What’s the Best Payment Processor for Small Business?

As a business owner, the number of executive decisions that need to be made on a day-to-day basis can be scary at times. Hunting for a payment processor provider for your business shouldn’t be one of those things. When digging through the thousands of solutions that are meant to help you accept payments, finding the right tools is a priority but it’s not everything.

Knowing what to look for and what to avoid can help take the fear out of finding the right payment processor, making the decision a lot easier. We want to help prevent you from making a decision that will haunt you so we’ve put together a list of options to consider when looking for the right payment processor.

Make Sure The Payment Processor Technology isn’t Dead and Buried

A payment processor is only as good as their customer service and their payment technology. If the terminals and tools they are offering provide more problems than solutions, it’s time to find a better processing services provider. Standard payment solutions nowadays must include mobile and touch-free options.

RELATED: Non-profit Payment Processing: How Chrimata Drives Effortless Digital Donations Through Stax Connect

Create Monster Solutions With a Unified Payment Processor Experience

As the eCommerce market continues to expand and customers have multiple choices regarding how, where, and when to shop, providing additional payment becomes a must. 

That said,finding a simple way for your business to increasingly expand its payment offerings to support new customers is an ongoing challenge. Implementing a Unified Payments Platform is a future-proof solution that provides access to multiple payment methods through a single streamlined integration.

Stax’ integrated payment platform sets a new standard in payment technology. We offer the most streamlined payment platform experience, revolutionizing online payments to support small to medium-sized businesses all across the U.S. Our all-in-one API allows you to accept card present and card not present transactions, and you’ll have access to the best apps and tools in our app marketplace. Most importantly, because all of the payment methods run through a single platform, all of your data is accessible in a single place, making it easy to quickly understand the health of your business.

Hidden Payment Processor Fees are a Nightmare

When you’re trying to grow your business the last thing you need is an endless stream of extra payment processing fees killing your revenue generation. Don’t let hidden payment processing fees be the death of you.

One way to make sure you’re not being price gouged is by shopping around for the best rates and making sure you ask specifically about extra fees not included in the base rates. Too many processors bundle and hide fees within other charges including everything from PCI compliance to setting up your account. Average credit card processing fees range from 1.7% for swiped card payments up to 3.5% for keyed-in transactions.

Interchange Plus Pricing

A small fixed fee (between $0.10 and $0.50), plus a percentage of each purchase (between 1% and 3%) on top of the interchange fees charged by the card issuers.

Tiered Pricing

A tiered model puts credit card transactions into several categories—qualified, mid-qualified, and non-qualified. Qualified rates come from when a customer meets a processor’s criteria for the easiest, most secure transaction (swiping/inserting a card in-person). The other tiers come from having to key in the card’s details, or when a customer pays online. Tiers can also vary by card type, making this the most confusing and least transparent pricing structure.

Flat-Rate

Each card type has the same rate, typically 2.9% plus a transaction fee between 10 and 30 cents. While this seems like it may be the most straightforward at face value, it can be a very expensive pricing structure as you will pay the same rate to accept a debit card as a premium rewards credit card. The actual cost to accept a debit card is around 1%, whereas a premium rewards credit card can easily be 2.5%, but in a flat rate structure, you’ll pay the same (typically 2.9%) for both, resulting in a significant markup on many card types. So while it may be simple, it typically results in higher overall processing costs for most established businesses.

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Subscription

This model uses a flat monthly membership fee, which then gets the business access to the direct wholesale cost of credit processing from Visa and Mastercard. After the monthly membership, the business only pays the wholesale cost (interchange) set by the card issuers so that the business is never overpaying for processing. This is the pricing structure that we use at Stax and established businesses that process over $7,000 per month typically see significant savings compared to the other traditional pricing structures.

Payment Processor Fees to watch out for:

  • Credit Card Terminal Fees
  • Setup Fees
  • Early Termination Fees
  • Reprogramming Fees
  • PCI Compliance Fees
  • Address Verification Fees
  • Chargeback and Retrieval Fees
  • Payment Gateway Fees
  • Statement Fees
  • Batch Fees

They Offer Security So Good It’s SCARY

There can potentially be a lot of risks involved when accepting payments today. Providing the highest level of security with complete encryption and various layers of fraud prevention tools provides an additional layer of comfort to your customers. Card information is encrypted on all of our processing devices and never stored after the transaction is completed. Stax’ state-of-the-art cloud architecture is constantly tested for vulnerabilities to ensure the safety and security of that sensitive data.

Their Customer Service is ALIVE

Talking to a physical person when you have an issue or a question is slowly dying due to the implementation of automated systems in the early 1980s. When issues arise the last thing you want is to fumble through automated options hoping to get in touch with someone who can actually help you. Time is money, especially in this case.

Stax offers in-house customer service. When you call during business hours, you will speak with someone who knows our product and is always happy to help. From training to troubleshooting, we are the company to choose if you appreciate a human touch to your customer service needs.

You Might Also Like: What is ACH Payment Processing?

The Top 10 Payment Processors Small Businesses Need To Know

Now that you know what to look for, here are the best credit card processing companies that small business owners should consider as they look for the right solution for their business needs. (All processors on the list not only accept traditional payments from things like American Express, Mastercard, and Discover cards, but also mobile payments.)

1. Stax

We’ve already talked a lot about Stax, but to sum it all up: Stax offers a fairly unusual subscription pricing model, rather than the standard per transaction model. This pricing model makes us an ideal payment processing company for high-volume businesses. We sell our own payment processing terminals, but Stax also seamlessly integrates with other payment terminals and many point-of-sale solutions. And as we noted, we offer top-notch customer support and the highest level of PCI-compliance in the industry.

