Comparing Credit Card Processing Companies

In today’s modern consumer landscape, cash is no longer king. Consumers are increasingly gravitating towards cashless payment options, including debit card and credit card payments, as well as online payments, contactless payments, and mobile credit card processing services.

As such, it’s essential to choose a vendor that enables you to accept payments with ease and provides you with payment solutions that meet the needs of modern shoppers.

In this article, we’ll review some of the most popular credit card processing services to help you figure out which of them may be the best credit card processing companies for your business needs.

Let’s get started.

How to Choose the Right Payment Processor for Your Business

Picking a merchant services provider out of all available credit card processing companies is difficult from the start. Different credit card processors might offer tiered pricing, flat-rate pricing, or interchange-plus pricing. And, depending on the payment processing company, you might get locked into a contract or be subject to things like an early termination fee or a monthly minimum processing requirement.

That’s a lot of information to consider for a new business. To make it a little easier, here’s a list of all the things you need to consider when choosing the best credit card processing service for your business.

1. Processing fees. It’s advisable to compare the different credit card processing fees charged by different credit card processing service providers before you sign up with one. Look for a credit card processor that offers transparent pricing and does not tack on any unnecessary fees (e.g., statement fees, chargeback fees, PCI compliance fees, monthly minimum fees, early termination fees, payment gateway fees, etc.)

While assessment and interchange fees are non-negotiable (these are set by card associations), processor markups vary widely from company to company, so make sure you get the most favorable rates.

2. Pricing structure. You also need to make sure the processor’s pricing model suits your business needs. For example, flat-rate pricing is best suited only for businesses that process very low volumes. Both interchange-plus and membership pricing may be better suited for businesses that need to process a high number of transactions every month. Finally, it’s best to steer clear of tiered pricing due to its lack of transparency.

3. Payment methods. It’s important to ensure that your payment processor supports all major credit and debit cards (Visa, Mastercard, Discover, American Express) as well as digital wallets (like Apple Pay, Google Pay, PayPal, etc.) and online payments. Depending on the nature of your business, you may even need support for invoicing, recurring billing, or Text2Pay, so look for a processor that offers all that.

4. Integrations. Make sure that it’s fairly easy to integrate the credit card payment solution into your online store, otherwise, you may need to hire developers which may be costly. Also, check the kind of APIs and documentation they offer as this will go a long way in making sure you can offer a host of different services to your customers. Finally, make sure that the solution integrates with your existing systems (e.g., your CRM system, accounting software, POS system, etc.).

5. Business type. Do you primarily run an eCommerce business or a brick-and-mortar store? Payment processors are typically geared more towards one or the other, so you’ll need to factor that into your choice.

Or perhaps you’re planning to add an online store to your existing physical locations. To start accepting payments online, you’re going to need a payment gateway, so check if your payment processing service offers one. Some may have their own payment gateway (like Stax) while others may require you to use a third party like

You’ll also need to consider your average monthly credit card payment processing volumes before you choose a payment processor. This is important because some companies specifically cater to high-volume merchants while some cater to low-volume businesses and will usually have very different processing fees.

Finally, if your business belongs to a high-risk businesses industry (e.g., CBD, e-cigarettes or vape, credit repair, online gaming, casinos, etc.), a regular payment processor may not be suitable for you. In fact, many payment processors typically don’t work with high-risk businesses because of their risky nature. So you’ll need to work with a processor that specializes in working with high-risk merchants. These high risk merchants will usually end up paying more for payment processing services as a result of the added unknowns and increased financial risks that these high risk businesses incur.

6. Customer support. Excellent and timely customer support is essential to ensure that your business runs smoothly. Your payment processor should be able to provide access to a knowledgeable customer service representative—a real person—whenever you need it. So check if your payment processor has an in-house outsourced support team. Are they available only during business hours or round the clock? Poor service can result in the loss of business—especially if your customers run into issues that can’t be resolved quickly. So choose wisely.

7. Security. When you’re handling the payment information of your customers, security is of utmost importance. Make sure your processor can help with PCI compliance and uses tokenization to protect sensitive cardholder data. It’s also a good idea to choose a payments partner that offers fraud protection services as well.

8. Type of processor. Depending on your unique business needs, decide if a direct processor like Stax or a third-party processor may be better suited for you. Although you may get approved quicker with a third-party processor, you’ll run a greater risk of unexpected account holds and freezes (as explained below).

