This article is part of a larger series on Payments.
Credit card processing is a must for every business, especially as more customers prefer to order online or purchase in-store using contactless payments. The fees associated with processing credit cards can be a large expense for your business. However, choosing the cheapest credit card processing company based on your business volume and how you accept card payments can significantly cut costs.
Based on our extensive evaluation, the cheapest credit card processing providers for small businesses are:
- Helcim: Cheapest overall credit card processing
- Payment Depot: Cheapest option with no percentage markups
- Square: Best value for individuals, new businesses, and seasonal operations
- Stripe: Best value for online sales
- PayPal: Cheapest for occasional sales
- Stax by Fattmerchant: Best value for high-volume professional services
- Dharma Merchant Services: Best for pricing transparency and support
Cheapest Credit Card Processing Companies Compared
Card-present Transaction Fee
Online Transaction Fee
Interchange plus 0.1%–0.3% + 5–8 cents
Interchange plus 0.2%–0.5% + 10–25 cents
Interchange plus 7–15 cents
Interchange plus 7–15 cents
Payment service provider
2.6% + 10 cents
2.9% + 30 cents
Payment service provider
2.7% + 5 cents
2.9% + 30 cents
Payment service provider
2.29% + 9 cents (through Zettle)
3.49% + 49 cents
Interchange plus 8 cents
Interchange plus 15 cents
Interchange plus 0.15% + 8 cents
Interchange plus 0.2% + 11 cents
In this guide, we prioritized finding the cheapest rates for established businesses, which means many of these options have monthly fees and/or stricter applications in exchange for low transaction fees. If you’re a new business or low-volume seller, consider a free merchant account with no monthly fees.
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Did you know?
Most of our picks for the cheapest credit card processing companies are also featured on our list of the best merchant services.
Helcim: Cheapest Credit Card Processing Company for Small Businesses
Helcim, a Canadian-based company that expanded into the US in 2013, is a traditional merchant account that offers low-cost interchange-plus pricing for established small businesses. It processes billions in transactions annually for merchants in over 800 industries.
Overall, it offers great value for small businesses with a free POS system, hosted payment pages, online store, virtual terminal, invoicing software, recurring billing and subscription management, customer portal, and more. Helcim rivals Square with the amount of free software it offers.
Since Our Last Update:
In 2021, Helcim dropped its $20 monthly fee, while Payment Depot increased its minimum monthly fee from $49 to $79. Historically, Payment Depot has been our top pick for cheapest credit card processing, but these changes resulted in Helcim being our new top pick. Helcim also launched an all-new free POS system and offered ACH and EFT payment processing to all merchants, which is one of the most affordable ways to accept payments online.
There are a few things that make Helcim unique: It charges no monthly fee—Payment Depot, Stax, and Dharma all offer interchange-plus pricing but with a monthly fee—and is the only payment processor on this list that automatically applies lower transaction fees as your monthly processing volume increases. Most processors, including Square, Payment Depot, Stripe, and Dharma, will offer volume discounts, but you need to apply for and negotiate the special rates.
In our evaluation, it earned a 4.38 out of 5, with high marks for pricing, features, and expert score. However, one to two business day deposit speed and somewhat limited customer support hours (9 a.m.–9 p.m. Eastern time Monday–Friday and 11 a.m.–7 p.m. Saturday and Sunday) prevented it from earning a perfect score. If you need faster deposits, consider Stax by Fattmerchant and Square, which offer next-day deposits or same-day/instant deposits for a fee.
Helcim also lost points because it has somewhat of a strict application process. It has a long list of prohibited business types—including dropshipping, travel, lead generation, certain types of events or event planning, and those operating arcade games. It is able to offer such low rates by minimizing risk, which means it is choosy about the businesses it works with.
Read our Helcim review for more information on pricing and features.
Payment Depot: Cheapest Option With No Percentage Markup
Payment Depot offers wholesale credit card processing prices for small businesses by using a subscription pricing model. It’s a traditional merchant account, meaning businesses can expect secure and stable processing. Many traditional merchant accounts come with different fees or subscription requirements for online, in-store, and virtual terminal payments; with Payment Depot, everything is covered under one subscription and a single transaction fee.
