For small businesses, accepting credit card payments is essential to streamline sales and attract more customers. Whether you’re a brick-and-mortar store or an e-commerce shop, choosing the best credit card processing service can make a significant impact on your operations. In this guide, we’ll help you navigate the different options for payment processing, covering the best payment processors, their features, and how to choose the best fit for your company.
Why Credit Card Processing is Important for Small Businesses
Credit card processing is not just a convenience for your customers; it’s an essential part of modern business operations. With a large portion of consumer purchases made using credit or debit cards, having a reliable payment system can increase your sales and improve cash flow.
Benefits of Credit Card Processing:
- Accept payments from customers worldwide
- Improve cash flow with quick deposits
- Offer convenience for customers who prefer card payments
- Simplify accounting and record-keeping with integrated systems
However, finding the right processor for your small business is crucial. Some credit card processing companies offer affordable rates, while others provide advanced features that might help your business grow. Here are the best credit card processing solutions for small businesses.
Square: Simple and Transparent: Square is one of the most popular payment systems for small business. It’s known for its easy-to-use platform and transparent pricing structure. Whether you run a physical store or an online business, Square is a versatile solution.
Key Features:
- No monthly fees: Square charges a flat fee of 2.6% + 10¢ per in-person transaction. Online transactions cost 2.9% + 30¢.
- Free Point of Sale (POS) system: Square provides free POS software that works on mobile devices and tablets, making it ideal for small businesses on the go.
- Wide range of payment options: Accepts chip cards, contactless payments, and online payments.
- Quick deposits: Square’s next-day deposits ensure you don’t have to wait long to access your funds.
The 6 Best Credit Card Processing Services for Small Businesses
1. Square: Best for Simplicity and Transparency
Square is one of the most popular payment systems for small businesses, known for its easy-to-use platform and transparent pricing structure.
Key Features:
- No monthly fees: Flat fee of 2.6% + 10¢ per in-person transaction and 2.9% + 30¢ for online transactions
- Free Point of Sale (POS) system that works on mobile devices and tablets
- Accepts chip cards, contactless payments, and online payments
- Quick next-day deposits
Why Square is Ideal for Small Businesses:
Square’s transparent pricing, free POS system, and ease of integration make it an excellent choice for small businesses, especially for startups and businesses with fluctuating sales volumes.
2. PayPal: Best for Online Businesses and Trusted by Consumers
PayPal is a leading choice for e-commerce businesses, widely trusted by consumers, which can increase customer confidence.
Key Features:
- Easy integration with online stores like Shopify, WooCommerce, and Etsy
- Competitive rates: 2.9% + 30¢ per domestic transaction
- Accepts multiple payment options, including credit cards, debit cards, PayPal balance, and PayPal Credit
- Mobile payments with PayPal Here card reader
Why PayPal is Ideal for Small Businesses:
PayPal is a top choice for small online businesses due to its seamless e-commerce integration and high consumer trust.
3. Stripe: Best for Customization and International Payments
Stripe is a highly flexible credit card processor favored by tech-savvy entrepreneurs and developers.
Key Features:
- Advanced APIs for full payment customization
- Accepts payments in over 135 currencies
- Transparent pricing: 2.9% + 30¢ per online transaction
- Recurring billing for subscription-based businesses
Why Stripe is Ideal for Small Businesses:
Stripe is excellent for businesses looking for flexibility, especially online retailers, subscription-based services, or tech startups that need seamless integration with their website or app.
4. Toast: Best for Restaurants
For small business owners in the restaurant industry, Toast provides a robust POS and credit card processing system tailored to foodservice operations.
Key Features:
- Restaurant-focused POS system integrating order management, payment processing, and inventory
- No setup fees, monthly fees, or long-term contracts
- Accepts major credit cards and mobile payments like Apple Pay and Google Pay
- Advanced reporting tools for tracking sales, tips, and employee performance
Why Toast is Ideal for Restaurants:
Toast is designed to meet the unique needs of restaurants, offering an all-in-one payment and management solution.
5. Worldpay: Best for Scalability and Global Growth
Worldpay is a global credit card processing provider ideal for businesses looking to scale internationally.
Key Features:
- Accepts payments in over 120 currencies
- Customizable solutions, including POS systems and virtual terminals
- Integrated fraud protection to prevent chargebacks
- Flexible pricing plans based on business needs
Why Worldpay is Ideal for Small Businesses:
Worldpay’s international reach and customizable features make it an excellent choice for small businesses planning to expand globally.
6. QuickBooks Payments: Best for Accounting Integration
If you use QuickBooks for accounting, QuickBooks Payments is a seamless credit card processing solution.
Key Features:
- Direct integration with QuickBooks, eliminating manual data entry
- Flat-rate pricing: 2.4% + 25¢ per in-person transaction, 3.4% + 25¢ for online payments
- Mobile payments with QuickBooks GoPayment app
- Recurring billing for subscription businesses
Why QuickBooks Payments is Ideal for Small Businesses:
QuickBooks Payments is best for businesses already using QuickBooks, as it streamlines accounting and payment processing.
How to Choose the Best Credit Card Processor for Your Small Business
When selecting the best credit card processor, consider the following:
- Pricing: Compare transaction fees and monthly fees. Some processors offer flat-rate pricing, while others have tiered pricing based on sales volume.
- Ease of Integration: Ensure the processor works with your POS system or e-commerce platform.
- Payment Methods: Choose a processor that supports the payment methods your customers use, including credit/debit cards, mobile wallets, and international payments.
- Customer Support: Look for providers that offer 24/7 support for quick issue resolution.
- Security Features: Opt for processors with fraud protection and PCI compliance to safeguard your business and customer data.
Final Thoughts
Choosing the best credit card processing for small business comes down to understanding your business needs and matching them with the right provider. Whether you’re looking for a simple solution like Square or PayPal, or need more advanced features from Stripe or Worldpay, there’s a processor out there that will work for you.
Remember to evaluate the fees, ease of use, and support options before making your decision. With the right credit card processing companies for small businesses, you can provide a seamless payment experience for your customers while helping your business grow.
Frequently Asked Questions (FAQs)
1. What is the cheapest way for a small business to process credit cards?
The cheapest way depends on your business size and sales volume. Payment processors like Square, PayPal, and Stripe offer simple flat-rate pricing, making them cost-effective for small businesses. However, interchange-plus pricing models from processors like Helcim or Payment Depot may be more affordable for high-volume businesses.
2. How do I choose the right credit card processor for my business?
Consider factors such as transaction fees, monthly costs, contract terms, ease of integration with your existing POS system, customer support, and security features. The best choice depends on your business model—whether you’re running a retail store, an e-commerce business, or a service-based company.
3. Do I need a merchant account to accept credit card payments?
Not necessarily. Some payment processors, like PayPal, Square, and Stripe, act as aggregators and allow businesses to accept payments without a dedicated merchant account. However, traditional merchant accounts from providers like Worldpay or Chase Payment Solutions may offer better rates for larger businesses.
4. What security measures should I look for in a payment processor?
Ensure the processor offers PCI compliance, encryption, tokenization, and fraud protection to safeguard your customers’ payment data. Providers like Stripe and Square offer built-in security features to help prevent fraud and chargebacks.
5. Can I accept international payments with a credit card processor?
Yes, but not all processors support international transactions. Stripe, PayPal, and Worldpay are among the best for accepting global payments as they support multiple currencies and cross-border transactions. Be sure to check international transaction fees before choosing a provider.