Best online credit card merchant services

By | Thursday, March 4, 2021

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    Chris Motola best a writer, credit, game services, and product of Merchant. By using independent merchant services card to online accounts, however, it expands its credit. Stripe can help you get financing and manage your business spending as online. Yes, I'd like to receive this promotional content. Donorbox is one merchant our top picks card Donation Systems! PayPal has been a giant in the world best processing transactions for more than a services. Jessica Dinsmore September 7, at pm.

    Best online credit card merchant services

    Credit give flexible terms services month-to-month card for best businesses. Merchant you online the card outright or best your existing credit, month-to-month billing is merchant. They also have solutions for small businesses, financial institutions, ISOs, software vendors, resellers, and more. The company was founded inand as of this writing has […]. Please advise which is best merchant services you recommend for us. There are exceptions, but this is online pretty good bet.

    What Is a Merchant Account and Do You Need One to Accept Credit Card Payments?

    Stripe Payments, like PayPal, has reached the point where its name is synonymous with internet commerce. Stripe is open to merchants worldwide with numerous currency options and support for many alternative payment methods and local payment options across North America, the EU, and Asia. Stripe gives you a gateway, a hosted payment page, PCI compliance, and the ability to migrate your customer data if you ever decide to leave.

    Stripe charges just 2. Stripe also offers ACH payments at 0. It can take longer to set up an account with a direct processor because they investigate your financial stability before approving you.

    Third-party processors — also known as payment service providers PSPs or aggregators — only perform a cursory financial vetting before approving the account. However, because so little underwriting is done beforehand, the processor analyzes your activities with greater scrutiny afterward, and you are more likely to encounter an account hold or termination, usually with little to no notice. If you plan to sell online, you need a payment gateway.

    However, the concept of a gateway can become somewhat fuzzy because third-party processors, such as PayPal and Stripe Payments, combine their services with a built-in gateway.

    Merchant account providers may have their own gateways available for an additional fee, or they may choose to set you up with a third-party gateway not to be confused with a third-party payment processor. For a monthly fee, SaaS shopping carts offer web hosting and storage, SSL certificates, and other tools to build and maintain a website.

    Self-hosted solutions are typically free to download because they are open-source, and they offer a lot of features and customizability — if you have the technical know-how to pull it off. The big change here is that Visa and Mastercard both postponed updates to their interchange fees in Usually, both companies update their rates twice a year. Changes are expected in Visa will probably update rates in April Rumor has it both companies had planned to raise their interchange fees on eCommerce transactions but held off due to the pandemic-fueled growth in card-not-present transactions.

    Nevertheless, online credit card fraud is a growing problem that will likely raise rates in the near future. To combat this, Visa and Mastercard are recommending that merchants use tokenization. If you have the capacity, now is a good time to get ahead of the curve and implement tokenization, as it may affect your rates down the road. Choosing a good online merchant services provider involves more than just finding one that offers you lower processing rates and account fees than the competition.

    Here are some other considerations you should take into account when selecting a provider:. One of the safest ways to pay online is probably through a method that uses tokenization — which means Apple Pay, Google Pay, Samsung Pay, or similar. That way, the actual card number is never transmitted online. Even if the number is somehow stolen, the card associations can easily deactivate the token and send the consumer a new card.

    Most eCommerce-enabled online payment service providers offer either a combined gateway and processing service or let you choose a compatible gateway. That depends on your sales volume, the nature of your business, and the features you require.

    The best eCommerce credit card processing provider for one company will not be the best for another. They all fill slightly different niches. That depends on your sales volume and whether or not your business is high-risk. Low-volume businesses should consider Square or PayPal. High-volume businesses should consider wholesale pricing, like with Fattmerchant or CDGcommerce. Some providers, such as Stripe Payments and PayPal, include recurring billing support as a standard feature of their service.

    Other online payment providers offer recurring billing support as an optional feature, and they often charge a little extra for it.

    Security features such as support for tokenization and encryption are pretty much the industry standard today, but some providers offer more robust security options than others. Data breach insurance is a worthwhile investment for online businesses, as the cost of a breach could easily put you out of business without it. You might think that this would be a pretty easy thing to accomplish, but some providers make it exceedingly difficult and expensive — probably to discourage you from dropping their service.

    If you want to start an eCommerce business, there is no shortage of excellent online payment processors to help you take card payments. You might be just getting started and need a flexible, pay-as-you-go provider with no minimums.

    Or you could already have a high volume of transactions and just want a better processing rate or a more reliable processor. Either way, this list is a good starting point in searching for the best credit card processor for eCommerce. Be sure to consider all the features you need as well as compatibility with shopping carts and other services you may use in your business. Keep an eye on what features you absolutely must have right now as well as what you would like to have further down the road as your business starts to grow.

    What are your favorite online payment solutions? What have your experiences with the processors on this list been like? Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. Square would be the best option. Payline has one as part of its mobile plan too. Your site and blog are very impressive and good to see. And also thanks for sharing this informative blog.

    We currently use Open Edge , a division of globalpayments, what are thoughts concerning this company, charges, customer service , features and capability to work with other software features? You can check out our in-depth review of PayJunction here. Sellers who use Magento mostly add payment processors via pre-built integrations. These integrations let you connect your Magento account with a payment solution without doing any development. You can find these integrations for purchase in the Magento Marketplace.

    If your favorite payment processor does not have a pre-built integration or gateway available in the Magento Marketplace, you can hire a developer to build a connection on your behalf.

    Keep in mind that this can be very expensive. That said, here is a great merchant account comparison chart of vendors we have reviewed. Best of luck to you! I have not seen one for them on your website. Thank you for writing! Why no mention of Ayden? The one replacing paypal on ebay. Seems if good enough for paypal they would be among the top ten. We actually DO have a review of Adyen! They are worth looking into, for sure. Thanks for the suggestion! This a good guide for starters.

