Choosing the best merchant services for your unique needs depends on many factors. Merchant account providers offer several different types of fee structures and some are better than others for small businesses. We review 6 top-rated merchant services providers in this guide and examine the differences in plans, prices, and other key service features.

Best Merchant Services for Small Businesses Summary Table

How We Evaluated & Selected the Best Merchant Services Providers for 2018

We reviewed the top-rated small business payment processors in terms of fees, plans, and customer support for this guide. We also made certain to include all 4 payment processing fee structures in our mix of providers. This will help you understand how credit card processing works and determine which is the best merchant services solution for your business.

These 4 merchant account provider structures include:

1. Flat-rate — With flat-fee merchant account providers, you pay a flat percentage rate based on the type of charge (in-store, online, mobile) that you’re processing. Flat-rate merchant account providers have the simplest fee structure and tend to be quick and easy to set up. Flat-fee is the best merchant services option for startups, independent shops, and low-volume (under $30k per month) sellers.
2. Interchange-plus — The Interchange Rate is the actual fee that credit card issuers (Visa, MasterCard, etc.) charge merchant account providers each time a card is processed. Interchange-plus providers add their fee on top of the card issuers’ Interchange Rates. Interchange-plus tends to be the best merchant services options for higher-volume sellers.
3. Tiered rates — Some merchant account providers create a tier structure (usually 3 to 6 tiers) that groups several card types into separate rate tiers. This typically isn’t the best merchant services fee structure for small business. But for some, like a business processing strictly B2B sales, a tiered structure can save on fees.
4. Direct Interchange — This type of merchant account provider charges a hefty monthly fee, but passes the Interchange Rate directly to you without a percentage markup. This isn’t the best merchant services provider for low-volume sales since you pay a large monthly fee regardless of volume, but volume sellers ($20k/month and over) can save with this option.

Now that you know the 4 different ways that merchant account providers charge for their services, let’s examine our 6 top picks in detail.

Best Merchant Services for Startups & Small Business: Square

Square is our recommended merchant account provider for small businesses and startups that want the freedom to process credit cards anywhere. Square is what’s called an all-in-one merchant services provider. That means with your one Square account, you can process any type of payment you wish: in-store, mobile payments, online, virtual terminal, and even invoice payments. Square is hands-down the simplest merchant account provider to get started with.

What Square Costs

Square operates using flat-rate credit card processing fees that are completely transparent and simple to understand. Plus, there are no monthly, setup, or cancellation fees and never any surprise fees. The only fees you pay to Square are for credit card processing, and that amount depends on how the sale was made: in-person, online, or using the virtual terminal. Here are Square’s 3 payment processing rates, plus the costs for credit card readers and store registers if you need more than the free Magstripe reader you get with your account.

Square’s Credit Card Processing Rates & Other Costs

Square Hardware Costs
Mobile card readers	Free Magstripe reader $49 Chip & eWallet reader
Square POS store registers	$169 for an iPad stand (add an iPad for $498) $999 Square Register ($49/month for 24 months)

What You Can do With Square

As soon as you create your free Square account, you can accept all types of credit card payments, plus record cash and check sales, including:.

Payments Accepted by Square

But the real benefit of choosing Square as your merchant account provider is Square’s full suite of business management tools included in your free Square POS software. With it, you can make sales, process payments, manage your inventory, customers, and staff, and much more. Best of all, you can do all of this wherever you do business using your smartphone, computer, or with an inexpensive retail iPad checkout stand, shown below.

Square Payments includes free POS software that works with iPads & smartphones

Plus, you can add an array of advanced business management features, like payroll, a customer loyalty program, or email marketing for low monthly fees. Best of all, every software and hardware component is fully integrated so you never have connectivity or compatibility issues using Square.

What Square is Missing

For most small business need and startups, Square’s credit card processing service isn’t missing a thing. Square’s only real shortcoming is that you can’t call them to learn more until you sign up for a Square account. To get phone support, you have to have an access code, and you only get that with an account. But, creating an account is quick, easy, and free, so if you want to learn more before actually using Square, you can open an account and give them a call. If it’s not right for you, you can cancel it with no fees, so it’s completely risk-free.

Aside from that, of our 6 top picks for best merchant services, only Square delivers a seamless, all-in-one payments processing and total business management solution. That, combined with their simple, predictable payment processing fees and $0 monthly account fees, makes Square our best merchant services pick for most small business needs.

