7 Best Free Merchant Accounts for Small Businesses in 2023
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
Anna is a retail expert writer for Fit Small Business with over six years of evaluating dozens of software for small business. She holds a double degree in Accountancy and Financial Management and is currently pursuing further education in financial and payment technology.
This article is part of a larger series on Payments.
Merchant services allow businesses to accept credit and debit card payments at a point-of-sale (POS) system, online, or through invoices. Technically, there is no way to accept card payments for free. However, there are free merchant services and payment service providers with no setup fees, contracts, or monthly fees that offer more affordable alternative payment options.
The best free merchant accounts are:
- Square Payments: Best overall free merchant account
- PayPal Business: Best for solopreneurs and occasional sellers
- Helcim: Best for growing storefronts
- Stripe: Best for online businesses
- Chase Payment Solutions: Best if you also need a free business checking account
- Wave: Best for free invoicing for solo professionals
- Braintree: Best for subscriptions and nonprofits
Our free merchant account recommendations are ideal for startups and low-volume merchants. For businesses with larger monthly sales volume, payment processors that offer very low transaction rates in exchange for a monthly fee are more cost-effective solutions. Read our guide to the cheapest credit card processing companies to learn more.
Top Free Merchant Accounts Compared
Card-Present Rate | Card-not-Present Rate | Online Transaction Rate | Chip and Tap Card Reader Cost | Chargeback Fee | |
|---|---|---|---|---|---|
 | 2.6% plus 10 cents | 3.5% plus 15 cents | 2.9% plus 30 cents | $49 (first magstripe reader is free) | Waived up to $250/month |
 | 2.29% plus 9 cents (Zettle) | 3.49% plus 49 cents | 2.59% plus 49 cents | $79 (first one, $29, Zettle) | $20 |
 | Average rate 1.92% plus 8 cents | Average rate 2.38% plus 25 cents | Average rate 2.38% plus 25 cents | $109 | $15 reversible |
 | 2.7% plus 5 cents | 3.4% plus 30 cents | 2.9% plus 30 cents | From $59 | $15 |
 | 2.6% plus 10 cents | 3.5% plus 10 cents | 2.9% plus 25 cents | $49.95 | From $25 depending on volume |
 | N/A | 2.9% plus 30 cents | 2.9% plus 30 cents (invoiced) | N/A | $15 reversible |
 | 2.29% plus 9 cents (PayPal Zettle) | 1.99% + 49 cents (nonprofits) | 1.99% + 49 cents (nonprofits) | $79 (first one, $29, Zettle) | $15 |
Please note that all the providers in our list offer $0 monthly fees, startup costs, and monthly minimums and no long-term contracts.
Why is there no such thing as free credit card processing?
Because card-issuing banks and card associations, such as Visa, set nonnegotiable rates. Learn more about credit card processing fees.
While you may see some companies advertise “free,” “no-cost,” or “zero-cost” payment processing, it just means passing the costs along to customers. Read more about no-cost payment processing.
Square Payments: Best Overall Free Merchant Account
Overall Score:
4.61 / 5
Pros
- Free, instant setup
- Chargeback protection up to $250 per month
- Free POS and ecommerce tools
Cons
- Automated clearing house (ACH) processing only in invoicing
- Account stability issues
- Limited live support
Square Payments Pricing
- In-person transaction: 2.6% plus 10 cents
- Ecommerce and invoice transactions: 2.9% plus 30 cents per transaction
- Keyed-in and card-on-file transactions: 3.5% plus 15 cents per transaction
- Monthly fees: $0 (paid plan starts at $60)
- Hardware costs: From $0 (first magstripe reader is free)
- Payment funding: One to two business days, or same-day with fee
- Chargeback fee: Waived up to $250 per month
See our guide on Square pricing and fees.
Square Payments is a free payment processing and POS solution where anyone can sign up and receive the same processing rates. While not the lowest, Square’s transaction processing rates are competitive, especially considering the free POS and ecommerce tools available to its users. Its low startup costs and competitive processing rates, sleek interface, and advanced POS features also make Square a consistent pick for the best overall merchant services.
- Free POS and mobile payments app: Accept all major credit and debit cards, including contactless payments like Apple Pay and quick response (QR) codes, offline mode, tipping, digital receipts, automated customer directory, and inventory tracking.
- Free Square Online account: Create a free website for ecommerce, events, donations, online ordering, appointment booking, or a simple checkout page.
- Free invoicing software: Create and send estimates and invoices, track payments, send reminders, and get notifications when invoices are viewed or paid. ACH payments are available through Square Invoices. Set up recurring invoices and auto-billing. Manage everything online or through Square’s dedicated invoicing app.
- Free business management tools: View sales reports, manage customer data, track orders, and manage all sales channels―POS, mobile, online, and invoicing―in one place through your Square Dashboard.