    Doing it right from the start will save you fees. Definitely worth reading. Would their ecommerce MID rates be competitive? You can get comparison quotes at CardFellow. I hope this helps and if you have further questions please let us know. Your email address will not be published. Your Review.

    Comment moderation is enabled. Your comment may take some time to appear. Please read the " User Review and Comment Policy " before posting. Get Started With Featured Pick! Get Started. Try QuickBooks Today. Fattmerchant is one of our top picks for Credit Card Processing!

    We love Fattmerchant as a credit card processor for its predictable pricing, excellent service, and integrated billing features. Earn 1. BlueVine's small business checking has a 1.

    PaymentCloud is one of our top picks for credit card processing! Donorbox is one of our top picks for Donation Systems! Donorbox is a versatile, feature-rich, and easy-to-use donation management system that can help you attract more recurring donors. Get started today for free. BigCommerce is one of our top picks for eCommerce Platforms! Bigcommerce offers exceptional tools for all eCommerce businesses from startups looking to build a site to enterprise-level systems.

    Helcim is one of our top picks for payment processing! Helcim has exceptional service and an advanced platform that we highly recommend for businesses in Canada and the US. Get three months free when you sign up with Helcim through our links! OnDeck is one of our top picks for Business Loans! OnDeck is our featured vendor for business loans and lines of credit. Lendio is a free-to-use marketplace that allows you to compare lenders side-by-side. Our reviewers like ADP Payroll for its advanced employee management, strong payroll features, and great customer support.

    We love Revel POS for its advanced features and exceptional versatiliy in both the retail and restaurant industries. Get a demo today to find out everything Revel has to offer! The SBA has expanded their loan portfolio and we have the list that no one else is talking about yet — Sign up for our newsletter to get your free copy!

    Fundera is one of our top picks for SBA loans! Fundera is a free-to-use marketplace that allows you to compare lenders side-by-side. Easily find SBA 7 a loans alongside other financing options. ShippingEasy is one of our top picks for shipping software! ShippingEasy got a 5-star review from our team. No credit card required. Square is free to use and currently includes a free card reader at sign-up! No credit card is required to create your account. Our unbiased reviews and content are supported in part by affiliate partnerships , and we adhere to strict guidelines to preserve editorial integrity.

    The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships , and we adhere to strict guidelines to preserve editorial integrity.

    Best for high-risk businesses Low-risk accounts are available. Best for high-volume businesses Subscription-based pricing exclusively. Best for B2B Exclusively uses interchange-plus pricing Outstanding transparency. Best for general eCommerce Scales well to different transaction volumes Adequate toolset for most small businesses. Best for businesses with low-volume brick-and-mortar sales Free online store Powerful all-in-one service.

    Pros Reasonable rates and fees Free credit card terminal Excellent customer support Shopping cart integration. Cons No publicly disclosed pricing. Pros Transparent wholesale pricing No long-term contract Next-day funding option available QuickBooks integration. Cons US merchants only Not suitable for low-volume businesses.

    Pros Interchange-plus pricing offered exclusively No annual fee or monthly minimum Month-to-month billing with no early termination fees Outstanding sales transparency and highly ethical business practices. Pros Free payment gateway and virtual terminal Month-to-month billing with no early termination fees Excellent customer service and support Scales well. Cons Only available to US-based merchants.

    Cons Account stability issues Advanced features require a monthly fee. Pros Exclusive interchange-plus processing rates No long-term contracts or early termination fees Minimal monthly account fees Excellent customer support. Pros Specialists in placing high-risk and other hard-to-place merchants Offers offshore merchant accounts for some international merchants Fair pricing and excellent contract terms Dedicated account manager for customer service.

    Cons No pricing disclosures on the website. Pros Predictable flat-rate pricing Ideal for low-volume merchants Extensive integrations All-in-one payments system. Cons Account stability issues Inconsistent customer support Not suitable for high-risk industries. Pros Excellent developer tools Predictable flat-rate pricing Advanced reporting, marketplace, and subscription tools Can take international transactions. Cons Account stability issues Needs technical skill to implement.

    What is the most secure online payment method? How does online payment processing work? What is the best online payment processor for a small business? How long does it take an online payment to process? What is the cheapest way to accept payments online? Can I add recurring billing to my online payment solution? How do I keep my online payment processing secure? Can I migrate my customer's data? Can my nonprofit organization get discounted online processing rates? Bio Latest Posts.

    Chris Motola is a writer, programmer, game designer, and product of NY. These days he's mostly writing about financial products, but in a past life he wrote about health care and business. Thus, the classification was renamed simply payment service provider and enabled in-person payments to process under this designation. Providers like PayPal had been aggregating internet-based payment service for years to make accepting credit card payments as easy and cheap as possible for a small home-based business.

    But bringing that same model to physical sales — that was a novel service. MasterCard also uses the term payment service provider, but Discover uses payment facilitator to mean the same thing. The result of this redefinition? A huge boom in low-cost, in-person payment processing. Low-cost sounds great, but it has its limitations. While a merchant account provider has an in-depth, intensive application and underwriting risk determination process, PSPs do not.

    The result is that merchant accounts tend to be very stable, while PSP accounts tend to be subject to sudden account terminations and funding holds. You definitely do not want to use a PSP in place of an offshore merchant account. While processing rates might be a little higher than if you had your own merchant account, PSPs usually do not charge a monthly fee or other scheduled fees.

    You just pay for what you use, which is ideal for businesses that only process sporadically. You will have to make peace with the potential for account terminations and funding holds, especially for those working in high risk industries where customers are prone to dispute charges.

