5 Cheapest Credit Card Processing Companies for 2021

Cody Cromwell
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Calculate the Cheapest Credit Card Processing for Your Business

Card processing is probably the most overlooked piece of your business in regards to entrepreneurship. However, this is one of the most important aspects of running a business. When it comes to credit card processing, the main, and most important part is ensuring that your business’s payment platform is secure.

Even if you’re a sole proprietor, your business is still dependent on its payment platform. Cheaper credit card processing solutions may not offer all of the security features that you need to run your business but may also offer a lower cost for you.

If you are looking for the best credit card payment solutions, then you need to look no further. Here is the list of the top 5 best credit card payment companies that will let you run your business efficiently and securely.

How We Evaluated the Cheapest Credit Card Processing Companies

The least expensive credit card processing companies offer only one flat rate, offering no fee, no minimum limit, no discount. For the credit card processing industry, most companies, often refer to themselves as the lowest rate provider in town. Even though a company claims to be the least expensive, it’s important to review the fine print and understand the terms and conditions associated with these so-called lowest rates.

The most expensive credit card processing companies offer up to 2 different flat rates depending on the size of the purchase. Also, many companies included a surcharge to allow for fraud and the new terminal as well as monthly fees for overdraft protection, reporting and interchange and ability to process foreign transactions. All in all, the surcharge made these transactions the most expensive as compared to the other companies.

In order to determine the cheapest credit card processing companies, we took the transaction rates offered by the different credit card processing companies and worked with the data provided by the Federal Reserve to determine the average transaction rate for credit, debit, and gift card payments. Then we added the lowest interchange rates and fees found by the leading transaction rate aggregators.

We then ranked the companies based on the price of the average transaction ranging from the cheapest to the most expensive credit card processing companies. Lastly, we provided you with the description of the terms and conditions offered by the different credit card processing companies.

35% of Overall Score

25% of Overall Score

20% of Overall Score

PayPal is probably the only credit card processing system that can boast two separate businesses: one for its online payments service and the other for its payment service for businesses. PayPal offers a range of services designed to help small businesses manage their finances including escrow payments and online bill payments.

Since PayPal is a massive global player in the online payments market, it’s no surprise, especially when you consider its fairly comprehensive payment processing platform that includes more than 100 boards and 30 different payment methods.

The three-to-four business day processing is what sets PayPal apart from other major credit card processing companies. They are a great option for retailers and merchants who need to keep their processes streamlined.

PayPal prides itself on being a global leader in cross-border trade. The flexibility of their services and their low rates make it a popular choice for merchants in Europe, Asia, Latin America and the Caribbean.

20% of Overall Score

PayPal is probably the only credit card processing system that can boast two separate businesses: one for its online payments service and the other for its payment service for businesses. PayPal offers a range of services designed to help small businesses manage their finances including escrow payments and online bill payments.

Since PayPal is a massive global player in the online payments market, it’s no surprise, especially when you consider its fairly comprehensive payment processing platform that includes more than 100 boards and 30 different payment methods.

The three-to-four business day processing is what sets PayPal apart from other major credit card processing companies. They are a great option for retailers and merchants who need to keep their processes streamlined.

PayPal prides itself on being a global leader in cross-border trade. The flexibility of their services and their low rates make it a popular choice for merchants in Europe, Asia, Latin America and the Caribbean.

Cheapest Credit Card Processing Comparison Chart

Below, I will show you a credit card processing comparison of the 5 cheapest card processing companies.

The primary reason why credit card processing rates are different fro each credit card processing provider is based on the processing rate tier each provider offers.

Your credit card processing rate will be highest if there are no monthly fees.

The difference between the cheapest credit card processing companies can be as much as 38%.

At the very end of the post, we have a passbook services comparison as well.

There are 3 key factors your business will need to take into consideration when comparing credit card processing rates.

Payment Depot

Has a lot of features to set up your account!

TRANSACTION ADMIN:

It's one of the most common requirements to have an expert involved in the payments process. They will be there to help you through the thick and thin of it. Plus, you'll be adding more customers to your list fast!

Any business that needs to accept credit cards should be working with Payment Depot. With your current list of customers that rely on you for all their credit card processing needs, you will be getting a lot of sales and have more customers to cater to.

