Best Credit Card Processing Rates For Small Business

Although credit cards have been around since the 1950s, in recent years, they’ve started to dethrone cash from its position as king of payment methods. With a whopping 84% of American adults owning at least one credit card (the average is 3 credit card accounts per person), card payments reached $9.43 trillion in 2021. In fact, that’s the fastest growth rate for card payments…ever.

As a small business owner, it’s important to accept different payment methods like cash, credit card, and contactless or NFC mobile payments to ensure an easy shopping experience for your customers. But to do most of that, you need to have a credit card processor.

Since we’ve spoken a lot about credit card processing before, today we’ll take a look at how to find the best credit card processor for your SMB in 2024. Since the big players in the landscape generally all offer a robust set of services, data shows that most SMBs are satisfied with their payment processors and aren’t likely to switch. However, for lower transaction fees, over half of SMBs would be willing to switch to another provider—which means finding the best credit card processing rates is an important criteria to factor in. If you have no idea where to start with evaluating potential payment processing solutions, fret no more. Here are the top factors you need to look for when finding a credit card processor, as well as our ranking of the top players in the industry. 

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  • To understand what the best credit card processing rates for small businesses are, it is important to know what options you have, what’s included in the rate, and what’s negotiable. In order to ensure you have the best credit card processing rates possible for your merchant account, avoid providers who charge percentage markups and ensure that you always understand what fees to expect from your provider.
  • Other factors you should take into account are integration with existing systems, security and fraud protection, customer support, and ease of use.
  • When looking for a credit card processor, assess your business needs upfront: decide on your non-negotiables and must-haves, then work from there and look for providers that offer features that match your needs and goals.

Fees and Pricing Structure 

You’ve most likely agonized over your credit card processing rates and wondered whether or not you have the best ones possible. With the majority of processors relying on negotiations and tacking on hidden costs like exorbitant setup fees, dishonest monthly subscription fees, or unfavorable long-term contracts, it can be hard to know what the best rates really are. To understand what the best credit card processing rates for small businesses are, it is important to know what options you have, what’s included in the rate, and what’s negotiable.

Knowing your processing rate

Want to know if your rate is “good” or not? You first need to determine what exactly is included in the rate you are looking at. The most common fees you’ll see are percentage markup rates and effective rates.

Percentage markup rates

Percentage markup rates are the rates a payment processing provider charges in addition to interchange. These rates can vary from 0% to 3%; therefore when looking at a percentage markup rate, you want to be as close to 0% as possible. Stax, for example, charges 0% markups on top of interchange, giving you the lowest percentage per transaction rate. However, the percentage markup rate does not give you a full picture of your processing costs.

Effective rates

The effective rate is what you want to look at to truly understand how much you are paying for your credit card processing. The effective rate is calculated by adding up every cost related to processing credit cards, divided by total sales.

These processing costs include interchange, percentage markups, ancillary fees, transaction costs, etc. Thus, the effective rate is the best indicator of whether or not you are paying too much for your payment processing.

Understanding interchange rates

The one part of your effective rate that you can not negotiate or change by switching providers is interchange. Interchange rates are set by the credit card companies themselves and are the same for every single business owner. You can think of interchange rates as your base rate. Everything on top of the interchange will increase your effective rate and vary depending on the provider.

For example, Stax charges a flat monthly membership in exchange for a 0% markup rate, a transaction cost of just a few cents, and no ancillary fees. Since the only processing costs other than interchange are flat (the monthly membership and a few cents per transaction), effective rates with Stax are close to interchange and tend to decrease as transactional volume decreases.

Traditional providers who charge percentage markups and ancillary fees will have higher effective rates and those rates will stay the same or increase as transactional volume increases, ultimately costing your business more money.

Getting the best credit card processing rates

To ensure you have the best credit card processing rates for your merchant account, avoid providers who charge tiered percentage markups and ensure that you always understand what fees to expect from your provider. Asking questions and paying attention to your credit card processing statement will help you never be surprised by an increase in your effective rate.

With Stax’ all-in-one, reliable platform there are no hidden fees: our goal is to ensure that you’re spending less when you need to process payments and putting more money back into your business’s bottom line, to help guarantee maximum satisfaction from our customers.

Security and Fraud Protection

Fraud is rampant in the SMB sector for both brick-and-mortar or eCommerce companies. Whether it’s phishing, fraudulent chargebacks, or account breaches, your credit card processor needs to be properly secured to minimize the risk of security breaches for in-person transactions and online payments. That’s why you need to work with a payment provider that implements secure payment systems and a trustworthy payment gateway.

With Stax, we’re proud to ensure PCI compliance, which means we meet the Payment Card Industry Data Security Standards, created by card associations like Visa, Mastercard, and American Express to ensure sensitive payment data is securely processed, transmitted, and stored. In other words, you can rest easy knowing that we’ve prioritized the security of the cardholder and bank account data of you and your customers.

