February 13, 2019

Cheapest Credit Card Processing

Read more about Business

Looking for a cheap credit card processor for your small business? The right one can help you keep more profits. Here are the top options for every kind of business.

In today's world, it's crucial for any small business to be able to accept credit card payments. Unfortunately, credit card processing fees is a necessary part of that.

These fees can be very confusing. Each company has different fee structures. So you can't just look purely at the lowest price. It may work for one kind of business, but be expensive for another. You have to think about what features you want and what's included in the fees.

Here are some of our top recommendations for cheap processing companies. We'll go over how each one works and what kind of business it's best for.

Two Types of Providers

Before we start, you first need to think about what level of service you want. There are two types:

  • Merchant account provider - a full-service provider
  • Payment system provider - only offers credit card processing

It's important to know the differences and pick the one best for you. Read on to learn more about these two types.

Merchant Account Providers

Merchant account providers are a "full-service" credit card processor. The main thing is that you get a unique merchant ID number just for your business. This number identifies you properly whenever there's a credit card transaction and lowers the risk of fraud.

Aside from the identity you receive, merchant accounts provide other services, including:

  • PCI compliance assistance
  • Payment gateways for the eCommcerce side of your business
  • ACH payment capabilities
  • Tax reporting assistance

Because of the full service provided, merchant account providers cost more and may not be affordable for new, small businesses.

Payment Service Providers

Payment service providers only processes credit card transactions. You don't receive your own unique merchant ID. Your transactions are processed in a batch with many other businesses' as well. It costs less because of the bulk processing.

The tradeoff, however, is lack of customer service, minimal PCI compliance assistance, and a higher risk of frozen or held funds and fraud.

This could be a good, cheaper option for micro businesses and those with very few credit card transactions, as they don't need the full service of a merchant provider.

What to Look for in a Cheap Credit Card Processing Company

After you decide which type of provider you need, think about these factors when comparing companies.

  • Pricing: This can be very complicated. There are several pricing models. To fully understand how fees work, we strongly recommend you read our guide about credit card processing fees.

    There are two components to transaction fees:

    1. Interchange (wholesale) fees: These are fees charged by the issuing bank and the card association (Visa, Mastercard, etc.). These fees are non-negotiable. It's same no matter what processor you're using.
    2. Markup fees: This is the fee charged by your card processor. The cost will vary depending on the processor and can be negotiated. This is the fee you should be comparing when shopping around for a processor.

    Some providers separate out the interchange and markup fees. While some blend them all together into a flat-rate fee. And some include it into a monthly subscription fee.

    Watch out for additional fees, such as PCI fees, terminal fees, payment gateway fees, and statement fees.

  • Terms of the contract: Beware of contract terms and early termination fees. Luckily, many of the credit card processing companies today offer month-to-month contracts.
  • Cost of equipment: In-person transactions will require the proper hardware. Some companies give you the option to buy it outright or lease. Some may even supply it free of cost.
  • Type of support: Not all companies provide customer support. Some charge for the service while others don't provide phone support. If you worry about setup, use, or just general support, pay close attention to this area.

Cheapest Credit Card Processing Companies

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The cheapest credit card processing company is the one that provides the features you need at the lowest price for your type of business. We provide our picks for each category below.

SQUARE: Best for Mobile Businesses


  • Swipe or chip transactions: 2.75%
  • Online transactions: 2.9% + $0.30
  • Key-in transactions: 3.15% + $0.15

What's included: Free swipe card reader, virtual terminal, and POS mobile app. Chip card reader can be purchased.

Pros: With a free card reader, app, and low per-swipe fee, Square makes it easy and affordable for new businesses to set up. It can also accept offline payments, so you don't need to have an internet connection. There are no hidden fees beyond the per-transaction flat fees.

Cons: Even though this flat-fee structure is most predictable, the transaction cost could be quiet high. Higher volume businesses may be better suited with interchange-plus pricing.

Square's customer service does leave a lot to be desired too. Their support hours are rather restricted and they prefer clients find their answers in their knowledge database.

Contract: No contract and no early termination fees.

Best for: Small mobile businesses with mostly in-person swipe/chip transactions. Ideal for businesses like food trucks, market vendors, etc.

STRIPE: Best for Online Businesses


  • 2.9% + $0.30 per transaction
  • Additional 2% for international payments in any currency

What's included: Payment processing and developer tools.

Pros: Stripe is known for a lot of advanced tools that allows for complete customization of your checkout experience. It can be customized with a variety of programming languages, however, you'd have to have a developer.

Stripe's main focus is on helping eCommerce businesses have robust storefront and billing features. Some even consider their payment processing as secondary.

Cons: Since Stripe is meant to be completely customized, it may be overwhelming if you don't have a developer (or expensive if you have to hire one). So it may not be ideal for small online businesses that don't advanced customization.

Contract: No contract and no early termination fees.

Best for: Larger online businesses, in-app purchases, eCommerce businesses that sell globally.

PayPal: Best for Low-Volume Retailers


  • Swipe or chip transactions: 2.7%
  • Online transactions: 2.9% + $0.30
  • Key-in transactions: 3.50% + $0.15
  • Virtual terminal: 3.1% + $0.30

What's included: Free payment gateway, online checkout tool, mobile app, and PCI compliance. Card readers can be purchased.

Pros: PayPal has the lowest fixed-rate swipe and chip processing fees. So it's good for small retailers that take in-person payments. It also has great features for mobile and online stores.