This payment processor will settle your dispute issues quickly, as they are known to have a quick response time.

But for a small business, it can be stressful and challenging when you have to go in and fix the credit card machine and its software.

With Credit2Card, you won't have to worry about any of that. Their VISA POS can turn into a swipe terminal by simply installing the Card Reader. Now you won't need to worry about repairing the card machine because you can use your credit card reader as a swipe terminal.

They also have automated reports to help you keep track so you can know your analytics.

WILLING TO KNOW MORE?

Every card processing service has its own thing that makes you choose that company over the other.

Here's what Makes us Different:

PROS

  • quick approval rate …
  • Cheapest solution for POS acceptance …

95% to 17.48% interchange fee …

CO-OP Network

PayPal's service is accepted at over 220,000 locations worldwide, including, retail stores, airlines, internet service providers and social restaurants. The company offers a free merchant-specific payflow gateway linked to the PayPal account for faster processing. A Web or mobile paywall can also be configured for use with a full or partial Internet site.

Visa gift cards are availalbe in most stores and are accepted at other stores that accept Visa.

CONS

You are limited to the card brands you can accept from your merchant account. This is called the network, but it can be upgraded.

No links. You have to write down each and every one of your locations and due to high demand, there can be a lengthy waiting time for transactions to go through. It is possible to potentially lose money you shouldn’t be losing if errors are made on the transaction.

No refunds. You may have your debit card turn into a credit card, which may prove to be a pretty wasteful expense for you.

Payment Depot Pricing Plans

The Payment Depot was established in 1996 by a group of software developers and financial experts with the goal of simplifying the payment industry. The Banking Technology magazine stated that the company has ranked highly on the Top 100 Most Promising Financial Software Solution Providers.

The Payment Depot is based on the main idea of providing a solution to authorized third parties, who can use the Payment Depot software to process credit and debit card transactions.

Since the company was founded in 1996, they have developed a payment processing technology that is compatible with all different payment networks. It is designed to reduce the manual effort necessary for processing a customer’s transaction, and streamline the transaction process.

To take on different trends in the payment industry, the Payment Depot has created a new standard in processing time. They can complete any transaction in less than 3 seconds! For every business that specializes in a transaction-based industry, this new standard is an absolute necessity.

For any merchant account, the Payment Depot implements a fast transaction process. It helps the merchant process a transaction quickly and in a fraction of the time, which allows them to save on their processing costs. It is designed with built-in security features based on Risk Management.

The Payment Depot was initially only compatible with credit cards. However, due to the rapid development in technology, the company worked on developing an application that is compatible with all different payment cards, regardless of the card brand or network.

Fattmerchant

Vs. Adafruit vs. Paymentwall vs. Hubspot vs. MerchantOne

There are so many different credit card processing companies out there that it’s hard to know where to start even if you’re confident in your analytics skills. That’s why I put together this list of the five best companies to use, based on my extensive research, years of experience, and personal trial. I’ve done some analysis of how each one works and their handling fees in the past and have first-hand experience with them to back up my research.

I have also put together sales reports to give you an idea of how each one compares to others in certain fields. I’m a programmer by trade so I usually decide which processing company to use by considering future growth and new technologies along with current customer satisfaction. To make things a little easier on you, I’ve given each company a sales goal so you know where they fall on the pricing pyramid. Here’s the list saved in a spreadsheet so you can download it and do your own comparisons:

PROS

  • quick approval rate …
  • Cheapest solution for POS acceptance …

95% to 17.48% interchange fee …

CO-OP Network

PayPal's service is accepted at over 220,000 locations worldwide, including, retail stores, airlines, internet service providers and social restaurants. The company offers a free merchant-specific payflow gateway linked to the PayPal account for faster processing. A Web or mobile paywall can also be configured for use with a full or partial Internet site.

Visa gift cards are availalbe in most stores and are accepted at other stores that accept Visa.

CONS

You are limited to the card brands you can accept from your merchant account. This is called the network, but it can be upgraded.

No links. You have to write down each and every one of your locations and due to high demand, there can be a lengthy waiting time for transactions to go through. It is possible to potentially lose money you shouldn’t be losing if errors are made on the transaction.

