of Stripe is not only their immense customization opportunities, but also their included security, reporting, and support features, as well as their simple, flat-rate pricing. Plus, unlike Authorize.Net, Stripe will not require any monthly fees—instead you’ll only pay 2.9% + $0.30 per transaction with an additional 1% fee for international payments.
All of this being said, between their customizable online payment options and integrations with leading platforms, there’s no doubt that Stripe is one of the best payment processors for online businesses.
Whereas Stripe is a newer name in the payment processor space, PayPal is probably one of the biggest and most well-known names in online payment processing. As the long-time leading provider in online payments, therefore, PayPal has a number of different options to offer as a payment processor for small businesses.
With PayPal, you can accept payments online, charge customers with invoices, and even take in-person payments with PayPal Here. In terms of online payment processing, you can use PayPal to accept debit cards, credit cards, digital payments, and of course, payment with PayPal. Specifically, you can use PayPal Checkout to allow customers to checkout on your website or you can connect it directly to your ecommerce platform. Additionally, you can use PayPal Payments Standard to add checkout buttons to your website, but direct them to the payment experience offsite.
Ultimately, PayPal gives you the ability to accept online payments in a way that works best for you. Plus, if you utilize any of their traditional solutions—PayPal Checkout, PayPal Payments Standard—you’ll only pay transaction fees: 2.9% + $0.30 for all online transactions within the U.S. In this way, like Stripe, PayPal is one of the most versatile and flexible payment processing companies for online-based businesses.
Although Veem, Authorize.Net, Stripe, and PayPal are notable options for online payment processing, you might alternatively be looking for payment processing companies that offer the simplest service that connects directly to your accounting platform. Let’s take a look at the leader in payment processing for simple invoicing.
With QuickBooks Payments, you’ll be able to access an online or a desktop solution that will integrate with its corresponding version of QuickBooks accounting software. Regardless of which of these options you choose, you’ll be able to invoice customers and let them pay directly through the invoice or accept debit and credit cards, Apple Pay, phone orders, and bank transfers, and connect all payments you receive to your business’s bookkeeping through QuickBooks.
This being said, as part of Intuit merchant services, you have two payment plan options for both online and desktop. First, if you opt for QuickBooks Payments Online and decide to pay as you go, then your payment processing costs will be structured as follows:
If you decide to pay monthly, you’ll see the following costs:
On the other hand, if you choose the desktop version of QuickBooks Payments Desktop for your payment processor, then you’ll likewise have a pay-as-you-go option and a monthly option:
If you choose to pay as you go, then your payment processing costs will adhere to the following structure:
If you choose to pay monthly for QuickBooks Desktop, your payments will be structured as follows:
Ultimately, of all the payment processing companies on our list, QuickBooks Payments is the most specialized—appealing directly to business owners who want to accept payments through their QuickBooks accounting software. In fact, QuickBooks is not the only accounting platform to offer this kind of service—both FreshBooks and Wave also provide their own integrated payment processing solutions. This being said, if you’re, say, a service-based business who mainly invoices customers, this could very well be the best payment processing solution for you.
Although both QuickBooks Payments and Authorize.Net can be used with a POS system, if your business will be utilizing a POS on a day-to-day basis, you’ll probably benefit from a company that, first and foremost, offers a point of sale system and payment processing services as an all-in-one package.
In this case, by exploring payment processing companies that include POS systems as part of their service, you’ll be able to access a more affordable and feature-rich option that will allow you to manage multiple business operations in one place with one company.
One of the very best payment processing companies on the market that offers all-in-one POS and payment services is Square. The Square POS system comes in a multitude of different shapes, sizes, and prices. Regardless of which POS system you choose, however, every Square product will include the company’s top-of-the-line payment processing. With Square, therefore, you’ll be able to accept the full variety of payment methods, as well as manage your orders, sales, and other related operational activities.
