Updated December 17, 2019

Online Credit Card Processing

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What's the best online credit card processing company? We explain the cheapest one for small businesses, high/low volume transactions and eCommerce.

Online credit card payments require a lot of moving parts. The customer's bank must approve or decline the transaction. The merchant's bank must receive the funds. Payment processors or payment gateways act as the "middleman" in this process.

Instead of applying for a separate merchant account and payment gateway, you can sign up for one credit card processing company. You'll often obtain better rates from the payment gateways going this route since you have the backing of bigger companies negotiating rates for you.

Of course, there are fees. Keep reading to learn just how much you'll pay.

Understanding the Fees

Credit card processing companies typically use one of the following pricing structures:

  • Interchange Plus Pricing
    You'll pay a percentage of the credit card transaction (interchange fee) plus the processor's markup, which is a flat fee.

    For example, 2.9% + $0.30 means you'll pay 2.9% of the credit card transaction plus $0.30. The flat fee is the processor's markup.

  • Tiered Pricing
    Credit card processors categorize each transaction into qualified, mid-qualified, and non-qualified. You then pay a fee based on the category, with qualified transactions having the lowest fees.

  • Flat-Rate Pricing
    This is the most predictable pricing model. You pay a flat monthly fee as well as a flat fee for each transaction. Many companies don't have any additional fees because they include it all in the flat rate. You may see the transaction flat rate as a percentage or a dollar amount.

Best Online Credit Card Processing Companies

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Here's a list of our top picks:

Read on for a full breakdown.

Best Overall: Square

Square offers a free plan with no monthly fee—you only pay per transaction that you process. If you want more flexibility, Square offers three plans with a monthly fee ranging from $12 to $72 per month.

The paid plans enable you to eliminate Square ads, add custom code, create shipping labels, offer shipping discounts, and send cart abandonment emails.

With any of the plans, you can:

  • Build an online store
  • Sync orders and inventory
  • Offer in-store pickup
  • Accept Square gift cards and coupons
  • Automatically calculate taxes

Here's a closer look at the details:

Processing Fee Structure: Flat-rate fees

Typical Rates: On average, processing a payment with Square will cost you 2.75%.

Pros

  • Funds arrive as soon as the next business day.
  • No underwriting requirements.
  • No early termination fees.
  • Sales and inventory can be updated in real-time.
  • Basic software option comes free, unlike other options.

Cons

  • If your small business needs anything beyond a magstripe reader, expect to pay for it. From a chip reader to a register, prices vary from $80 to $800 for hardware options.

  • Basic features may not fit your small business needs.

The Best for eCommerce Businesses: Shopify

Shopify's all-in-one platform works best for ecommerce businesses looking for a strong website presence and built-in credit card processing.

A basic monthly plan starts at $29 a month and includes plenty of features for new small businesses, including printed shipping labels, 24/7 support, and more.

Take a look at some of the details:

Processing Fee Structure: Pick from one of three monthly plans to start. Flat-rate credit card processing will cost extra, though the extra quantity will depend on your plan.

Typical Rates: An average of 2.6% plus $0.30 for processing credit cards. Rates very slightly for in-person and online credit card processing, depending on the plan.

Pros

  • No set-up or cancellation fees.

  • Get a 10% discount on annual plans and a 20% discount on biennial plans if paid upfront.

  • Start a free, 14-day trial with no obligations.

Cons:

  • The most expensive monthly plan costs $299 a month, a significant cost for businesses.

  • If you want to use Shopify outside of the U.S. or Canada, your small business will need supported hardware, which will cost extra.

Cheapest Online Processor: Dharma

Unlike Square, Dharma has a strict underwriting process, so not all businesses will get approved for a credit card processing account. For those that do, Dharma's fees are lowest for companies processing more than $10,000 per month.

Dharma doesn't require a long-term contract or have monthly minimum requirements. Each account includes free access to a payment gateway from MX Merchant. If you need larger processing capabilities, you can choose from one of two upgraded payment gateways for an extra monthly fee.

Take a look at some of the details:

Processing Fee Structure: Interchange Plus pricing

Typical Rates: Fees vary depending on the type of payment you're processing. For a $100 sale on a Visa debit card, for example, you'll pay $0.64. For that same sale on a Visa Rewards card, you'll pay $2.13.

Pros

  • If your small business processes over $100,000 a month, Dharma will offer reduced rates.

  • Dharma does not charge fees for several areas. There are no annual fees, no early termination fees, and more.

  • Transparent pricing structure on their website.

  • Added $20 a month rate to use the service, which is lower than competitors.

Cons

  • Small businesses that do not process more than $10,000 a month are not eligible for Dharma.

  • If you are processing an American Express card, expect to face completely different fees.

  • You may have to wait 2 business days or more to receive your funds.

Best for Small Businesses: Stripe

Small businesses can start accepting credit card payments right away with Stripe. They offer predictable pricing structures (flat-rate pricing) and advanced API solutions that help your payment processing grow with your business.