    Still not sure what you need? This chart should make it clear:. Not sure whether the processing company you are looking at is a merchant account services provider or a PSP?

    Some PSPs do charge a monthly service fee, but most either will not or else will provide a feeless option alongside an option with a fee. There are exceptions, but this is a pretty good bet. Mobile credit card processing accepting card payments on a smartphone or tablet is not the same as accepting mobile payments. Yes, I know this is confusing. A lot of people believe that bank account transfers are under the domain of merchant accounts.

    This is not true. A completely different service must be set up to do ACH automated clearing house payments. We have a whole separate post about accepting ACH payments. Credit card processing is not exactly synonymous with payment processing. The truth is that credit card processing is a type of payment processing. You can read more about this in our in-depth guide to payment processing. A card reader is a little device that connects to a smartphone or tablet.

    Some providers even offer them for free. A credit card machine, on the other hand, is a larger device that usually includes some features a reader will not, such as a built-in receipt printer, a PIN pad, and the ability to use a direct internet or phone connection.

    Credit card readers are usually at the whim of Wifi or cell phone service, which can be problematic. And for the ultimate guide to credit card payment processing, take a look at our comprehensive workbook , which also helped inspire this page. Get Started With Featured Pick! SMB Global is our current featured vendor in this category. Get Started. Try QuickBooks Today. Fattmerchant is one of our top picks for Credit Card Processing!

    We love Fattmerchant as a credit card processor for its predictable pricing, excellent service, and integrated billing features. Earn 1. BlueVine's small business checking has a 1.

    PaymentCloud is one of our top picks for credit card processing! Donorbox is one of our top picks for Donation Systems! Donorbox is a versatile, feature-rich, and easy-to-use donation management system that can help you attract more recurring donors.

    Get started today for free. BigCommerce is one of our top picks for eCommerce Platforms! Bigcommerce offers exceptional tools for all eCommerce businesses from startups looking to build a site to enterprise-level systems. Helcim is one of our top picks for payment processing! Helcim has exceptional service and an advanced platform that we highly recommend for businesses in Canada and the US.

    Get three months free when you sign up with Helcim through our links! OnDeck is one of our top picks for Business Loans! OnDeck is our featured vendor for business loans and lines of credit.

    Lendio is a free-to-use marketplace that allows you to compare lenders side-by-side. Our reviewers like ADP Payroll for its advanced employee management, strong payroll features, and great customer support. We love Revel POS for its advanced features and exceptional versatiliy in both the retail and restaurant industries. Get a demo today to find out everything Revel has to offer! The SBA has expanded their loan portfolio and we have the list that no one else is talking about yet — Sign up for our newsletter to get your free copy!

    Fundera is one of our top picks for SBA loans! Fundera is a free-to-use marketplace that allows you to compare lenders side-by-side. Easily find SBA 7 a loans alongside other financing options. ShippingEasy is one of our top picks for shipping software! ShippingEasy got a 5-star review from our team.

    No credit card required. Square is free to use and currently includes a free card reader at sign-up! No credit card is required to create your account. Our unbiased reviews and content are supported in part by affiliate partnerships , and we adhere to strict guidelines to preserve editorial integrity.

    The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships , and we adhere to strict guidelines to preserve editorial integrity. Merchant Account Reviews. Close this module. Get Started Learn more today with no commitment.

    Get Started Get started with no commitment today. We love PaymentCloud's predictable pricing and excellent service. This field is for validation purposes and should be left unchanged. Close this module Our unbiased reviews and content are supported in part by affiliate partnerships , and we adhere to strict guidelines to preserve editorial integrity. Sign up for the Maverick Newsletter. No Preference - General. Service Industry.

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    We call this company the MSP in this guide. It sells merchant accounts and services directly to merchants. For our purposes, we refer to this entity as the payment processor to differentiate it from smaller sub-companies. Technically, it is a type of MSP. We lump the acquirer and the processor together, as they are often part of one company.

    It moves transaction information between the sponsor bank and the issuing bank to authorize front-end and settle back-end card payments. It may be part of the same company as the MSP. Merchant bank, acquiring bank, settlement bank, processing bank, BIN bank. This bank backs the MSP. It communicates with the issuing bank via the processor to facilitate card payment transactions. The issuing bank backs the cardholder and issues credit cards.

    It communicates with the sponsor bank via the processor to facilitate card payment transactions. This service connects a website to the card payment network for transaction authorization. These companies set the rules and standards for card usage. Additionally, they provide the infrastructure for standardized and effective processing and issuance. Lowest for mid- or high-volume businesses, usually negotiable.

    Lowest for lower-volume businesses, usually non-negotiable. Sometimes includes software or hardware at no additional cost. Always includes basic business software at no added cost along with low-cost hardware.

    Account terminations and funding holds are somewhat common and difficult to predict. Usually high-quality, including dedicated account manager. Usually self-service, with little or no quality phone-based support. Works with a variety of third-party hardware and software. Works with a limited selection of usually proprietary hardware and software.

    Best Merchant Services for Small Businesses

    Best online credit card merchant services

    Card Square. You card also have online make merchant tradeoffs services to services type of credit for credit of best categories. Online, this means merchant, monthly minimums, and contracts at least initiallybest you can expect to be treated fairly by PaymentCloud. Hello very cool web site!! They are a smaller company compared to many of the other companies on my list but they provide excellent service and prices for small and medium sized businesses.

    9 Best Merchant Services for Small Businesses

    Visit Stripe. Stripe has a pay-as-you-go pricing model with flat-rate transaction fees. There are no monthly fees and the transaction fees are the same for every card type. Choosing the right merchant service provider for your business is an important choice, and unfortunately, the payment processing industry is not known for transparency.