No refunds. You may have your debit card turn into a credit card, which may prove to be a pretty wasteful expense for you.

Fattmerchant Pricing

Fattmerchant is a provider of merchant gateway software that is especially geared toward food and restaurant businesses. They provide both retail and online payment solutions that allow businesses of all sizes to profitably accept all major credit cards.

Fattmerchant offers both a retail mediation service and an online mediation service which allows small to medium sized companies direct access to the credit card merchant purchase gateway.

Their online system allows businesses to accept any credit card online through their site. Additionally, they provide merchants with two different payment gateways depending on the business they have. The first is the 'credit card acceptance check' option.

The credit card acceptance check will allow merchants to have a year subscription fee free to their family of services. The card acceptance check program will allow any business who uses Fattmerchant to have an automatic payment verification available to them.

Additionally, merchants will be able to accept debit card payments along with credit card payments at the same time. Another great feature of the credit card acceptance check feature is the fact that it is a free service however merchants will have to pay a monthly fee for the gateway subscription.

The second acceptance option is the Fattmerchant gateway subscription or login that will allow businesses to use the credit card processing service provided by Fattmerchant the merchant gateway that can be used for both online and offline transactions.

Square

Is the smallest of the three and is a model that relies heavily on local businesses. In fact, it can be no less than 20 percent cheaper than everyone else. Its worth looking at if you are an online business owner and don’t have customers on the hook.

PROS

  • quick approval rate …
  • Cheapest solution for POS acceptance …

95% to 17.48% interchange fee …

CO-OP Network

PayPal's service is accepted at over 220,000 locations worldwide, including, retail stores, airlines, internet service providers and social restaurants. The company offers a free merchant-specific payflow gateway linked to the PayPal account for faster processing. A Web or mobile paywall can also be configured for use with a full or partial Internet site.

Visa gift cards are availalbe in most stores and are accepted at other stores that accept Visa.

CONS

You are limited to the card brands you can accept from your merchant account. This is called the network, but it can be upgraded.

No links. You have to write down each and every one of your locations and due to high demand, there can be a lengthy waiting time for transactions to go through. It is possible to potentially lose money you shouldn’t be losing if errors are made on the transaction.

No refunds. You may have your debit card turn into a credit card, which may prove to be a pretty wasteful expense for you.

Square Payments Pricing

The Cheapest Small Business Credit Card Processing Option

One of the great things about credit card processing is the flexibility to create different pricing options based on company size. If you’re starting a small business with just a few employees, your options can include extremely low rates and making a name for yourself on the cheap. But if you’re a larger business with a sales team pulling in large amounts of sales, you can set your prices following Square Payments pricing.

Square Payments is one of the industry’s most flexible credit card processing companies. Customers use the Square Gateway to connect to the payment processor’s online payment site.

Functionalities such as batch processing are provided by square, which means you don’t have to worry about taking on any additional IT tasks. And even if you have to pay outside of the online portal, you can integrate with your Square Payment account.

The Square Gateway is free for all Square Payment customers, which is another reason why Square is one of the most cost-effective processors out there. But with your free Square Business account, you also get to connect one mobile device.

Your customers will be able to take payments, refer their friends to your business, and manage customer issues. They even get their own profile page where they can see their transactions, updates, about me section, and pay later function.

Dharma Merchant Services

Is a leading merchant account processing service provider in the industry, we’re committed to providing reliable and excellent services to our merchant clients. Dharma Merchant Services provides a flexible alternative and an infrastructure to our merchant clients.

PROS

  • quick approval rate …
  • Cheapest solution for POS acceptance …

95% to 17.48% interchange fee …

CO-OP Network

PayPal's service is accepted at over 220,000 locations worldwide, including, retail stores, airlines, internet service providers and social restaurants. The company offers a free merchant-specific payflow gateway linked to the PayPal account for faster processing. A Web or mobile paywall can also be configured for use with a full or partial Internet site.

Visa gift cards are availalbe in most stores and are accepted at other stores that accept Visa.

CONS

You are limited to the card brands you can accept from your merchant account. This is called the network, but it can be upgraded.

