According to a study performed by the business technology firm Weave,
nearly 30% of small business consumers were unable to purchase something at a physical store because, "their mode of payment wasn't accepted.”
Nowadays, it's nearly impossible to conduct business without acceptance of credit cards, whether in person or online. To accept credit card payments, however, you will need to work with a credit card processing business.
Some credit card processing providers impose a cost per transaction that decreases as more transactions are done. Others employ flat-rate pricing that is more accommodating to businesses who process fewer credit card transactions.
However, with so many different rates, regulations, and alternatives available, selecting the correct processor for your business can be difficult.
But, don’t worry, we are here to assist you. We researched and tested some of the best credit card processing companies in 2023. To assist you with narrowing down your options, we examined transaction fees, pricing structures, customer service, third-party integrations, hardware alternatives, and security features.
Let's look at some of the best available options.
What is a Credit Card Processor?
Before jumping into the best option let’s check out what a credit card processor is. Credit card processing is the multi-step procedure required to complete credit card payments correctly. In today's digital age, transactions may take place almost anywhere - in person, online, by phone, or through the mail. Numerous entities are involved in credit card processing. The consumer, merchant, payment gateway, credit card processor, card network, issuing bank, and acquiring bank are all included.
Key Participants in Credit Card Transactions
- A cardholder acquires a credit from an issuing bank and then utilizes the account to purchase goods or services.
- Any form of company that takes card payments in return for goods or services is referred to as a merchant.
- A merchant bank opens and manages merchant accounts. Merchant banks enable retailers to accept credit card payments as deposits.
- Companies that process credit card transactions are known as payment processors. Payment processors facilitate card payments by connecting businesses, merchant banks, card networks, and others.
- Banks, credit unions, and other financial organizations that issue credit cards to cardholders through card associations are known as issuing banks.
- Visa, Mastercard, Discover, and American Express are all card organizations. Card organizations, among other things, determine interchange rates and qualifying requirements and serve as an adjudicator between issuing and acquiring institutions.
How to Select a Credit Card Processor
1. Compatibility- Some credit card processors will be more suited to your business than others, depending on criteria such as transaction volume and industry.
2. Security- Credit card processing companies are frequently the first line of defense against fraud. As a result, several processors include unique tools and automation to assist you in improving security and combating fraud.
3.Fees- Unfortunately, credit card processing costs are unavoidable. Fixed transaction credit card processing costs, such as interchange fees established by your card network, are the most general expenses you'll face. The following fees may be imposed on your transactions:
- Per-transaction fees: A fee charged by the processor for each sale.
- Annual fees: A cost paid annually with interest based on your sales volume.
- Maintenance fees: Fees for administering your payment processing account. Fees are charged to keep your card processing by PCI DSS and other industry requirements. Costs for using processing equipment, like POS systems and e-commerce web services, are known as equipment or terminal lease fees.
4. Customer Service and Support- Though credit card processing systems are generally stable, service and operations can be disrupted at times. As a result, a card processor must provide dependable customer care.
Many different parties can be referred to as payment processors. These parties all process payments in some manner, but each may provide different services or extra technologies to assist you to achieve your needs. The payment processor must evaluate whether or not the cardholder is eligible to make the purchase, authorize the transaction, and exchange funds between the cardholder and the merchant.
5 Best Credit Card Processors 2023
1. Square - Square is a strong overall choice for credit card processing because its flat-rate pricing model is simple to understand and allows you to budget for a fixed monthly cost. However, your actual cost may be higher than what you’d pay with interchange-plus pricing.
2. Helcim- Helcim is a standout choice for credit card processing because it checks off many boxes. The setup is quick. Helcim gives you the ability to accept credit cards in person, online, through an app, or over the phone. The rates are also competitive.
3. Stax by Fattmerchant- Stax offers plans starting at $99 per month that give businesses access to 0% markup on interchange fees, plus a low fixed fee per transaction. That makes it a strong choice for businesses with high sales volumes.
4. Stripe- Stripe stands out from the competition because its suite of developer-friendly tools allows you to customize the online payment experience for your e-commerce business. With no monthly fees, pay-as-you-go pricing, and volume discounts, Stripe is a solid option for businesses of any size.
5. Payment Depot- Payment Depot doesn’t charge a markup on top of interchange fees but instead has membership pricing plans at a set monthly cost, which can lead to cost savings for businesses with high sales volume. Volume-based discounts are also offered.
To decide if a payment processor is compatible with your business, as a business owner wishing to take credit cards, you must first grasp the principles of credit card processing, your client profile, and your firm's possible risk profile.
After that, consider the security features, costs, and customer service quality. Compare and contrast results from several companies to get the best payment processor for your company.