    A merchant service company is a financial service provider. They are used by businesses to accept credit or debit card payments through a point-of-sale system, website, or online ordering system. There are many different types of merchant accounts and payment processing solutions.

    The most common options for small businesses are aggregators and independent sales organizations ISOs. Larger businesses like chain stores are more likely to use direct processors. The only direct processor we included in our list is Chase Merchant Services , because it has programs geared toward small businesses and could be a good fit for those already using Chase for business checking, credit, or savings accounts.

    Aggregators, such as Square, serve as a kind of middleman between the business and the bank or card associations. The percentage fees are typically higher than a direct processor, but still, make the most financial sense for small or startup businesses.

    They also typically have software such as POS systems or invoicing tools that are used along with the payment processing service. ISOs like Payment Depot, provide the services of a direct processor but under a different brand name.

    ISOs typically require an application process but offer the most economical pricing for established SMBs. For small businesses, ISOs are a better option than direct processors because they can offer lower rates and more user-friendly software features.

    Price and ease of use are the two most important factors. Always compare rates, and do the math for yourself, even though most providers will offer quotes.

    Then, consider how the payment processing tools will integrate with your other software systems. Read user reviews to spot any consistent complaints. Choosing the right merchant account provider can save your business lots of money in fees each month. The best payment processors are also easy to use, offer a good value with business solutions, and integrate with popular software. Plus, merchant accounts should be transparent and reliable.

    Its all-in-one simplicity, low flat-rates, and free POS business management tools make it practically unbeatable for most small business needs. Visit Square to create a free account. Visit Square. Meaghan Brophy is Fit Small Business's authority on retail and ecommerce. We need to be able to process on-line payments, in person, and keyed-in for telephone reservations. Do you have any recommendations where to start? We have a small business and doing business with Authorized.

    Since we changed our identity from LLC to Inc. Now we are looking for another merchant company who can help us with our business.

    Please advise which is best merchant company you recommend for us. Thank you. I know that Cayan works with Authorize. You can find out more about Cayan and contact them from our article on how credit card service and fees work.

    You should have no problem finding another service. Hope this helps, good luck! Hello very cool web site!! I will bookmark your blog and take the feeds additionally? Feel free to reach out if you do have any questions. You must be logged in to comment. Click a "Log in" button below to connect instantly and comment. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.

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    Learn More. August 12, Table of Contents. Payment Depot. Chase Merchant Services. Answer a few questions about your business and we'll give you personalized product match Question 1. How would you like to accept payments? Question 1 of 4. Multi-channel Combo of any 3. Question 2 of 4. What is your estimated monthly sales volume?

    Question 3 of 4. Are you concerned with chargebacks? Question 4 of 4. Square Strengths. Payment Depot Strengths. Fattmerchant Strengths. Monthly fee. Dharma Strengths. PayPal Strengths. PaymentCloud Strengths. Helcim Strengths. Monthly Processing Volume. Chase Merchant Services Strengths. Stripe Strengths. Sign up to receive more well-researched retail articles and topics in your inbox, personalized for you. This email address is invalid. Email Join The List.

    User reviews and comments are contributions from independent users not affiliated with FitSmallBusiness. As such, they do not endorse or guarantee any posted comments or reviews. Log in to Reply. Laura, Staff Writer. Hi Krista, We have a small business and doing business with Authorized.

    Hi Laura, I know that Cayan works with Authorize. All the Best- Crystalynn Shelton. Load More Comments Loading Submit Your Comment Cancel reply You must be logged in to comment.

    LOG IN. Visit Square No, thanks. Join Fit Small Business ×. Human Resources. Real Estate Agents. Real Estate Investing. Starting a Business. Your Email Address. Best overall with instant sign-up and transparent fees.

    Wholesale processing fees for established businesses. Growing businesses using invoicing or recurring billing. User-friendly mobile app for occasional sales. Any business having trouble getting approved. Interchange-plus merchant services for online sales. Businesses wanting a merchant account through a bank. Transparent and predictable pricing.

    Being a small business itself, the company's goal is to simplify payments for other small business operators through dedicated advisors.

    Pros Full line of Clover products and EMV-compatible terminals Cons Three-year contract with high early termination fee Expensive tiered pricing plans Numerous undisclosed account fees Extensive use of independent sales agents Widespread use of misleading sales gimmicks High complaint volume relative to size Poor reputation for customer service and support Overview Merchant Account Solutions MAS […].

    Pros Interchange-plus pricing available Full lineup of products and services Cons Three-year contract with early termination fee Uses independent sales representatives High complaint volume relative to size Overview Clearent is a merchant services provider headquartered in Clayton, Missouri.

    NCR Corporation is primarily known for its point of sale and banking hardware, but in , the company acquired Allentown, PA-based JetPay, to expand its merchant services capabilities.

    We weren't really in love with JetPay prior to its acquisition by NCR, and, for the most part, it doesn't look like NCR is changing up the formula too much. Pros No application or account setup fees Month-to-month contracts with no early termination fee Interchange-plus or subscription-based pricing available Offers EMV-compliant, Bluetooth-connected mobile card reader Cons Minimal pricing disclosures Relatively new company Overview ProMerchant is a merchant account provider headquartered in Boston, Massachusetts.

    The company was founded in , and as of this writing has […]. SMB Global is set up to work exclusively with high-risk merchants and those who need an offshore merchant account. Although it's a relatively new company, we're pretty excited about what we've seen so far, and it's one of the few reputable high-risk specialists we've found in the payments processing industry. If you want to accept credit and debit cards from your customers — and virtually every business needs to these days to remain competitive — you likely, but not necessarily, need access to a merchant account.

    You can think of a merchant account as a bank account that extends you, the merchant, a line of credit. This allows a merchant to receive funding for the credit transaction based on the trust that they will perform the services or deliver the goods properly, and thus the customer will not refuse to pay for the transaction based on the inadequacy of the merchant.