Visit Square

Best Merchant Services for Online Sellers: PayPal

PayPal is our recommended merchant account provider for businesses that primarily sell online and want to accept PayPal payments. In fact, accepting PayPal can be a major sales driver for online sellers. Studies show that adding PayPal as a payment option can increase online store sales conversions as much as 44%.

What PayPal Costs

Like Square, PayPal charges flat-rate credit card processing fees based on the type of sale, in-person, online, or via virtual terminal. PayPal’s flat-rate processing fees are nearly identical to Square’s rates, however, PayPal charges a monthly fee to access certain services, such as the virtual terminal. This makes PayPal a more costly merchant account provider than Square if you want access to all payment processing features.

PayPal’s Credit Card Processing Rates & Other Costs

PayPal Hardware Costs
Mobile card readers	Free Magstripe reader $25 Chip & eWallet reader
PayPal POS store registers	Several 3rd-party iPad POS hardware options from $129

What You Can do With PayPal

As soon as you create a PayPal account, you can accept PayPal payments online and even via email request. Plus, you can process all types of credit card payments and record cash and check sales:

Payments Accepted by PayPal

Since PayPal’s prime focus is online sales, both its basic $0/month Payments Standard and more advanced $30/month Payments Pro plans integrate with virtually every ecommerce platform on the market. For most online sellers, this seamless integration between shopping carts and PayPal’s secure online payment system makes PayPal the natural choice for online payment processing.

PayPal’s payment capabilities also extend beyond online sales. Like Square, PayPal is an all-in-one merchant services provider that lets you manage your online, mobile, in-store, virtual terminal, and invoicing payments within one account. For sellers with an online focus, but that also want the flexibility to use PayPal for in-store, mobile, and invoice payments, PayPal is a good merchant account provider choice.

What PayPal is Missing

PayPal’s free POS software is very limited compared to Square’s free full-featured business management system. You can accept payments and track sales, but its inventory and customer management tools are very basic. Plus, to access certain features like the virtual terminal, you need the $30/month Payments Pro plan. This makes PayPal far more costly than Square if you need to process keyed-in payments for things like phone orders.

Aside from a weak POS system compared to Square, the fact that PayPal accepts PayPal payments makes it the best merchant services provider choice for businesses that focus on online sales.

Visit PayPal

Need a more detailed comparison of these top all-in-one solutions? See our Square vs. PayPal matchup.

Best Merchant Services for QuickBooks Users: QuickBooks Payments

If you use QuickBooks to manage your business sales and finances, QuickBooks Payments is a convenient way to process all types of credit card payments. With it, you can process in-store, and mobile payment sales, accept credit cards for invoices and even receive cash transfers via ACH.

What QuickBooks Payments Costs

QuickBooks Payments offers simple, straightforward pricing with two flat-rate plans. The rates you pay depend on the plan you’re on and the type of sale you’re processing: in-person, online, or virtual terminal. Here’s a look at QuickBooks Payments fees range and hardware costs; we’ll examine the differences in plan pricing below.

QuickBooks Payments’ Credit Card Processing Rates & Other Costs

QuickBooks Hardware Costs
Mobile card reader	1 Free Magstripe reader with account $30 Swipe & Chip reader (no eWallet reader)
QuickBooks In-store Card Readers & PC-based Checkout Register	Buy just the peripherals you need with a-la-carte pricing

As shown below, QuickBooks Payments’ $0/month plan has higher processing rates than the $20/month plan, especially for Swiped (in-person) sales. If you primarily sell in-store or via mobile payments, the $20/month plan can actually be the most cost-effective of the two.

Source: QuickBooks Payments

If you want to use QuickBooks to manage in-store sales, you’ll need to purchase QuickBooks’ full-featured POS software. That starts at $1200 for the basic version and goes up to $1900 if you operate multiple locations. It sounds expensive, but note that it’s a one-time cost, not an ongoing monthly fee like most top POS systems. So, it can be a cost-effective POS option in the long run.

What You Can do With QuickBooks Payments

QuickBooks Payments fully integrates both credit card and check payment processing into your QuickBooks system, including:

Payments Accepted by QuickBooks Payments

With QuickBooks Payments, all invoice payments, mobile selling, in-store sales, and even online payments connect seamlessly within QuickBooks. This dramatically cuts your payment processing and record-keeping time since everything is recorded automatically each time a payment is completed. This includes inventory counts, customer updates, sales figures, job costs, invoices, and whatever other key business data you track in QuickBooks.

