Cheapest Credit Card Processing Companies

Cheap credit card processing

By Rob Binns | Senior Writer | 1 April, 2020

Accepting credit and debit cards is crucial if you want to grow your business but it doesn’t have to be expensive. Let’s find out why…


Accepting credit card payments is a no-brainer. It’s quicker and more secure than accepting cash not to mention more hygienic and the popularity of digital payment methods is rising year-on-year. It’s a no-brainer… right?

Right. But then, why do around 50% of America’s small businesses still not accept credit or debit card payments, missing out on millions of potential customers in the process? What’s the deal?

Unsurprisingly, it largely boils down to cost. “It’s too expensive to accept credit or debit card payments”, business owners will say, or “I don’t have the budget right now”. But what if we told you that credit card processing doesn’t actually have to be expensive?

Well, it doesn’t – and to bust the myth that accepting credit cards is beyond your business’ budget, we’ve put together a list of the cheapest credit card processing companies in the US

Read on to find out which one is best for your business.


Cheapest Credit Card Processing Companies

We didn’t just want to find a few good deals for accepting credit and debit cards. We wanted to find the cheapest credit card processing companies in the US. Doing that meant looking at more than simply how low the prices were – we also explored how transparent companies made their rates, and how understandable these were for business owners.

With all that in mind, we whittled our list down to the top eight cheapest credit card processing companies in the US: Payment Depot, National Processing, Square, Dharma Merchant Services, PayPal, Payline, Stripe, and Fattmerchant. 

ProviderCheapest for:In-person transaction feeOnline transaction feeMonthly feeRead review
Payment Depot logo tableSmall to medium-sized businessesInterchange + 5 to 15 centsInterchange + 5 to 15 cents$49 to $199Payment Depot
National Processing logo tableRetailers and restaurateursInterchange plus 0.15% + 7 centsInterchange plus 0.30% + 15 cents$10 to $199National Processing
Square logoMicro-merchants2.6% + 10 cents3.5% + 15 centsNoneSquare
Dharma Merchant Services logoLarge businesses0.15% + 7 cents0.20% + 10 cents$20Dharma Merchant Services
PayPal logoMulti-channel merchants2.7%3.5% + 15 centsNonePayPal
Payline logo smallHigh-risk businesses0.20% + 10 cents0.30% + 20 cents$10Payline
Stripe logoEcommerce businessesN/A2.9% + 30 centsNoneStripe
Fattmerchant logo tableHigh sales volume and valueInterchange + 6 to 8 centsInterchange + 15 cents$99Fattmerchant

Payment Depot

Cheapest for small to medium-sized businesses (SMBs)

If you’re a fan of big wholesalers such as Target or Costco, you’ll fall in love with Payment Depot’s fixed, predictable pricing. Unlike most other companies, you won’t pay any percentage-based markups on the credit or debit card transactions you accept. Payment Depot’s membership rates of between $49 and $199 per month (plus a single fee of between 5 and 15 cents on each sale) wrap all your recurring costs into a simple, understandable (and, most importantly, cheap!) bundle. Better still, Payment Depot’s four different pricing plans offer flexibility, allowing you to pick the option that best fits your business’ processing volume, and the level of added features you require.

Payment Depot pricing

  • Interchange rate plus 5 to 15 cents per transaction
  • $49 t0 $199 per month membership fee

Pros:

  • No early termination fee
  • Comes with a 90-day satisfaction guarantee
  • Most plans come with a free card reader

X Cons:

  • Available to US-based merchants only

National Processing

Cheapest for retailers and restaurateurs

Whether you're running a busy restaurant or are a retail whizz, National Processing offers some of the cheapest credit card processing rates around. Small businesses will pay just $10 per month, with extremely agreeable transaction fees on top – and the interchange rate separated out for transparency. Sweetening the deal is National Processing's laudable customer support, a dedicated account executive, and a total lack of lengthy contractual commitments.

