Updated May 27, 2020

Online Credit Card Processing

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

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It doesn't matter if you're a big chain or small online shop. You need to accept credit cards to run your business.

But choosing the right payment processor to work with is tricky. Many providers issue huge markups for each transaction and sneak in hidden fees.

You need one that:

  • offers the best pricing for your business
  • is compatible with your website
  • has the right payment features

To start selling online, find out how those fees and features work. Plus, discover the best online credit card processing providers.

Here are the best online credit card processing companies:

Merchant Account vs. Payment Service Provider

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

  1. Merchant account provider
    This is a full service credit card processor. The main thing is that you get a unique merchant ID number just for your business.

    Merchant account providers offer other services such as PCI compliance assistance, payment gateways, and tax reporting assistance. Because of the full service provided, merchant account providers cost more and may not be affordable for new, small businesses.

    Typically, merchant accounts require underwriting to approve you as a client. So it's best for larger, established businesses with high processing volume.

  2. Payment system provider
    This is a more simplified option that only offers credit card processing. You don't receive your own unique merchant account ID. Your transactions are processed in a batch along with those of many other businesses, so therefore costs less.

    This is a good, cheaper option for micro businesses, as they don't need the full service of a merchant account provider.

    This kind of provider usually don't require underwriting or have processing minimums. You can get set up almost right away.

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. The interchange fee is a non-negotiable rate different for each type of debit or credit card transaction.

This pricing plan often comes out to be the best value. It works for most types of businesses. However, the provider may tack on other fees for services like payment gateway, virtual terminal, etc.

For example, let's say the interchange fee for an online transaction with a Visa Rewards credit card is 1.95% + $0.10, and the merchant provider markup is 0.3% + $0.20 on each transaction. On a $100 sale, it would cost you $2.05 + $0.50 for a total of $2.55.

Flat-Rate Pricing
You pay a flat rate fee for each transaction. Many companies don't have any additional fees because they include it all in the flat rate. This pricing structure is the most predictable, but often comes out to be the most expensive, especially if you have a lot of sales.

For example, if the flat rate for an online transaction is 2.9% + $0.30, on a $100 sale, the processing fee would be $3.20.

Subscription Pricing
You pay a small per-transaction fee for each transaction, and then a flat monthly subscription fee for using the service. This pricing model could be good for large-volume businesses, as your savings would justify the subscription price.

For example, the non-negotiable interchange fee is 1.95% + $0.10. The provider markup could look like $0.25 per transaction plus a $30 monthly subscription fee.

Best Online Credit Card Processing Companies

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 for each transaction that you process. Square comes with a free webstore and a free virtual terminal to accept credit card by phone orders.

If you need more advanced features, 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
  • View detailed reports and insights

Processing Fee Structure & Rates:
Square uses flat-rate pricing. It charges a flat rate of 2.9% + $0.30 for each online transaction.

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:

  • Basic features may not fit your small business needs
  • Weak customer service
  • Flat-rate pricing can be expensive for larger businesses

Square actually started as a mobile payment processor. So it's also a good choice if your business has a physical presence too. Square only offers a free magstripe credit card reader. If you need a chip reader, terminal, or register, prices vary from $50 to $800 for hardware options.

Best for eCommerce Businesses: Shopify

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

The cheapest plan, Shopify Lite (for $9/mo), gives you the ability to sell on any existing website (Wordpress, Tumblr, Facebook etc.) with Buy buttons. Note that you don't get an ecommerce store. It works for those who want to sell on social media or their blog.

The Shopify Basic plan (for $29/mo) comes with your own Shopify webstore and shopping cart.

Processing Fee Structure & Rates:
Shopify plans cost a monthly subscription fee (starting from $9 to $299/mo). Then each transaction has a flat-rate processing fee.

Shopify charges 2.9% + $0.30 for online sales for the basic account. More advanced plans have lower rates.

Pros:

  • No set-up or cancellation fees
  • Get a 10% discount on annual plans and a 20% discount on biennial plans if paid upfront
  • Free 14-day trial with no obligations
  • 27/4 customer support via email or live chat

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

Dharma is a full merchant account provider. It has an interchange-plus pricing structure, which is ideal for high volume businesses. 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, which also includes a virtual terminal. If you need larger processing capabilities, you can choose from one of two upgraded payment gateways for an extra monthly fee.

However, unlike Square, Dharma has a strict underwriting process, so not all businesses will get approved for a credit card processing account.

Processing Fee Structure & Rates:
Dharma uses interchange-plus pricing. For online transactions, Dharma charges 0.20% + $0.10 plus interchange rate (which is different for each type of card you're processing).

For example, for a $100 sale on a Visa debit card, you'll pay $0.72. For that same sale on a Visa Rewards card, you'll pay $2.51.

On the other hand, if you used Square, which has a flat fee of 2.9% + $0.30 for online transactions, a $100 sale will cost $3.20 in processing fees. This is why interchange-plus model is better for high volume businesses.

Pros:

  • Reduced rates for business processing over $100,000 a month
  • No annual fees or early termination fees
  • Transparent pricing structure on their website
  • Added $20 a month rate to use the service, which is lower than competitors

Cons:

  • Must process over $10,000 a month to be eligible for Dharma
  • Processing Amex cards will have completely different fees
  • 2 business days or more to receive your funds

Best for Subscriptions and Recurring Billing: Stripe

Stripe is one of the most popular credit card processors for ecommerce and in-app purchases. It offers flat-rate pricing for all cards with no setup or monthly fees, which makes it easy and affordable for new businesses to get started.