If you use the QuickBooks POS, you can build out a complete checkout register like the setup below using hardware peripherals and card readers available with a-la-carte pricing

Pair QuickBooks POS register with QuickBooks Payments for all-in-one retail management

Another plus for growing businesses is QuickBooks Payments’ customized rates for high-volume processing. The flat-rate plans are geared for businesses that process less than $7500/month in credit card payments. But if you process over that amount, QuickBooks Payments can customize an interchange-plus rate plan that can lower your credit card processing fees. The option of moving from flat-rate to interchange-plus pricing with one provider is great for a growing business.

What QuickBooks Payments is Missing

When it comes to payment processing options, there is little that QuickBooks Payments can’t do. However, QuickBooks Payments is geared for QuickBooks users. If you don’t use QuickBooks to manage your business, QuickBooks Payments isn’t the choice for you.

If you already use QuickBooks to manage your business or are planning to get started with QuickBooks, QuickBooks Payments is a natural fit. And the fact that is provides both competitive flat-rate and interchange-plus pricing options is an added bonus for growing businesses.

Visit QuickBooks Payments

Best Merchant Services for Growing Businesses: Cayan Payments

Cayan tops our list of best merchant services providers for growing businesses, especially those that would like the option of interchange-plus pricing or tiered pricing. As we mentioned above, interchange-plus plans provide lower processing rates than flat-rate services when you reach a certain sales volume. But for sellers focusing on specific markets, like B2B or government sales, tiered pricing can provide even more savings. A Cayan account representative can help you determine the best fit for your selling needs. Usually, that will be interchange-plus, so that’s what we’ll cover here.

What Cayan Costs

Cayan has a monthly account fee plus charges credit card processing fees per-sale. Here’s an overview of these fees and we’ll explore what they meant to your specific business in detail below.

Cayan Credit Card Processing Rates & Other Costs At-a-Glance

Cayan Hardware Costs
Mobile card reader	1 Free Magstripe & Chip card reader $29 per additional reader
In-store checkout credit card terminals	Selection of credit card terminals starting at $149.00, one-time payment

Unlike many full-service merchant account providers, Cayan doesn’t have a sales volume minimum for its plans. But that doesn’t mean Cayan is right for many startups and low-volume sellers. For example, in a side-by-side comparison of Square and Cayan, we found that Square’s flat-fee pricing can be the better deal up to about $30,000 in monthly sales. After that, Cayan’s interchange-plus rates win out. However, there are 3 major factors that play into that scenario, such as:

1. Average ticket amount – In the following example, you’ll see that Cayan has a much lower Visa card processing rate (2.01%) than Square (2.75%) for retail processing. But, Cayan also adds a 25¢ per-transaction fee, unlike Square. If you sell big-ticket items, Cayan’s lower rate tends to beat Square. But if you run a high volume of small-ticket sales, Square’s no per-transaction fee model beats Cayan.

How Average Ticket Amount Affects Interchange-plus vs Flat-rate Costs

2. Credit vs. Debit card purchases — With interchange-plus pricing, you pay far less to process a retail debit card sale (.55%) than a credit card sale (2.01%). If your customers tend to use debit cards, interchange-plus can cost far less than a flat-rate provider like Square which charges the same fee (2.75%) for both debit and credit cards.

3. Add-on needs like a POS system — Interchange-plus providers like Cayan don’t provide a free full-featured management system to match Square POS. If you need POS software to track inventory, sales, customers, and employees, you’ll have to integrate with another POS provider, like Lightspeed ($99/month) or ShopKeep ($69/month). Keep in mind that these monthly costs can override the money saved on processing fees.

What You Can do With Cayan

At a certain sales volume, you can save money using a traditional merchant account provider like Cayan. It can customize a complete payments processing package, based on your specific needs and volume, and process all types of payments, including:

Payments Accepted by Cayan

Cayan integrates with many top-rated POS systems and ecommerce platforms, and provides an excellent mobile payments solution, too. So, you can use Cayan to sell anywhere you do business and use the exact business management or POS software you like. Plus, you can revisit your fee plan as you grow and negotiate for lower rates based on your sales volume and transaction types. Merchant account providers like Cayan offer a lot of flexibility. But making it all work requires more setup and oversight compared to a flat-rate provider like Square.

What Cayan is Missing

All-in-one simplicity is what you don’t get with traditional merchant account providers, Cayan included. You need separate accounts to manage in-person and online payments, which requires more setup, oversight, and monthly fees. Plus you really need to understand how credit card processing fees work to ensure you’re getting the best rates.

