9 Cheapest Credit Card Processing Companies in 2026
Credit card processing is a necessity for every business, especially as more customers prefer to order online or purchase in-store using contactless payments. The fees associated with processing credit cards can be a large expense for your business. However, choosing the right processor can significantly cut costs.
Based on my evaluation, the cheapest credit card processing companies for small businesses in 2026 are the following:
How I chose the cheapest credit card processing companies
To evaluate the cheapest payment processors for small business, I started by comparing dozens of processors against our 26-point scoring rubric and our rate calculations. This guide is also regularly fact-checked and updated to ensure it continues to provide the best answer. Learn more in my full methodology below.
Why you can trust Fit Small Business
The Fit Small Business Editorial Policy is driven by our company mission to “deliver the best answers to people’s questions.” This involves thorough research and expertise to provide accurate, clear, and authoritative information to meet our audience’s needs.
I have over five years of order and payment processing experience and have been evaluating, testing, and writing about POS and payment solutions for over two years.
Payments Staff Writer at Fit Small Business
Cheapest credit card processing compared
How to calculate processing fees
This is the general formula we use to calculate credit card processing fees:
(% Processing fee x Monthly sales volume) + ($ Processing fee x Number of monthly transactions) + Any monthly or other fees = Total monthly payment processing costs
If you need to accept cards in-store and online, you may need to do two calculations, as many processors have different rates for card-present and card-not-present transactions.
For interchange plus pricing, we used the current interchange rate for Visa Credit swiped retail payments in our calculations.
Related reading: Credit Card Processing Fees Explained
Having trouble getting approved? PaymentCloud has 98% approval odds. And, it works with multiple back-end processors to get you the best rates possible. Visit PaymentCloud to learn more.
Helcim: Best overall and best for maximizing savings
Pros
- Interchange-plus pricing, zero monthly fee
- Automated volume discounts as your business grows
- Free credit card processing
- Free point-of-sale (POS) and virtual terminal
- Free ecommerce, hosted checkout, and customer portal
Cons
- Long list of prohibited business types
- No option for same-day funding
- No 24/7 customer support
- Limited cross-border payment processing capabilities
- Only available to merchants in the US and Canada
Overview
Who should use it:
Active businesses with fast-growing sales volume
Why I like Helcim:
Overall, Helcim is the best choice for maximizing your savings. Unlike other traditional merchant account providers on this list, Helcim does not charge a monthly fee for offering interchange-plus rates. There is no additional cost for using any of its payment processing services (subscription management, surcharging, etc.). It is also the only payment processor in this guide that applies automated volume discounts for growing sales volume, so merchants always pay the lowest rate.
While Helcim offers some of the lowest transparent rates, it may not be ideal for every business. Its platform is designed for merchants who process consistently higher volumes, so very small or seasonal businesses might not see enough savings to outweigh the simplicity of out-of-the-box solutions like Square, which bundle payment processing with free hardware and built-in tools for quick startup.
- Monthly fee: $0
- Card-present transaction fee: Interchange plus 0.15% + 6 cents to 0.4% + 8 cents
- Card-not-present transaction fee: Interchange plus 0.15% + 15 cents to 0.5% + 25 cents
- Automated clearing house (ACH) payments: 0.5% + 25 cents
- Chargeback fee: $15, but Helcim refunds the charge for disputes settled in your favor
- Funding speed: 1-2 business days
- No setup, application, Payment Card Industry (PCI), statement, or early termination fees
Hardware Cost:
Deposit speed:
- Standard 1-2 business days for cards
- 3-4 business days for ACH
- No instant payout
- Offers automated volume discounts (adjusted based on a three-month processing history)
- Uses interchange plus pricing without monthly fees
- Offers free invoicing and subscription management service
- Can process Level 2 and 3 data for B2B
- Offers free credit card processing program (no monthly fees)
- Accepts alternative payment methods like ACH payments
- Has low and refundable chargeback fees
- Has free basic POS software
Square: Cheapest all-in-one solution for new businesses
Pros
- Predictable, flat-rate fees
- No monthly, cancellation, or chargeback fees
- Instant signup, no application or approval required
- Free suite of software, including POS and invoicing
Cons
- Limited customer service hours
- Not compatible with many high-risk businesses
- Locked into Square POS and business tools
- Account stability issues — potential for frozen funds and shutdown accounts
Overview
Who should use it:
New businesses looking for an all-in-one payment and POS system
Why I like Square:
Square is a flat-rate, pay-as-you-go credit card processing and merchant services platform with free, cloud-based POS software. Setup is quick — there’s no lengthy approval process — so most small businesses can start taking payments as soon as the account is active. Its free plan also packs in tools that others charge for, including invoicing, online checkout, a basic online store, and a virtual terminal — a coverage that few picks in our cheapest credit card processing list match.