With PayPal being such a recognized brand, it's nice to be able to accept PayPal payments on your website. PayPal is incredibly easy to set up and works with most major e-commerce platforms. Within minutes, you can install a free online checkout button and being accepting credit, debit, PayPal, and Venmo payments.

Cons: The card readers are not free, but the prices are reasonable. And if you want to accept payments over the phone, you'll need the virtual terminal, which is only under the PayPal Pro plan and costs $30/month. This is a lot considering that Square offers this for free.

Contract: No contract and no early termination fees.

Best for: Small or new businesses with less than $10,000 in monthly sales; businesses with low average transaction amounts.

PAYJUNCTION: Best for Established Retailers


  • Credit cards: Interchange price + 0.75%
  • Checks: 0.75%

What's included: Free Smart Terminal (for qualified merchants), payment gateway, mobile app, PCI compliance.

Pros: PayJunction's main selling point is paperless transactions. Paper receipts are messy, wasteful, and toxic. PayJunction's Smart Terminal digitally stores your customers' transaction histories, card and ACH info, and signatures. You can easily pull them out if you need to (like for a refund).

This paperless processing also makes for very easy setup and minimal hardware. You can get the Smart Terminal for free if you can provide 2 months of billing statements.

It has an interchange-plus fee structure with one single percentage markup. This may be a little bit high, but there is no monthly fee.

Cons: PayJunction is not ideal for very small businesses. If you process less than $10,000 in business transactions per month, there is a $35 monthly fee.

Contract: No contract and no early termination fees.

Best for: Established businesses with a steady $10,000 or more in monthly sales volume.

PAYLINE DATA: Best for High Risk Businesses


  • Online transactions: Interchange price + 0.3% + $0.20
  • In-store transactions: Interchange price + 0.2% + $0.10
  • $20 monthly fee for card-not-present transactions
  • $10 monthly fee for shop transactions

What's included: Merchant account, payment gateway, PCI compliance. Credit card readers and terminals available for purchase.

Pros: Payline Data is a full service merchant account. It offers interchange-plus pricing, which may seem complicated. But it can actually come out cheaper than flat-fee structures like Square, especially if you have higher sales volume.

Payline Data also has a reputation for dealing with high-risk businesses. This could include:

  • Industries with a high risk of chargebacks or fraud
  • Businesses with high rate of failure
  • Industries that require a lot of legal regulation
  • If you have a history of bad credit
  • Businesses with large transaction amounts

Many credit card processors don't approve these kinds of businesses. Payline Data is willing to take on the risk and work with you to find your best options for your unique needs. Note that fees may be higher for high-risk businesses, but the prices are fair.

Some examples of high-risk businesses include:
  • Adult entertainment
  • Cigarettes, e-cigs and vape shops
  • Travel related businesses
  • Auto parts and accessories
  • Online electronics

Cons: The downside to interchange-plus is that it may be hard to calculate how much fees you'll end up paying.

Contract: No contract and no early termination fees.

Best for: High-risk businesses. Most other businesses will also find this pricing model affordable.

CDG Commerce: Best Full Service Merchant Account


  • Online transactions: 1.95% + $0.30
  • Swiped or mobile transactions: 1.70% + $0.25
  • For $10,000+: Interchange plus 0.30% + $0.10
  • $10 monthly fee

What's included: Merchant account, virtual terminal, free USB card reader, PCI compliance, and 24/7 customer support. Credit card terminal and POS free, but must purchase insurance.

Pros: CDG offers tiered pricing based on the volume of your business. It offers a simplified flat-rate pricing for smaller businesses. For established businesses, it offers interchange-plus pricing, which is often more affordable. The larger the volume, the greater the discount. The pricing will only get better as your business grows.

CDG offers its equipment with no upfront costs, so that makes it easy for newer businesses to set up. CDG includes free updates and maintenance of the hardware.

Cons: While CDG claims to provide the equipment free of charge, they do charge insurance. But it's still pretty affordable. For example, the credit card terminal costs $79/year, which comes out to just $6.58 per month. And the POS system will cost $39/month for complete protection.

Contract: No contract and no early termination fees.

Best for: Small to mid-volume businesses looking for a full-service merchant account.

Optional security package available for $15 per month.

Other Credit Card Processing Companies to Consider

  • Flagship Merchant Services: Flagship is one of the oldest merchant account providers around. Today, they operate as a reseller for iPayment. They offer month-to-month contracts with no setup, cancellation, or gateway setup fees. They do, however, have a whole host of additional fees they charge. Negotiating these fees based on your needs will yield the best results.
  • Dharma: If monthly minimum requirements are an issue for you, Dharma is a good option. They don't require minimum monthly transaction amounts and don't charge setup fees. They do charge $10 per month plus $7.95 for PCI compliance, but their transaction fees are competitive for businesses conducting more than $10,000 per month.
  • Helcim: If you want to know exactly what your per transaction pricing will be, visit Helcim's website. After inputting information about your industry, monthly processing volume, and per transaction average, you'll receive a customized quote on the spot. They do charge monthly rates based on your industry, but they are very transparent about every fee on their website.

The Bottom Line

Finding the cheapest credit card processing company requires plenty of research and patience. Thoroughly review the features offered and read the fine print. Ask the providers as many questions as possible before signing up in order to maximize your profits while pleasing your customers with your ability to accept credit card payments.

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Mobile Credit Card Processing

POS System for Retail

How to Build Business Credit

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CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

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