This being said, however, the cost of Square’s payment processing will depend on which POS software you choose, as well as how you accept payments from your customers. To explain:
If you utilize the basic Square POS software, you’ll have access to the software for free and you’ll be able to use it on any iOS device. You’ll also receive one free magstripe reader to process credit cards. If you decide you need alternative or additional hardware, you’ll need to pay separately for the hardware required.
No matter which hardware device you use with the Square POS software, however, you’ll pay the following transaction fees:
On the other hand, if you opt for one of Square’s specialized software systems, your overall costs will differ. If you use Square for Restaurants, you’ll pay a monthly fee for software, any associated hardware costs, as well as the same transaction rates as listed above.
If you utilize Square for Retail, you’ll also pay a monthly software fee and any associated hardware costs, but your transaction fees will be slightly different. You’ll pay the following in Square fees:
Altogether, if you’re looking for the whole package—and not just payment processing—then getting everything through Square could seriously streamline your business’s transactions and overall operations.
Clover is another top option if you’re looking for payment processing companies that include a POS system.
Like Square, Clover is perhaps one of the largest payment processing companies to offer all-in-one POS and payment processing services. Unlike Square, though, Clover provides greater options for POS systems that are fully functional on their own. Many of Square’s POS systems, on the other hand, require smart devices to function. Plus, most of Clover’s POS systems will come complete with a receipt printer, which will be crucial for brick-and-mortar needs.
On the whole, Clover functions much like Square in that they provide all of the features that you need to run your business’s sales, as well as accept the full-range of payments from customers. Unlike Square, however, Clover does not offer a free POS software option, instead, you’ll have to choose from their Register Lite or Register software, which will cost $14 per month or $29 per month, respectively.
The software you choose will not only dictate your POS features but your payment processing rates as well:
Finally, you’ll need to pay for the Clover hardware you require. Clover offers four different options, starting at $69.
At the end of the day, if you’re running a brick-and-mortar store that requires a full-service POS system, you’ll find that the best payment processor for your small business will likely be one, like Square or Clover, that bundles their payment processing and point of sale system. This being said, although Square and Clover are two of the most well-known options on the market, there are numerous other solutions—including those specialized for restaurants, salons, retail stores, and more—that might also be worth considering for your business.
So far, the majority of the payment processing companies on our list have been payment service providers—meaning these processors aggregate all of their clients’ funds that they receive from customers into one merchant account and distribute them as appropriate from there. Although there are certainly benefits to this type of payment processor, there are also drawbacks—the most notable of which is that working with these providers puts your account at a greater risk of hold or cancellation if the company deems your business too risky.
Therefore, you might consider a more traditional merchant service provider. A merchant account provider will require a more involved qualification process and will likely have more complicated pricing, but working with this type of payment processor will also mean better security, possibly more cost-effective transaction rates, and a highly customizable solution.
All of this being said, then, here are three top options for payment processing companies that are also merchant account providers:
Payment Depot is a merchant account provider that can offer a variety of payment processing solutions—depending on what your business needs—as well as affordable and transparent pricing. First and foremost, by working with Payment Depot, you receive a dedicated merchant account, which Payment Depot actually acquires from either TSYS or First Data. With your account through Payment Depot, you’ll be able to accept credit cards, debit cards, ACH, and e-check payments.
This being said, Payment Depot gives you the option to take payments in a variety of ways, including using your mobile device, traditional credit card terminal, through an ecommerce website, or using a POS system. With this payment processor, you’ll have to pay a monthly service fee, as well as processing fees.
However, unlike the payment processing companies we’ve discussed thus far, the transaction fees with Payment Depot are not flat-rate. Instead, their fees are priced using the interchange (the fee that comes from the credit card network)-plus model, arguably one of the best pricing models available.
This being said, the most basic Payment Depot plan will cost $49 per month, plus transaction fees, which in this case, are interchange plus $0.15 per transaction. This plan will also include a free reprogramming of existing equipment and a free online payment gateway.
