Best Credit Card Processors of 2020
Simplify payments & save on rates
Compare the best credit card processing companies and easily accept credit card payments.
Choose the best provider and grow your business today!
Best Credit Card Processors of 2020
Compare the best credit card processing companies and easily accept credit card payments.
Choose the best provider and grow your business today!
Best Credit Card Processors of 2020
Last Updated September 2020
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What is a Credit Card Processing Company?
Credit card processing companies, also known as a credit card processors, payment processors, or merchant services providers, are companies that facilitate all your credit and debit card transactions. Your credit card processor acts as an intermediary between your business and your customer’s credit card/debit card provider, enabling you to seamlessly and instantly collect payments.
Here’s how the top payment processors help you accept credit card payments:
  • The customer swipes their credit/debit card or enters their card information to make a purchase from your business.
  • Your point-of-sale software sends the data to your credit card processor.
  • The credit card processor contacts your customer’s credit/debit card provider to confirm the customer has enough credit for the transaction.
  • The credit/debit card provider checks with the customer’s bank to confirm the transaction.
  • The credit card processor confirms the transaction and issues you a receipt to give to the customer.
The best credit card processing companies make this happen in the blink of an eye. Modern technology, eh?!
What are Merchant Services?
Not all credit card processors (CCPs) offer merchant services, but all merchant services providers (MSPs) offer credit card processing. A merchant services provider, or MSP, is an umbrella term for a company that offers services to merchants (businesses), including: credit card processing, business financing, gift card programs, loyalty programs, and website design. The terms ‘merchant services provider’ and ‘credit card processor’ are used interchangeably, but it’s important to remember that credit card processing is only one service – albeit the primary service – from among many services offered by MSPs.
If you’re the sort of business owner who enjoys the convenience of a one-stop shop, then the best payment processor for you may beone also that offers a variety of merchant services. But if your main goal isto accept credit card payments, then you can freely choose from the best credit card companies without having to worry about whether they offer additional services.
Top 3 Credit Card Processors
#1
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Pros
  • Caters to all types of industries
  • Specializes in serving high-risk merchants
  • Wide selection of third-party hardware
Cons
  • Pricing isn’t at all transparent
  • Hidden fees
  • Long contracts and high cancellation fees
Flagship Merchant Services offers a solid credit card processing service, doing some things better and some things worse than its competitors. Like other authorized resellers of processing and POS solutions, it specializes in high-risk accounts. In Flagship’s case, it appears to have particular expertise in handling high-risk merchants with high volumes of online, phone, and mail-order transactions.
#2
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Pros
  • High approval rates
  • Lowest-price guarantee
  • No long contract
Cons
  • Pricing isn’t very transparent
  • Unpredictable per-transaction fees
  • Lack of information about terminals
Flagship Merchant Services offers a solid credit card processing service, doing some things better and some things worse than its competitors. Like other authorized resellers of processing and POS solutions, it specializes in high-risk accounts. In Flagship’s case, it appears to have particular expertise in handling high-risk merchants with high volumes of online, phone, and mail-order transactions.
#3
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Pros
  • Excellent customer service reputation
  • Integrates with any CMS (e.g. Shopify, Wix)
  • Offers web development as a service
Cons
  • Usually locks you into a contract
  • Has monthly minimum requirements, with penalties
PaymentCloud can rightly call itself a high-risk merchant specialist. Over the years, it has built up a reputation for serving dozens of high-risk industries. It continues to be one of the premier merchant services companies catering to merchants who struggle to get approved elsewhere.
Credit Card Processor Fees and Charges
Credit card processing fees can be complicated; the best credit card processing rates depend on your type of business and sales volume. The most important fee to know about is the interchange fee – which is the fee you pay for each transaction. Depending on your MSP/CCP, you could be subject to any number of other fees and charges. According to Square, a leading credit card processor, the average cost of processing payments for an American business earning $10,000 to $250,000 in annual payments volume is between 2.87% to 4.35% per transaction.
Some credit card processors charge the interchange/transaction fee and little else, while others charge dozens of fees. There is no right or wrong. However, one thing is for sure: the best credit card processing for small business involves transparent feesand charges. Before locking yourself into an agreement with an MSP/CCP, always read the fine print to be sure you know what you’re being charged.Obviously,the fee structure needs to suit your sales volume; the best payment processor for a small businessisn’t necessarily the same as for a large business.