9. Contracts. Some processors may lock you into long-term contracts with hefty cancellation fees that will make it impossible for you to switch providers. Look for a processor that offers month-to-month contracts with no cancellation fees, so you can switch at any time.

Who are the Major Credit Card Processors?

Today, we’ll demystify some of the most popular payment processing companies and merchant account providers out there. We’ll provide a side-by-side comparison of the following credit card processing companies:

  • Stax
  • Stripe
  • Square
  • PayPal
  • Banks

Before we proceed further, it may be worthwhile to mention that there are two types of credit card payment processors: direct processors (or merchant account providers) and third-party processors (or payment aggregators). Here’s how they differ from each other:

Direct processors like Stax provide a dedicated merchant account for each merchant and follow a strict vetting process before approving these accounts. This may take a little time, however, merchants can rest assured that they won’t be in for any unpleasant surprises in the form of sudden account freezes or withheld funds in the future.

Third-party processors like Square, PayPal, or Stripe don’t provide individual accounts to merchants but aggregate them into an existing pool. This explains why they may be able to approve accounts almost instantly, however, merchants run the risk of facing account holds and freezes at any time—often with little to no warning.

That said, below is a quick overview of each company’s fees and terms.

Stax Stripe Square PayPal Banks
Contract Required No No No No Yes
Early Termination Fees No No No No Yes
Card Present Processing Pricing $99/month
+ 8¢ per transaction
+ interchange
2.9% + 30¢ per transaction (includes interchange) 2.6% + 10¢ per transaction (includes interchange) 2.29% + 9¢ / transaction (in person); 3.49% + 49¢ for key-in and scanned cards Varies;
1.8-3.5% per transaction +15-30¢ per transaction
Card-Not-Present Processing Pricing $99/month
+ 15¢ per transaction
+ interchange
2.9% + 30¢ per transaction (includes interchange) 3.5% + 15¢ per transaction (includes interchange) 2.99% + 49¢/ transaction (includes interchange) Varies;
1.8-3.5% per transaction +20-30¢ per transaction


Cost Breakdown Per Credit Card Processing Company

Let’s use a couple of examples to see what this means in practice for both card-present (CP) and card-not-present (CNP) companies. Then, we’ll get into the details of each credit card processor and payment technology provider.

Credit Card Processing Companies Scenario 1: Card Present Costs

First, let’s say your business processes $15,000 CP payments per month with five $100 sales per day for thirty days. How much will each company’s credit card processing costs affect you?

Stax Stripe Square PayPal Banks
$359 $480 $405 $357 to $597 $570

Credit Card Processing Companies Scenario 2: Card-Not-Present Costs

Now, let’s break down what you would pay in processing fees if you have a higher cash flow. Say you take credit card payments using online invoices or over the phone (which is different from contactless payments). Your business keys in three $400 sales per day for a total of $36,000 per month in CNP processing. How much would this cost your business?

Stax Stripe Square PayPal Banks
$887 $1,071 $1,273.5 $1120 to 1300.5 $1,287

*Interchange is set by the card associations like Visa and Mastercard and is a required cost for taking credit cards. The exact interchange rate for each transaction is affected by dozens of factors. Interchange can be less than 1% for certain in-person debit cards and over 2.7% for some keyed-in rewards credit cards.

For these examples, we averaged a number of common interchange rates and applied 1.65% for card-present transactions and 2.15% for card not present purchases. Read more about interchange.

Learn More

What Is the Best Credit Card Processing Company for a Small Business?

Stax Payment Processing

Stax is built on transparency, helping provide business owners with the power to manage their companies effectively. Merchants pay $99 per month, then the flat rate pricing of interchange plus a set fee (cents) per transaction.

That means the more you process, the less it costs on average per credit card transaction. For companies that process over $500,000 annually, the monthly price increases, but our Payment Consultants will work with you on a custom package to help your business save money.

We sell our merchants terminals outright instead of leasing equipment; this way, you won’t be charged monthly terminal fees and you’re in control of your own credit card processing equipment. Stax also offers various hardware options and can easily connect to payment devices including point of sale (POS) systems, mobile credit card readers, and more. Stax also supports card-not-present (CNP) transactions through our virtual terminal and eCommerce integrations.

There are no contracts and no cancellation fees. Plus, you can add on services like next-day funding, ACH processing, and QuickBooks Online Pro Sync to help you save time and get paid faster.

Generally, Stax is the best fit for companies who process over $7,500 per month and that don’t process microtransactions. Our team can analyze your existing statements for free to calculate how we compare with your current processor.