In other words—it doesn’t charge higher rates for online sales. This is especially important for small businesses as more customers are buying online, ordering ahead, or looking for contactless solutions.
Most interchange-plus processors—including Helcim and Dharma Merchant Services—charge a percentage markup on each transaction in addition to a flat fee. However, Payment Depot does not. This model allows for more predictability and is especially affordable for businesses with larger average order sizes.
Payment Depot also doesn’t charge setup and cancellation fees. Every account comes with a free payment gateway and free reprogramming of any existing equipment. Some plans include free mobile readers, terminals, and PIN pads.
Though Payment Depot received a high score in our evaluation, a 4.24 out of 5, a $15 chargeback fee, lack of native card-on-file features for stored payments, and a one to two-day deposit time prevented it from earning a perfect score. For card-on-file and recurring billing payments, consider Helcim, which offers software for this with no monthly fee.
Like Helcim, Payment Depot has an application and approval process. It does not work with high-risk businesses, and because of its higher monthly fee, it is best for established businesses processing at least $10,000 monthly.
Read our Payment Depot review for more information on pricing and features.
Square: Cheapest for Individuals & New Businesses
Square is a cloud-based credit card processing and business management software provider with competitive pay-as-you-go processing fees and free top-rated POS software. These features make it not just one of the cheapest credit card processors but also one of the best.
In our evaluation, Square earned a 4.21 out of 5. Instant signup with no application process; contract; and monthly, cancellation, and chargeback fees earned Square high marks. Bonus features like free invoicing software, free online store, online checkout tools, virtual terminal, and POS software also contributed to Square’s high score. No other solution on this list offers such a wide array of free software and business solutions with no application or monthly fee required. This flexibility and value is ideal for individuals, occasional sellers, and new businesses on a budget.
Limited customer service hours and account stability issues prevented Square from earning a perfect score. Growing and established businesses wanting to save with interchange-plus pricing and a more stable merchant account should consider Payment Depot, Stax by Fattmerchant, and Helcim.
Stripe: Best for Online Payments
The provider is extremely popular because of its developer-friendly platform, which supports over 135 currencies and payment methods, and it can be used to create just about any kind of online checkout. Unlike Stax by Fattmerchant, which charges a monthly fee for software solutions like invoicing and recurring payments, Stripe offers free open-source solutions and charges a per-transaction fee.
Every free Stripe account includes a reporting dashboard, simplified PCI compliance, 24/7 support, 3D secure identity authentication, automatic updates to expired customer cards on file, and free payouts in two business days. Plus, Stripe includes customer management, reporting, and basic product management.
In our evaluation, it earned a 3.87 out of 5. It received high marks for its pay-as-you-go billing, robust online support, and free developer tools. Additional fees for recurring and invoice billing and the fact that users need technical skills or developers on staff to make the most of the platform prevented Stripe from earning a higher score. If you need an online payment solution that’s easier to implement and manage, consider Square or Helcim.
Another thing to note about Stripe is that, like Square, it is a payment service provider. Signing up with Stripe is fast and easy, but you won’t get a dedicated merchant account. It’s an aggregate processor, so there is the potential for frozen or suspended accounts.
Also, Stripe will place a reserve on your account and/or delay your payout time if it thinks you may not have enough funds in your Stripe account to cover future disputes or refunds. Reserves are a fairly common industry practice, especially for high-risk merchants or any business that has a lot of chargebacks. However, Stripe has many complaints around lack of communication around reserves and difficulties in reaching support.
For a dedicated and more stable online processor, consider a merchant account like Helcim and Payment Depot.
Read our Stripe review for more information on pricing and features.
PayPal: Cheapest for Occasional Payments
PayPal has online solutions for businesses and a mobile app, PayPal Zettle, for accepting credit cards in-store or on the go. Through both these channels, PayPal offers some of the cheapest credit card processing for occasional sales, especially those with an average transaction below $20 and accepting most payments in-person through card-present or QR code methods.
It also offers discounted online payment processing for nonprofits. Online payments are usually very expensive, but these are some of the lowest rates we have seen from a reliable processor outside of traditional merchant accounts, making PayPal a great option for organizations wanting to add “Donate Now” buttons to their websites. However, its unpredictable fund reserve policies mean it is ideal for occasional sellers.
