Credit card processing for small business: 10 options for 2024

Growing a small business can be a dream come true—and in some ways a total nightmare! It can be daunting to learn what will really grow your business and where to focus your energy.

One key decision you’re likely to face is whether you’re ready to diversify your accepted forms of payment to include credit cards. If you are, it’s time to consider that crucial question: What credit card processing service is best for your small business?

With a wealth of options at your fingertips (pun intended), choosing the right credit card processor is no easy feat. Maybe you need to prioritize lower fees over stellar customer service, or maybe your main concern is ease-of-use.

To help you make an informed decision—and ease your overwhelm—we’ve put together a list of 10 trustworthy credit card processing services and how they’ll benefit your small business. 

Let’s dive in!

What is credit card processing?

The credit card transaction process may seem complicated at first glance, so let’s break it down to clear up any confusion: Credit card processing enables small businesses to accept credit card payments from their customers. 

Credit card processing systems authorize and transfer of funds between a customer’s issuing bank and a business’s merchant bank to complete a sale. As the merchant, you’ll partner with a credit card processor to take payments in person, online, or over the phone.

Though transactions like these are completed millions of times a day, it can be a complicated process! A number of key participants play a role in this process, including:

  • Cardholder 
  • Credit card
  • Merchant (that’s you!) 
  • Point-of-sale system 
  • Issuing bank
  • Acquiring bank
  • Merchant services provider

What to look for in a small business credit card processor

It’s hard to know which credit card processing service will check all the most important boxes for your small business. With so many factors to consider, we’ve expanded on a few key points to help you cut a clear path forward—and take control of decision-making. 

Processing fees

Sorry: avoiding these pesky fees is virtually impossible. But while you might be stuck with them, you can do your best to minimize costs and choose a pricing model that meets your needs. Consider the following options:

  • Flat rate: Provides the most stability and predictability. It’s best suited to small businesses that process less than $5,000 per month. The rate you pay remains consistent across any point of sale, whether online or in-person, and regardless of your customer’s credit card brand. 
  • Interchange plus: Best for businesses that process a high volume of credit card payments, because the processor’s fee is often lower in exchange. Along with paying a flat fee per transaction, you pay a varying percentage of the transaction that matches the amount charged by the processor.
  • Membership or tiered pricing: Requires a monthly subscription fee and a higher level of commitment. It’s not the best option if you want to test the waters with some different processors before deciding. Companies that charge higher subscription fees may offer lower processing fees. Evaluate your business’s sales volume before determining if this’ll save you money in the long run.

Cost

Credit card processors can tack on a number of extra fees that drive up the cost, so watch out for:

  • Transaction fees: Varies depending on the card type and payment method (in-person or online). They typically range from 1% to 4% on the cost of the sale, plus an extra fee of up to 50 cents.
  • Service fees: A monthly or annual subscription fee to use the service, as well as fees for PCI Compliance.
  • Setup and/or termination fees: If you require a point-of-sale (POS) system for your business, the processor may charge for install, setup, and termination.
  • Incidentals: One-time fees for situations like chargebacks, insufficient funds, or special verification services. 

Tip: To cut down on credit card processing costs, try charging a convenience fee, raising your prices slightly, or setting a minimum purchase amount.

Contracts

Especially if your small business is just starting out, it’s important to keep your options open in case your partnership with a credit card processor goes awry.

Avoid companies that lock you into annual contracts and charge high fees for cancelation. Instead, opt for more flexible agreements that offer month-to-month contracts or that have no subscription requirement and no early termination fees. 

Customer service

Consider the level of customer service you’ll need: live phone support, bot text chats, or email communication. Also pay attention to hours of service, especially if your business hours are atypical and require 24/7 support. 

Integrations

If you plan to use a credit card processor’s POS software, make sure it integrates seamlessly with your accounting system and any additional tools your small business may use, like e-commerce software or online shopping carts.

Equipment

Depending on your type of business, you may need customer-facing hardware like a credit card reader and POS system, or a virtual terminal for online transactions. Keep in mind that buying the system outright will be cheaper over time than leasing it.

The best credit card processing for small businesses

When deciding on the best credit card processing service for your small business, consider how your needs match with factors like competitive and transparent rates, comprehensive customer service, timeline to accessing funds, accessibility, and flexibility. 

1. Square: Best for mobile payments

This processor is widely-used among small business owners because of its affordable price point and user-friendly system. It’s an appealing option for businesses on the go, like pop-up shops or market vendors, because of its free credit card reader that connects to smartphones and free POS app. If this doesn’t sound like your jam, check out the 10 Best Square Alternatives.