Helcim’s interchange-plus pricing can be cheaper at higher volumes, but Square’s simple rates are easier to predict and manage. You can also qualify for custom discounted pricing once you process around $21,000 per month or $250,000 per year. The tradeoff: Square is a closed ecosystem, so choosing Square for payment processing means using Square POS rather than third-party POS systems.
- Monthly fee: $0-$60+
- Transaction fees:
- Card-present: 2.6% + 15 cents per transaction
- Online: 2.9% + 30 cents per transaction
- Keyed-in and recurring billing: 3.5% + 15 cents per transaction
- Chargeback fee: Waived up to $250/month
- Funding speed: 1-2 business days. 1.75% fee (Instant and same-day deposit)
Hardware Cost:
Square also has a range of POS hardware with built-in card terminals designed for storefronts. For a complete list of Square’s hardware options, read our Square Pricing Guide.
Deposit speed:
- Free next-business-day to a linked bank (or instant to Square Checking for $0)
- Instant payout fee: 1.75% per transfer to an external bank/debit card; same-day transfer also 1.75%
- Offers volume discounts for businesses processing more than $250,000 annually
- Accepts alternative payment methods, such as ACH payments
- Has built-in free virtual terminal
- Offers free and paid invoicing and subscription management options
- Offers lower processing fees in some Square-paid POS plans, including ecommerce
- Has free magstripe card reader for every account
- Waives chargeback fees up to $250/month
Did you know?
Stripe: Best for customizable online payments
Pros
- Highly customizable payment features with free developer tools
- Transparent pricing, no long-term contract
- Fast signup; no minimum requirements or fees
- Global payment processing and free business management tools
- Integrates with most business software
Cons
- Technical skills required to make the most of the platform
- No out-of-the-box mobile payment option
- Virtual terminal limited to invoicing function
- Lack of ready integration with POS systems
- Lack of clarity around reserves
Overview
Who should use it:
Businesses that are actively selling online and looking for advanced payment processing customizations
Why I like Stripe:
Stripe offers one of the best payment gateways on the market and is often considered the industry leader for online credit card processing. It supports 135+ currencies and payment methods, making it a standout for international payments. Compared with Helcim and Square, Stripe offers deeper checkout customization and stronger multicurrency tools — ideal for ecommerce and SaaS businesses that need flexibility.
I chose Stripe because every account includes advanced customization options to tailor checkout flows, subscriptions, and invoicing without upgrading tiers. You get invoicing and subscription management, a real-time reporting dashboard, built-in fraud protection, simplified PCI compliance, 24/7 support, and an optional fast-payout feature. However, Stripe isn’t a POS-first solution and lacks native, out-of-the-box mobile/POS software — an area where Square is stronger.
- Monthly fee: $0
- Card-present transaction fee: 2.7% + 5 cents
- Online transaction fee: 2.9% + 30 cents
- ACH payments: 0.8% with a $5 cap
- Invoice payments: +0.4%-0.5%
- Recurring payments: +0.5%-8% per transaction
- Chargeback fee: $15 per lost dispute
- International payments: +1.5%
- No contract or early termination fees
- Funding speed: Two business days, 1% (for instant payouts), first payout can take 7-14 business days.