- Add-ons and upgrades: Industry-specific POS software, payroll processing, team management, email marketing, advanced ecommerce, loyalty programs, and gift cards are available for a fee.
- Chargeback protection: Square has a dispute management system that notifies businesses of any chargebacks and provides space to submit any supporting documents. A hold will be placed on your account for the amount in question until the bank rules one way or the other. But Square does not charge any additional fees.
PayPal Business: Best Free Merchant Account for Solopreneurs
Overall Score:
4.23 / 5
Pros
- Easy to use
- Instant access to PayPal funds
- Free invoicing and POS software
Cons
- Monthly fee for virtual terminal and recurring payments
- Three to five business days for a bank deposit
- $20 chargeback fee
PayPal Business Pricing
- In-person processing fees: 2.29% plus 9 cents
- Online processing fees: 2.59% plus 49 cents
- Keyed-in processing: 3.49% plus 49 cents
- Monthly fees: $0 (add-ons start at $30)
- Hardware costs: PayPal Zettle reader $79 (first reader discounted, $29)
- Payment funding: Same-day PayPal funding, three to five business days for bank deposits
- Chargeback fee: $20
PayPal Business offers low-cost, user-friendly payment processing for individuals and small businesses. It has a sleek mobile POS app with additional payment methods exclusive to PayPal users.
PayPal’s One Touch technology creates a faster checkout experience that leads to higher conversion rates for your online store. It offers affordable mobile and online transaction fees, plus a free mobile POS app and invoicing software. Its online payments also work with just about any website or software.
Solopreneurs, hobbyists, and occasional sellers will find its rates and peer-to-peer payment tools an ideal solution.
- Free POS and mobile payments app: Accept all major credit and debit cards and contactless payments, including Apple Pay, PayPal payments, QR code, invoices, create a product catalog, view sales reports, add multiple users, send digital receipts, and accept tips.
- Online transactions: Install a free online checkout on just about any website or create a custom or branded checkout ($30 per month). Accept all major credit and debit cards, PayPal, PayPal Credit, QR code transactions, and Venmo payments.
- Invoicing: Create and send invoices for free, accept credit and debit card payments, plus PayPal and PayPal Credit payments. Save customer information, send reminders, accept international payments, schedule recurring invoices, and accept partial payments or tips. Manage all of this online or through the PayPal Invoicing app.
- Chargeback protection: PayPal has automated fraud detection and a seller protection program. When a customer files a chargeback, PayPal charges you a $20 fee, unless the transaction is protected by PayPal’s Seller Protection program.
Helcim: Best Free Merchant Account for Growing Storefronts
Overall Score:
3.96 / 5
Pros
- Interchange-plus pricing
- Automated volume discounts for businesses processing over $25,000 per month
- Free invoicing and ecommerce tools
Cons
- Limited integration
- Longer application process
- Reports of poor customer support
Helcim Pricing
- In-person processing fees: Interchange plus 0.1% plus 5 cents to 0.3% plus 8 cents
- Online and keyed-in processing fees: Interchange plus 0.2% plus 10 cents to 0.5% plus 25 cents
- ACH processing fees: 0.5% plus 25 cents per transaction
- Recurring billing: $0
- Monthly fees: $0
- Hardware costs: $109 per card reader
- Payment funding: Up to two business days
- Chargeback fee: $15 and will be refunded for every dispute you win
Helcim offers interchange-plus transaction fees and automatic volume discounts for sales above $25,000/month. It also comes with free POS, inventory, invoicing, customer management, and ecommerce features to launch a multichannel business easily. The system can easily be adapted for various industries, including retail and subscription-based service businesses.
However, while its interchange-plus pricing scheme makes per-transaction cost comparatively low, Helcim’s auto-applied volume discount favors businesses with larger monthly transactions hence we find Helcim best suited for retailers.
- Free POS and mobile payments app: Helcim allows you to accept credit and debit card payments, including EMV and near-field communication (NFC) transactions. Electronic fund transfers (EFT) or ACH payments are also available.
- Online transactions: Use Helcim’s free online store builder to create your own hosted website or simply add a Helcim-hosted payment page on your current website.
- Invoicing: Helcim includes a free invoicing tool to create customized invoices. Accept payments over the phone with a virtual terminal, via email or short message service (SMS) with a link, or a “buy now” button. For recurring payments, automate recurring invoice creation, offer subscriptions, trials and prorated fees, and accept membership registrations with a “subscribe” button.
- Chargeback protection: Helcim’s user dashboard includes a tab for chargebacks that summarizes any open dispute. This lets you respond to the dispute immediately and use the platform to submit documents supporting your claim. Helcim reimburses users for winning a chargeback dispute.