Stax Reviews

Stax consistently ranks as one of the best payment processors in the market. The company has a 5-star rating on both Merchant Maverick and G2, as well as a 4.1-star rating on Forbes Advisor.

Many merchants commend Stax’s easy onboarding experience, cost-effective fee structure, and customer service.

“I had a great experience the entire way through the very easy process of switching. I look forward to saving tons of money vs my last credit card processing company.” – Kelly McDonough

Square Credit Card Processing

Square offers one card-present rate for card present payments at 2.6% + 10¢ per transaction. Square has no monthly minimums and now offers a point-of-sale system in addition to its mobile readers and tablet applications. These can be pricey.

Given Square’s pricing and capabilities, it’s a good fit for business processing under $7,000 a month.

Square Reviews

Square has solid ratings across various merchant and review websites. Merchant Maverick gives Square a 5-star rating, while Forbes Advisor and G2 give it a 4.4 and 4.6-star rating respectively.

Most merchants appreciate Square’s ease of use and ability to accept credit card payments quickly, though a number of business owners have complained about the company holding their funds or unexpectedly deactivating their accounts.

“We went through the onboarding process and we used the services. We were able to use the card processing services but Square had been holding our funds. They said Square needed more financial documents to authorize the transaction. We provided the documents but no response for a week.” – Daniel Berditchevski

Stripe Payment Processing

First, Stripe charges almost 3% per transaction plus a 30¢ transaction fee. With these costs combined, this particular pricing model gets expensive the more you process, or for the higher quantity of purchases processed.

Beyond pricing, Stripe offers processing for mobile and online transactions and supports recurring transactions. They use a deposit schedule for merchant accounts and don’t offer Next Day Funding. You can expect your deposit in 2 days or 7, depending on your business and if you’re located in the US.

Currently, Stripe doesn’t offer in-person payment processing aside from through an app and their invite-only terminals. You can apply to get the chance to purchase one of their terminals so you can process payments in-person, but the process is unclear at this time.

Stripe Reviews

Stripe’s ratings are slightly lower than others on this lit of best credit card processing companies. While it has respectable ratings on Merchant Maverick and G2 (4.5 and 4.3 stars respectively), business owners give Stripe a lackluster 3.1 stars on Trustpilot.

Many merchants complain about Stripe’s tech support team, and there have been instances of Stripe terminating merchant accounts with little to no explanation.

“Stripe worked wonderfully for 2 years, then without warning they terminated my account. I had no disputes, chargebacks or complaints. They just terminated it leaving me in the lurch. Their response gave no reason why, and when emailing support they stated the same thing. It’s a terrible thing to do with a business. I do not recommend them.” – Daniel Milks

PayPal Credit Card Processing

PayPal offers a quick setup, but you’ll end up paying more for the convenience in the long run. While they say that you can start an account in 15 minutes, you’ll end up paying higher rates per sale.

Plus, you’ll find a lot of add-ons in what you pay: if you want recurring billing, that’s an additional $10 per month. For “advanced fraud protection,” you’ll pay $10 per month plus an additional 5 cents a transaction on every charge. Instead, we would recommend becoming PCI compliant to mitigate your risk and prevent fraudulent activities.

While known mostly for its online payments platform, PayPal also offers new accounts a free mobile reader. But watch out for the higher rates you’ll pay for convenience.

If you use the “scan card” feature or key in a card to the mobile app, your credit card processing costs goes up to 3.49% plus 49 cents a transaction. That’s the highest card-present rate that we’ve seen on the market. This also applies to any form of online credit card payments and even invoicing as this is now their standard Digital Payments transaction rate. And if you accept American Express, it’s a set 3.5% per transaction—even though AmEx no longer costs that much more than other cards.

For a business owner looking for on-the-go options, PayPal offers their PayPal Here mobile payments solution, but at a cost. Small business owners wanting the flexibility to collect payments from anywhere are charged 2.7% for card-present payments, and the high rate of 3.5% plus a fixed transaction fee of 15 cents for anything keyed-in.

The PayPal Payments Standard platform has no monthly fee but does not include a virtual terminal. For an online shopping cart, your customers will have to navigate away from your site to complete their payments.

If you want to accept cards directly through your website or take them over the phone, you’ll have to pay $30/month for a PayPal Payments Pro account to key in not-present cards.

PayPal Reviews

PayPal’s ratings aren’t as high as other credit card processors. While it has a 4.4-star rating on G2, Merchant Maverick gives it a 3.5-star rating. Worst of all is TrustPilot which gives PayPal a 1.3-star rating, though some of these complaints do come from consumers and not merchants.

