Credit card processing is the backbone of modern commerce, enabling businesses to accept payments through credit and debit cards efficiently and securely. With an expanding global digital economy, finding the right credit card processing company is crucial for businesses to streamline transactions, manage costs, and ensure security. Whether you’re a small business owner or running an enterprise-level operation, partnering with a reputable processing company can significantly impact your operations. In this comprehensive guide, we will explore the best credit card processing companies, answer essential questions regarding the largest companies, major credit card networks, and who profits the most in the industry.
What Makes a Good Credit Card Processing Company?
When evaluating credit card processors, several key factors come into play:
- Transaction Fees: Different processors charge different rates for transactions. Understanding the fee structures — interchange fees, monthly service fees, and additional costs — is critical.
- Security: PCI compliance, encryption, and fraud detection tools should be top priorities.
- Ease of Use: The best processing systems integrate seamlessly with existing point-of-sale (POS) systems, e-commerce platforms, and accounting software.
- Customer Service: Responsive and knowledgeable customer support can make a significant difference, especially during technical issues or chargeback disputes.
- Global Reach: For international businesses, the ability to accept multiple currencies and process cross-border payments is crucial.
Square is one of the most popular and user-friendly payment processors, especially for small and mid-sized businesses. Known for its simple, flat-rate fee structure and free mobile card readers, Square makes accepting credit card payments seamless.
- Transaction Fee: 2.6% + 10¢ per swipe, dip, or tap for in-person transactions.
- Features: Offers POS systems, inventory management, e-commerce integration, and detailed analytics.
- Security: PCI compliant and offers encryption and fraud detection tools.
- Best For: Small businesses, restaurants, and mobile vendors.
Square is a top choice for businesses with lower transaction volumes due to its lack of monthly fees and its extensive range of features.
PayPal is another global leader in payment processing, widely recognized for its convenience and integration with online platforms. While it is more commonly associated with online payments, PayPal also offers in-person processing solutions with PayPal Here.
- Transaction Fee: 2.29% + 9¢ for PayPal QR code transactions; online payments are 2.99% + 49¢.
- Features: Integrated payment buttons, recurring billing, invoicing, mobile payments, and strong buyer protection.
- Security: PCI compliant, offering fraud protection and end-to-end encryption.
- Best For: E-commerce platforms and businesses with a global customer base.
PayPal’s ability to process transactions in over 100 currencies and its reputation for trust and security make it an excellent option for international businesses.
Stripe is a favorite among online businesses due to its developer-friendly platform, powerful API, and extensive customization options. Stripe allows businesses to build custom payment solutions, making it ideal for tech-savvy companies and startups.
- Transaction Fee: 2.9% + 30¢ per transaction for online payments.
- Features: Subscriptions, invoicing, fraud prevention, global payments, and a flexible API for custom integrations.
- Security: PCI compliance, advanced encryption, and a range of fraud detection tools.
- Best For: E-commerce, SaaS businesses, and companies with global aspirations.
With its comprehensive suite of developer tools, Stripe is an excellent solution for businesses seeking advanced customization and international growth.
- FIS (Worldpay)
Worldpay, acquired by FIS, is one of the largest credit card processing companies globally, catering to businesses of all sizes. Worldpay supports a wide range of payment methods, including credit and debit cards, as well as alternative payment options like Apple Pay and Google Pay.
- Transaction Fee: Custom pricing based on business size and volume.
- Features: Recurring billing, payment analytics, mobile payments, and multi-currency processing.
- Security: PCI DSS Level 1 certified, encryption, tokenization, and risk management tools.
- Best For: Medium to large enterprises, especially those with complex payment needs.
Worldpay’s scale and comprehensive feature set make it a go-to choice for large organizations that require global payment solutions.
- Chase Payment Solutions (formerly Chase Paymentech)
Chase Payment Solutions offers end-to-end payment processing services for small businesses to enterprises. With its competitive pricing, integrations with Chase business accounts, and robust fraud prevention, Chase is highly regarded in the industry.
- Transaction Fee: 2.6% + 10¢ per transaction for in-person payments.
- Features: E-commerce solutions, mobile payments, recurring billing, and fraud management.
- Security: PCI compliance and advanced security protocols.
- Best For: Businesses that already bank with Chase, seeking an integrated financial ecosystem.
