Choosing a payment processing provider is a bigger decision than it might seem. After all, this is the company that will handle your customer payments and help move money into your business. The right provider should make it easy to accept payments without saddling you with unnecessary fees, restrictive contracts, or technology that doesn’t fit the way you sell. And with so many options available, knowing what to compare can save you time and money.
Whether you’re setting up payment processing for the first time or considering a switch, here are seven things to know before finding and choosing a payment processor for your business.
1. Know which payment methods you need to accept
Start with your customers. How do they prefer to pay? Your payment processing provider should support the methods people already use while giving you room to add new options as preferences change.
Depending on your business, that could include:
- Credit and debit cards
- Contactless payments
- Digital wallets like Apple Pay and Google Pay
- Online payments
- Recurring or subscription payments
- Bank or ACH payments
Offering choice matters. According to Mastercard, more than two-thirds of in-person purchases on its network are now contactless, highlighting just how mainstream tap-to-pay has become.
Think about where you sell, too. A brick-and-mortar retailer may prioritize contactless card payments, while an ecommerce business may care more about digital wallets and recurring billing. Ideally, your provider can support the payment methods you need today without limiting where you sell tomorrow.
2. Look at where you accept payments
Where you sell should shape the payment processor you choose. A brick-and-mortar business needs reliable in-person payment processing, which may include card readers, point-of-sale integrations, and support for contactless payments. An ecommerce business has different priorities, such as a payment gateway that works with its existing ecommerce platform. If you sell both online and in store, look for a provider that can handle both.
Keeping payments under one system can make it easier to track transactions, issue refunds, and manage reporting across sales channels. Also consider where your business is headed. The right provider should support how you sell today and where you plan to sell next.
3. Understand the payment processor’s pricing model
Payment processing fees aren’t always structured the same way. Before choosing a provider, make sure you fully understand how its pricing works and how that model fits your sales volume and average transaction size.
Common pricing models include:
- Flat-rate pricing: You pay the same percentage and, in some cases, a fixed fee for each transaction. It’s simple and predictable, but it may become expensive as your processing volume grows.
- Interchange-plus pricing: You pay the card network’s interchange fee plus a separate processor markup. This model gives you more visibility into what you’re paying and why.
- Tiered pricing: Transactions are grouped into pricing tiers, typically based on factors such as card type and how the payment is processed. Your rate depends on which tier a transaction falls into.
- Membership pricing: Providers such as Stax Pay use a subscription-based model. Rather than adding a percentage markup to the interchange rate, Stax charges a monthly subscription plus a per-transaction fee. This structure can make processing costs more predictable, particularly for businesses with higher sales volumes.
Don’t compare providers on the advertised rate alone. Run the numbers using your actual transaction volume and average ticket size.
4. Calculate your actual processing costs
The advertised processing rate only tells you part of the story. To understand what you’ll actually pay, factor in all the costs that come with accepting payments.
Depending on the provider, these may include:
- Transaction and processing fees
- Monthly or subscription fees
- Setup fees
- Payment gateway fees
- Chargeback fees
- PCI compliance fees
- Currency conversion fees
- Early termination fees
Then, run the numbers using your average transaction size and monthly sales volume. A pricing model that saves money for a business processing $100,000 per month may not make sense for one processing $10,000. Comparing your estimated total monthly cost gives you a much clearer picture than comparing rates alone.
5. Check how quickly you’ll get paid
Making a sale is one thing. Getting that money into your bank account is another. Payment processors have different funding timelines, so find out how long it typically takes for settled funds to reach your business account. Some providers offer same-day or next-day funding, while others may take several business days. Also ask about cutoff times, weekend deposits, and whether faster funding comes with an extra fee.
6. Make sure it works with your existing business software
Your payment processor shouldn’t create more work for your team. Look for a provider that connects with the tools you already use, such as your:
- Point-of-sale system
- Ecommerce platform
- Accounting software
- CRM
- Inventory management system
- Subscription billing tools
7. Look at support, reliability, and the customer experience
Payment problems can cost you sales, so reliability and support deserve a spot on your checklist. Find out what support channels a provider offers, when help is available, and how it handles issues like declined payments, chargebacks, or technical problems.
Consider the customer experience, too. Your payment system should make checkout quick and easy, whether someone pays online or in person. Features like contactless payments, digital wallets, saved payment methods, and a smooth mobile checkout can remove friction.
Ultimately, your processor should make accepting payments easier for your business and paying easier for your customers.
How to choose a payment processor for your business
Once you know what to look for, it’s time to narrow down your options. The best payment processor for your business isn’t necessarily the one with the lowest advertised rate. It’s the one that fits how you sell, what you process, and what you need from your payment system.
Define your payment needs
Start by taking stock of your business. Consider your monthly sales volume, average transaction size, and where customers pay you. Then list the payment methods you need to accept, such as credit cards, debit cards, digital wallets, or recurring payments.
If you expect your business to change or grow, factor those plans in as well.
Build a shortlist of providers
Research payment processing companies that support your requirements. Look at their payment methods, integrations, hardware, security features, funding times, and customer support.
Don’t rely on a provider’s headline rate to make your shortlist. A low transaction fee won’t help much if the processor charges high monthly fees or doesn’t integrate with your existing software.
Request a complete pricing breakdown
Ask each provider for a detailed list of fees, including processing rates, processor markups, monthly charges, chargeback fees, setup costs, and early termination fees.
Use your own sales figures to estimate what you would pay each month. This gives you a more realistic comparison than looking at transaction rates alone.
Read the contract carefully
Review the contract length, cancellation policy, automatic renewal terms, equipment requirements, and any minimum processing commitments. If something isn’t clear, ask before you sign.
Compare your options side by side
Finally, compare your shortlisted processors based on the factors that matter most to your business. Look beyond price and consider payment options, integrations, security, reliability, support, and room to grow.
The goal isn’t to find the cheapest provider. It’s to choose a payment processor that makes accepting and managing payments simpler as your business evolves.
Final words
As a business, choosing a payment processor is one of the most important decisions you’ll make. The right payments partner can pave the way for smoother customer experiences, better cash flow, and a healthier business overall. That’s why it pays to understand the ins and outs of payment processing. Knowing how the ecosystem works and asking the right questions can help ensure you choose the payment processing company that’s the best fit for your business.
Secure payment processing that’s tailored to your small business. Get in touch with the experts at Stax Pay today.