National Processing pricing

Restaurant

  • Interchange rate plus 0.15% + 7 cents per transaction
  • $10 per month

Retail

  • Interchange rate plus 0.20% + 10 cents per transaction
  • $10 per month

Ecommerce

  • Interchange rate plus 0.30% + 15 cents per transaction
  • $10 per month

Large businesses

  • Interchange rate plus 0% + 9 cents per transaction
  • $59 per month

Even larger businesses

  • Interchange rate plus 0% + 5 cents per transaction
  • $199 per month

Pros:

  • Partners with Clover to offer beautiful POS (point of sale) systems
  • 24/7 support for US-based businesses
  • PCI compliance support included

X Cons:

  • It can take a while to reach a customer service rep on the phone
How much could you save on your processing fees with National? Let's find out

Square

Cheapest for micro-merchants

Smaller businesses – or ones with less frequent footfall – will find much to love about Square. With no monthly fees and your first card reader free, Square is ideal for those looking to trim down costs. It’s simple, too – you’ll pay just 2.6% + 10 cents on each card-present transaction. Sure, it’s not cost-effective for businesses processing large amounts of sales – but for micro-merchants, market stall owners, or sole traders, it’s just the ticket.

Square pricing

  • 2.6% + 10 cents per transaction (in-person payments)
  • 2.9% + 30 cents per transaction to invoice
  • 3.5% + 15 cents per transaction (online/keyed payments)
  • $0 to $10 for a magstripe card reader ($49 for contactless)

Pros:

  • Slick, stylish card readers and point of sale (POS) hardware
  • PCI compliance is handled for you
  • Intuitive mobile app

X Cons:

  • Flat-rate pricing won’t work for businesses with bigger sales volumes
Square is currently offering eligible merchants their first credit card reader free. Hit the button to head to Square's site and sign up, and find out if your business qualifies. Take me there

Dharma Merchant Services

Cheapest for large businesses

Dharma’s rates aren’t just low – they’re transparent, straightforward, and highly understandable. Why? Because there’s not that many of them. No AVS (Address Verification Service) fee, no batch fee, and no charge for PCI compliance. Dharma is also ideal for those looking to take payments over the phone, or online. With a virtual terminal and mobile processing functionality both included as standard (and at no extra cost), Dharma is the perfect partner to help grow a modest business into an ecommerce empire.

Dharma Merchant Services pricing

  • $20 monthly fee
  • 0.15% + 7 cents per transaction (in-person payments)
  • 0.20% + 10 cents per transaction (online payments)
  • $20 chargeback fee

Pros:

  • High volume discounts for merchants processing more than $100,000 per month in sales
  • No long-term agreements
  • Card-present merchants will receive next-day payouts

X Cons:

  • Dharma doesn’t offer high risk merchant account options
  • It’s also not ideal for smaller businesses – you’ll need to be processing a minimum of around $10,000 per month to be accepted

PayPal

Cheapest for multi-channel merchants

Speaking of online payments, anyone that’s ever made one will be familiar with ecommerce behemoth PayPal. And there’s a reason it’s such a household name – simple, straightforward rates that also happen to be some of the cheapest on the market. You’ll pay only 2.7% per swiped transaction with PayPal’s card reader, and only slightly more for invoices (2.9% + 30 cents) or keyed transactions (3.5% + 15 cents). You’ll also benefit from renowned customer support, plus the added consumer confidence that comes from association with PayPal’s big, blue brand.