Chase Payment Solutions excels with businesses that want a unified banking and payment processing system, offering seamless integration and lower fees for Chase customers.
The Largest Credit Card Processing Companies
When looking at the largest credit card processing companies, Fiserv (First Data) is the undisputed leader. Fiserv processes trillions of dollars in transactions annually and serves millions of merchants worldwide. After acquiring First Data in 2019, Fiserv became a behemoth in the credit card processing space.
- Largest in Revenue: Fiserv processes over $2 trillion in transactions each year.
- Key Competitors: Global Payments, FIS, JPMorgan Chase.
Fiserv’s dominance in the credit card processing sector, coupled with its extensive service offerings, makes it the go-to provider for large enterprises globally.
The Four Major Credit Card Networks
When discussing credit card processing, it’s essential to recognize the four major credit card networks that dominate the global market:
- Visa – The largest and most widely accepted network globally.
- Mastercard – A close competitor to Visa, accepted in over 200 countries.
- American Express (Amex) – Known for its premium customer base and higher fees.
- Discover – Primarily used in the United States but gaining international acceptance.
These four networks collectively process billions of transactions annually, with Visa and Mastercard leading the charge in terms of market share and global reach.
Biggest Revenue Drivers for Credit Card Companies
The largest credit card companies make money primarily through interchange fees, which are the fees merchants pay for accepting credit card transactions. These fees range from 1.5% to 3.5% of the transaction value and are split between the merchant’s bank, the customer’s bank, and the credit card network.
- Interchange Fees: The biggest revenue driver, especially for Visa and Mastercard.
- Interest on Outstanding Balances: Credit card issuers like Chase and Citibank earn significant revenue from the interest charged on cardholders’ unpaid balances.
- Annual Fees and Other Charges: Premium cards, especially from Amex, often charge annual fees that contribute to revenue.
Among credit card issuers, American Express is one of the biggest money-makers, not only because of interchange fees but also due to the premium annual fees its customers pay for benefits and rewards.
Where Are Most Fintech and Credit Card Companies in the USA?
The United States is home to many of the largest credit card processing companies and fintech innovators. Major hubs include:
- Silicon Valley (California): Known for companies like Stripe and Square.
- New York City: A financial powerhouse, home to firms like JPMorgan Chase.
- Atlanta, Georgia: Often referred to as “Transaction Alley,” home to Fiserv, Global Payments, and other processing giants.
Atlanta leads in terms of processing volume, making it a focal point for the credit card processing industry.
Final Thoughts
Selecting the right credit card processing company depends on your business’s unique needs. Whether you’re a small business looking for affordable options like Square or PayPal, or a large enterprise requiring the advanced capabilities of Fiserv or Worldpay, the top credit card processors offer various services to ensure efficient, secure, and cost-effective transactions. With the four major credit card networks driving global commerce, businesses need to stay informed and aligned with the right processing partners to stay competitive.
Best Credit Card Processing Companies:
- What are the most affordable credit card processing companies?
- Square and PayPal are known for offering affordable, flat-rate pricing, especially for small businesses.
- How do credit card processing fees work?
- Fees typically include a percentage of the transaction amount plus a fixed fee, varying by provider and card type.
- Can I use a mobile device for credit card payments?
- Yes, many companies like Square and PayPal offer mobile card readers for easy payments via smartphones or tablets.
- How do I compare the best merchant account providers?
- Compare based on transaction fees, customer service, ease of integration, and added features like security and reporting tools.
- Is Square the best option for small businesses?
- Square is popular for small businesses due to its flat-rate pricing, easy setup, and no monthly fees.
- Which credit card processing company is best for high-volume businesses?
- Stripe and Fiserv (First Data) are often preferred for high-volume businesses due to customizable rates and scalability.
- Do I need to worry about PCI compliance with credit card processors?
- Yes, most processors offer tools or ensure your system meets PCI compliance for secure transactions.
- What’s the difference between credit card processors and payment gateways?
- Processors handle transactions between your bank and the cardholder’s bank, while gateways securely transmit transaction data.
- Who are the four major credit card companies?
- Visa, Mastercard, American Express, and Discover.
- Which card processing company is best for e-commerce?
- Stripe is widely favored for e-commerce due to its robust API and developer-friendly integrations.