The no-added-fees aspect is also missing with Cayan. You can encounter batch fees and other add-on fees based on your specific account and business type, unlike flat-rate providers like Square. But at certain sales levels, the savings you garner with Cayan’s low interchange-plus rates can be worthwhile. That’s why we recommend providers like Cayan for established and growing businesses, not for startups and small-volume sellers.

If interchange-plus looks like the best merchant services solution for your growing business, you can try Cayan on for size with confidence. It offers very low rates and builds plans to meet your unique selling needs, whether in-store, online, mobile, or a combination of all channels. Plus, Cayan has no sales minimums, locked-in contracts, or account startup or cancellation fees, making it another no-risk option.

Visit Cayan

Best Merchant Services for Volume Sellers: Dharma

We recommend Dharma’s top-rated interchange-plus credit card processing services for high-volume sellers who process $10,000 in credit card charges per month, or more. If you sell in this volume, Dharma provides very low, completely transparent fees. One visit to its website and you’ll see that Dharma has nothing to hide when it comes to both processing and account fees. But, it has a $10,000/month minimum, so it’s not right for many small sellers and most startups.

What Dharma Costs

You’ll see in the rate chart below that Dharma’s interchange-plus fees are actually lower than Cayan. Like Cayan, Dharma integrates with a number of credit card terminals, readers, and POS systems, including a native integration with Clover POS. So you have a choice when it comes to store management systems and hardware choices.

Dharma Credit Card Processing Rates & Other Costs

Dharma Hardware Costs
Clover Go mobile card readers	$99 Magstripe & Chip card reader $139 for Contactless reader
In-store checkout credit card terminals or complete Clover Checkout registers	Selection of credit card terminals starting at $249.00, one-time payment Complete Clover registers run $1349/each, plus a $59/month Clover POS subscription

Despite Dharma’s lower interchange-plus fees, Cayan tops Dharma as our recommended small business interchange-plus merchant account provider since Dharma doesn’t work with sellers processing less than $10,000/month. Dharma is very up-front about this and even has a page on its website that points startups and low-volume sellers to either Square or PayPal.

From a transparency standpoint, you really have to love Dharma. That honesty is one of the reasons you see consistently high ratings across the board in Dharma reviews.

Since transparency is built-in to Dharma, you’ll always know what you’re being charged for, and why. One thing Dharma does differently is pass through add-on fees, like the Visa assessment fee shown in the chart above, without a markup. Most providers, including Cayan, roll these up into a higher overall interchange-plus rate.

That’s one example of the differences to watch for when you compare interchange-plus providers, and why Dharma’s fee transparency is a plus when you sell in higher volumes.

What You Can do With Dharma

If you meet Dharma’s sales volume, you can save money on your processing fees for all types of in-store, online, and mobile sales payments.

Payments Accepted by Dharma

Like most traditional merchant account providers, Dharma integrates with top-rated POS systems and ecommerce platforms via API connections. But it also supports many simple-start turnkey integrations. Online sellers can pair Dharma with Authorize.net to easily accept payments on nearly all ecommerce platforms. Retailers can use Clover POS for in-store selling starting at $59/month, and Clover Go for mobile selling starting at just $9.99/month.

Plus, for mobile and retail store sales you can choose from a range of feature-rich Clover POS devices or the complete Clover Station:

Purchase the Clover Station POS register for $1349 and pair with Dharma for payments

Dharma also supports integrations with QuickBooks and other top business accounting solutions. And if you don’t have an existing business management solution, Dharma’s free MX Merchant software provides many sales, payment, invoicing, and business management tools.

What Dharma is Missing

Small business and startup accessibility is what you don’t get with Dharma. You’ll also have to set up separate accounts for online and in-person sales, which means two account fees and added oversight if you’re a multichannel seller. Plus, Dharma is our only top pick that we don’t consider risk-free. If you decide Dharma’s not right for you, you’ll pay a $25 account closure fee. While not a lot of money, it removes the risk-free factor the other 5 offer.

This is why we recommend Dharma for established businesses looking to lower their current credit card processing rates. If you have credit card sales exceeding $10,000/month and are looking for a better deal, Dharma is one of the best merchant services providers on the market.

Visit Dharma

Best Merchant Services for Direct-Interchange Fees: FattMerchant

FattMerchant’s direct-interchange model can be a money-saving option for sellers processing around $20,000/month or more in credit cards. FattMerchant is one of few merchant services providers that offer a direct-interchange fee structure to smaller businesses. This model gives you the lowest possible interchange rate since there is no markup on card issuer fees at all. But you do pay a hefty monthly fee to FattMerchant, which can override the low rates for some sellers. We break it all down for you below.