Hardware Cost:
Deposit speed:
- Standard T+2 business days in the US
- Instant payout fee: 1.5% per instant payout in the US (funds typically arrive within 30 minutes)
- Offers custom interchange plus pricing for qualified accounts
- Has options for potential volume and multiproduct discounts
- Accepts alternative payment methods like ACH payments
- Can process Level 2 and 3 data for B2B
- Supports payment via cryptocurrency for selected US merchants
Payment Depot: Best for custom interchange-plus pricing
Pros
- No monthly fee
- Free software including gateway and virtual terminal
- No long-term contract or cancellation fee
Cons
- Custom pricing, no published rates
- For US merchants only
- Application and approval required
Overview
Who should use it:
Small businesses that prefer a traditional merchant account and interchange plus rates
Why I like Payment Depot:
Payment Depot now uses interchange-plus pricing (it previously used a membership model). It no longer offers wholesale, no-percentage-markup rates like Stax, but its $0 monthly fee makes it a strong fit for small businesses focused on the cheapest credit card processing with predictable costs. And because it’s a traditional merchant account provider, you’re less likely to face unexpected account closures or frozen funds than with payment aggregators.
Pricing is now closer to Helcim’s, but Payment Depot offers more customized rates and broader business integrations. Its custom pricing includes a virtual terminal, payment gateway, invoicing, and subscriptions for online credit card processing. The tradeoffs: an underwriting application is required, and there’s no instant or same-day payout option. So, if faster access to funds is essential, consider Square or Stripe.
Fees:
- Monthly fee: $0
- Transaction fee: Custom interchange-plus pricing
- Chargeback fee: $25
- No setup or cancelation fees; no long-term contracts
- $19.99 fee for businesses that fail to be PCI-compliant
Hardware:
While it does not have its own proprietary hardware, Payment Depot is compatible with a variety of hardware options from Swipe Simple, Dejavoo, and Clover. It supports mobile card readers, smart terminals, point of sale (POS), and standard payment terminals.
Deposit speed:
- Typically next-day to 24-48 hours, depending on processor/cutoff
- Instant payout fee: Not advertised/not available as a published add-on (ask sales for expedited options)
- Has no monthly fee
- Has interchange-plus pricing
- Can process Level 2 data for B2B
- Accepts alternative payment methods, including ACH payments
- Has free virtual terminal and payment gateway
Chase Payment Solutions: Best for free and fast payouts
Pros
- Fast payouts with no additional cost
- Direct processor
- Free POS software & virtual terminal
- Transparent flat-rate and no monthly fees
- Uniquely advanced business insights
Cons
- Chase Business bank account required for some payment tools
- Contract required, depending on the features and hardware you need
- Third-party reseller program (avoid this by going through Chase directly)
- Monthly maintaining balance for Chase Business Banking account
- Expensive chargeback fees
Overview
Who should use it:
Small businesses that prefer a traditional merchant account and free and fast payouts
Why I like Chase:
Chase is unusual among direct processors because it offers merchant accounts directly to small businesses. With Chase for credit card processing, you get the advantages of a direct acquirer and faster funding when paired with Chase Business Checking, strong account stability, and detailed analytics. Its global banking footprint also helps with cross-border approvals, which is useful if you accept international cards or sell online.
Pricing is similar to Square: no monthly processing fees, though you may need to keep a minimum balance to avoid charges on a Chase Business bank account. Custom pricing, including interchange-plus, may be available on request. If you need both in-person and online credit card processing from a stable provider, Chase is a solid fit for small businesses looking for low-maintenance merchant services.
