Cheapest Credit Card Processing Companies for 2021

The average credit card processing company charges $2.67 a transaction and the best charge around 1%. This is why people are turning to alternative means of payment like Bitcoin or other cryptocurrencies. In 2021, there will be more than 200 million cryptocurrency holders worldwide but only 50 banks in America have partnered with crypto companies. That leaves many Americans without access to their funds when they need it most because of these higher costs for traditional banking institutions that process their transactions.

Every company needs credit card processing, particularly as more consumers opt to shop online or make in-store purchases using contactless payments. The costs connected with credit card processing may be a significant expenditure for your company. Choosing the lowest credit card processing provider depending on the size of your business and how you take card payments, on the other hand, might save you a lot of money.

The cheapest credit card processing for small companies, according to our research, is:

• Payment Depot offers the most cost-effective credit card processing for most companies.
• Fattmerchant’s Stax is the best overall value for small companies.
• Square: The most affordable option for individuals and new small enterprises, with no monthly cost.
• Helcim: Lowest interchange + processing fees, plus no monthly fees
• PayPal is the cheapest way to handle credit cards for one-time purchases.
• Stripe is the most cost-effective credit card processing solution for internet companies.
• Dharma Merchant Services; offers the most affordable credit card processing for small businesses and restaurants.

You’ll need to apply for a specific high-risk merchant account if you have a high-risk company (such as CBD sales or a history of chargebacks). For cheap prices, we suggest PaymentCloud. Otherwise, check out our picks for the best small company merchant accounts.

Payment Depot

4.46 OUT OF 5

What We Enjoy

• Fees that are both low and transparent
• Virtual terminal and free gateway
• No cancellation charge, month-to-month billing
• Money-back guarantee for 90 days

What Isn’t There

• Best for companies that handle $10,000 or more each month
• High-risk companies are unlikely to get authorized.
• Regardless of payment volume, there is a monthly cost.

Pricing

• $79-$199 per month
• Exchange + 7-15 cents is the transaction cost.
• Fee for a chargeback: $15
• There are no setup costs, cancellation fees, or long-term commitments to worry about.
• Payment gateway and virtual terminal are both free.
• The majority of plans come with complimentary hardware.
• Businesses that aren’t PCI compliant will be charged a $19.99 fee.

Payment Depot uses a subscription pricing model to provide small companies with wholesale credit card processing rates. Because it’s a typical merchant account, companies can anticipate safe and consistent processing. Payment Depot covers everything under one subscription and a single transaction charge, unlike many typical merchant accounts, which provide separate fees or subscription needs for online, in-store, and virtual terminal payments.

In other words, it does not levy a surcharge for online purchases. In 2021, this will be particularly crucial for small enterprises, as more clients will be purchasing online, ordering ahead of time, or seeking contactless solutions.

There are no setup or cancellation fees with Payment Depot. A free payment gateway is included with every account, as well as free reprogramming of any existing equipment. Free mobile readers, terminals, and pin pads are included in certain programs.

Payment Depot received the highest score of 4.46 out of 5 in our review, however, a $15 chargeback fee, the absence of native card-on-file functionality for saved payments, and a one to two-day deposit delay kept it from receiving a perfect grade. Consider Helcim’s software for card-on-file and recurring billing payments, which comes with no monthly subscription.

Fattmerchant’s Stax

4.44 OUT OF 5

What We Enjoy

• ACH processing at a low cost
• The Omni program is available for free.
• Billing, invoicing, and virtual terminals are ideal for enterprises.

What Isn’t There

• Monthly membership charge of $99+
• For fledgling firms, this is not ideal.
• Subscriptions for card-present and card-not-present payments are separate.

Pricing

• Fee per month: $99+
• Interchange extra 8 cents for card-present transactions
• Interchange additional 15 cents for card-not-present transactions
• Optional software packages are available for $29-$129 per month and include capabilities such as a reporting dashboard, ACH payments, invoicing, Text2Pay, web-hosted payments, recurring payments, chargeback management, and dedicated support.
• The chargeback cost is $25.
• Custom plans are available for firms that handle more than $5 million per year.

Stax is a merchant services subscription provider comparable to Payment Depot, but with somewhat different pricing and software. Stax offers a larger monthly membership charge than many of Payment Depot’s plans, but lower transaction fees, making it an excellent option for developing enterprises. Stax’s own software, which can be used for invoice administration, saved and recurring payments, customer management, text-to-pay options, and a reporting dashboard, also provides good value.

Stax by Fattmerchant is an affordable credit card processing company for all established businesses, but especially professional services, because of its affordable recurring payment and billing credit card processing, as well as user-friendly software programs and virtual terminal that are included for free.

