9 Cheapest Credit Card Processing Companies of November 2024

To find the cheapest credit card processing company, you’ll want to consider your business’s industry, sales volume, typical transaction size and whether you process payments in person, online or both. Because credit card processing companies often have different pricing structures, no single provider is the cheapest option for all businesses, but these factors can help you estimate and compare credit card processing fees.

In addition to the processing fees themselves, remember to factor in monthly subscription costs and hardware expenses if you plan on accepting card payments in person. To further narrow down options, you can make a list of extra tools and capabilities your business requires.

Here are some of the cheapest credit card processing companies to consider, based on your business type:

Square: Best for brick-and-mortar businesses.
Stripe: Best for online businesses.
Helcim: Best for high-volume businesses.

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Our picks for cheapest credit card processing companies

Best for high-volume businesses

Why we like it: Helcim is a fantastic choice for small businesses looking for low rates and no monthly subscription fees. Its interchange-plus fee structure is a cost-effective option, especially for businesses with high sales volumes, and its website makes it easy to find pricing information. The company’s volume discounts, which are applied automatically as the amount you process increases, are a nice perk to have as your business grows. Read our full Helcim review.

Interchange plus 0.4% and 8 cents per in-person transaction (if $50,000 or less in monthly card transactions).
Interchange plus 0.5% and 25 cents per online or manually keyed transaction (if $50,000 or less in monthly card transactions).
0.5% plus 25 cents for ACH payments (capped at $6).

No long-term contracts or cancellation fees.
No monthly subscription fees.
No setup fees.
Processing rates go down after your business processes more than $50,000 in payments per month.

Doesn’t work with high-risk merchants, meaning businesses that are more susceptible to fraud and chargebacks.
No 24/7 support.

Best for brick-and-mortar businesses

Why we like it: With clear, flat-rate pricing, free POS software and a free mobile card reader, Square is one of the cheapest credit card processing solutions, especially for smaller businesses. Businesses can use the payment service provider to accept a variety of payments, including both in-person and online. To process in-person payments, for example, you can use free POS software alongside one of its hardware options. Businesses can also opt for Square’s retail POS or Square’s restaurant POS software plans to access more features. Square offers Tap to Pay on iPhone and Android, which lets merchants accept card payments using only an iPhone or Android phone with the Square POS app. API integrations let clients accept credit card payments on their website or e-commerce site too. Read our full Square review.

$0 for Square POS, Restaurant, Retail and Appointments Free plans.
$29 for Square Appointments Plus plan.
$69 for Square Appointments Premium and Square Restaurants Plus plans.
$89 for Square Retail Plus plan.
$165 for Square Restaurant Premium plan.
Custom pricing for Square Retail plan.

2.6% plus 10 cents for in-person transactions.
2.9% plus 30 cents for online transactions.
3.5% plus 15 cents for manually keyed transactions.
3.3% plus 30 cents for invoices.

No early termination, activation, refund or chargeback fees.
No PCI compliance fees.
No monthly subscription fee.
Free point-of-sale software.
Free mobile card reader (magstripe only).

May be more expensive than an interchange-plus pricing model for some businesses.
Doesn’t work with high-risk merchants.
Only paid POS plans include 24/7 live customer service.

Best for online businesses

Why we like it: With transparent, flat-rate pricing and no subscription fees, Stripe is one of the easiest payment processing solutions for online businesses. Although you may find an alternative provider with lower processing fees, it’s difficult to beat the lack of other fees, flexibility and included-payment tools within the company’s platform. The payment service provider offers its own invoicing, billing, business data and tax calculation features, too. Read our full Stripe review.

2.7% plus 5 cents for in-person transactions.
2.9% plus 30 cents for online transactions.
3.4% plus 30 cents for manually keyed transactions.
4.4% plus 30 cents for international card transactions.

No setup fees.
No monthly subscription fees.
24/7 phone, chat and email support.
More than 450 platforms and extensions available.
Accepts payments in more than 135 currencies.

Best for membership-style pricing

Why we like it: Instead of charging interchange fees plus a percentage markup per transaction like some of its competitors, Stax requires its clients to subscribe to a monthly plan and charges interchange plus a fixed per-transaction fee, which is 8 cents for in-person transactions. This fee structure could help high-volume businesses save money, especially if they’d otherwise pay more than $99 per month in percentage markups and other fees. Read our full Stax review.

$99 if you process less than $150,000 per year.
$139 if you process between $150,000 and $250,000 per year.
$199 and up if you process more than $250,000 per year.

Best for high-risk merchants

Why we like it: Payline is a merchant account provider that offers interchange-plus pricing at very low rates. It has two plan offerings, one designed for brick-and-mortar retailers and one designed for e-commerce merchants. Although paying for both plans isn’t ideal for businesses that sell products both online and in stores, it could be one of the cheapest options for businesses that require only one or the other. It also offers high-risk merchant accounts for businesses involved in industries such as tobacco, cannabis, credit repair and more. Read the full Payline review.