- Monthly fee: $0-$15
- Card-present transaction fee: 2.6% + 10 cents
- Online transaction fee: 2.9% + 25 cents
- ACH payments:
- Real-time deposits: 1% (capped at $25), nonreversible
- Same-day deposits: 1% (capped at $25), reversible
- Standard deposits (1-2 business days): $2.50 for the first 10 transactions, 15 cents for additional, reversible
- Chargeback fee: $25-$100 per transaction depending on dispute volume
- Funding speed: Same- and next-day payouts, free if using a Chase business bank account
Hardware:
Deposit speed:
- Same-day when using QuickAccept® with a Chase business checking account
- Next-day with Chase accounts for most standalone solutions
- 2–3 business days to non-Chase banks
- Instant payout fee: Not listed
- Has no monthly fee
- Has free same-day funding
- Offers custom pricing
- Can process Level 2 and 3 data for B2B
- Accepts alternative payment methods like ACH and e-check payments on the virtual terminal
- Has free POS and virtual terminal
PayPal: Best for PayPal and Venmo payments
Pros
- Fast sign-up; no monthly minimums
- One of the cheapest flat rates for in-person payments
- Free invoicing, online checkout, and QR code payment tools
- Customer-friendly One Touch checkouts
Cons
- Additional monthly fee for virtual terminal
- Account stability issues and hard-to-anticipate reserve policies
- Weekly limit for swiped and keyed-in payments
- 30-day hold on funds over weekly limit
Overview
Who should use it:
Occasional or seasonal sellers, and those that primarily accept PayPal and Venmo payments
Why I like PayPal:
PayPal offers free pay-as-you-go subscriptions for mobile and online payments, along with a popular trustworthy security seal. It also offers discounted rates for nonprofits and a wide range of payment methods, including exclusive PayPal payments used by over 400 million active PayPal users. Like Square, PayPal is very small and microbusiness-friendly, though the latter integrates better with other online platforms.
Overall, PayPal offers very competitive pricing and is among the easiest solutions to accept payments online. But I also like how it offers the cheapest flat rates for in-person transactions in this guide. With PayPal’s pay-as-you-go plan and ability to accept 26 currencies and cryptocurrency, seasonal sellers, including businesses that cater to tourists can maximize both their sales and savings by offering PayPal payment option to customers.
Since our last update:
PayPal used to offer its in-person POS through PayPal Zettle. In 2025, this was rebranded into PayPal Point of Sale. Despite the name and look change, the features and tools remain the same under the PayPal brand.
Fees:
- Monthly fee: $0-$30
- PayPal checkout transaction fee: 3.49% + 49 cents
- PayPal Zettle in-person transaction fee: 2.29% + 9 cents
- Online card payments transaction fee: 2.99% + 49 cents
- Quick response (QR) code transaction fees: 2.29% + 9 cents
- Chargeback fee: $20; waived for certain transactions
- Virtual terminal: 3.09% + 49 cents, $30 per month
Hardware:
Deposit speed:
- Balance available immediately
- Standard transfer to bank typically 1-3 business days (no fee)
- Instant payout fee: 1.5% of the amount transferred (min $0.50), to eligible bank or debit card
- Offers discounts for donations and nonprofits
- Has flat rate with no monthly fees
- Has lowest in-person flat-rate fee
- Accepts alternative payment methods like e-checks and QR transactions
- Waives chargeback fees of certain qualified transactions
- Offers separate free POS
CardX: Best for surcharging
Pros
- Fully compliant automatic surcharging
- Exclusive partnership with Mastercard
- Payment plans for card terminals
- Provides merchant training
Cons
- Monthly account and terminal fee
- Limited invoicing tools
- No POS software integration
- For US business only where surcharging is legal
Overview
Who should use it:
Local US businesses looking for fully compliant surcharging tools
Why I like CardX:
CardX is an industry-leading automated surcharging platform and Mastercard’s exclusive surcharging partner. It offers invoicing, billing, and ecommerce integrations that allow you to accept both in-person and online payments. CardX is available in 48 states, including New York and Maine plus the District of Columbia, and works with any business size with a very low monthly fee.
Some challenges when using out-of-the-box surcharging platforms are the learning curve and tailoring the system to your business needs. However, the CardX platform is clean and modern. I tested the CardX platform and found it easy to set up, while the online payment gateway and virtual terminal features are easy to use. One downside though is that CardX offers limited hardware options.
Fees:
- Monthly fee: $29-$199 (based on sales volume)
- Credit card transaction fee: Free (passed on to customers)
- Debit card transaction fee: Starts at 1.25% + 25 cents (varies depending on processor)
- Chargeback fee: N/A
- Funding speed: 1-2 business days
- No setup, application, or early termination fees
- Month-to-month billing
Hardware:
Deposit speed:
- Next-business-day funding (CardX notes deposits “the next day”)
- Instant payout fee: Not offered/not listed; no same-day option documented
- Offers volume discounts
- Has flat-rate fee for debit card payments
- Offers free credit card processing program
Learn more about free credit card processing:
Dharma Merchant Services: Best for transparent pricing & business practices
Pros
- Low interchange-plus pricing
- Level 2 and Level 3 processing supported
- Free surcharging tools
- Automatic discounts if processing over $100,000 annually
Cons
- Strict application process
- No same-day funding option
- Higher rates for American Express
- Account closure fee
Overview
Who should use it:
Small businesses that prefer the low interchange plus rates with affordable monthly fees
Why I like Dharma:
Dharma Merchant Services is a small independent merchant services provider that specializes in working with small businesses. It offers low-cost interchange plus pricing, particularly for storefront and restaurant payments. In addition to fair pricing and transparency―every single fee is listed directly on Dharma’s website ― Dharma is also an eco-friendly company and, to date, has donated nearly $750,000 to nonprofits.