Stax received a 4.44 out of 5 rating in our review. It’s one of the few merchant services that accepts all of the payment methods we examined, including ACH, card-on-file recurring billing, and level 2 and level 3 processing, all of which may help a company’s bottom line. Stax was denied a perfect grade due to their $25 chargeback cost and excessive monthly expenses.

Consider Payment Depot, Dharma Merchant Services, or Helcim if you want interchange plus processing with a low (or free) monthly cost. Payment Depot and Helcim both have reduced chargeback costs of $15 per chargeback.

Square

4.29 OUT OF 5

What We Enjoy

• Fees that are predictable and fixed
• There are no monthly fees, cancellation fees, or chargeback costs.
• There is no need to fill out an application or wait for the approval.
• Disputes and administration of chargebacks are automated.

What Isn’t There

• For firms processing over $10,000 per month, this is not the cheapest option.
• Issues with account stability—the possibility of frozen money or account closure
• For high-risk or high-volume organizations, this isn’t the best option.

Pricing

• Free on a monthly basis
• 2.6 percent + 10 cents per transaction for card-present transactions
• 2.9 percent + 30 cents per transaction for online transactions
• Transaction cost for keyed-in and recurring billing: 3.5 percent + 15 cents per transaction
• There is no chargeback cost.
• Volume discounts are available for firms processing more than $250,000 per year. In addition, certain software subscriptions have cheaper processing costs.

Square is a cloud-based credit card processing and business management software company that offers low pay-as-you-go processing costs and free top-rated point-of-sale software. Square is not only one of the cheapest credit card processors, but also one of the finest, thanks to these characteristics.

Square received a 4.29 out of 5 rating in our review. Square received good reviews for its instant enrollment with no application procedure, contract, monthly fees, cancellation fees, or chargeback costs. Square’s high score was boosted by additional services such as free invoicing software, a free online shop, online checkout facilities, a virtual terminal, and free POS software. There is no other option on our list that provides such a diverse range of free software and business solutions without the need for an application or a monthly cost. Individuals, infrequent sellers, and new enterprises on a budget will benefit from this flexibility and value.

Square missed out on a perfect score due to limited customer support hours and account stability difficulties. Discover our comparison of the top free merchant accounts to see how Square compares to other payment processors with no monthly fees.

Payment Depot, Stax by Fattmerchant, or Helcim are good options for growing and established companies looking for interchange-plus rates and a more solid merchant account.

Helcim

4.10 OUT OF 5

What We Enjoy

• With no monthly subscription, you may get interchange-plus pricing.
• Virtual terminal and free POS app
• Ecommerce, hosted checkout, and customer portal are all examples of free online payment options.

What Isn’t There

• Doesn’t work with high-risk businesses.
• Best for well-established companies
• Time to deposit: 2 business days

Pricing

• Fee per month: $0
• Interchange plus 0.1 percent + 5 cents – 0.3 percent + 8 cents for card-present transactions
• Interchange plus 0.2 percent + 10 cents – 0.5 percent + 25 cents for card-not-present transactions
• Helcim charges a $15 chargeback fee, however, it is refunded if the dispute is resolved in your favor.
• Time to deposit: 2 business days
• Volume discounts are applied automatically.

Helcim is a typical merchant account that provides established small companies low-cost interchange-plus rates. There are a few factors that distinguish Helcim: It has no monthly cost (Payment Depot, Stax, and Dharma all have monthly fees) and is the only payment processor on our list that automatically lowers transaction prices as your monthly processing volume grows. Most processors, including Square, Payment Depot, Stripe, and Dharma, will provide bulk discounts, but you must apply for them and negotiate the terms.

With a free POS system, hosted payment pages, virtual terminal, invoicing software, recurring billing and subscription management, online shop, customer portal, and more, Helcim is a great value for small companies. With the quantity of free software it provides, Helcim is a close competitor to Square, earning it a position on our list of the top merchant accounts for shops.

It received a 4.10 out of 5 rating in our review, with near-perfect marks for price and acceptable payment methods. Helcim was denied a perfect score due to a two-business-day deposit speed and restricted customer service hours (9 a.m. to 9 p.m. Eastern time Monday through Friday and 11 a.m. to 7 p.m. Saturday and Sunday). If you require speedier deposits, Stax by Fattmerchant or Square, both of which charge a fee, provide next-day or same-day/instant deposits.

PayPal

4.04 OUT OF 5

What We Enjoy

• Pay-as-you-go pricing with a flat rate
• Accept payments by PayPal, PayPal Credit, and Venmo.
• Qualified 501(c)(3) organizations get a discounted processing charge.
• Invoicing is free, and you may pay using a QR code.