Many of the negative merchant reviews center around high fees and PayPal holding funds for too long.

“I was paid through PayPal from my client up front as part of our monthly contract agreement. PayPal held over half of my money for over a week and I still don’t have it despite jumping through all their hoops to prove that I’m fulfilling the contract agreement.” – Kelly Carey

Bank Merchant Services Companies

Most banks offer payment processing. Some banks that have gotten into credit card processing services include:

  • Chase Merchant Services—formerly Chase Paymentech
  • Wells Fargo Merchant Services
  • Bank of America Merchant Services, also known as BOA Merchant Services
  • Citi by First Data

It might seem convenient to process with the same bank that your business already works with. However, bank merchant services are usually the most expensive option for businesses. Like other processors, banks often require contract terms with early termination fees. At the same time, many banks use a third-party company for the actual payment processing. This means you’re paying more fees but it’s harder to tell where they’re coming from.

Cost of Bank Merchant Services vs. Stax

Most banks make you apply for their services before telling you what you’ll pay. That means you don’t know if you’re getting a good deal or are paying more than other small business owners.

Choosing a larger bank for a processor can also mean your account probably won’t have a dedicated support team. You won’t get the same attention as if you worked directly with a processor. That’s why they’re not usually recommended for small businesses. Here are some of the pros and cons of each of these banks:

Chase and Wells Fargo give estimates before you buy, though they don’t include the small print of other monthly fees you’ll get. For instance, if you don’t bank with Wells Fargo, you’ll be charged an additional fee for batching.

Chase Merchant Services vs. Stax

Chase advertises 2.6% + 10¢ per transaction for in-person credit card charges and 3.50% + 10¢ per transaction for online payments. If you lease their terminals instead of buying them, you could get stuck in a long-term contract.

Stax sells terminals outright, so you’re not locked into a contract. The high per-transaction cost means the more you make in a month, the more you pay with Chase.

Wells Fargo Merchant Services vs. Stax

Meanwhile, Wells Fargo charges 2.6% + 15¢ for in-person and 3.4% + 15¢ for online transactions (for monthly processing volumes under $15000). Plus, they charge a monthly fee per location. In addition, Wells Fargo’s preferred physical terminals are all Clover products. Clover is a notoriously expensive POS system, which does not integrate with many other payment technologies. That means that if you want to later switch to a new provider, you’ll have to buy all new equipment.

Stax sells affordable Dejavoo card readers and BBPOS mobile card readers to merchants. That way, they have total control over their processing and aren’t charged costly monthly terminal leasing fees. We never charge batch fees or other unnecessary fees.

Bank of America Merchant Services vs. Stax

Bank of America also uses Clover devices for their payment processing. However, they do sell them outright instead of just leasing—at around $429-$1249 per terminal. Not only will you be locked into a Clover device, but you also may get locked into a cellular contract. These devices require T-Mobile or AT&T to connect with your BOA merchant services.

As far as pricing is concerned, you can expect around 2.65% for in-person transactions and 3.5% + 15¢ for cards not present—one of the highest rates we’ve seen. If you don’t have a business checking account through Bank of America, you’ll also be paying an additional monthly fee.

Citi Merchant Services Provider vs. Stax

Citi merchant services are actually provided by First Data. As mentioned before, this means that as both the processor (First Data) and the services provider (Citi) need to make money, you’ll likely be paying a higher rate. First Data owns Clover so again, you’ll be locked into those pricey POS choices.

Plus, Citi doesn’t share its pricing, so you won’t know how much you’ll be paying in transaction fees or monthly fees until you give up your business information.

Choosing the Best Credit Card Processing Company

Most credit card processing companies will claim to be the best at what they do. But choosing a credit card processor that’s the right fit for your business could mean you need a suite of products or just a mobile reader. The best payment processing companies for you should be transparent and serve your business needs.

While it’s certainly advisable to look into each company’s pricing and compare quotes, you must also look beyond processing fees and features. You will want to choose a payment processing provider that gives you access to a knowledgeable customer service and tech support team. No merchant wants to experience issues around credit card payment processing, so having a provider that has your back is a must.

Stax uses a subscription-style pricing model to give business owners flexibility and convenience. You’ll also have access to a top-rated customer success team whenever you have questions or concerns. If you need a terminal or mobile reader, Stax offers a host of products to choose from.

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