As a payment processor, I like how Dharma offers a bit of everything: invoicing, subscription management, surcharging, level 2 and 3 data processing, ACH processing, even inventory management and online ordering. Add-on payment processing tools are available so you can create a payment processing solution tailored to your business needs. Dharma also offers cheaper monthly subscription fees compared with Stax, although the latter offers better wholesale transaction rates.
Fees:
- Monthly fee: $20
- Card-present transaction fees: Interchange plus 0.15% + 8 cents, 0.25% + 8 cents for American Express
- Online transactions fees: Interchange plus 0.2% + 11 cents, 0.3% + 11 cents for American Express
- Nonprofit transaction fee: 0.1% + 8 cents for storefront, 0.1% + 11 cents for online
- Chargeback fee: $25 per chargeback
- Account closure fee: $49
- Funding speed: Next business day
Hardware:
Dharma’s range of hardware also includes mobile card readers, payment terminals, and POS. It can be programmed into Clover hardware devices, while the mobile hardware supports direct MX Merchant gateway and mobile app integrations. Visit Dharma for the complete list.
Deposit speed:
- Default 2-business-day funding
- Next-day typically available for card-present/retail merchants (subject to underwriting and batching cutoffs)
- Instant payout fee: Not offered/not listed
- Offers volume discounts
- Has low-cost subscription-based, interchange plus pricing
- Can process Level 2 and 3 data for B2B
- Offers free credit card processing program
- Accepts alternative payment methods like ACH payments
- Offers discounted rates for nonprofits
Stax: Cheapest wholesale rates for high-volume business
Pros
- Wholesale rates with no percentage markup
- Automatic updates for expired customer payment cards
- Full feature access regardless of plan
- 24/7 customer service
Cons
- ACH and next-day funding are add-ons
- Separate application for surcharging program
- High monthly fees
- No same-day funding option
Overview
Who should use it:
High-volume businesses looking to save on payment processing fees
Why I like Stax:
Stax (formerly Fattmerchant) is a subscription-based merchant services provider with no percentage markup over interchange. For businesses with steady, high sales volume, this pricing model can deliver some of the cheapest credit card processing effective rates. You also get strong tools for service businesses, including invoicing, stored cards, text-to-pay, and a virtual terminal, making Stax a high-value pick for professional services and other recurring-billing use cases.
Stax is versatile as a payment processor: it integrates with leading POS software, ecommerce platforms, and payment gateways, and works with popular POS hardware and card readers (including Clover). It supports both in-person and online credit card processing, so retailers, restaurants, and SaaS companies can tailor workflows while keeping credit card processing fees predictable under a flat monthly plan.
Fees:
- Monthly fee: $99-$199
- Card-present transaction fee: Interchange plus 8 cents
- Card-not-present transaction fee: Interchange plus 18 cents
- Chargeback fee: $25
- Funding speed: Next-day
- Contract length: Effectively month-to-month
- Early termination/cancellation fees: $0
Since our last update: Stax has added a paid plan option at $139/month for businesses that process $150,000-$250,000 a year.
Hardware:
Deposit speed:
- Next-business-day funding (same-day available as a paid add-on)
- Instant payout fee: Charged as an add-on; pricing varies by account
- Offers custom pricing
- Has subscription model with wholesale rates, 0% markup
- Can process Level 2 and 3 data for B2B
- Offers free credit card processing program
- Accepts alternative payment methods like ACH payments
- Has free virtual terminal
Most of the payment processors on this list can offer such low rates by minimizing risk. This means they are selective about who they work with. Dropshipping, event planning, lead generation, and other common business types may have trouble getting approved.