No links. You have to write down each and every one of your locations and due to high demand, there can be a lengthy waiting time for transactions to go through. It is possible to potentially lose money you shouldn’t be losing if errors are made on the transaction.

No refunds. You may have your debit card turn into a credit card, which may prove to be a pretty wasteful expense for you.

Dharma Merchant Services Pricing

Let's face it, mobile payment technology is a major game changer in the customer payment world. Quick-serve restaurants, for example, can now adopt mobile payment technology to help boost business, reduce customer wait times and minimize line-wait time.

However, it's not so easy for businesses to integrate mobile payment technology into their business models without a dedicated mobile card processing solution.

For the most part, each major card network has their own mobile payment processing solutions but these solutions are complex to implement and require teams of IT professionals. Plus having a complex mobile payment processing platform makes it extremely expensive to use.

The good news is that there are an increasing number of independent credit card processors that specialize in mobile payments technology and card-present transactions. These companies not only save money but also make it easier for you to get started with mobile payments.

Below, we'll cover the best 5 independent mobile payment processing companies for card-present transactions. But first, it's important to understand how card-present transactions work. Click here to get the beginner's guide to card-present technology.

What is a Mobile Card-Present Transaction?

PayPal

PayPal has been one of the pioneers of digital payments, processing more than 300 million payments per year and handling trillions of dollars in transactions. But as the market continues to change, PayPal isn’t ignoring that the industry is ripe for change.

The recent acquisition of Braintree by PayPal is one of the biggest changes we’ve seen to date. With Braintree now fully integrated into PayPal and all of its payments solutions, the company is no longer developing its own payments platform and will rely on Braintree’s technology to enhance its existing payment solutions.

What’s the Benefit?

Braintree’s technology brings a number of benefits to PayPal’s existing payment solutions. It offers a rich set of features including:

Braintree can dramatically reduce developers’ integration time and the cost of reacquiring business by providing an easy and secure API for its services. The integration between Braintree’s merchant tools and the PayPal Payments Platform also allows users to access their point of sale terminals with no additional setup, which makes it easier for users to run businesses.

PROS

  • quick approval rate …
  • Cheapest solution for POS acceptance …

95% to 17.48% interchange fee …

CO-OP Network

PayPal's service is accepted at over 220,000 locations worldwide, including, retail stores, airlines, internet service providers and social restaurants. The company offers a free merchant-specific payflow gateway linked to the PayPal account for faster processing. A Web or mobile paywall can also be configured for use with a full or partial Internet site.

Visa gift cards are availalbe in most stores and are accepted at other stores that accept Visa.

CONS

You are limited to the card brands you can accept from your merchant account. This is called the network, but it can be upgraded.

No links. You have to write down each and every one of your locations and due to high demand, there can be a lengthy waiting time for transactions to go through. It is possible to potentially lose money you shouldn’t be losing if errors are made on the transaction.

No refunds. You may have your debit card turn into a credit card, which may prove to be a pretty wasteful expense for you.

PayPal Pricing

PayPal Here Pricing

4 Tips to Get the Lowest Credit Card Processing Fees

There are a plethora of different fees you may have to pay as a business owner, especially if you’re using credit card processing like a merchant account. Fortunately, as the merchant service provider for your business, CardFellow can help offset any fees you may be paying.

There are many different aspects you need to be aware of when it comes to your processing fees. So here are a few tips to help you save on your processing fees:

If you’re looking for the lowest credit card processing fees then Shopify might be a viable option. Shopify processes credit cards for any type of business, including brick and mortar stores. They are so good at what they do, they have been awarded the CEP Preferred Provider status!

Use Plastiq for tax payments and then process the credit card payment through your merchant account. On average, Plastiq can save you up to 62% off the retail price of receiving a gift card. So the savings can be significant!

If you use Shopify, then your credit card fee will be as low as 10 cents per transaction. If you’d like to avoid the extra fees, consider using credit card processing services like CardFellow. CardFellow has made it easy for you to get the lowest credit card processing fees. And if you have any questions, we’re always happy to help.

Incentivize Cash Payments

Are you as fed up with the transactions fee's and interest charges of using credit cards to pay for your restaurant bills, as I am?