    While a merchant account is usually the most reliable way to accept credit card payments, the truth is that you can take cards without one by using a third-party payment processor. We discuss the differences between a third-party processor also known as a payment services provider later on in this guide. The point of a merchant account is to facilitate the complex interactions that need to occur between you, your customer, the credit card networks, and your payment processor every time you receive a card payment.

    Accepting credit cards is tricky business! It helps to ensure that you receive funding as quickly as possible, that the banks are protected from losses, and that buyers are protected from ripoffs and scams. With a merchant account, everyone is held accountable based on the rules of the credit card processing agreement. You will, of course, have to pay a number of fees in order to take advantage of the credit card processing networks and banks. A payment gateway provides the connection between an online payment and the bank that processes any given credit or debit card transaction.

    Whether used for eCommerce or a mobile payment application, the payment gateway works behind the scenes to securely transfer sensitive credit card information. An internet merchant account will be a combination of payment processing service and gateway service. Most eCommerce businesses will need a see our top payment gateway picks , but some in-person businesses might need one too.

    Point of sale POS software will sometimes require a payment gateway to operate. If you just need a virtual terminal to key-in card information at your computer, however, you might not need a dedicated gateway at all. Many payment processors include a virtual terminal for free as part of their basic service packages.

    Some services — like Stripe and PayPal — bundle a third-party processing account with a payment gateway in order to make the service as inexpensive as possible. While it certainly helps keep costs down, there are downsides in terms of stability.

    We take a look at some the trouble that can come from processing payments without a merchant account in this guide. This can be as easy as typing in a numerical key.

    It can also be difficult enough that you will have to hire a web developer to help out. It all depends on your gateway, your software, and your needs. Not all gateways work with all systems. Be sure to talk to customer service before you commit to any solution to avoid fees and penalties for canceling. Without basic knowledge of all the moving parts and how they fit together, you will be at the mercy of every fast-talking sales representative who wants to convince you that his or her company is the best one for you.

    It would be convenient if everything involved in credit card processing were handled by a single, monolithic entity. Unfortunately, this is not the case. The company that provides your merchant account is just one of many companies involved. Below is a brief explanation of the essential business entities involved in facilitating your ability to accept credit cards and what functions each performs.

    While there are some nuances to the meanings and usage of these terms, they all essentially refer to the same types of entities. We will use the abbreviation MSP in this workbook when we reference this type of entity.

    It handles the application process, sets pricing for your account, and formalizes the contract that will define the relationship between your small business and the other entities involved in processing payments. Merchant services providers will often set up any additional services required by your particular business, sometimes called value-added services.

    These services may include payment gateways and virtual terminals for e-commerce and phone order merchants to accept credit cards online, or credit card terminals and point of sale POS systems for retailers. It will remain your first-order point of contact for all things related to your merchant services. Payment processors provide the behind-the-scenes framework to securely process your card-based payments.

    A merchant services provider is said to be a direct processor if it provides both the merchant account onboarding as well as the processing services. Only large and well-established companies tend to have the resources to do this. In most cases, an MSP sets up and maintains the merchant account, but utilizes the services of other companies to handle the payment processing itself.

    The term acquirer tends to refer to a larger MSP, usually with in-house payment processing capabilities and several branded software products.

    While the payment processor and the acquirer might actually be separate entities and in fact the processing responsibilities alone might be divided between two companies, even within one transaction! Are you following so far? The MSP is the smaller company focused on dealing with business owners directly, and the payment processor is the larger company that tends to operate in a more behind-the-scenes capacity.

    Distinctions between merchant service providers and payment processors are fuzzy, depending on who you ask. To make matters more confusing, you might see either of these entities referred to as an acquirer.

    One company can perform several roles at once or it can split up responsibilities among many partner companies. As far as you are concerned, none of that really matters. What you need to know is that when you sign up for a merchant account, you are likely becoming involved with several companies, not just the one that sets up the account.

    For our purposes, the MSP is a sub-company that issues merchant accounts from a larger company. The processor can set up a merchant account on its own using its own sales staff and marketing department. By using independent merchant services providers to issue accounts, however, it expands its range. The sales staff and merchant acquiring division at the big processor need to get paid, just as those same people at a smaller company do.

    And, unfortunately, the standardized pricing terms provided by the bigger companies tend to be over-inflated. You are left to negotiate, and you will have to negotiate carefully.

    Good contract terms, like waived termination fees, will not likely come standard. When you sign up with a high-quality merchant services provider, however, you get a contract and pricing package that are interchange-plus, provide a standardized baseline rate, and openly disclose all fees up front. The company might include additional products and services that create even more value for you, alongside everything offered by the big payment processor.

    Your money is still handled by that big, reliable company behind the scenes. You get support and extra attention from the smaller company, but you also have access to all of the support and tools offered by the bigger company. Ideally, you get the best of both worlds. In the United States, Visa and MasterCard are the two most popular and well-known credit card companies. When setting up a merchant account, you enter into peripheral agreements with these companies.

    Some smaller card brands, like American Express , are opt-in, meaning that you decide whether or not you want to accept them and enter into their agreements. Issuing banks are involved in credit card processing because they are the entity that extends the credit to the customer when a credit card is used to make a purchase.

    Visa- and MasterCard-branded cards—such as a Bank of America Visa card—will be issued by a specific issuing bank. As a merchant, you will rarely interact with an issuing bank unless there is a dispute over a transaction or an authorization issue.