They use flat-rate pricing for all cards with no setup or monthly fees. They also offer the option to accept international payments for a 1% surcharge. You can also accept mobile wallet payments, including Apple Pay and Google Pay.

Take a look at some of the details:

Processing Fee Structure: Flat-rate pricing, on a pay-as-you-go basis

Typical Rates: In-person payments using the Stripe terminal cost 2.7% plus $0.05 per transaction.

Pros

  • Dozens of customization options for small business owner.
  • Pay-as-you-go pricing structure.
  • Ability to cancel at any time without fees.
  • Accept international cards with a 1% fee.

Cons

  • Funds may take up to two business days to arrive in your account.

  • Funds can be frozen without warning.

Best for Low Volume: PayPal

PayPal fits the bill for low volume sellers quite well. In addition to accepting credit card payments, you can accept PayPal payments, which can help increase your customer base.

PayPal offers the option to add a PayPal button to an existing website or create a customized checkout solution with PayPal's Pro option.

Take a look at some of the details:

Processing Fee Structure: Flat-rate fees

Typical Rates: The average fee is 2.8% for card payments. Expect to pay 2.7% for mobile and in-store payments and 2.9% for online payments and invoices.

Pros

  • PayPal integrates with most shopping carts.
  • Cancel anytime without paying a penalty.
  • Accept payments in your PayPal account.
  • No monthly or set-up fees.

Cons

  • Using the PayPal button means users have to leave your website to pay. This may increase cart abandonment.

  • PayPal often suspends accounts if there are too many customer complaints.

Best for High Volume Stores: Payment Depot

Payment Depot's membership-based pricing model helps businesses with high volume save money on credit card processing fees. They offer plans based on your monthly processing volume.

Beyond the monthly membership fee, you'll pay the interchange cost of processing the transaction (for example, the Visa or MasterCard interchange fee, plus a fixed amount).

The Basic account, which allows up to $25,000 in transactions, costs an additional $0.15 per transaction. As you move up the tiers, your per transaction fee decreases.

Take a look at some of the details:

Processing Fee Structure: Membership-based pricing model

Typical Rates: You'll pay a monthly membership for credit card processing, plus interchange. Monthly plans start at $49.

Pros

  • The more transactions your small business processes, the smaller the transaction fee.

  • All plans include a free gateway.

  • 90-day money-back guarantee if you are unhappy.

  • Funds arrive as quickly as the next business day.

  • No setup or cancellation fees.

  • Access to complex and costly payment processors at discounted rates through the system.

Cons

  • The fewer the number of transactions, the more your small business will pay. You will only benefit if your business processes a high volume of transactions. Otherwise, the fees are too excessive.

  • The less expensive plans don't include perks like free pin pad, free terminal upgrade every 2 years, and more.

  • Payment pricing may be online. But to get an exact quote and details about fees, you will have to speak with a representative.

The Best Online Credit Card Processing Company for Nonprofits
CDG Commerce helps charities keep most of their donations by offering a tiered pricing system with low rates for qualified transactions.

Non-qualified transactions are corporate cards, international cards, and premium cards. As long as a majority of your donations don't come from these sources, you'll come out ahead.

Other Online Credit Card Processing Companies to Consider

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While these companies didn't make our top list, they may still be a good fit for your business.

Braintree

Owned by PayPal, Braintree offers a powerful platform with customizable options. Braintree does require underwriting, and not all businesses will get approved. They offer interchange plus pricing and no monthly fees. They also don't have any hidden fees.

Take a look at some of the details:

Processing Fee Structure: Interchange Plus Pricing. Custom flat rates and custom Interchange Plus pricing is available for established businesses to negotiate with the company.

Typical Rates: Standard merchants will be charged 2.9% plus $0.30 per transaction. ACH Direct Debit will cost 0.75% per transaction, with fees capped at $5.

Pros

  • No minimum fees, no monthly fees, and no hidden fees.

  • Braintree will set up individualized payment processing for your small business if you call them.

  • American Express cards are charged the same rate as other cards, unlike other merchant providers.

  • PayPal and PayPal Credit are offered at no additional charge.

Cons

  • Braintree transaction fees will not be returned for refunded transactions.

  • Chargebacks cost $15.

  • If you process more than $80,000 a month, Braintree will create a custom plan for you, which may be more expensive than you expect if you don't negotiate well.

Payline

Payline Data offers a powerful credit card processing service. But they charge a monthly fee on top of the interchange plus pricing. One of the largest perks of using Payline is its seamless integration with Magento, QuickBooks, Shopify, and various other third parties.

Take a look at some of the details:

Processing Fee Structure: Interchange Plus Pricing

Typical Rates: Pay either $10 or $20 a month, depending on your needs and $0.20 or $0.30 per transaction.

Pros

  • No cancellation, early termination, or hidden fees. Payline requires a monthly minimum of $25 and charges fees if you lose a chargeback dispute and failure to complete PCI compliance.