What Isn’t There

• Payments swiped and keyed-in have a weekly restriction.
• Overdraft funds are subject to a 30-day hold if they exceed the weekly limit.
• Issues with account stability
• No automated bank account deposits are available.

Pricing

• Free on a monthly basis
• 3.49 percent plus 49 cents per transaction for online transactions
• Transaction costs for QR codes are 1.9 percent + 10 cents – 2.4 percent + 5 cents.
• Fee for charitable transactions: 1.99% + 49 cents per transaction
• Fee for using the donation button: 2.89 percent + 49 cents
• Fee for a chargeback: $20 (waived for certain transactions)
• Fee for a dispute: $15

Pricing

• 2.29 percent + 9 cents for card-present transactions
• 3.49 percent + 9 cents for keyed transactions
• Transaction cost for QR codes: 1.9 percent + 10 cents – 2.4 percent + 5 cents

PayPal offers online business solutions as well as PayPal Zettle, a mobile app for collecting credit cards in-store or on the go. PayPal provides some of the lowest credit card processing for infrequent purchases, particularly those with an average transaction under $20, via both of these methods.

Nonprofits may also take advantage of PayPal’s cheap online payment processing. Online payments are often pricey, but they are some of the lowest rates we’ve seen outside of established merchant accounts, making PayPal an excellent choice for groups looking to add “Donate Now” buttons to their websites. PayPal, on the other hand, is great for infrequent sellers due to its uncertain money reserve restrictions.

PayPal received a 4.04 out of 5 rating in our review. PayPal received good grades for its no-contract or cancellation costs, flexible hardware and payment choices (including QR payments), pay-as-you-go pricing, and customer-friendly One Touch checkouts. It didn’t get a perfect grade because of limited help hours, processing restrictions, account stability difficulties, and monthly cost requirements for things like virtual terminal and ACH processing.

Consider Payment Depot or Helcim if you require a more dependable option with a free virtual terminal.

Stripe

3.98 OUT OF 5

What We Enjoy

• There is no long-term contract.
• Support is available 24 hours a day, 7 days
• Pricing that is clear and predictable

What Isn’t There

• Instability in your account and withholding of funds
• To get the most out of the platform, you’ll need some technical know-how.

Pricing

• Fee per month: $0
• 2.7 percent + 5 cents for card-present transactions
• The fee for online transactions is 2.9 percent plus 30 cents.
• 0.8 percent with a $5 maximum on ACH payments
• Additional 0.5 percent per transaction for recurring payments
• Fee for chargebacks: $15 per lost dispute.
• Card readers are $59 each.
• There are no early termination or contract costs.

Stripe is one of the greatest payment gateways on the market and is often regarded as the industry leader for online credit card processing, coming in second only to PayPal in terms of market share.

Stripe is well-known for its developer-friendly platform, which supports more than 135 currencies and payment methods and can be used to construct almost any kind of online checkout. Stripe provides free open-source solutions and charges a per-transaction cost, unlike Stax by Fattmerchant, which charges a monthly price for software solutions including invoicing and recurring payments.

A reporting dashboard, easier PCI compliance, Support is available 24 hours a day, 7 days, 3D secure identity verification, automated updates to expired client cards on file, and free payments in two business days are all included in every free Stripe account.

Stripe received a 3.98 out of 5 rating in our review. Stripe’s pay-as-you-go pricing, 24/7 support, and free developer tools all received top scores. Stripe was denied a better grade due to additional expenses for recurring billing and the fact that customers require technical knowledge or developers on staff to get the most out of the platform. Consider Square or Helcim if you require an easier-to-implement and-manage online payment system.

Dharma Merchant Services

3.91 OUT OF 5

What We Enjoy

• The interchange price is low.
• Apps for virtual terminals and mobile processors are both free.
• 24/7 support
• Funding on the same day

What Isn’t There

• The application procedure is really strict.
• American Express has higher rates.
• A monthly fee is charged.

Pricing

• Fee per month: $25
• Interchange additional 0.15 percent + 8 cents for MasterCard, 0.25 percent + 8 cents for American Express.
• Fees for online transactions: 0.2 percent plus 11 cents for Interchange, 0.3 percent plus 11 cents for American Express
• Fee for non-profit transactions: 0.1 percent + 8 cents for storefront transactions, 0.1 percent + 11 cents for internet transactions
• Fee for chargebacks: $25 per chargeback
• Fee for closing an account: $49
• Support and financing are accessible 24 hours a day, 7 days a week.

Dharma Merchant Services is a conventional merchant services company that focuses on working with small companies and provides online and offline payment acceptance solutions. It accepts low-risk companies that handle over $10,000 per month.