Here are the main types of fees and rates to know about:
Interchange fees
Interchange is a wholesale fee that accounts for most of the cost of processing credit cards. Technically speaking, each card provider (e.g. Mastercard, Visa) sets its own interchange fees. However, many credit card providers charge the same interchange fee regardless of card provider, making it a lot easier for you to know what you’re paying. An interchange fee comprises two parts: a percentage of the transaction amount plus a flat fee, e.g. 2.5% + $0.10 per transaction. Additional fees apply for foreign currency transactions.
Monthly fee
Some, but not all, credit card processing companies charge a flat monthly fee for using their services.
Assessment fees
Some credit card processing companies charge a percentage of your estimated monthly sales volume, e.g., 0.1% of sales up to 1,000 sales, then 0.11% of the next 1,000 sales, etc.
Terminal fees
To accept credit card payments, you need a physical terminal like a countertop register or mobile EMV. Your credit card company can sell or lease you the equipment, or you can purchase the equipment from a third party. Separate costs generally apply for leasing/buyingbiggerhardware.However, the best mobile credit card processing solutions involve a free mobile card reader that lets your customers chip, swipe or tap their card onto your mobile device.
Monthly minimum fee
If you don’t reach the minimum amount of annual transactions agreed to with the credit card processor, you may be charged an additional fee.
Additional fees
Even among the top credit card processors, you may find additional fees such as these:
  • PCI non-compliance: For failing to comply with credit card industry data-protection standards
  • Termination fee: For leaving a contract early
  • Statement fee: For receiving invoices and statements by mail
  • 1099-K fee: For reporting transactions to the IRS
  • ACH fees: For receiving large volumes of transactions in batches
  • Chargebacks: A chargeback is when a credit card provider refunds your customer for a disputed or fraudulent transaction.
Accepting EcommercePayments: Finding the Best Online Payment Processor
Online payments are an important source of income for many businesses. Credit card processors facilitate online payments through what is known as apayment gatewayorvirtual terminal. The best payment gateways securely encrypt the customer’s data and send it to the payment processor. At the back end, the process works the same as with physical credit or debit card transactions, all the way up to the issuing of a receipt to the customer.
Here are things to consider when looking for the best payment gateway:
  • Security.Not only must your payment gateway be secure, but customers must also feel that it is secure. The best payment gateways let you show off security credentials at the checkout (such as a ‘Guaranteed Safe Checkout’ sign with logos of accepted payment types).Additionally, all the top payment gateway providers have APIs that let your customers pay you securely without ever leaving your website.
  • Choice of payment methods. People have a diverse range of preferences when it comes to payment methods. The best online payment gateways let you offer your customersthe full range of methods, including Visa, Mastercard, American Express,PayPal, and Apple Pay.
  • Cost. Running an online store should be cheaper than having a physical store, and that includes being able to pay the cheapest online payment gateway fees.Asalways, read the fine print and make sure the fee structure suits you –the best payment gateway for small business isn’t necessarily the same as for larger companies.
  • Compatibility. When you set up an e-commerce store, you needa payment gateway that is easy to integrate into your website and is compatible with your brand. At a minimum, the best online payment gateway must integrate with top ecommerce website builders like Wix, Bigcommerce, and WooCommerce.
Getting Approved for Credit Card Processing
Getting approved for credit card processing is straightforward. As long as you can show you’re a legitimate, lawful business, you shouldn’t have too much trouble opening an account. Charges generally depend on how much you earn each month or year. If you fail to make the amount agreed upon with the processing company, then you may be subject to additional fees.
The one group that can have trouble getting approved for credit card processing is what’s known as high-risk merchants:businesses that typically have lots of chargebacks or that do business in multiple currencies.
High-risk businesses include:
  • Online gambling or casinos
  • Advance bookings in travel and tourism
  • Magazine or other subscription-based businesses
  • Online dating services
  • Debt collection
  • Vitamins and supplements
  • E-commerce
If you fall into this category, then what you need is a credit card processor / merchant services provider that caters to high-risk businesses.
How to Find the Best Credit Card Processor
Every business has different sales volumes and different needs, so it’s fair to say no one credit card processing company is best for everyone. If you run a small business, a business that takes most of its sales online, or a mobile business (like a food truck) that works from many different remote locations, then your needs will naturally be different from a large bricks-and-mortar retailer. For example, the best merchant services for small businesses charge low setup fees and don’t tie you into contracts with unrealistic monthly sales commitments.
Here are some things to compare when searching for the best credit card processing servicesfor small business:
  • Experience serving your industry
  • Ability to service all your transaction needs, e.g. bricks-and-mortar, remote, online
  • Straightforward fees, with no risk of hidden charges
  • Minimum monthly transactions that you can uphold
  • Preferably no contracts or setup fees (unless these things don’t bother you)