$10 for in-person sales.
$20 for online sales.

No long-term contract or cancellation fees.
No PCI compliance fees.
Offers high-risk merchant accounts.
First month is free for eligible merchants.
24/7 phone support.

Best for tailored interchange-plus rates

Why we like it: Payment Depot is a merchant account provider owned by Stax. Its interchange-plus model may be best suited to businesses that are looking for ways to save and don’t mind the more complex pricing structure. Read the full Payment Depot review.

0.2%-1.95% plus interchange.

Businesses save when customers use cards with low interchange rates.
No cancellation fees.
Compatible with several POS hardware providers, including Clover.
24/7 phone support.

Why we like it: National Processing is a payment processor with competitive rates, useful integrations and compatibility with several card readers. Plus, it works with high-risk merchants. Its long-term contracts are a concern, but every plan includes free reprogramming of existing equipment and some merchants qualify for free hardware. Read our full National Processing review.

$9.95 for Basic In-Person Package, Basic E-Commerce Package.
$9.95 and up for Premium Package (for businesses with monthly sales volumes exceeding $30,000).
$19 and up for Advanced Package.

Basic In-Person Package: 2.5% plus 10 cents per transaction.
Basic E-Commerce Package: 2.9% plus 30 cents per transaction.
Advanced Package: 2.41% plus 10 cents.
Premium Package: quote-based.

Works with high-risk merchants.
Offers several good integrations for accounting, online selling and shopping carts.
Each plan includes free reprogramming of existing hardware plus a free mobile card reader.

National Processing’s payment processing fees are only guaranteed for merchants that process at least $10,000 in sales a month.
Monthly fees can add up.
Requires a long-term contract, and there are early termination fees (with a few exceptions).

Why we like it: Dharma Merchant Services charges nonprofits reduced monthly fees and processing rates, making it a top choice for these organizations. It’s also a certified B Corp, meaning it’s held to higher environmental and social standards. That’s a big plus for small businesses that pride themselves on working with socially responsible companies. The company also offers reduced rates for small businesses that process over $100,000 per month. Read our full Dharma Merchant Services review.

$12 for nonprofits.
$15 for business to business, e-commerce, hospitality, retail and restaurant.

Interchange plus 0.15% + 8 cents for in-person transactions.
Interchange plus 0.20% + 11 cents for online transactions.
Interchange plus 0.25% + 8 cents for in-person AmEx transactions.
Interchange plus 0.30% + 11 cents for online AmEx transactions.

U.S. Bank Merchant Services

Best for fast deposits

Why we like it: U.S. Bank Merchant Services stands out for its Everyday Funding feature that gives U.S. Bank checking account holders access to same-day funding seven days per week. It offers competitive in-person and online processing rates, along with a variety of POS software plans ranging from $0 to $99 per month. If you plan on depositing funds directly to an outside bank account, though, this might not be the best option.

2.6% plus 10 cents for in-person payments.
2.9% plus 30 cents for online payments.
3.5% plus 15 cents for keyed payments.

Same-day funding seven days per week for U.S. bank checking account holders.
No PCI compliance fees.
No cancellation fees.
Free POS software plan available.

Best for accepting QR code payments

Why we like it: PayPal Zettle’s low card-present transaction rates — which also apply to QR code payments — and free POS app make it an affordable option for service-based businesses and solopreneurs selling at markets or popups. To accept a QR code payment, you enter the sales total into the app, choose PayPal or Venmo as the payment method and ask your customer to scan the QR code that the app generates. Since processing online transactions may involve separate payment gateway subscriptions, it’s not the best choice for businesses making the bulk of their sales online. Read our full PayPal Zettle review.

2.29% plus 9 cents for in-person and QR code transactions.
3.49% plus 9 cents for manual-entry card transactions.
2.99% plus 49 cents for invoicing (payment made with card).
3.49% plus 49 cents for invoicing (payment made with PayPal).

No monthly software fees for accepting in-person payments.
No long-term contract or termination fees.
Accepts a variety of payment types, including Venmo and PayPal payments.
Inexpensive card reader with a keypad, plus built-in payment processing and a free mobile app lets you quickly accept in-person payments on the go.

Didn’t find what you’re looking for?

How to calculate credit card processing costs

To predict your business’s monthly credit card processing fees, start by determining your average card transaction amount and how many card sales you complete each month. From there, you can use this calculation to estimate your monthly credit card processing costs for specific types of transactions (e.g., online, in-person or keyed-in):

[(average credit card transaction dollar amount x transaction percentage fee) + transaction fixed fee] x [number of credit card sales completed per month]

Here’s a breakdown of credit card processing fees, plus other associated costs.

Credit card processing fees

Credit card processing fees vary by provider and which fee structure they use: interchange-plus or flat-rate. Generally, interchange-plus is more transparent and better for high-volume merchants, but flat-rate pricing can be more predictable and easier to understand. Alternatively, some processors may choose to lower their per-transaction fees and charge a monthly fee. On average, though, credit card processing fees range from 1.5% to 3.5% of the total transaction cost.