Integration with Existing Systems

While there will always be a learning curve when you work with a new payment processor, you want it to complement your way of working, not completely upend your small business. A good provider will have the functionality to allow you to easily connect their payment processing solution to popular applications or add-ons to speed up your workflow.

If they don’t offer ready-for-use integrations, ask if they at least allow access to their API so you can create web hooks to send the data to other online business tools or vice versa—but this does require having the technical expertise in your company, so this shouldn’t be the first option!

Customer Support and Service Quality

A top-notch payment processor will go above and beyond to provide a great working relationship with their customers, and excellent customer support is at the heart of that. That means short communication lines so it’s easy to get in touch with a real person, quick turnaround times, and an understanding customer success team.

When looking for a credit card processor, ask them what channels they can be contacted on and if they’re available 24/7. Then, look into reviews regarding their turnaround time on support requests. Remember, if it takes a few business days to resolve an issue with invoicing or processing your credit card transactions, not only could you lose out on valuable revenue, you could damage your customers’ trust in your business.

Accessibility and Ease of Use

This hopefully goes without saying, but the best credit card processing company is one that offers an intuitive solution. With proper customer onboarding, you should feel empowered and confident to use the different tools your solutions provider offers, like the POS system, credit card reader, virtual terminal, and any other unique features. To determine this, ask what sort of support resources are offered, what onboarding looks like, and if you can chat with an expert by phone, email, or live chat if you need additional information to get set up for success.

The Best Credit Card Processors for Small Businesses in 2024


Throughout this article, we’ve already touched on a lot of the features our all-in-one payment processor offers, but here’s a quick summary: Stax offers secure in-person and online payment processing designed to not only run, but grow your business. With flat-rate, transparent pricing; Level 1 PCI Compliance; and the ability to take all major forms of payments and online transactions, Stax has been consistently ranked as the (one of the) best credit card processing solutions for small businesses. Plus, we support card-not-present (CNP) transactions, offer no cancellation fees, and provide additional services like next-day funding and ACH processing if you want to get paid faster.

If you’re not sure if Stax is a great fit, our team will analyze your existing statements to give you free advice on if you should make the jump or not!

Payment Depot by Stax

Did you know we also offer an alternative to Stax Pay that takes on a cost-saving membership approach to credit card processing fees, which means instead of marking up the interchange rates, Payment Depot by Stax passes these rates on to its members, which lets startups and SMBs benefit from these lower rates (at an average of $400 a month in savings).

Beyond that, you get the same Stax benefits like no long-term contracts or hidden fees, subscription-style pricing, and PCI compliance. As with Stax, this isn’t the best solution for extremely low-volume businesses. If you’re a high-risk merchant account or regularly process recurring payments, this may also not be the right fit.

Choosing the Right Payment Processor for Your Business

While we’ve already looked at some tips on picking the right processor if looking at specific factors, there are a few other things you should keep in mind on a broader level while on the quest for the best payments solution for your small business.

Most importantly, you need to assess your business needs upfront: do you value a provider that offers its own hardware? One that provides invoicing features? Decide on your non-negotiables and must-haves, then work from there and look for providers that offer features that match your needs and goals. Of course, take pricing and credit card processing rates into consideration! Finally, think long-term. If your business scales, will your potential provider be able to support your growth? Armed with these questions, you should be able to make the right decision for the future growth of your business.

Stax’ all-in-one payment processing platform helps small businesses save on credit card processing. Discover how to run your entire business on Stax by contacting us today.

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FAQs about the Best Credit Card Processing For Small Business 

Q: How can small businesses get the best credit card processing rates?

Start by knowing the different pricing models, such as interchange-plus, flat-rate, and tiered pricing. Small businesses should shop around and compare rates from various providers, considering not just the rates but also any additional fees. Negotiating with providers can often lead to better rates, especially if you can demonstrate a steady volume of transactions or a growing business.

Q: How can merchants find the best credit card processing provider for their business?

To find the best credit card processing provider, merchants should assess their specific business needs, such as the volume of transactions, the average transaction value, and whether they need mobile or online processing capabilities. Researching and comparing different providers is crucial. Look for transparency in pricing, quality of customer service, and the range of services offered. Reading reviews and seeking recommendations from other business owners in similar industries can provide valuable insights.

Q: What are the credit card processing rates that merchants need to pay?

Credit card processing rates vary depending on the provider and the plan chosen by the merchant. These rates generally include a percentage of the transaction value plus a fixed fee per transaction.

That said, providers like Stax can give you access to the direct cost of interchange without the markup. We simply charge a subscription fee that you pay per month. 

Q: What factors should merchants consider when choosing a credit card processor?

Some of the key considerations  include: 

  • Pricing Structure
  • Contract Terms
  • Type of Transactions
  • Integration and Compatibility
  • Security and Compliance
  • Customer Support