Stripe: Best Free Online Merchant Account for Small Businesses
Overall Score:
3.84 / 5
Pros
- Free account with instant setup
- Works with any website or online store
- Instant payout options available
Cons
- Complex setup process
- $15 chargeback fee
- First deposit payout takes up to 14 days
Stripe Pricing
- In-person processing fees: 2.7% plus 5 cents
- Online processing fees: 2.9% plus 30 cents
- Keyed-in processing fees: 3.4% plus 30 cents
- ACH processing fees: 0.8% per transaction with a $5 cap
- Monthly fees: $0 (add-on fee starts at $10)
- Hardware costs: From $59
- Payment funding: Up to 14 business days for the first payout, two business days for succeeding.
- Chargeback fee: $15
Often compared to Square and PayPal (see our comparison of the three), Stripe offers basic and customizable online checkouts with instant setup and no application process. It can also manage subscriptions, recurring fees, and store card data with a range of customization options. Detailed online features, zero startup and monthly fees, and competitive processing rates make Stripe a solid choice for ecommerce businesses and business-to-business (B2B) sellers.
I tested the system by opening a Stripe account upon hearing that it now offers basic checkout options. However, I still find the setup process is too complicated for simple mom-and-pop shops or occasional sellers.
- Stripe Payments: Use one of Stripe’s existing tools or create your own with Stripe’s application programming interface (API) guides and libraries. Send one-off invoices, store and save payment methods, create an embeddable checkout, and integrate with more than 450 online platforms. Accept all major credit and debit cards, ACH, and bank transfers, plus accept international payments and Alipay.
- Stripe Terminal: Accept in-person payments with Stripe Terminal APIs and software development kits (SDKs). Unlike the other solutions on our list, Stripe requires separate POS software.
- Stripe Billing: Create subscription and invoicing solutions, add unlimited team members, and view revenue reports.
- Customer support: It offers 24/7 email, phone, and chat support. Stripe also has extensive support documentation and frequently asked questions (FAQs). Premium, dedicated support is also available for purchase.
Chase Payment Solutions: Best Free Merchant Services With Free Business Checking Account
Overall Score:
3.66 / 5
Pros
- Direct processor
- Compatible with most card terminals
- Offers free gateway integrations
Cons
- Contract and monthly minimums on some accounts
- Dispute management feature cost extra
- Limited seller protection
Chase Payment Solutions Pricing
- In-person processing: 2.6% plus 10 cents
- Online processing: 2.9% plus 25 cents
- Keyed-in processing: 3.5% plus 10 cents (requires a Chase Business Complete Account)
- Monthly fees: $0
- Hardware costs: From $49.95 or free with a long-term contract
- Payment funding: Same-day and next-day funding available
- Chargeback fee: From $25 depending on sales volume
Apart from being one of the big names in the banking industry, Chase Payment Solutions has also acquired key subsidiaries to become one of the most versatile merchant service providers in the market. So, unlike most of its contemporaries, Chase works directly with small businesses, offering in-person, online, and mobile sales with strong banking infrastructure.
You can sign up for a free Chase merchant account with or without a Chase bank account, although having one qualifies you to use Chase payment methods that support same-day access to funds. There is no fee for opening a Business Checking account with Chase, and maintaining one is also free for merchants with a minimum $2,000 balance.
- Free POS and mobile payments app: Accept all major chip cards, contactless cards, PIN debit cards, and select mobile wallets like Apple Pay. Chase also allows check and remote acceptance via phone or mail, plus tip payments, adjustments, and reporting.
- Online transactions: Build your online store in minutes and start taking payments from your website, virtual terminal, or mobile app. You can also set up a “buy now” or “subscribe” button to accept recurring payments. Use one of Chase’s more than 140 integrations, including Shopify and WooCommerce.
- Invoicing: Create custom invoices or recurring billing. Automate invoice generation and set a schedule to send out your invoices while providing your customers with flexible payment methods.
- Chargeback protection: Chase offers an online dispute management system for an extra fee. This allows users to receive notification of chargeback disputes immediately and respond promptly before the account is debited.
- Customer insights: All Chase merchant accounts have an easy-to-use business analytics tool. It generates information such as sales overviews, shopping and purchasing trends, and in-depth customer profile.
Wave: Best Free Invoicing & Accounting Tools for Solo Professionals
Overall Score:
3.65 / 5
Pros
- Easy to use
- Free accounting and invoicing software plus mobile app
- Fast deposit turnaround time
Cons
- Invoice payments processing only
- Very limited live support
- Standalone product (lacks integrations)
Wave Pricing
- In-person processing fees: N/A
- Credit card processing (online invoice payments): 2.9% plus 30 cents; 3.4% plus 30 cents for American Express cards
- ACH processing fees: 1% with a $1 minimum
- Monthly fees: None for accounting and invoicing; optional payroll processing for $20 to $35 per month.
