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9 Cheapest Credit Card Processing Companies for Small Businesses

There’s no free way to accept card payments. However, there are multiple options for keeping processing costs down.
By Karrin Sehmbi, Hillary Crawford
Last updated on July 10, 2024
Edited byChristine Aebischer
Fact checked and reviewed

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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.

Cheapest Credit Card Processing Companies for Small Businesses

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Estimates assume an average interchange fee of 1.81% + $0.10, based on our latest available data. Estimates provided reflect online and in-person transactions, but exclude any keyed transactions. Estimates are based on the lowest monthly plan and processing fees for each provider.

Product
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Payment processing fees
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Square

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on Square's secure website

Get an estimated monthly cost for your business.
5.0/5

Best for Brick-and-mortar businesses

In-person: 2.6% + $0.10

Online: 2.9% + $0.30

$0.00

Starts at $0/month for unlimited devices and locations.

Get an estimated monthly cost for your business.
Learn more

on Square's secure website

Helcim

Learn more

on Helcim's secure website

5.0/5

Best for High-volume businesses

In-person: 0.4% + $0.08

Online: 0.5% + $0.25

Plus interchange

$0.00

Learn more

on Helcim's secure website

Stripe

Learn more

on Stripe Payments' secure website

5.0/5

Best for Online businesses

In-person: 2.7% + $0.05

Online: 2.9% + $0.30

$0.00

Learn more

on Stripe Payments' secure website

National Processing

Learn more

on National Processing's secure website

5.0/5

Best for Free terminal

In-person: 2.5% + $0.10

Online: 2.9% + $0.30

$9.95

for Basic In-Person Package.

Learn more

on National Processing's secure website

Stax by Fattmerchant

Learn more

on Stax by Fattmerchant's secure website

4.0/5

Best for Membership-style pricing

In-person: 0% + $0.08

Online: 0% + $0.15

Plus interchange

$99.00

and up.

Learn more

on Stax by Fattmerchant's secure website

Payment Depot

Learn more

on Payment Depot's secure website

4.5/5

Best for Tailored interchange-plus rates

0.2% + $0.00

to 1.95%, plus interchange.

$0.00

Learn more

on Payment Depot's secure website

U.S. Bank Merchant Services

4.5/5

Best for Fast deposits

In-person: 2.6% + $0.10

Online: 2.9% + $0.30

$0.00

and up.

Payline

4.5/5

Best for High-risk merchants

In-person: 0.4% + $0.10

Online: 0.75% + $0.20

Plus interchange

$10.00

in person; $20 online.

Dharma Merchant Services

4.5/5

Best for Nonprofits

In-person: 0.15% + $0.08

Online: 0.2% + $0.11

Plus interchange

$15.00

for most industries; $12 for nonprofits.

Our pick for

Brick-and-mortar businesses

Square’s flat-rate processing fees, reasonably priced hardware options and free POS software plan make it an easy solution for small-business owners accepting credit card transactions in store. The mobile app also lets you accept card payments with Tap to Pay on your smartphone — no hardware purchases required.

Learn more

on Square's secure website

Monthly fee
$0.00

Starts at $0/month for unlimited devices and locations.

Our pick for

High-volume businesses

Though interchange-plus pricing can be confusing, it’s often a good cost-saving alternative to flat-rate processing. On top of using an interchange-plus pricing model, Helcim also extends volume discounts to businesses processing more than $50,000 in credit card transactions per month.

Learn more

on Helcim's secure website

Monthly fee
$0.00

Our pick for

Online businesses

Though Stripe offers POS hardware for accepting credit card transactions in person, its product is best for businesses that sell mostly online. You can embed its prebuilt payments form on your e-commerce website or create your own customized checkout experience for customers.

Learn more

on Stripe Payments' secure website

Monthly fee
$0.00

Our pick for

Free terminal

Small-business owners who qualify for a free terminal with National Processing can save money on POS hardware costs. If you already have POS hardware, the company may be able to reprogram it for free, too.

National Processing

Learn more

on National Processing's secure website

Monthly fee
$9.95

for Basic In-Person Package.

Our pick for

Membership-style pricing

Stax’s membership-style pricing model is more expensive than competitors upfront, but can cut high-volume business’s overall credit card processing costs in the long run. Comparing your monthly costs under different pricing models can help you decide which is cheaper for your business.

Stax by Fattmerchant

Learn more

on Stax by Fattmerchant's secure website

Monthly fee
$99.00

and up.

Our pick for

Tailored interchange-plus rates

Instead of charging all businesses a standard per-transaction fee on top of interchange rates, Payment Depot tailors its markups to your business. If you’re able to negotiate a smaller margin than competitors offer, you may be able to save a significant amount of money.

Payment Depot

Learn more

on Payment Depot's secure website

Payment processing fees
0.2% + $0.00

to 1.95%, plus interchange.

Monthly fee
$0.00

Our pick for

Fast deposits

Small businesses with U.S. Bank checking accounts get access to free same-day funding, seven days a week, which can help improve their cash flow. Some competitors only offer same-day funding as an add-on that increases your overall processing fees.

U.S. Bank Merchant Services

Monthly fee
$0.00

and up.

Our pick for

High-risk merchants

Payline can be an ideal solution for high-risk businesses struggling to find affordable merchant services. Supported high-risk industries include cannabis, travel, vitamins and credit repair. Additionally, high-risk businesses’ first two months with Payline are free.

Payline

Monthly fee
$10.00

in person; $20 online.

Our pick for

Nonprofits

Dharma Merchant Services offers discounted interchange-plus rates for nonprofit businesses, along with the ability to accept recurring donations. You can also use its services to add a “donate now” button to your existing website.

Dharma Merchant Services

Monthly fee
$15.00

for most industries; $12 for nonprofits.

Our picks for cheapest credit card processing companies

Helcim

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.

Square

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.

Stripe

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.

Stax

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.

Payline

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.

Payment Depot

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.

National Processing

Best for free terminal
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.

Dharma Merchant Services

Best for nonprofits
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.

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.
Merchants opening a new Payment Solutions account are eligible to earn back 2.5% on transaction fees each month through 2025. Terms and conditions apply.

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.
Last updated on July 10, 2024

Methodology

NerdWallet’s ratings of payment processing providers rewards companies whose products and services are priced well and work in a variety of payment scenarios, among other criteria. Ratings are based on weighted averages of scores in several categories, including overall cost, hardware and software options, system capabilities, customer service, contract requirements and integrations. Learn more about how we rate payment processing providers.
These ratings are a guide, but fees, hardware, software and contract requirements can vary widely from business to business and provider to provider. We encourage you to shop around and compare several providers.
NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.
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