Best Small Business Credit Card Processing Companies 2020

Credit card processing is an integral part of selling goods and services that allows businesses to complete credit and debit card transactions. Businesses of all sizes rely on payment processing services as a quarterback for expediting card transactions. Processors verify, accept, or decline transactions, securely transmit data, and transfer payments to a merchant account—all in seconds. Running a cash-only business limits merchants from paying the way consumers prefer.

There’s no one-size-fits-all credit card processor because what a business needs in a service depends on in-store/e-commerce capabilities and sales volume. We’ve rated the best credit card processing companies for small businesses: Payment Depot, Fattmerchant, Helcim, Square, and Dharma Merchant Services.

Our Best Small Business Credit Card Processing Companies of 2020 Rating

Best Credit Card Processing Companies for Small Businesses

Payment Depot

4.1 out of 5

MONTHLY FEE $49 & up
View Prices »

4.1 out of 5

MONTHLY FEE $99 & up
View Prices »

4.1 out of 5

View Prices »

4.0 out of 5

View Prices »

The best credit card processing services for small businesses provide flexibility to grow, infrastructure to accept payments, and access to essentials like a payment gateway and merchant account so business owners can deal with one vendor.

Payment Depot: Payment Depot offers lower-cost credit card processing compared to other payment processors. For a $49 membership fee, small businesses access wholesale rates on equipment like terminals for in-person payments. Payment Depot also has a business funding arm to help small businesses with cash flow.

Payment Depot does not charge a third-party POS fee. Payment Depot will reprogram an existing terminal for free or help select new equipment, which is helpful for small businesses that aren’t sure what type of terminal they need.

Payment Depot is the No. 1 the best credit card processing company for small businesses, tied with Fattmerchant and Helcim. Read more in our Payment Depot review.

Fattmerchant  »


Best for Higher-Volume Businesses Looking for A La Carte Services

Monthly Fee
$99 & up
Online Fee
Swiped/Chip Fee
1.5% + .08¢

See Review

Fattmerchant: Fattmerchant is a subscription credit card processor that allows small businesses to pay month-to-month. The benefits for business owners include no markup on interchange or batch fees, and no fees for cancellation, PCI compliance, or statements. Transparent pricing is appealing for merchants seeking simplicity.

Read the full review of Fattmerchant as the No. 1 best credit card processor for small businesses, tied with Payment Depot and Helcim.

Helcim  »


Best for Businesses Looking for a Package Deal

Monthly Fee
Online Fee
Swiped/Chip Fee

See Review

Helcim: Helcim offers small businesses a virtual terminal, or all-in-one card reader that connects to other devices and accepts payments in-store or on the go. The Helcim app allows businesses to process payments on a computer (Windows or Mac), tablet, or smartphone while linking data in the cloud so you can access payments information and process cards. Also, Helcim allows subscribers to create an online store and set up recurring payment plans. A bonus for small businesses: Helcim offers free service for the first three months.

Helcim is the No. 1 best credit card processor for small businesses, tied with Payment Depot and Fattmerchant. Read our full Helcim review.

Square  »


Best Overall and Best for Low-Volume Businesses and Simple/Quick Setup

Monthly Fee
Online Fee
2.90% + $0.30 & up
Swiped/Chip Fee
2.6% + 10¢

See Review

Square: Square is known for its point-of-sale hardware and software that gives small businesses a plug-and-play system for in-store and e-commerce transactions. Subscribers get a free magstripe card reader. POS solutions include a Square Register, Square Terminal, Square Card Reader, and Square Stand. Businesses can manage inventory and employees, and produce sales reports. Square charges no monthly fee, offers flat-rate pricing for most transactions, and is ideal for growing small businesses that want to select among various plans.

Square is rated No. 4 in our list of the Best Credit Card Processing Companies of 2020 and is the No. 4 best credit processor for a small business. Read more in our Square review.

Dharma Merchant Services: Dharma Merchant Services is appealing to small businesses that do not want a contract and need access to tech support, which is available 24/7. Also, for start-ups that have low sales volume, Dharma provides a plan with no monthly fee (minimum of $50), and growing businesses that exceed $100,000 in monthly sales get a discount on interchange-plus rates.

Small businesses that want to work with a single vendor to manage credit and debit card processing can do so with Dharma, which offers a virtual terminal, online reporting, mobile processing, online payment links, and a customer database with credit card storage.

Credit card processing is how a business accepts payment for goods and services. There are several parties involved in what seems like a simple swipe, dip, or tap and takes only seconds. A payment processor acts as the mediator, moving payments from the card-issuing bank to the merchant account. A payment gateway is how card data is securely transmitted via the payment processor so transactions can be verified, and then approved or declined. The payment processor might offer an in-house or third-party payment gateway. A merchant account is where a payment processor transfers customers’ funds after transactions are approved.