PayPal pricing

  • 2.7% per transaction (in-person payments)
  • 3.5% + 15 cents per transaction (keyed payments)
  • 2.9% + 30 cents per transaction to invoice
  • 1.5% per transaction for cross-border transfers

Pros:

  • No monthly, annual, or PCI compliance fees
  • Offers free invoicing and online checkout tools
  • Same-day payouts to your PayPal account

X Cons:

  • PayPal’s lack of POS hardware and functionality means it’s not particularly well-suited for bricks and mortar businesses

Payline

Cheapest for high-risk businesses

Online gambling, timeshare investments, tobacco and alcohol… it’s risky business. And, if your operation trades in one of these industries (or you just have a poor credit score), then you’ll need a high-risk merchant account. Luckily, Payline isn’t just one of the best options for high risk, US-based merchants  – it’s one of the cheapest, too. There’s no annual fee, no charge for PCI compliance, zero early termination fees, and you won’t have to pay through the nose to accept AMEX, either.

Payline pricing

  • 0.20% + 10 cents per transaction interchange fee (in-person payments)
  • 0.30% + 20 cents per transaction interchange fee (online payments)
  • $10 monthly fee for payment gateway
  • $10 monthly fee for Payline Start (in-person payments)
  • $10 monthly fee for Payline Connect (online payments)

Pros:

  • No long-term contracts
  • Payline partners with both Clover and Ingenico to provide reliable card machines
  • Virtual terminal included free

X Cons:

  • It makes less financial sense if you’re not a high-risk merchant

Stripe

Cheapest for ecommerce businesses

Founded in 2012, Stripe is as close any online payments provider has come to rivalling PayPal’s sheer ecommerce dominance. And, with competitive processing rates, 24/7 customer support, and huge levels of customizability, Stripe clearly has a bright future. Its slick, stylish payment forms slot seamlessly into your website, and you’ll only pay a small 2.9% + 30 cents on each transaction. Geared towards software engineers, Stripe’s advanced API (Application Programming Interface) integrations and white label payment gateway may confound the less tech-savvy business owners out there. But for those willing to get to grips with the code, at least, Stripe offers big benefits.

Stripe pricing

  • 2.9% + 30 cents per transaction (online payments)

Pros:

  • Offers a discounted rate for nonprofits
  • Integrates with more than 450 extensions and platforms
  • Developer-friendly...

X Cons:

  • … but not particularly user-friendly
  • Stripe’s expensive card reader (the Stripe Terminal) makes it a solution suitable primarily for online businesses
Square is currently offering eligible merchants their first credit card reader free. Hit the button to head to Square's site and sign up, and find out if your business qualifies. Take me there

Fattmerchant

Best for businesses with high sales volume and value

Fattmerchant’s subscription model is good news for businesses dealing in higher sales volume and value. Instead of a percentage markup, you’ll pay just $99 per month, plus a nominal transaction fee (between 6 and 15 cents per sale). Fattmerchant’s volume discounts also make it an attractive proposition for more established businesses, while its low (if a little confusing) pricing helps keep costs down. Add in fantastic customer support and no early termination fees, and Fattmerchant emerges as a top pick for US businesses.

Fattmerchant pricing

  • $99 monthly subscription fee
  • Direct interchange rate plus 8 cents (businesses processing less than $500,000 annually) or 6 cents (businesses processing over $500,000 annually) for in-person payments
  • Direct interchange rate plus 15 cents for online payments

Pros:

  • No annual fees
  • 24/7 customer support
  • Integrates with popular POS solutions, including Revel and Vend

X Cons:

  • Fattmerchant’s subscription-based plan may be beyond the budgets of smaller businesses
Read more: Revel POS Review

How We Chose the Cheapest Providers

While price was our main focus when putting this list together, we’re well aware that ‘cheap’ does not always mean ‘good’. That’s why we took all of the following factors into account:

Pricing

Credit card processing comes with a whole boatload of fees, and it can be overwhelming for merchants new to the game. 

We looked not only at how cheap these credit card companies’ rates were, but how easy they were to understand. Transparency was also an important consideration – how can you trust a provider if you don’t know how much it’s charging?

We also took into account the pricing plans involved:

  • Interchange-plus pricing (offered by Payline and Fattmerchant) provides peace of mind and transparency to business owners. 
  • Subscription-based pricing (offered by Payment Depot) is ideal for high value, high volume merchants
  • Flat-rate pricing (offered by Square) suits smaller merchants, or those reliant on largely seasonal trade.