Don’t take it from us, though. Take it from all of our happy customers. We’ve got a 95% customer satisfaction score, a 73 NPS score, and a 9.2 rating on Trustpilot. Henry on Trustpilot put it best: “We have been doing business with this processing company for many years. We love to give them our business because they are very responsive.” Plus we’ve got a bunch of rave reviews for our customer support team on Trustpilot. 

2. Square

Square is best known for their iconic white square credit card readers that plugged into the headphone jacks of mobile devices. Around 2014, the Square Reader took off amongst small merchants trying to take credit card payments because the mobile card reader is free and it required no contract to use the processor or virtual terminal. Square made it possible to start taking in-person transactions same day. Its pricing structure is also a very straightforward flat-rate, with no PCI-compliance fees. And while it still serves primarily the small business or low-volume market, its functionality as a merchant services provider has grown to support mid-size businesses.

3. Shopify

Shopify is a behemoth in the eCommerce space.  In fact, it’s the most popular eCommerce platform. And now, Shopify Payments can power both online transactions and in-person sales. For online stores already running Shopify online, using Payments in-store is an easy way to get started taking credit card payments in-person. The Shopify universe includes not just eCommerce software, but a POS system as well. While it will integrate seamlessly with a Shopify store, the in-person payment processing system is still fairly new and not as robust as other solutions on this list. 

4. Payment Depot

Like Stax, Payment Depot runs on a monthly subscription pricing model. They offer 24/7 customer support, no long-term contracts, no PCI-compliance fees, and an online dashboard to manage payments. It integrates with Clover’s POS solution for in-person sales and Authorize.net for online sales. (If you’ve already got hardware other than Clover, Payment Depot’s team will work to create the integration you need.) Payment Depot is not only well-priced, it has excellent customer support.

5. Stripe

Stripe is one of the more well-known payment processors because it’s very easy to get started taking payments on it. However, Stripe truly shines in the fact that it’s extremely developer-friendly. For businesses looking to create totally unique integrations with their payments systems, Stripe is an ideal solution. Of the payment processors, it was also one of the earliest to take mobile wallet payments like Apple Pay and Google Pay. All this tech-savviness can be a real downside, though. For small businesses looking for a straight-forward payment processing solution, the sheer volume of stuff Stripe can do can be very overwhelming and confusing once you’re in the dashboard system.

6. PayPal

Originally a peer-to-peer payment platform, PayPal has grown into an absolute powerhouse in the payments world – offering merchant accounts as well as customer accounts. They offer a flat-rate pricing structure. Because the system is extremely well known at the consumer level, the name also inspires trust with customers. They now also offer POS hardware through its subsidiary, Zettle. The first card reader you purchase comes at a steep $50 discount. PayPal IS known for its hidden fees and poor customer service – so that should be something that you are prepared for.

7. QuickBooks Payments

For merchants who love QuickBooks, Intuit now offers a payment processing service. It’s a combo of subscription and flat-rate pricing structures. That is, you have to have a QuickBooks Online subscription to use Payments and then the actual pricing of Payments is a flat-rate per transaction model. It should be noted that QuickBooks Payments doesn’t offer phone support. It does, however, offer instant transfers for no additional fee when you have a QuickBooks Cash account. Overall, for those who want to live in the QuickBooks universe, Payments is an easy and obvious add-on. 

8. Clover

Much like Square, Clover is a credit card processor that offers native hardware options with integrated flat-rate payment processing. This makes them an ideal solution for very small businesses who need an easy all-in-one POS software and payment processing system. (You may also have noticed them earlier on the list. Unlike Square, you can utilize their POS hardware integrated with a variety of other payment processors if you prefer.) However, unlike a number of other solutions on this list, Clover’s payment processing will take at least a few days to get up and running. You have to get the solution through a sales rep. As a result, it also lacks pricing transparency on it’s site.

9. Dharma Merchant Services

Dharma Merchant Services is best known for providing great discounts to nonprofit organizations. (And for donating a large portion of their profits to charity.) However, they are also well-enough priced that other small businesses may enjoy them. They have interchange-plus pricing, with no long-term contracts. Dharma also can be used on Clover hardware. It should be noted that in addition to a $25 chargeback fee, Dharma also charges a $5 retrieval fee when a customer disputes a transaction. Additionally, they do not charge an early termination fee, but they DO charge a $49 account closure or cancellation fee.

10. Helcim

Helcim provides full-service merchant accounts without a monthly fee. They instead operate on interchange plus pricing. This makes it an ideal transition for growing small businesses from simple payment processing to merchant accounts. Helcim also offers robust inventory management integrations, making it an ideal solution for those merchants who put their inventory system at the heart of their operations.

It should be noted that Helcim has a larger than usual list of prohibited customer-types, which generally include only high-risk merchants. Businesses like psychics and consumer bankruptcy law firms, for instance, appear on the list.

 

How Stax Takes The Fear Out of Payment Processing

With top-rated customer support, optimized payment technology, and the highest level of PCI compliance, Stax takes the fright out of finding the right payment processing solution. We offer you subscription-based credit card processing at a direct cost. This means zero markups, zero hidden fees, and no contract.

To learn more about Stax payment processing services reach out to a payment consultant for a consultation today. We will be glad to answer any questions you may have and help you make use of our state-of-the-art integrated payment solutions right away.

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