In this guide we review three of the most popular credit card processing companies and give you our pick for the best merchant services provider for small business.
Unless you’re doing more than $10k/month in credit card transactions, negotiating with a merchant services provider might not be worth the hassle. If you want to get started quickly, we recommend Square, a free POS system that you can get up and running with in minutes. Click here to check it out.
Best Merchant Services Provider: Payline Data
We chose Payline Data as the best merchant services provider for small businesses because they are one of the good guys in an industry that is known for shady operators. They have one of the lowest processing rates in the industry, have a very transparent payment structure, do not have a monthly minimum charge, and have a whole arm of their company dedicated to giving and community involvement.
Payline Data vs. Dharma Merchant Services vs. Merchant Warehouse Comparison Table
Interchange Plus rate of .2% of transaction + $.10 fixed fee + interchange rate + $15 monthly fee
Interchange Plus (0.25% of transaction amount + $0.10 + Interchange Rate) $15 per month PCI compliance fee, No monthly minimums
Tiered. We were quoted:
Minimum Contract Length and Minimum Monthly Processing Limit
Month -to-Month, no minimum processing limit
Month-to-month, $10,000 minimum processing limit
Month-to-month and $25 minimum
24/7 Tech support. Non-tech support M-F from 7am - 9pm EST
Tech Support 24/7. Non-Tech Support M-F 11am - 8pm EST.
Lightspeed Retail Integration?
Mobile Payment Processing?
iPhone 3GS, 4, 4S, 5, 5S and 5C with iOS 5.1 or higher. Supported Android devices must have Android 4.0 or higher.
iOS and Android via the Authorize.net gateway. FREE swiper included with account.
iOS and Android
Why We Chose Payline Data for The Best Merchant Account Services Provider
We chose Payline Data as the best merchant services provider because they offer low and honestly transparent pricing that is paired with well-rated 24/7 technical support. Unlike most of their competitors, Payline Data does not charge you an application fee, monthly minimum, or account termination fee.
Payline Data also has just recently dedicated an entire arm of their company to giving back and community involvement. For example, non-profits and charities can refer businesses to Payline. When they do, Payline will donate 10% of that referred businesses’ revenue that they make back to the non-profit, free-of-charge to business and non-profit, which is pretty cool.
Payline Data vs. Dharma Merchant Services vs. Merchant Warehouse In-Depth Review
Pricing – Buyer Beware
Determining the price of a merchant account service can be something of a mystery. That’s why we’ve included a comprehensive guide to the fees associated with accepting credit cards which you can read here. Here is the short version:
You are going to pay different rates for debit and credit cards. You are also going to pay different rates depending on the type of credit card your customers use. For example, you will pay more when your customers us American Express than Visa, and also for customers who use certain rewards cards or international cards.
The fees that the banks and credit card companies charge you (called interchange fees) are generally going to be the same, as long as you are working with one of the larger merchant account service providers.
The fees that the merchant account service providers charge you however, are going to differ from provider to provider. There are two main pricing models used by the merchant account service providers: the interchange plus pricing model and the tiered pricing model.
The Interchange Plus Model
With an interchange plus model the merchant account service provider charges a fixed percentage of the transaction, and a fixed transaction fee for every sale you process through them. With this model the percentage and transaction fee paid to the merchant account service provider remain the same, regardless of the type of card used.
This is the most transparent pricing model and the one that is used by reputable merchant service providers like Payline Data and dharma. Below is an example table that better explains how interchange plus works using Payline Data’s Interchange Plus rates.
Paid to your
Paid to Payline Data
0.05% + $0.22
0.11% + $0.02
0.20% + $0.10
0.36% + $0.34
1.51% + $0.10
0.11% + $0.02
0.20% + $0.10
1.82% + $0.22
1.61% + $0.10
0.11% + $0.02
0.20% + $0.10
1.92% + $0.22
2.05% + $0.10
0.12% + $0.02
0.20% + $0.10
2.37% + $0.22
1.62% + $0.25
The Tiered Pricing Model
This is in comparison to the tiered pricing model, where you just pay a percentage of each transaction that includes all the fees (credit card provider fees, bank fees, and merchant account service provider fees).
With a tiered pricing model the merchant account service provider’s fees can fluctuate depending on the type of card used and whether they consider that card “qualified”, “mid-qualified”, “non-qualified”, or something else.
The problem with the tiered model is that there is no consistency of fees and the way cards are classified differs from one provider to another. This is the most common pricing model, and the one that is used by less reputable providers.
We Recommend Going With The Interchange Plus Pricing Model
This is why we prefer companies that use the interchange plus pricing model: it’s clear what you are paying.
Finally, some companies charge a monthly or yearly fee for things like customer service and Payment Card Industry compliance fees (Also known as PCI Fees).
For a more in depth explanation and overview of both the tiered and interchange plus pricing model as well as all the other costs involved with accepting credit cards go here.
Merchant Account Service Provider Pricing Comparison
Payline Data provides 24/7 technical support for all customers. For any non-technical issues, there is phone, chat, and email support M-F from 8am – 6PM (CDT). There are also customer support forums and a knowledge-base portal that has answers to common questions.
Dharma, like Payline Data, provides 24/7 technical support. For non-technical issues they provide phone support from Monday to Friday between 8AM and 5PM PST, as well as email and numbers for third parties, such as payment gateways.
All the merchant account service companies sell credit card readers. However, there is no need to buy hardware, like a credit card reader, from your merchant services provider. In fact, we recommend purchasing credit card readers through your POS system provider. A POS system typically includes a credit card reader, a cash drawer, receipt printer, and iPad. Buying your credit card reader from the POS provider provides easy integration and set-up among the different system components.
Payline Data has their own hardware store, where you can purchase a variety of credit card processing devices, POS systems, and more.
Dharma provides a number of hardware options and you can buy the hardware and save on leasing costs. It also works with most existing hardware, but be sure to check first.
Merchant Warehouse isn’t called a warehouse for nothing. They have a complete line of credit card processing equipment available that you can select from. Reps can help you decide what you need – we were offered a terminal for $159 and the rep did not try to upsell us more equipment.
Most providers accept all major debit and credit cards. Several accept mobile payments as well, or allow you to integrate these with your system.
Payline Data accepts all standard debit and credit cards. Payline Data has their own fully-featured Payment Gateway, costing $10/month + $.10 per transaction.
Dharma accepts all of the standard debit and credit cards payments. They work with three payment gateways; Authorize.net, USAePay and Priority Payment’s MX, all of which have various costs and fees associated with them. This provider also accepts ACH Direct.
Merchant Warehouse holds one advantage over Payline Data and Dharma; they offer free use of Authorize.net and LinkPoint Payment gateways, in addition to debit cards and credit cards.
Dharma, like Payline Data, is all about philanthropy. Although donating a similar amount to Payline for many years, Dharma just recently upped its giving substantially, now donating 50% of their profits to charity.
Merchant Warehouse has several benefits, such as customer loyalty programs, mobile payments, cash advances and mobile processing through the free MerchantWARE Mobile app.
The Bottom Line
If you are looking for a low cost, straightforward credit card processing company you cannot go wrong with Payline Data.