Monthly fee: Starting at $0 for unlimited devices and locations.

Payment processing fees:

  • In-person – 2.6% plus 10 cents
  • Online – 2.9% plus 30 cents
  • Keyed-in – 3.5% plus 15 cents

Pros: 

  • Free to start with no setup or chargeback fees
  • Basic plan offers no monthly fees
  • AI-powered features like a menu generator, image creator, and content generator
  • Integration with e-commerce platforms and many other third-party apps
  • Instant access to funds for a 1.5% fee

Cons:

  • 24/7 customer support is only available for paid subscribers
  • Not cost-effective for businesses with high-volume transactions
  • Incompatible with Windows devices
  • Not available to all industries

2. Helcim: Best for high monthly sales

Known for its transparent and flexible pricing model, Helcim is a great option for small businesses looking to expand sales while minimizing overhead. 

Helcim charges a margin over their interchange rate based on a sliding scale. As your processing volume increases, this margin decreases—rewarding your business’s growth. 

Monthly fee: None.

Payment processing fees:

  • In-person – 1.76% plus 8 cents
  • Online and Keyed-in – 2.39% plus 25 cents

Pros: 

  • Free software for merchants
  • No contracts or hidden fees
  • Low interchange fees for each credit card type
  • Free PCI Compliance
  • Seamlessly syncs with Quickbooks Online and Xero to simplify financial management

Cons:

  • No option for same-day deposit
  • Not cost-effective for businesses with low-volume transactions
  • Limited hardware offerings
  • Not available to all industries

3. Stripe: Best online small business credit card processing

With a global payment system accepting over 135 currencies, Stripe is ideal for e-commerce businesses of any size. After a quick and easy setup, you’ll be ready to accept online payments immediately. 

Monthly fee: Starting at $0.

Payment processing fees:

  • In-person – 2.7% plus 5 cents
  • Online – 2.9% plus 30 cents

Pros: 

  • No monthly or setup fees
  • Option for instant payouts for 1% fee
  • Advanced reporting and fraud protection tools
  • 24/7 phone, chat, and email support
  • Seamlessly syncs with Quickbooks Online

Cons:

  • Extra cost for hardware and POS software
  • Advanced features require technical knowledge
  • Not available to all industries

4. Shopify: Best for Shopify ecommerce users

Shopify Payments offers a range of subscription options for businesses of all sizes. It fully integrates with e-commerce platforms, point-of-sale system, and payment processing services. Businesses with Shopify stores can easily streamline their sales and transactions.

Monthly fee: $5 for Starter plan and up to $289 for Advanced plan.

Payment processing fees:

  • In-person – 2.6% plus 10 cents
  • Online – 2.9% plus 30 cents

Pros: 

  • Accepts a wide variety of payment methods and currencies
  • Competitive and transparent transaction rates
  • Customizable checkout page
  • Automatic setup with Shopify stores

Cons:

  • Monthly plan is required
  • Only available in select countries
  • Extra fee for use of third-party payment gateway

5. Clover: Best credit card processing for international payments

With versatile payment options and fully integrated POS hardware and software, this processor is ideal for retailers, restaurants, and field service businesses

Monthly fee: $9.95 and up.

Payment processing fees:

  • In-person – 2.3% plus 10 cents
  • Online – 3.5% plus 10 cents

Pros: 

  • POS integrates with its mobile app and virtual terminal
  • Predictable transaction fees
  • 24/7 customer support
  • Integrates with Quickbooks Online and Xero

Cons:

  • Most expensive online processing fees
  • Only available in select countries
  • Added costs include a monthly platform and application fee

6. Stax: Cheapest credit card processing for small businesses

Stax has a flat-rate subscription model. It’s ideal for businesses with a sales volume of over $5,000 per month because of the 0% markup on interchange fees. Stax also boasts a low fixed fee per transaction and offers several subscription tiers without locking customers into iron-clad contracts. 

Monthly fee: $99 and up.

Payment processing fees:

  • In-person – 0% plus 8 cents
  • Online – 0% plus 15 cents

Pros: 

  • Transparent and reliable pricing
  • 0% markup on top of interchange fees
  • Option for same-day payouts for 1% fee
  • 24/7 in-house customer support
  • Lowest-tier plan includes a free terminal or mobile reader

Cons:

  • Low-volume sales will result in higher cost
  • Limited integration options for lower tier subscriptions
  • Minimum 48-hour setup time

7. PaymentCloud: Best for high-risk businesses

With a 98% approval rate and free, hands-on assistance with achieving PCI compliance and resolving issues efficiently, PaymentCloud is the top choice for industries considered high-risk like firearms, marijuana, and debt collection. 