Dharma’s interchange-plus price is exceptionally cheap, especially for storefront and restaurant payments. In fact, it’s one of the finest credit card processors for restaurants, in addition to being one of the cheapest.

Dharma received a 3.91 out of 5 rating in our review. It received great grades for accepting all of the payment methods we tested, including card-on-file and level 2 and level 3 processing. Dharma offers the lowest monthly charge of all the credit card processing businesses on our list that offer interchange-plus rates (with the exception of Helcim, which has no monthly fee). Dharma does, however, impose a $25 account closing fee as well as a $25 chargeback cost. Storefront firms are also the only ones that can get capital the next day. Dharma was unable to get a better score due to these constraints.

Consider Payment Depot or Square if you require a solution with fewer chargeback costs and quicker deposit timeframes.

How We Selected the Most Cost-Effective Credit Card Processing Firms

To find the lowest credit card processing businesses, we examined monthly rates, processing fees, starting fees, and more. Payment Depot is the lowest credit card processor for most small companies, according to our research. Payment Depot has a 4.46 out of 5 rating from us. It provides cheap interchange-plus rates for online and in-person transactions, as well as economical all-in-one subscription pricing.

25% of the overall score

Accepted Payment Methods

35% of the overall score

We looked for merchant services that charge on a month-to-month basis and don’t demand long-term commitments. We also took cancellation and chargeback costs into account. We only considered organizations that provide flat-rate or interchange-plus pricing, excluding those that employ a tiered pricing structure.

25% of the overall score

We gave points for in-person/POS payments, eCommerce and internet, virtual terminal, ACH and e-check, saved payments (card-on-file), and B2B or level 2 and 3 processing, as well as B2B or level 2 and 3 processing.

20% of the overall score

The finest credit card processors also provide same-day or next-day financing, free 24-hour customer service, and hardware flexibility. We put a premium on solutions that allow you to utilize current gear and provide flexible payment options. Any business that has to lease equipment was excluded.

20% of the overall score

We gave points to systems that had straightforward pricing, volume discounts, user-friendly interfaces, and connections with typical small company software, such as point-of-sale, eCommerce, and accounting software, in this area. We also looked at the total worth of each system, as well as any additional benefits, such as free software and account stability.

How to Work Out Your Processing Fees

This is the typical calculation we use to figure out how much it costs to process credit cards:

Total monthly payment processing expenses = (percent processing charge x monthly sales volume) + ($ processing fee x # of monthly transactions) + any monthly or additional fees

Because many processors have different rates for card-present and card-not-present transactions, you may need to complete two computations if you need to take cards in-store and online.

We utilized the current interchange rate for Visa Credit swiped retail payments for interchange-plus pricing.

Methods for Reducing Credit Card Processing Fees

Credit card processing costs are a significant recurrent expenditure for many organizations. They’re inescapable to some extent, and their volume will only rise as your company expands. There are, however, a few things you may do to lower your costs.

Encourage clients to pay in cash as the first step in lowering your card processing charges. In essence, companies may offset processing costs by including them in their normal rates and providing a discount to customers who pay in cash. However, pay special attention to the legislation in your state and neighborhood. Cash discounts are common in many regions, while credit fees are not.

Gas station pricing is a good illustration of this. The per-gallon pricing is cheaper if you pay cash inside than if you pay with a credit card at the pump.

After cash, ACH and e-check payments are frequently the most cost-effective payment options. This option is suitable for companies that accept regular payments such as subscriptions or invoices. Stax by Fattmerchant has a monthly fee of $49 and a fee of 25 cents for every ACH transaction. Square provides free invoicing with ACH payment alternatives for small companies. The processing cost for Square ACH transactions is 1% per transaction, with a $1 minimum. In addition, QuickBooks includes an ACH invoicing feature that costs 1% per ACH transaction, which is useful if you already use the accounting software.

B2B companies may be eligible for significantly cheaper processing charges, referred to as L2 or L3 processing. Most small firms, particularly B2C enterprises, do not have access to these prices. If you’re a B2B firm with a lot of transactions, talk to a merchant account provider like Dharma Merchant Services.

You should be able to negotiate cheaper prices with multiple processors after your firm has grown to the point where you are routinely processing over $20,000 per month. Actively look about and obtain estimates to determine whether switching credit card processing businesses might save you hundreds of dollars each month.

Conclusion

Credit card processing and payment processing, in general, are essential services for every company, but they come at a cost. Many firms offer the lowest prices, however many of them have radically different cost systems. Finding the most affordable credit card processing might be difficult, but it can save your company hundreds, if not thousands, of dollars each month.