In our evaluation, PayPal earned a 3.82 out of 5. No contract or cancellation fees, flexible hardware and payment options (including QR payments), pay-as-you-go pricing, and customer-friendly One Touch checkouts earned PayPal high marks.
Limited support hours, processing limits, account stability issues, and monthly fee requirements for features like virtual terminal and ACH processing prevented it from getting perfect marks. In August 2021, PayPal increased certain rates, which also contributed to a lower score.
If you need a more stable solution, or one with a free virtual terminal, consider trying Payment Depot and Helcim. Square also offers free software tools and is suitable for small sellers.
To learn more, read our full PayPal Business review.
Stax by Fattmerchant: Best Value for High-volume Professional Services
Stax by Fattmerchant is a subscription-model merchant services provider used by more than 12,000 businesses. It is similar to Payment Depot but with a slightly different pricing structure and software. Stax has a higher monthly subscription fee but lower transaction fees on certain plans.
Its affordable recurring payment and billing credit card processing, along with user-friendly software programs and virtual terminal, make it an affordable credit card processing company for established businesses processing upward of $30,000 monthly—but especially professional services that will make the most use of invoicing, stored payments, and text-to-pay.
In the News
In November 2021, Stax acquired CardX, a surcharging platform to enable Stax merchants to pass along credit card transaction fees to customers. If surcharging is enabled, customers can choose to do fee-free cash or debit card payments. Surcharging is not legal in all states, though Stax has state-level compliance. Learn more about why we typically don’t recommend credit surcharging.
Stax earned a 3.80 out of 5 in our evaluation. It’s one of the only merchant services that offer all of the payment types we looked at—including ACH, card-on-file recurring billing, and level 2 and level 3 processing, all of which can have a positive impact on a business’s bottom line. Stax’s $25 chargeback fee and high monthly fees prevented it from earning a perfect score. More recent complaints around Stax customer support also prevented the company from earning a higher score.
If you want interchange-plus processing with a lower monthly fee and responsive support, consider Payment Depot and Dharma Merchant Services. Payment Depot also offers a lower chargeback fee of $15.
For more information on pricing and features, read our full Stax by Fattmerchant review.
Dharma: Best for Transparency & Support
Dharma Merchant Services is a small independent merchant services provider that specializes in working with independent businesses and offers solutions for accepting online and offline payments. It accepts low-risk businesses processing more than $10,000 monthly. Dharma offers extremely low-cost interchange-plus pricing, particularly for storefront and restaurant payments. In fact, in addition to being one of the cheapest, it’s one of the best credit card processors for restaurants.
The payment processing industry is infamous for opaque pricing structures and hidden fees. However, Dharma’s founder created the business with a mantra of “commerce with compassion,” emphasizing pricing transparency, honest practices, and fair pricing. Based on my experience interacting with the company, along with feedback from businesses and other payment industry professionals, Dharma lives up to its mission.
In our evaluation, Dharma earned a 3.69 out of 5. It earned high marks for accepting every payment type we looked for, including card-on-file and level 2 and level 3 processing. Of all the credit card processing companies on our list that offer interchange-plus pricing, Dharma also has the lowest monthly fee (with the exception of Helcim, which has no monthly fee). However, Dharma does charge a $49 account closure fee and a $25 chargeback fee. Next-day funding is also only available for storefront businesses. These limitations prevented Dharma from scoring higher.
If you need a solution with lower chargeback fees and faster deposit times, consider Payment Depot or Square.
Read our complete Dharma Merchant Services review for more information.
How We Evaluated the Cheapest Credit Card Processing Companies
The cheapest credit card processing for your business will vary depending on your sales volume, average order value, and the type of transactions you process. To find the cheapest overall options, I considered dozens of processors before evaluating 15 in detail. I only considered payment processors that offer flat-rate or interchange-plus pricing, as it is the most transparent and usually the lowest cost, and excluded any that offer tiered rates as they can be deceiving.