Other plans, such as tiered pricing, offer nothing but hassle, heavy fees, and smoke and mirrors. We tend not to recommend providers offering that, and you won’t find any above.

Customer support

For this, we took into account the availability of a credit card processor’s customer service (are they available on weekends? How about evenings?), plus the channels available to the consumer, including email, phone, Twitter, and live chat

We also took into account customer reviews, and what individuals were saying about their processor’s customer support online.

Contract length

Some merchants crave the warmth and security of a long-term deal; others will prefer the flexibility of a short-term contract. 

For the sake of the small businesses out there, we selected only the cheap credit card processing companies that offer month-to-month contracts. Most of the providers above won’t change an early termination fee, either.

POS hardware

How smooth and seamless your customer’s experience in your store will be depends on more than just your card machine. What about the cash register? What about the barcode scanner, the receipt printer, or the touchscreen terminal

Without point of sale (POS) options for expanding and beautifying your countertop, service will still be as slow and lumbering as ever. We picked only the cheapest credit card processing companies that also provide (or integrate with) electronic POS system hardware.


Next Steps

Just as we took into account a whole bunch of different factors to put together this list of the cheapest credit card processors, so should you. Because, while price (quite rightly) should be one of your first considerations when choosing a merchant account, it shouldn’t be the only one.

You’ll need to take into account your business’ size, its sales volume, and the average value of the sales you’ll be processing with credit cards. You’ll also need to weigh up where your priorities lie – are you willing to sacrifice the freedom of a month-to-month contract for a cheaper deal? To forgo lower fees for the straight-up simplicity of a flat-rate transaction fee?

As you’ve seen, there are plenty of low-cost credit card processing options out there for businesses. Just make sure you select the one that best fits yours, and read the small print carefully – otherwise you may end up paying more in the long run!


FAQs

Zero cost credit card processing… is there such a thing?

Sadly, there isn’t. The main reason for this is wholesale costs. These are mandatory fees charged by the card networks (Visa, Mastercard, Discover, and American Express), and the banks that process the cards. Wholesale fees go towards maintaining the network and infrastructure underpinning the credit card acceptance process.

Wholesale fees are fixed, and while other (markup) fees charged by your provider can usually be negotiated… these ones can’t. If a merchant account provider comes to you offering anything resembling zero cost credit card processing? 

Run a mile.

What’s the best way to minimize credit card processing costs?

Minimizing your credit card processing bill boils down to three tips, which we’ll end on.

1. Choose the right provider

It’s easy to get suckered in by low, simple rates. So remember – different pricing plans (and, ergo, providers) are made for different types of businesses. Though it may look cheap now, it may not be the right long-term fit for your business.

2. Negotiate! 

Most dedicated merchant account providers offer some wriggle room when it comes to fees. This won’t work with flat rate processors such as Square. But for more traditional merchant services, a bit of bartering might help you avoid paying a signup fee, or sidestep the suspicious-sounding ‘statement fee’.

3. Get wise to the hidden costs

Hidden costs. There are plenty in the world of credit card processing, and you’ll want to know about them before (rather than after) signing on that dotted line. 

So, now you’re done here, why not head straight to our bumper guide to credit card processing fees? It’s got everything you need to know about pricing plans, hidden costs, what’s negotiable… and what isn’t. Enjoy!

Square is currently offering eligible merchants their first credit card reader free. Hit the button to head to Square's site and sign up, and find out if your business qualifies. Take me there
Rob Binns
Rob Binns Senior Writer

Rob writes mainly about the payments industry, but also brings industry-specific knowledge of CRM software, social media monitoring, and invoice finance. When not exasperating his editor with bad puns, he can be found relaxing in a sunny corner, with a beer and a battered copy of Dostoevsky.

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