Although this monthly fee is much higher than many of the other processors on our list, you’ll be receiving a more secure service with Payment Depot and hopefully saving on transaction fees. Plus, as you opt for higher subscription plans, you’ll see lower interchange-plus rates and additional equipment options included in each plan.
Next, you might consider Payline Data as the best payment processor for your small business especially if you’re looking for a merchant account provider with a lower monthly fee than Payment Depot.
With Payline Data, you’ll receive a dedicated merchant account through WorldPay and you’ll be able to choose from two service plans depending on how you need to accept payments. First, Payline Data offers their Payline Start plan, which will allow you to accept payments using an EMV terminal, as well as key in transactions using a virtual terminal. This plan will require a $10 monthly fee, plus the following interchange-plus rates:
Unlike Payment Depot, however, Payline Data will not include any equipment in their plans; instead, you’ll have to pay separately for a mobile, wireless, or countertop terminal.
On the other hand, if you need to accept online payments, you can opt for the Payline Connect plan. This plan will cost $10 per month, plus an additional $10 per month for payment gateway access. With this plan, you’ll pay interchange-plus 0.3% + $0.20 in processing fees whether you use the payment gateway or virtual terminal.
Like Payment Depot, Payline Data is one of the best payment processors that is also a merchant account provider, especially considering their interchange-plus pricing and more affordable monthly fee.
Finally, we’ve reached the last option on our list. Of all of the payment processing companies we’ve discussed, Stax is probably the best processor for midsize or larger companies that have substantial sales volumes.
By working with Stax, as with Payline Data and Payment Depot, you’ll receive a merchant account with your service, but you’ll also need to opt for a subscription plan. Stax has two subscription options: Stax Starter and Stax Enterprise. The subscription plan you choose will not only dictate your monthly subscription fee, but your processing fees as well.
To explain further:
The Stax Starter plan will cost $99 per month. All of Stax’s processing fees are a flat fee plus interchange, however, they will depend both on your subscription plan and on the way you accept payments. Therefore, with the Starter plan, if you accept payments using the physical terminal or Stax integrations, you’ll pay $0.08 plus interchange. If you accept payments using an online shopping cart, virtual terminal, mobile device, or Stax API, you’ll pay $0.15 plus interchange.
Likewise, the pricing will be set up similarly for the Enterprise plan, which will cost $199 per month. With this plan, accepting payments via physical terminal or integrations will cost $0.06 plus interchange. Accepting payments with the shopping cart, virtual terminal, mobile device, or APIs, on the other hand, will cost $0.12 plus interchange.
Although their pricing may seem complex, by offering a flat fee plus interchange, these are some of the most affordable credit card processing fees you’re going to find, as long as you can afford the higher monthly subscription fee. All in all, Stax offers the same wide range of payment solutions as their competitors but stands out with these low processing rates.
Now that we’ve explored the ins and outs of some of the best payment processing companies out there, it can be easy to feel overwhelmed by all of the choices ahead of you.
How do you know which payment processor will be the right fit for your small business?
Unfortunately, we won’t be able to make this decision for you. As the person who knows your business best, it will be up to you to determine which payment processing company will be able to fulfill your needs.
This being said, however, we can offer some advice on how to proceed through the decision-making process. As you’re looking into different payment processors, ask yourself a few questions:
By answering these questions, you’ll be able to narrow down your options and start considering other factors like price, customer service, and additional features. Ultimately, with all of the knowledge you now have about the best payment processors for small businesses, we have no doubt you’ll find the one that’s right for you.
Maddie Shepherd is a former Fundera senior staff writer and current contributing writer for Fundera.
Maddie has an extensive knowledge of business credit cards, accounting tools, and merchant services, but specializes in small business financing advice. She has reviewed and analyzed dozens of financial tools and providers, helping business owners make better financial decisions.