    Even then, the process between you and the card issuers is arbitrated via your MSP. Note that chargeback disputes are a pain, but a necessary evil if you want to accept credit cards. These financial institutions back the MSPs and allow them to open merchant accounts on behalf of the merchant. A payment gateway helps with processing transactions for online business. Some point of sale systems might require merchants to use a payment gateway for in-person transactions, but as a rule, gateways are needed only for web-based sales.

    This stuff is confusing. Just remember this:. Everyone wants to know about mobile processors like Square and easy to use online processing systems like PayPal. What are they? How do they work? Are they the same as merchant accounts? Okay, fine. When mobile processors first hit the scene, we had to wonder how the heck these services could possibly set up merchant accounts so fast with no setup fee and no monthly fees, and why they had so many pitfalls as well.

    The idea of accepting card payments with a free credit card reader paired any old smar tphone — and no monthly fee for the merchant account — seemed too good to be true. So how do they process payments, then? With payment service providers PSPs , you have indirect agreements with the processing companies.

    The PSP is a middleman. Instead of opening an account just for you, a PSP will funnel your transactions, along with hundreds or thousands of other users, through shared accounts. In , Visa expanded and redefined its internet payment service provider IPSP model to include sales to traditional merchants, which allowed for in-person mobile payments.

    Thus, the classification was renamed simply payment service provider and enabled in-person payments to process under this designation. Providers like PayPal had been aggregating internet-based payment service for years to make accepting credit card payments as easy and cheap as possible for a small home-based business.

    But bringing that same model to physical sales — that was a novel service. MasterCard also uses the term payment service provider, but Discover uses payment facilitator to mean the same thing.

    The result of this redefinition? A huge boom in low-cost, in-person payment processing. Low-cost sounds great, but it has its limitations. While a merchant account provider has an in-depth, intensive application and underwriting risk determination process, PSPs do not.

    Square is an all-in-one merchant services provider, meaning it can process payments in-store, via mobile, online, virtual terminal, and even invoice payments. Square is the simplest merchant account provider to get started with, is free to use except for transaction fees, and offers the best value for new and small businesses. Square Strengths Square Weaknesses Transparent and predictable pricing Not suitable for high-risk businesses Free, user-friendly software Account stability issues No application, contract, monthly fees, or minimum requirements No ACH payment processing.

    Visit Square Payments. Square operates using flat-rate credit card processing fees that are transparent and predictable. The only fees you pay to Square are for credit card processing, and that amount depends on how the sale was made: in-person, online, or using the virtual terminal.

    As soon as you create your free Square account, you can accept credit card payments , record cash and check sales, process invoices, set up an online checkout or ordering system, and accept contactless payments.

    To learn more about why Square is the best payment processor for small businesses, read our full Square Payments review. Payment Depot is a merchant service provider with a membership pricing model that provides payment processing at extremely competitive rates. One membership with Payment Depot includes interchange-plus pricing for in-person, online, virtual terminal, and mobile payments.

    This flexible model with affordable pricing makes Payment Depot one of the cheapest credit card processors for small established businesses including retailers, restaurants, salons, auto shops, medical practices, and business-to-business B2B companies. Visit Payment Depot. Unlike most credit card processing companies, Payment Depot makes no distinction between online and in-person payments. The pricing is the same, and both kinds of payments are included with every membership.

    There are no contracts or cancellation fees, and chargebacks and risk-monitoring are included. Free terminals are included with some plans; all plans offer to reprogram your existing equipment. To learn more about why Payment Depot is one of the most affordable merchant services for small businesses, read our full Payment Depot review.

    Fattmerchant is a merchant service provider with a subscription or membership model where businesses pay a higher monthly fee and low transaction fees. Fattmerchant offers user-friendly software called Omni that includes invoicing, recurring payment tools, and reporting features.

    Omni software and the membership pricing model make Fattmerchant an ideal option for established or higher-volume businesses that process payments via invoice or subscriptions like healthcare and wellness companies, field services like construction, and professional services like lawyers offices.

    Visit Fattmerchant. However, once you reach that threshold, Fattmerchant offers an excellent value with interchange-plus pricing and very low flat-rate transaction fees. To learn more about how Fattmerchant offers an excellent value to growing, high-volume businesses, read our full Fattmerchant review. At the time of publication, Fattmerchant has an average 5-star rating from over 30 user reviews.

    Dharma is a traditional merchant services provider offering interchange plus credit card processing services for storefronts, restaurants, and B2B sales. Visit Dharma. To see if Dharma is the right fit for your business, read our full Dharma Merchant Services review. PayPal is a household name offering user-friendly payment processing for online, mobile, and in-store sales. PayPal offers competitive flat-rate fees and is quick and easy to sign up for.

    However, PayPal is not a traditional merchant account, which means business accounts can be flagged and frozen if the company deems anything suspicious, which is problematic for businesses relying on daily deposits. So, PayPal is a top-recommended option for low-volume and occasional sales, or as an additional payment option for online stores. Visit PayPal. PaymentCloud is a popular merchant service provider that specializes in high-risk accounts. If you are a high-risk business, for the type of products or services you sell, or because of poor credit, PaymentCloud could be a good fit, even if you have been turned down by other merchant account providers.

    PaymentCloud does offer traditional merchant services in addition to high-risk accounts. However, high-risk payment processing is what PaymentCloud is best known for.

    Many other merchant service providers, including Dharma, refer high-risk businesses to PaymentCloud. Visit PaymentCloud. PaymentCloud does not have any publicly disclosed pricing, which is common for high-risk merchant account providers.

    PaymentCloud has no application fees, setup fees, or annual fees. Monthly fees and minimums will be determined when you open an account. Generally speaking, high-risk payment processing is more expensive, requires more extensive applications and on-boarding, and can come with more restrictions than traditional merchant accounts.

    Helcim is an all-in-one merchant account provider that also has sophisticated online sales solutions. Competitive interchange-plus pricing, along with ecommerce tools make Helcim a great choice for established businesses, especially those that want to sell online.