Here are the steps a credit card processor follows to complete transactions:

  • Point of Purchase: A customer makes a purchase in-store with a card reader or online through a business’s e-commerce site.
  • Payment Gateway: A payment gateway is a tool that securely connects information that is sent through the payment processor from a customer’s bank to the merchant’s account. The payment gateway communicates a payment decline or acceptance.
  • Payment Processor: Payment processors act as a shuttle, delivering information from the issuing banks of the credit cards customers use to merchant accounts, where accepted payments ultimately land. The payment processor validates card security and facilitates the transfer of payment, moving money from the issuing bank to the merchant account.
  • Issuing Bank: The issuing bank is a financial institution associated with a customer’s credit card.
  • Merchant Account: The payment processing company facilitates the movement of money from the issuing bank to the merchant account. This is a bank account that enables a business to accept credit cards, debit cards, and digital payments.

To decide which credit card processing is best for your small business, first consider where most of your transactions take place. Do customers shop online at an e-commerce site? Do you have a brick-and-mortar store? Or, do customers buy both online and in-person? You’ll want a credit card processing service that is flexible and can accommodate sales growth, as well. Also, some payment processors offer special industry packages, such as bundles including a POS system, scheduling tools, and inventory systems.

Here are some important factors small businesses should consider when choosing a credit card processing company.

  • Pricing structure: Find out whether you’ll pay a monthly fee on top of the cost per transaction. Interchange-plus pricing is the interchange fee plus a percentage of each purchase, while a flat-rate model is a fixed fee. Look for transparent pricing that is easy to understand so you’re fully aware of the cost of processing payments.
  • POS system: As a small business, partnering with a credit card processor that provides access to POS hardware and software such as terminals, cash register card readers, and programs alleviate the need to acquire equipment on your own. All the better if the payment processor offers free or wholesale-priced equipment.
  • No hidden fees: Aside from the price per transaction and/or monthly subscription cost, credit card processors can charge for statements, chargebacks, support, and PCI compliance. The best credit card processors for small businesses will provide these services without billing for them.
  • Customer service: If you run into a problem with processing a payment, you should be able to reach customer service 24/7 without paying extra for support.
  • EMV-compliant: Be sure the company can process chip cards.
  • PCI-compliant: The credit card processor should adhere to the Payment Card Industry Data Security Standard (PCI-DSS), according to the PCI Security Standards Organization.

The cost of using a credit card processing company varies because companies have different pricing structures. Aside from monthly subscription fees and transaction charges, the processor can also bill you for equipment, chargebacks (card-not-present), PCI compliance, statements, and other services.

Small businesses can expect to pay from $20 to $99 for monthly subscriptions, based on the fees charged by our top-rated credit card processors for small businesses. Not all companies charge a monthly fee.

Transaction charges are structured as follows:

  • Interchange-plus: a fee charged by the credit card companies plus a percentage of each purchase
  • Flat-rate: a fixed fee per transaction
  • Subscription: monthly charge for the service, may also include interchange-plus or flat-rate pricing for transactions

Credit card processing companies can assign different fees based on the card used or transaction type. For example, Helcim’s fees are interchange-plus at a rate of 2% plus 19 cents for in-store swiped and in-store chipped payments. However, in-store keyed (card-not-present) and online transactions are 2.3% plus 37 cents. In general, payment processors charge more for keyed and online transactions. So, when making a choice for your small business, consider how most of your customers pay and what the pricing is for those types of transactions.

Chargebacks are return payments to a credit card after a consumer disputes a transaction. Small businesses can take a revenue hit from chargeback fees from payment processors that range from $5 to $30. Not all companies have chargeback fees, for example, Square does not assess fees for chargebacks.

Frequently Asked Questions

Do I need a credit card processor?

If your small business sells goods and services online, you need a credit card processor to manage e-commerce transactions. You should also have a payment processor if you have a brick-and-mortar store and your customer base prefers to pay without cash, which is the case for most consumers today.

Will I need a separate point-of-sale (POS) system?

POS systems allow small businesses to process payments, track inventory, and perform other business functions. Ultimately, a merchant’s POS completes sales transactions, including adding in sales tax, accounting for promotions, and providing receipts. Credit card processing companies can offer POS bundles that include equipment such as terminals, cash registers, and card readers. Some payment processors, such as Square, have proprietary POS systems. Others integrate with third-party POS systems or will program an existing POS system. Credit card processors with apps can allow businesses to use their computers and mobile devices to process payments. Learn more about POS systems here.

Is there a difference between a payment processor and a credit card processor?

A payment processor facilitates credit card and debit card transactions. Payment processors handle credit card transactions and sometimes are referred to as credit card processors.

We rated the best credit card processing companies of 2020 to help businesses understand the POS systems, pricing, and extra features each offer.

Learn More

Still looking for more information about credit card processing or trying to find the best credit card processing company for you? Explore the directory below to learn more.

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How U.S. News Evaluated Credit Card Processing Companies

We explain what matters most when it comes to credit card processing companies by sourcing opinions from business consumers, experts, and professional reviewers. Then we provide an unbiased evaluation of the credit card processing products. Our goal is to empower business consumers with the information and tools they need to make informed decisions. More information about our 360 Reviews methodology for evaluating credit card processing companies is here.

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