- Hardware costs: N/A
- Payment funding: Two business days
- Chargeback fee: $15, refunded if the dispute is decided in your favor
Wave is a free accounting and invoicing tool for freelance workers, contractors, and small businesses. Like Square, it can create, customize, and send invoices (even estimates) on your computer and from the mobile app, and offer a variety of payment methods, including adding a Pay Now button. However, it’s important to note that Wave does not provide you with a full-service online merchant account.
That said, Wave can let you track and manage your invoices with an accounts receivable (A/R) system integrated with your merchant account, which you can only do with Square through an accounting software add-on.
- Invoicing: Wave provides unlimited invoices and allows you to accept payments directly from the invoice and set up recurring billing and automated reminders. Invoices sync with its accounting software.
- Accounting: Wave features unlimited income and expense tracking and sales tax tracking. You can also generate financial statements, view reports on overdue payments, manage cash flow, connect unlimited banks and credit cards, organize expenses and income into tax categories, and view business health from your customized dashboard.
- Receipt scanning: Enjoy unlimited receipt scanning with Wave’s free iOS and Android mobile app, which integrates with Wave’s accounting software and works by taking a photo of the receipt.
Braintree: Best Free Merchant Account for Subscriptions & Nonprofits
Overall Score:
3.60 / 5
Pros
- Significant discount for nonprofits
- Dedicated merchant account
- Built-in PayPal payment methods
Cons
- Account takes longer to approve
- Platform not as user friendly as PayPal
- Poor customer reviews
Braintree Pricing
- In-person payments: PayPal rates
- Online card and digital payments: 2.59% + 49 cents
- Venmo payments: 3.49% + 49 cents
- Nonprofit payments processing: 1.99% + 49 cents
- ACH processing: 0.75% per transaction capped at $5 per transaction
- Chargeback fee: $15
- Month-to-month contract
Braintree is PayPal’s sister service and a good fit if you need a free traditional merchant account with affordable nonprofit rates you can use to collect donations online and internationally. It also lets you accept donations through ACH payments and comes with PayPal payment methods built into its features.
Aside from providing dedicated merchant services for small businesses, Braintree is also the better choice over PayPal if you need to manage subscriptions. It offers more advanced and even free customization tools (PayPal charges for recurring billing) such as payment gateways with customizable checkout interfaces and a PCI-compliant customer credit card data vault if you want to set up automatic recurring payments.
- Payment types: Braintree accepts online credit card and ACH payments, including invoiced and automated recurring payment setup. It also accepts mobile payments via PayPal Zettle.
- Payment gateway: Braintree comes with a built-in and easily customizable payment gateway. This is free with a Braintree merchant account, but non-Braintree merchants can also sign up for the individual payment gateway to integrate with their own merchant account for a fee.
- Braintree Vault: Merchants can use Braintree’s payment gateway to securely sign up customers for automated recurring payments. The payment gateway automatically encrypts customer information and saves it in Braintree’s secure vault. Automatic card updater is also available as an add-on feature.
- Fraud protection: Braintree comes with built-in fraud protection tools, such as customizable risk threshold settings, address verification, and card verification functions. Advanced services like geolocation and device information are also available but cost extra.
How We Evaluated Free Merchant Accounts
Since there are no “free” merchant accounts, we considered companies that don’t lock you into a contract or have monthly fees, startup costs, and monthly minimums, which considerably narrowed our list. We then tested each software ourselves to identify the most small business-friendly payment processors, evaluating for ease of account application, quality of services offered with its free plan, transaction fees, and payment processing.
We also looked at the overall transparency of each company’s pricing structure, affordability, reputation, customer reviews, and integrations. Finally, we considered the value of each provider’s paid plans and the cost of add-on features in this update. Based on these criteria, Square received the highest rating, with an overall score of 4.61 out of 5.
Click through the tabs below to see our specific evaluation criteria:
30%
Pricing & Contract
25%
Transaction Features
25%
Budget Features
20%
Expert Score
30% of Overall Score
25% of Overall Score
25% of Overall Score
20% of Overall Score
*Percentages of overall score
Bottom Line
Although there are no true merchant services that are 100% free, there are many options that have no monthly fees, startup fees, or processing minimums and come with competitive pay-as-you-go transaction processing fees.
Square is our top recommendation for free merchant services for small businesses because—in addition to having no application process, monthly fees, setup fees, and minimal hardware fees—it has all the basic tools that you need to run a mobile, in-store, online, or multichannel retail business. Square comes with a free, top-of-the-line mobile payments app and has other business solutions you can add for a truly affordable, all-in-one payment and POS solution.