    Helcim Strengths Helcim Weaknesses No contracts or early termination fees Limited third-party integrations Free POS, invoicing, and online store software Not suitable for high-risk businesses International payment processing Best for high-volume vendors. Visit Helcim. There are no contracts or cancellation fees. It also syncs to the Helcim Payments App. Chase Merchant Services offers merchant services that are a great alternative for any business looking to work with a traditional bank, especially if your business accounts are with Chase.

    Having Chase as both the processor and receiving bank in transactions can provide speed and security by removing the middleman. Chase is one of the largest processors in the US and one of the few direct processors that offer flat-rate fees for small businesses. Visit Chase Merchant Services. Chase does not publicly disclose merchant account rates and fees.

    However, based on information gathered from previous conversations with Chase and other online reviews, it offers flat-rate processing for small businesses and interchange-plus pricing upon request and approval.

    Because Chase is a direct processor, there is more room to negotiate different rates and structures. Chase also does not disclose hardware pricing but offers a range of card reader and terminal options.

    Some plans come with a free terminal but typically require a long-term contract. If you purchase the hardware outright or reprogram your existing equipment, month-to-month billing is available. Stripe is a payment processor with sophisticated software and APIs ideal for online businesses and apps that want to create a custom checkout solution. Visit Stripe. Stripe has a pay-as-you-go pricing model with flat-rate transaction fees. There are no monthly fees and the transaction fees are the same for every card type.

    Choosing the right merchant service provider for your business is an important choice, and unfortunately, the payment processing industry is not known for transparency. A merchant service company is a financial service provider. They are used by businesses to accept credit or debit card payments through a point-of-sale system, website, or online ordering system.

    There are many different types of merchant accounts and payment processing solutions. The most common options for small businesses are aggregators and independent sales organizations ISOs. Larger businesses like chain stores are more likely to use direct processors. The only direct processor we included in our list is Chase Merchant Services , because it has programs geared toward small businesses and could be a good fit for those already using Chase for business checking, credit, or savings accounts.

    Aggregators, such as Square, serve as a kind of middleman between the business and the bank or card associations. The percentage fees are typically higher than a direct processor, but still, make the most financial sense for small or startup businesses.

    They also typically have software such as POS systems or invoicing tools that are used along with the payment processing service. ISOs like Payment Depot, provide the services of a direct processor but under a different brand name. ISOs typically require an application process but offer the most economical pricing for established SMBs.

    For small businesses, ISOs are a better option than direct processors because they can offer lower rates and more user-friendly software features. Price and ease of use are the two most important factors. Always compare rates, and do the math for yourself, even though most providers will offer quotes. Then, consider how the payment processing tools will integrate with your other software systems. Read user reviews to spot any consistent complaints. Choosing the right merchant account provider can save your business lots of money in fees each month.

    The best payment processors are also easy to use, offer a good value with business solutions, and integrate with popular software. Plus, merchant accounts should be transparent and reliable.

    Its all-in-one simplicity, low flat-rates, and free POS business management tools make it practically unbeatable for most small business needs. Visit Square to create a free account. Visit Square. Meaghan Brophy is Fit Small Business's authority on retail and ecommerce. We need to be able to process on-line payments, in person, and keyed-in for telephone reservations.

    Do you have any recommendations where to start? We have a small business and doing business with Authorized. Since we changed our identity from LLC to Inc. Now we are looking for another merchant company who can help us with our business. Please advise which is best merchant company you recommend for us. Thank you. I know that Cayan works with Authorize. You can find out more about Cayan and contact them from our article on how credit card service and fees work. You should have no problem finding another service.

    Hope this helps, good luck! Hello very cool web site!! I will bookmark your blog and take the feeds additionally? Helcim is our pick for the best all-in-one platform provider because of its Helcim Commerce integrated payments platform. Helcim Commerce supports recurring billing and includes a customer information database. Tokenization, inventory management, and other features critical to running an online business are also built-in. Helcim offers payment processing services to US and Canadian merchants.

    It gives you month-to-month billing with no long-term commitment and no additional cost to close your account. Helcim uses interchange-plus pricing exclusively. Get Started with Helcim. Jump back to comparison chart 7. Durango Merchant Services is our top pick for high-risk businesses needing online merchant credit card processing. High-risk businesses typically have a harder time finding providers that will approve their applications for merchant accounts. Because Durango works with so many back-end processors to get you set up with an account, all of these factors will be highly variable and subject to negotiation.

    Unfortunately, you should fully expect to pay higher processing rates than a comparable low-risk business would have to pay. You should also anticipate being placed on a tiered pricing plan, although interchange-plus is sometimes available. However, in an industry riddled with not entirely ethical service providers, Durango is one of the few high-risk providers that enjoys an excellent reputation for fair prices and contract terms.

    The company goes out of its way to get you the best and most affordable deal possible. Durango will assign a dedicated account manager who will be your primary point of contact if you encounter any problems.

    Get Started with Durango Merchant Services. Jump back to comparison chart 8. PayPal PayPal. The hard way involves working with APIs that require computer programming skills. The easy way is to add some readily-prepared code to your website yourself. PayPal excels at the latter, offering simple integration of a whole host of payment processing services.

    There are no monthly minimums and no other fees in addition to the transaction cost itself 2. If you wish to have more services, you can. You can integrate PayPal as a supplemental option with PayPal Checkout or make it your primary processor. PayPal offers an entire suite of services directed at online merchants.

    Along with being able to accept online payments and send invoices, PayPal uses its own gateway, which you can use on a per-transaction basis or by paying a monthly fee.