It's known for advanced API solutions that allow for complete customization of your checkout experience. It can be customized with a variety of programming languages, however, it's best if you have a developer.

Stripe also has a Stripe Billing feature for recurring billing. This is essential for subscription-type businesses, or even if you want to give customers the option to pay a large bill over several months. You'll need to be able to store cards on file and charge them automatically when the next bill is due.

Stripe Billing even allows you to set trial periods, tiered pricing, and usage-based pricing. You can integrate the Stripe Billing API into existing websites, mobile apps, and even CRM systems.

You also have the option to accept international payments for a 1% surcharge (another 1% for conversion). You can also accept mobile wallet payments, including Apple Pay and Google Pay.

Processing Fee Structure & Rates:
Stripe uses flat-rate pricing. Each online transaction costs 2.9% + $0.30.

Pros:

  • Dozens of customization options for small business owners
  • 450+ platforms and extensions
  • Ability to cancel at any time without fees
  • Accept international cards
  • 24/7 phone, chat, and email support

Cons:

  • Funds may take up to two business days to arrive in your account
  • Funds can be frozen without warning

Best for Low Volume Businesses: 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.

Processing Fee Structure & Rates:
PayPal has flat-rate pricing. Online transactions cost 2.9% + $0.30.

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:

  • Virtual terminal is another $30/month (under Paypal Pro)
  • 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. It's a full merchant account provider.

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 for each transaction. As you move up the tiers, your per-transaction fee decreases.

Processing Fee Structure & Rates:
Payment Depot has a membership-based pricing model, with monthly plans starting at $49. You'll pay a monthly membership for credit card processing, plus interchange.

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.

Best for High-Risk Merchants: Payline Data

Payline Data is a full service merchant account with straightforward Interchange-Plus pricing.

Payline Data also has a reputation for dealing with high-risk businesses. Many credit card processors don't approve these kinds of merchants. Payline Data is willing to take on the risk and work with you to find the best options for your unique needs.

It's more common for an eCommerce business to be labelled high-risk than a physical business. Some examples 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

Another perk of using Payline is its seamless integration with Magento, QuickBooks, Shopify, and various other third parties.

Processing Fee Structure & Rates:
Payline uses Interchange-Plus Pricing, plus a monthly subscription fee of either $10/month (for retail) or $20/month (for online merchants).

The fee for online payments is Interchange + 0.30% + $0.20 per transaction.

Note that fees may be higher for high-risk businesses, but the prices are fair.

Pros:

  • Monthly billing with no cancellation fees
  • Try your first month for free
  • Transparent pricing available according to your needs
  • Deposits funds within 2 business days
  • Direct QuickBooks integration
  • Accepts high-risk merchant accounts

Cons:

  • $25 monthly minimum processing requirement
  • Additional $10/month for access to a virtual terminal to key in credit cards and send invoices
  • $25 if you lose a chargeback dispute
  • $19.95 charge if you do not complete the PCI compliance survey within 90 days of being approved
  • Hardware can be expensive if you also have a retail store

Other Online Credit Card Processing Companies to Consider

While these companies didn't make our top list, they may still be a good fit for your business. These are all merchant account providers best for higher volume businesses.

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.

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.

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

Standard merchants will be charged 2.9% + $0.30 per online transaction. ACH Direct Debit will cost 0.75% per transaction, with fees capped at $5.

Pros:

  • No minimum transaction processing amount
  • Braintree will set up individualized payment processing for your business if you call them
  • Amex 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.

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.

Processing Fee Structure & Rates:
Starting from 2.49% per transaction, or $0.60 + 0.10% for AHC and eCheck processing. The monthly membership fee costs $59.95 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 monthly fee on top of their cost + rate per transaction. So it's best for high volume businesses.

Processing Fee Structure & Rates:
Helcim uses Interchange-Plus Pricing, plus a monthly subscription fee of either $15/month (for retail) or $35/month (for online).

The typical rate is Interchange + 0.45% + $0.25 per transaction for up to $25,000/month in processing (for online transactions). Higher processing volume will get discounts.

Pros:

  • Month-to-month billing with no cancellation fees
  • Process payments using a credit and debit terminal, mobile app, or a virtual terminal
  • Transparent pricing available on their website. It has an interactive calculator that gives you your exact rates.
  • All monthly fees include processing of Visa, Mastercard, and American Express
  • 24/7 customer support

Cons:

  • Expensive for very small merchants processing less than $1,500/month
  • $75/month PCI non-compliance fee
  • Online and ecommerce credit card processing is $30/month
  • Hardware purchases for retail can be pricey—a mobile card reader costs $30 and a terminal starts at $299

What to Look for in Online Credit Card Processing Companies

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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 a flat-rate monthly fee. 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 Amex payments too. Many credit card processing companies charge higher rates for Amex payments.

Also think about if you'd like to accept ACH payments, Paypal, Apple Pay, or Google Pay. These forms of payments give your customers more options.

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.

Generally, merchant account providers will take a little longer to get set up and running, as you have to go through an underwriting process.

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.

Note: This website 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. You do not have to use our links, but you help support CreditDonkey if you do.

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