  • Transparent pricing available according to your needs. Small business owners can estimate their total monthly charges.

  • Direct QuickBooks integration.

Cons

  • Hardware can be expensive—a wireless mobile reader costs $125, and it's the cheapest option.

  • Access to a virtual terminal to key in credit cards and send invoices is not included—it costs an additional $10 a month.

  • Payline charges $25 if you lose a chargeback dispute.

  • Payline will charge $19.95 if you do not complete the PCI compliance survey within 90 days of being approved.

Payline isn't the only extra that integrates easily with Magento. This article from AdWords Robot lists some of the other extensions you can use with Magento, specifically for marketing your business.

PaySimple

You can build a storefront with PaySimple as well as embed a "buy now" button in your existing website. PaySimple isn't transparent with its pricing, though. They advertise "credit card processing as low as" but don't tell you the exact fees you'll pay. They also don't disclose the cost of their monthly fee.

Take a look at some of the details:

Typical Rates: 2.49% per transaction, plus monthly fees, or $0.60 + 0.10% for AHC and eCheck processing. Monthly fees cost $54.95 a month.

Pros

  • No added fees, including no early termination fees, no setup fees, and no application fees.

  • Customizable payment pages.

  • Everything is included in the monthly fee.

  • If you process more than $50,000 a month, you may qualify for lower rates.

Cons

  • Not the best option for high volume or international merchants.

Helcim

Helcim offers volume-based pricing, which means the more transactions that you process, the less you'll pay per transaction. They do charge a hefty monthly fee on top of their cost + rate per transaction. But Helcim doesn't charge any cancellation fees.

Take a look at some of the details:

Processing Fee Structure: Interchange Plus Pricing

Typical Rates: $15 a month or $35 a month cost structures in addition to transaction costs. For example, for a small business processing a $50 retail payment with the card present, expect to pay $0.08 per transaction, plus 0.25%. The average transaction rate for a small business processing under $25,000 with an average $50 retail payment, the average transaction costs 1.98% plus $0.08.

Pros

  • Process payments using a credit and debit terminal, mobile app, or a virtual terminal.

  • Transparent pricing available on their website. Small business owners can put in their exact needs and get pricing in return.

  • No cancellation fees.

  • All monthly fees include processing of Visa, Mastercard, and American Express processing.

Cons

  • The most affordable plan does includes a payment gateway API or online and ecommerce credit card processing.

  • Hardware purchases can be pricey—a terminal costs $299 at the lowest.

  • A mobile card reader costs $30, a piece of hardware that comes free with other credit card processing options.

What to Look for in Online Credit Card Processing Companies

A quick search online will turn up hundreds of online credit card processing companies. How do you know which one is right for you?

Before signing on the dotted line, consider these factors:

Pricing

Pricing will vary per company dramatically. Interchange fees may not be negotiable, but the additional fees the credit card processing companies charge in addition to the interchange fee will be negotiable.

Transparency with pricing is also important to ensure your small business gets the best possible deal. Know what the credit card processing company charges for any of the following:

  • Monthly subscription fee
  • Gateway fees
  • Chargeback fees
  • PCI compliance fees
  • Manually entered transaction fees
  • Early termination fees
  • Batch processing fees
  • Fund transfer fees

Some credit card processing companies charge one flat monthly fee no matter how many transactions you process. Others charge fees per transaction or offer volume discounts. Know the pricing model that works best for your business model.

Transparency

The more transparent a credit card processing company is with their fees and terms, the fewer surprises you'll experience. You want to know upfront what a transaction will cost you so that you can make the right decision for your business.

You'll typically find credit card processing companies that offer tiered pricing (more on this below) to be less transparent than those that offer flat-rate monthly fees. If a company doesn't offer the full list of their fees online, ask your representative for a full list of the fees. If he or she balks, you may want to look elsewhere.

Types of Allowed Payments

Each credit card processor accepts different credit cards. Don't assume each one accepts all major credit cards. For example, if you want to accept Discover or American Express payments, you may need specific processing companies.

Keep a watch out for special fees for processing American Express payments too. Many credit card processing companies charge higher rates for Amex payments.

Ease of Setup

The application and setup process may take a few hours or a few weeks. Find out upfront so you know what to expect. If you think you'll be up and running today, but the company you choose has a two-week turnaround, you may want to look elsewhere.

Level of Customer Support

Customer support is crucial to successful credit card processing. Operating online means you operate 24/7.

What if you need support in the middle of the night? Does the credit card processing company have live agents or is it self-service online? Many of the cheaper processing companies rely on email support.

Bottom Line

Choose your online credit card processing company carefully. Know the type of transactions you'll process and compare how it will affect your bottom line.

Interchange plus pricing typically offers the lowest out-of-pocket costs, but consider all your options to determine which processor offers the features you need at a reasonable cost.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

More from CreditDonkey:


Cheapest Credit Card Processing


Mobile Credit Card Processing


Credit Card Processing Fees


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