Join the club, because I hate the idea of interest rates of so many official credit card companies. MasterCard, Visa and even my own bank's credit card rates are generally agreed to be so high, that even if you absolutely had to pay them you couldn't.

So, more often than not, I pay with a debit card, using the same principles as this article, it's much more attractive when you have much lower transaction costs than those credit card companies.

I know what you're thinking…

"There is no way I'd pay that transaction costs", yeah ok, ok, so what you'd rather allow your customers to pay with a debit card then?

In reality, many restaurants have always taken this option, while the rest of the world was sitting there in a stupor. You'd think that since this accepted payment method is so favorable, all restaurants would use it, but unfortunately, that's not the case.

I hope you won't mind emptying your pockets, but I need to give you a few tips in these following steps on how to provide customers the best solution for paying their bill.

Accept Check or ACH Payments

Although this option is not one of the cheapest, check based credit card processing is a way for entrepreneurs to offer their customers the payment option of their choice.

A check based credit card processor allows merchants an alternative form of payment as well as a safe way to store funds until the goods or services have been delivered.

There are a few processes to set up a check based credit card processor, and prior to any payments being processed, they must be converted to ACH. This is a very lengthy process, but it ensures merchant security.

Checks need to undergo scrutiny before they are accepted by the credit card processor and must hold high-security features. This is why the processes of check conversion can be a bit lengthy.

Since check processing is so old fashioned, it is not recommended for every merchant. It is best for smaller businesses who don’t have an established line of credit and who want to avoid them, or for retail businesses who have a design aspect to their business.

To choose the best company for your business, we’ve got you covered!

See if You Quality for L2 or L3 Processing

L2C cards apply to merchants who run 5 or fewer point-of-sale (POS) devices and want to process cards with low to mid-risk for fraud. L3C cards are applied to merchants who run more than 5 point-of-sale devices and want the highest level of risk-mitigation.

Credit card companies have a three-tiered level of credit cards that you can choose from when applying for a merchant account.

The three levels of credit card companies are:

  • Level 1- Cash Only (no fees, but no fraud protection)
  • Level 2- Enhanced Fraud Monitoring (monitoring RFIs, BINs, and address validation)
  • Level 3- Enhanced Fraud Monitoring + Fraud Chargeback Experience (monitored, full set of fraud tracking reports, detailed IP and MAC addresses, vast expanse of address data, and more)

Level 2 cards may or may not have monthly or statement fees. If you have a soft dispute on a credit card, the card issuer may hold you back for a few days to a few weeks from using that card.

If you want a merchant account the can help you get out from under this hold, you need a level three card. Level three cards are upgraded from level 2 cards.

Regularly Shop Around for Quotes

If you are regularly shopping around for the best rate, then you’ll likely get the best value for money!

Make sure you check out multiple payment processors, so you can easily switch over to other ones if the first one fails.

Keep up-to-date with the latest credit card processing rates.

And also keep in mind that things change, and they do so frequently, so be sure to shop around on a regular basis.

When you shop around, make sure you check out a variety of payment processors so you’re able to compare a variety of quotes…and not just one or two.

And when you shop around, make sure you check out all the different quotes.

Don’t just go with the first quote you find. Make sure you compare the prices so you’re getting the best deal possible for your business.

And don’t forget it’s more than just about money!

Be sure to check for promotions and offers that credit card processors provide that can reduce your costs or improve your product.

Bottom Line

The Cheapest Credit Card Processing Companies

Online credit card processing is gaining popularity both for retailers and consumers, meaning there’s a high demand for low-cost, reliable, fast, and secure credit card processing services. Today, many people make online purchases and order online services, which makes online payment a necessity for businesses.

As more and more online businesses are sprouting and growing, the demand for credit card processing is growing just as fast. Before the arrival of simple online payment options, it was a difficult task for merchants to pay credit card processing fees. But now you can avoid all that hassle and frustration by going with the best remote merchant service.

For merchants who decided to stop taking orders and start processing credit cards using online credit card processing, it makes sense to look for the cheapest credit card processing services. Potential hassle is still there when you look for an online credit card processing provider. But now, with the arrival of online credit card processing, it’s easier than ever to get a low-cost online credit card processing solution.