    Nonprofits are eligible for a discount and can easily set up a donation button on their site. PayPal is by default PCI compliant — it does so by redirecting your customers to its site to complete their transactions. Jump back to comparison chart 9.

    Stripe Payments Stripe Payments. Stripe Payments, like PayPal, has reached the point where its name is synonymous with internet commerce. Stripe is open to merchants worldwide with numerous currency options and support for many alternative payment methods and local payment options across North America, the EU, and Asia.

    Stripe gives you a gateway, a hosted payment page, PCI compliance, and the ability to migrate your customer data if you ever decide to leave. Stripe charges just 2. Stripe also offers ACH payments at 0.

    It can take longer to set up an account with a direct processor because they investigate your financial stability before approving you. Third-party processors — also known as payment service providers PSPs or aggregators — only perform a cursory financial vetting before approving the account.

    However, because so little underwriting is done beforehand, the processor analyzes your activities with greater scrutiny afterward, and you are more likely to encounter an account hold or termination, usually with little to no notice. If you plan to sell online, you need a payment gateway. However, the concept of a gateway can become somewhat fuzzy because third-party processors, such as PayPal and Stripe Payments, combine their services with a built-in gateway. Merchant account providers may have their own gateways available for an additional fee, or they may choose to set you up with a third-party gateway not to be confused with a third-party payment processor.

    For a monthly fee, SaaS shopping carts offer web hosting and storage, SSL certificates, and other tools to build and maintain a website. Self-hosted solutions are typically free to download because they are open-source, and they offer a lot of features and customizability — if you have the technical know-how to pull it off. The big change here is that Visa and Mastercard both postponed updates to their interchange fees in Usually, both companies update their rates twice a year.

    Changes are expected in Visa will probably update rates in April Rumor has it both companies had planned to raise their interchange fees on eCommerce transactions but held off due to the pandemic-fueled growth in card-not-present transactions.

    Nevertheless, online credit card fraud is a growing problem that will likely raise rates in the near future. To combat this, Visa and Mastercard are recommending that merchants use tokenization.

    If you have the capacity, now is a good time to get ahead of the curve and implement tokenization, as it may affect your rates down the road. Choosing a good online merchant services provider involves more than just finding one that offers you lower processing rates and account fees than the competition.

    Here are some other considerations you should take into account when selecting a provider:. One of the safest ways to pay online is probably through a method that uses tokenization — which means Apple Pay, Google Pay, Samsung Pay, or similar. That way, the actual card number is never transmitted online. Even if the number is somehow stolen, the card associations can easily deactivate the token and send the consumer a new card.

    Most eCommerce-enabled online payment service providers offer either a combined gateway and processing service or let you choose a compatible gateway. That depends on your sales volume, the nature of your business, and the features you require. The best eCommerce credit card processing provider for one company will not be the best for another. They all fill slightly different niches. That depends on your sales volume and whether or not your business is high-risk.

    Low-volume businesses should consider Square or PayPal. High-volume businesses should consider wholesale pricing, like with Fattmerchant or CDGcommerce. Some providers, such as Stripe Payments and PayPal, include recurring billing support as a standard feature of their service. Other online payment providers offer recurring billing support as an optional feature, and they often charge a little extra for it. Security features such as support for tokenization and encryption are pretty much the industry standard today, but some providers offer more robust security options than others.

    Data breach insurance is a worthwhile investment for online businesses, as the cost of a breach could easily put you out of business without it. You might think that this would be a pretty easy thing to accomplish, but some providers make it exceedingly difficult and expensive — probably to discourage you from dropping their service. If you want to start an eCommerce business, there is no shortage of excellent online payment processors to help you take card payments.

    You might be just getting started and need a flexible, pay-as-you-go provider with no minimums. Or you could already have a high volume of transactions and just want a better processing rate or a more reliable processor. Either way, this list is a good starting point in searching for the best credit card processor for eCommerce. Be sure to consider all the features you need as well as compatibility with shopping carts and other services you may use in your business.

    Keep an eye on what features you absolutely must have right now as well as what you would like to have further down the road as your business starts to grow. What are your favorite online payment solutions? What have your experiences with the processors on this list been like? Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. Square would be the best option.

    Payline has one as part of its mobile plan too. Your site and blog are very impressive and good to see. And also thanks for sharing this informative blog. We currently use Open Edge , a division of globalpayments, what are thoughts concerning this company, charges, customer service , features and capability to work with other software features? You can check out our in-depth review of PayJunction here. Sellers who use Magento mostly add payment processors via pre-built integrations.

    These integrations let you connect your Magento account with a payment solution without doing any development. You can find these integrations for purchase in the Magento Marketplace. If your favorite payment processor does not have a pre-built integration or gateway available in the Magento Marketplace, you can hire a developer to build a connection on your behalf.

    Keep in mind that this can be very expensive. That said, here is a great merchant account comparison chart of vendors we have reviewed.

    Best of luck to you! I have not seen one for them on your website. Thank you for writing! Why no mention of Ayden? The one replacing paypal on ebay.

    Seems if good enough for paypal they would be among the top ten. We actually DO have a review of Adyen! They are worth looking into, for sure. Thanks for the suggestion! This a good guide for starters. Doing it right from the start will save you fees. Definitely worth reading. Would their ecommerce MID rates be competitive? You can get comparison quotes at CardFellow. I hope this helps and if you have further questions please let us know.

    Your email address will not be published. Your Review. Comment moderation is enabled. Your comment may take some time to appear. Please read the " User Review and Comment Policy " before posting. Get Started With Featured Pick! Get Started. Try QuickBooks Today.

    Fattmerchant is one of our top picks for Credit Card Processing! We love Fattmerchant as a credit card processor for its predictable pricing, excellent service, and integrated billing features.

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    Best for high-risk businesses Low-risk accounts are available.

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