If you’ve been rejected by processors in the past or are concerned about your application being approved, consider working with a high-risk payment processor. Our recommended solution, PaymentCloud, works with many different back-end processors to offer higher approval odds and competitive pricing. It also guides you through the application process.
How to choose the cheapest credit card processing company
Finding the cheapest credit card processing option isn’t just about the headline rate. Compare the total cost for your volume, mix of in-person and online credit card processing, and tools you actually need.
- Pricing model (flat vs. interchange-plus vs. subscription): Flat-rate pricing is simple for low volume; interchange-plus usually wins as you grow; subscription (no % markup) can be cheapest at high, steady volume. Match the model to your monthly sales and average ticket.
- Monthly fees and markups: Add up gateway, PCI, statement, and platform fees plus the processor’s per-transaction markup over interchange; small, fixed fees can outweigh a low “rate” at low tickets.
- Deposit speed/instant-payout fees: Check standard funding times (same-day/next-day vs. 2–3 days) and what instant payouts cost; faster cash flow is great, but instant funding often carries extra % or flat fees.
- Chargeback fees and policies: Compare chargeback fees, refund costs, and representment support; ask about fraud tools and reserves, especially important for online credit card processing.
- Contract terms (cancellation/ETF): Prefer month-to-month with no early termination fees; avoid liquidated damages, auto-renewals, and rate-hike clauses buried in the MSA.
- Hardware and integrations: Price readers/terminals and check POS/ecommerce compatibility; closed ecosystems can be easy but limiting, while open setups and the best payment gateways give more flexibility as you scale.
How to lower credit card processing fees
Processing fees are a huge recurring expense for every business, lowering your fees can save you hundreds, if not thousands, of dollars each month. Although you can’t avoid them altogether, there are some steps you can take to get low-cost credit card processing fees.
Incentivize cash payments
The first step to lowering your card processing rates is encouraging customers to pay in cash. Essentially, businesses can offset processing fees by building them into their regular prices and offering a discount for shoppers paying in cash. However, look closely at the laws in your particular state and local area. In many places, cash discounts are legal, but credit surcharges are often not.
A common example of this is pricing at gas stations. If you walk inside and pay cash, the per-gallon price is lower than paying with a card at the pump. Read our guide on cash discounting to learn more.
Accept ACH payments
After cash, ACH and e-check payments are usually the cheapest payment method to accept. This option is ideal for businesses that use recurring payments like subscriptions or charge via invoice. Stax does not charge extra fees for ACH processing except for its monthly plan.
For smaller businesses, Square offers free invoicing with ACH payments options. Square ACH processing fees are 1% per transaction with a $1 minimum. Alternatively, QuickBooks also offers an ACH invoicing option, which charges 1% per ACH transaction. This option is particularly practical if you are already using the accounting software. Read about ACH processing and the other most affordable ways to accept payments online.
Apply for B2B rates
B2B businesses can qualify for even lower processing rates known as Level 2 or Level 3 processing. These rates are not available to most small businesses, especially business-to-consumer (B2C) businesses. However, if you are a business-to-business (B2B) company processing large volumes, check with a merchant account provider like Dharma Merchant Services.
Shop around for quotes
Once your business grows to a place where you are consistently processing more than $20,000 per month, you can likely negotiate lower rates with different processors. Shop around and request quotes actively to see if you could save several hundred dollars per month by switching credit card processing companies.
Implement a surcharge
At least on the surface, the most straightforward way to lower credit card processing fees is to pass them along to customers. This option is becoming increasingly popular, and there are now more reputable payment processors offering this service.
However, surcharging is not legal in every state (although cash discounting is). Adding on extra fees to every transaction does not create a positive customer experience, which is crucial for retention and long-term business success. See if credit card surcharging is right for your business.
Lower your chargeback rates
When your business faces a chargeback, if the dispute is not resolved in your favor, your business could be out of the transaction fee from the initial purchase, the cost of the product or service itself, and potentially another transaction fee for the reimbursement. So, chargebacks are costly even as a one-off occurrence.