Monthly fee: Ranging from $0 to $50.

Payment processing fees: From 2.4% plus 10 cents to 3.5% plus 25 cents.

Pros: 

  • Highly tailored contracts
  • Free hardware for the duration of the contract
  • Free, same-day e-commerce setup
  • QuickBooks Online integration

Cons:

  • Pricing is not available online
  • Approvals can take a long time
  • Early termination fee

8. Gravity Payments: Best customer service

While Gravity Payments doesn’t disclose their rates on their website—their pricing plans are tailored to each individual business—their comprehensive customer service makes up for their lack of cost transparency. Offering 24/7 support via phone, email, or contact form in multiple languages, Gravity Payments lets you choose your form of preferred communication. 

Monthly fee: Provided through custom quotes.

Payment processing fees: 2.5% plus 10 cents (this rate may vary). 

Pros: 

  • Highly tailored pricing plans
  • Accommodates in-person, online, or on-the-go transactions
  • Fast onboarding process
  • Receive payment in 24 hours

Cons:

  • Pricing isn’t available online
  • Binding 3-year contracts
  • Extra cost for hardware

9. Toast: Best for tip management

Toast is a point-of-sale system built specifically for restaurant use that boasts automated tip distribution to minimize errors. With a wide range of online ordering tools, you’ll be able to accept, manage, and track food orders from multiple locations and in a variety of ways, including through in-store kiosks and their app. 

Monthly fee: $0 for Starter Kit and up.

Payment processing fees:

  • 2.49% plus 15 cents if you buy hardware upfront
  • 3.09% plus 15 cents for pay-as-you-go

Pros: 

  • Sturdy, spill-resistant hardware
  • Free plan offers up to 2 POS terminals
  • Integration with their payroll and team management software
  • Seamless tip management solution

Cons:

  • Requires a 2-year contract with early termination fees
  • Pricy payment processing fees
  • Extra charges for setup

10. eHopper: Best for micro businesses

This all-in-one POS and payment processor designed specifically for retail and restaurants is known for its affordable pricing and free processing for US-based customers through a cash discount or credit surcharge. The free plan is ideal for small businesses that process under 300 transactions per month. 

Monthly fee: From $0 to $35.99.

Payment processing fees: None.

Pros: 

  • User-friendly system
  • Month-to-month plans available
  • Free processing, software, and credit card terminal
  • You can use your own hardware

Cons:

  • No customer support with free plan
  • Extra cost for hardware
  • Processing fees are passed on to customers

Struggling with more than just credit card processing fees? Homebase is here to help. Our all-in-one app makes all things finance a lot easier, especially when it comes to payroll, tipping, and taxes. See for yourself with our free plan!

Credit card processing for your small business FAQs

How do I accept credit card payments as a small business?

The first step in accepting credit card payments as a small business is to evaluate your specific needs. Consider your product: how much do you sell and where (online, in person, or both)? Then make a list of priorities from affordability and flexibility to customer support and functionality. Once you nail down exactly what you need from a credit card processor, you’ll have to choose the best fit and create an account before accepting credit card payments.

What is the cheapest way of taking card payments?

The cheapest way of taking card payments depends on the scale of your business and how much you sell monthly. If your business processes less than $5,000 per month, it’s more cost-effective to go with a processor like Square or Stripe that charges a flat rate without extra account fees. 

But if you run a business with a high sales volume, you’re better off choosing a processor that offers an interchange plus pricing structure with a low margin, like Helcim or Stax.

If you’re stuck on how to make the most cost-effective choice, start with some beginner finance tips that’ll help take the guesswork out of budgeting for a credit card processor.

What's the best payment system for a small business?

The best payment system for a small business should balance a number of factors, including price point, ease-of-use, level of support, contract versus no contract, and integration. Depending on your monthly sales volume, either a flat rate, interchange plus, or monthly subscription model will be the best fit.

What are credit card processing fees for small businesses?

Credit card processing fees for small business will vary across processors, but will typically range between 1% and 4% of the sale price, plus 5 cents to 30 cents per transaction. These fees are usually unavoidable, but you can try offsetting them by: 

  • Negotiating the price with your processor rep during the application process
  • Setting minimum transaction amounts for every purchase
  • Charging a convenience fee on every credit card transaction

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