From there, I looked at transaction fees, percentage markups, monthly fees, startup fees, chargeback fees, hardware pricing, and more (see my full evaluation criteria below). Based on this evaluation, Helcim is the cheapest credit card processor for most small businesses. It’s the only one on our list to offer low interchange-plus pricing with no monthly fee. Plus, Helcim offers a full suite of software tools most companies charge extra to use, and there is no chargeback fee for disputes settled in your favor.
Click through the tabs below for the full evaluation criteria:
35% of Overall Score
Helcim performed the best here, while PayPal came in last because of its recently increased fees.
25% of Overall Score
Processors with either no or month-to-month contracts earned the most points, along with those offering $0 cancellation fees and affordable card readers. Any provider that requires a long-term contract or long-term hardware leases was penalized. Traditional merchant accounts earned points over aggregate processors because of the greater stability they offer with fewer holds and reserves. Finally, options with no minimum requirements or application/setup fees earned bonus points.
Square earned the highest score in this category thanks to its lack of contract and monthly requirements. Dharma received the lowest score as it’s the only one on this list to charge an account closure fee.
20% of Overall Score
Square earned the highest score here, closely followed by Helcim. They both offer lots of free business tools. However, Stax, Payment Depot, Dharma, and Stripe earned top scores for customer support. Stax and PayPal received the lowest overall scores in this section.
20% of Overall Score
The biggest factor considered here is pricing transparency. We looked at sample statements and contracts where possible, as well as reviews from other business owners to make sure our top choices aren’t riddled with extra or surprise fees. I also considered account stability and general ease of use, along with reviews and reputation for each processor. Finally, I considered how well each processor works with other popular small business software like POS systems, shopping carts, and accounting software.
Payment Depot earned a perfect mark here because it offers excellent value with good customer support and reviews. Helcim, Dharma, Square, and PayPal were all tied for second.
How to Calculate Processing Fees
This is the general formula we use to calculate credit card processing fees:
(% processing fee x monthly sales volume) + ($ processing fee x # of monthly transactions) + any monthly or other fees = total monthly payment processing costs
If you need to accept cards in-store and online, you may need to do two calculations, as many processors have different rates for card-present and card-not-present transactions.
For interchange-plus pricing, we used the current interchange rate for Visa Credit swiped retail payments.
Ways to Lower Credit Card Processing Fees
For many businesses, credit card processing fees are a huge recurring expense. To some degree, they are unavoidable and only increase in volume as your business grows. However, there are a few things you can do to reduce your fees.
The first step to lowering your card processing rates is to encourage customers to pay in cash. Essentially, businesses can offset processing fees by building them into your regular prices and offering a discount for shoppers paying in cash. However, look closely at the laws in your particular state and local area. In many places, cash discounts are legal but credit surcharges are often not.
A common example of this is pricing at gas stations. If you walk inside and pay cash, the per-gallon price is lower than if you pay with a card at the pump.
Learn more: Read our how-to guide on zero-cost processing.
After cash, ACH and e-check payments are usually the cheapest payment method to accept. This option is ideal for businesses that use recurring payments like subscriptions or charge via invoice. Stax by Fattmerchant charges $49 per month and 25 cents per ACH transaction. For smaller businesses, Square offers free invoicing with ACH payments options. Square ACH processing fees are 1% per transaction with a $1 minimum. Alternatively, QuickBooks also has an ACH invoicing option that charges 1% per ACH transaction, which is practical if you are already using the accounting software.
Learn more: Read about ACH processing and the other most affordable ways to accept payments online.
B2B businesses can qualify for even lower processing rates known as L2 or L3 processing. These rates are not available to most small businesses, especially B2C businesses. However, if you are a B2B company processing large volumes, check with a merchant account provider like Dharma Merchant Services.
Once your business grows to a place where you are consistently processing over $20,000 per month, you can likely negotiate lower rates with different processors. Actively shop around and request quotes to see if you could be saving several hundred dollars per month by switching credit card processing companies.
Credit card processing and payment processing in general are necessary functions of any business, but they come at an expense. Many different payment processing companies advertise the lowest rates, and many of them have completely different fee structures. Finding the cheapest credit card processing is tricky but can save your business hundreds, if not thousands, of dollars every month.