Hardware and software fees

In terms of hardware, chances are you’ll need to buy credit card readers or a more robust point-of-sale (POS) system for accepting in-person payments. Some companies offer free card readers and others range from around $29 to $59. Card readers with receipt printers or a screen usually cost more. You’ll also need some type of POS software or app to use alongside the hardware. Some basic software plans are free, but prices rise as you seek out additional features like inventory tracking, employee management or in-depth reporting.

If you only need to accept a handful of transactions each day, payment apps let you complete contactless transactions using just your smartphone. That way, you can skip the card reader and save on hardware. However, processing rates vary.

Other fees

Look out for additional fees related to services like PCI compliance, setup, cancellation, funds withdrawal and more. Not all processors are transparent about these added fees, so be sure to read the terms of your contract closely and speak to a representative if anything is unclear.

Learn more about credit card processing fees

Explore ways to offset processing fees and use NerdWallet’s calculator to estimate how much your business should expect to owe.

How to choose the cheapest credit card processing company

If you want to offer your customers the option to pay by card, whether in person or online, you will need to pay fees to credit card companies and financial services providers to authorize and complete card transactions. However, carefully weighing credit card processing companies can guide you toward the most cost-effective option.

To find the cheapest credit card processing company for your business, consider the following factors:

Your industry: Your industry’s perceived level of risk can impact how many payment processors you have to choose from. For example, many credit card processing companies won’t work with high-risk businesses in industries like CBD, credit repair, travel and vitamins. That’s where high-risk payment processors come into play. Risk aside, certain types of businesses, like retail shops and restaurants, might want to work with a credit card processing company that sells POS systems created specifically with their industry needs in mind.
Typical transaction size: Average transaction size affects how much your processing costs cut into your margins. For example, imagine you run a landscaping company and your average transaction size is $1,000. A flat rate of 2.6% plus $0.10 would cost you $26.10. If you own a cafe, however, and your average transaction size is $5, you’d owe $0.23 cents per transaction, which adds up to $46 in processing fees per $1,000 in sales. This discrepancy illustrates why it’s so important to predict and compare your processing fees across multiple credit card processing companies before committing.
Sales volume: Similar to average transaction size, the number of transactions your business completes each month also impacts your overall credit card processing costs. The cheapest credit card processing company for a business that does $5,000 in transactions per month may not be the best choice for one that completes $100,000 in monthly sales. That being said, higher-volume businesses might be able to negotiate down rates or qualify for volume discounts.
Convenience: If you want to start accepting card payments immediately, payment service providers, like Square and Stripe, are often good options. They might not offer the absolute lowest rates, but they don’t require you to apply for your own merchant account, which simplifies the process. Oftentimes, there’s a tradeoff between convenience and cost.

Tips for reducing credit card processing fees

While you can’t avoid credit card processing fees altogether, there are several strategies for reducing the burden on your business.

Incentivize customers to pay with cash

Certain credit card processing companies offer credit card surcharge programs that pass some or all of the processing fees to customers who choose to pay with a card instead of cash. If you go this route, be sure to understand your state’s laws around the program. Another option is cash discounts, and unlike credit card surcharging programs, they’re legal in all 50 states. Essentially, cash discount programs extend discounted prices to customers who choose to pay in cash. Customers using a credit card pay the advertised, non-discounted price.

Implement minimum purchase amounts

Paying processing fees on a small transaction amount, like $3, might not be worth it for your business. If that’s the case, consider implementing a minimum credit card purchase amount and require customers to use cash if their receipt total is below the minimum.

Request a volume discount

Some credit card processing companies reduce processing fees as your business’s sales volume grows. Helcim, for example, begins lowering rates once businesses clear $50,000 in credit card transactions each month. Other companies might offer a similar discount but not advertise it as openly. It’s worth reaching out to a representative to ask.

Consider interchange-plus over flat-rate pricing

Interchange-plus pricing passes interchange fees, plus a set markup, to the merchant. This means that the merchant pays less when customers use cards with lower interchange fees. Many times, this pricing model is more cost-efficient, but less predictable, than flat-rate pricing.

Negotiate markups

If you go with an interchange-plus processor, you might be able to negotiate how much they charge on top of interchange fees. Prior to having that conversation, though, make sure you have the figures ( e.g., your monthly processing costs, average transaction amount, how your processor‘s markups compare to competitors) to back up your request.

Make sure your interchange fees align with your industry

When you start accepting credit card payments, your business is assigned a merchant category code based on its industry and what it sells. That code determines your interchange rate, among other factors. If you use an interchange-plus processor that passes fluctuating interchange rates to your business (instead of charging a consistent fee, like flat-rate processors), ensuring your business is assigned the correct code can help guarantee you’re being charged the appropriate interchange fees for your industry type.

Learn more about minimizing credit card fees

Read more about surcharge programs and cash discounting, their pros and cons and which credit card processing companies offer these options.

Read the full article here

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