However, if your chargeback rates are above 1% of your total transactions, your processor might impose higher transaction fees and reserve requirements. A high chargeback rate could also cause your business to be labeled “high risk,” which also results in higher processing fees. Read our guide for preventing chargebacks, which is key for keeping transaction fees low.
Accept more in-person payments
As you may have noticed with the rates listed in this guide, card-not-present transactions like ecommerce, keyed-in, invoicing, card-on-file, and payments made over the phone come with higher processing fees. This is because these types of payments have a higher risk for card networks and issuing banks as they are more susceptible to chargebacks and fraud.
Whenever possible, opt for card-present transactions like swipe, chip, and NFC payments. Because the customer is physically present, there is less risk involved, and therefore the interchange fees and processor markups are lower. Read our guide to interchange fees and factors that influence them.
Methodology: How I evaluated the cheapest credit card processors
The cheapest credit card processing for small business will vary depending on your sales volume, average order value, and the type of transactions you process.
To find the cheapest overall options, I did the following:
- Considered dozens of processors that offer any combination of the following: zero monthly fees, low interchange rates, wholesale transaction fees, free credit card processing, volume discounts, free or competitively priced hardware, and free business and payment tools.
- Excluded any processors that offer tiered pricing plans as the default option.
- Narrowed our selection down to 15 payment processors that offer the most transparent (and usually the lowest) pricing and value for money.
- Evaluated them across 26 data points that cover pricing, contract terms, account and payment features, and opinions from our in-house experts who have experience working with these processors.
- Calculated processing fees for various mock businesses with requirements similar to small retail, restaurant, service-type, nonprofits, and B2Bs.
I only considered payment processors that offer flat-rate or interchange plus pricing (the most transparent and usually the lowest cost) and excluded any that offer tiered rates as they can be misleading.
To consistently provide the best answer, this guide is regularly updated to reflect changes in payment services industry standards.
My full evaluation criteria includes:
- Pricing (35%): I prioritized solutions with the lowest transaction fees. I also considered cancellation fees, chargeback fees, and higher rates on certain card types (which are most common with American Express cards). Processors that have volume discounts and flexible pricing structures earned bonus points.
- Contract terms (25%): I looked for either no or month-to-month contracts, $0 cancellation fees, affordable card readers, and no minimum requirements or setup fees. Points were docked from any provider that requires a long-term contract or long-term hardware lease. Traditional merchant accounts earned points over aggregate processors because of the greater stability they offer with fewer holds and reserves.
- Account features (20%): Processors that offer a variety of payment options, including mobile, ecommerce, ACH or e-check, virtual terminal, card-on-file, and surcharging earned the most points. I also evaluated each processor on their deposit speed, availability of customer support, and whether or not the processor offers tools like virtual terminals, payment gateways, and POS software at no additional cost.
- Expert score (20%): The biggest factor here is pricing transparency. I looked at sample statements and contracts where possible, along with reviews from other business owners, to make sure our top choices aren’t riddled with extra or surprise fees. Additionally, I considered account stability and general ease of use, along with reviews and reputation for each processor. Finally, I considered how well each processor works with other popular small business software like POS systems, shopping carts, and accounting software.
Frequently asked questions (FAQs)
These are some of the most common questions we get about the cheapest card processing companies.
There’s no single cheapest credit card processing option. Your effective rate depends on volume, average ticket, and in-person vs. online credit card processing. Micro-merchants often save with flat-rate tools such as Square and PayPal, while growing businesses typically get lower costs with low-markup interchange-plus, like Helcim and Payment Depot, or subscription pricing, like Stax.
It’s a pricing program that passes card fees to customers via surcharges or dual pricing/cash discounts so the merchant pays little or nothing. It reduces costs but requires strict card-brand/state compliance (no surcharges on debit/prepaid and clear disclosure).
Bottom line
In general, credit card processing and payment processing are necessary functions of any business, but they come at an expense. Many different payment processing companies advertise the lowest rates, and many of them have completely different fee structures. Finding cheap credit card processors for small businesses is tricky but can save your business hundreds, if not thousands, of dollars every month.
If you’re not ready to choose, read more about merchant accounts and how credit card processing fees work.
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