What FattMerchant Costs

In the table below, you’ll see that FattMerchant has the lowest per-sale credit card processing rates of our 6 top contenders. This is because FattMerchant passes the actual card issuers’ interchange and assessment fees on to you with no percentage markup at all. But, it has high monthly fees, which we examine in detail below.

FattMerchant Credit Card Processing Rates & Other Costs

FattMerchant Hardware Costs
FattMerchant Payments Mobile	$75 Magstripe & Chip card reader (iPad & iPhone only)
In-store checkout credit card terminals	Integrates with nearly all popular credit card terminals and POS systems

Yes, you read the “final fee you pay” rates right. With FattMerchant, all you pay in credit and debit processing fees are:

• A monthly account fee: $99/month if you process less than $1M/year; or $199/month if you process over $1M/year
• A per-transaction fee of 8¢-15¢ per transaction, depending on the type of sale, in-person (8¢), or online (15¢)

But, there are 2 things about FattMerchant’s monthly fee that you need to clearly understand:

1. You pay the monthly fee whether you make 0 sales or 1,000 sales — If you’re just starting up, you’ll pay the monthly fee even if you have $0 in sales. For a startup, $99 per month can add up when very little is coming in.
2. You pay monthly fees per-account — If you sell in-store, online, plus need a mobile payment solution, you need 3 FattMerchant accounts. So, for 3 $99 accounts, you’ll pay $297 per month just to access all of your needed payment methods. Then you still have to tack on interchange and per-transaction fees per-sale.

So, that’s the downside of FattMerchant. You need a unique account for each payment solution and pay monthly fees per account no matter your sales. Square, by comparison, costs you absolutely nothing if you sell nothing. Plus, you can access all payment methods within your one free Square account and use Square’s powerful mobile and in-store POS software for free, too.

To see how it all breaks down, here’s a look at FattMerchant’s retail processing fees compared to Square.

FattMerchant vs Square: Comparing In-store Credit Card Processing Costs

So, for a retail store that’s processing about $20,000 in credit card sales per month, FattMerchant can provide substantial savings. But for a low-volume startup, the monthly fees really add up. And remember, if you sell both online and in-store you need to add another $99 in monthly fees to your totals because you need an account for each payment processing solution you use.

What Can You do With FattMerchant

FattMerchant accepts a full range of in-store, online, and mobile payments, including:

Payments Accepted by FattMerchant

Plus, FattMerchant really leverages technology, perhaps better than any other payment processor on our list. Though FattMerchant has only been around since 2014, it’s poised to become the next big thing in small business payment processing. This is thanks largely to fully supported integrations with:

• Popular POS software like ShopKeep, Vend, Revel and more via API
• All top-rated & popular in-store credit card terminals
• Virtually all ecommerce platforms via its Authorize.net gateway integration

Add in its 24/7 Customer Service, complete technical support, and powerful set of sales management and reporting tools built into your payments portal, and FattMerchant is a true powerhouse payments option. Plus, FattMerchant is backed by Fifth Third Bank, so it’s definitely not a fly-by-night operation.

FattMerchant’s intuitive payments portal is accessible via computer, tablet, and smartphone

What FattMerchant is Missing

Like Dharma, FattMerchant is missing small seller-friendly pricing. Its monthly fee makes it an expensive choice for startups and micro sellers, and for multichannel sellers that need 3 $99/month accounts to handle in-store, online, and mobile sales.

When you compare the processing costs between FattMerchant and Square, FattMerchant is simply more expensive for sellers processing less than $20,000/month in credit cards. The direct-interchange fees are unbeatable, but the monthly fees add up for low-volume or multichannel sellers.

But if you’re selling $20k/month or more in credit card and debit card sales, FattMerchant’s monthly fee + direct interchange model is worth looking into, especially considering its across-the-board integrations, nice management tools, and 24/7 support.

Visit FattMerchant

The Bottom Line

Any small business person really needs to understand how credit card processing fees work before deciding on a merchant account provider. The best merchant services provider for one business isn’t necessarily the best for another. A retail store selling $20k per month in credit card sales and needing a POS system has very different payment processing requirements than a high-volume ecommerce seller.

When considering your options, be sure to list what you know: your business model, current sales volume, types of cards you process (credit, debit, business cards, etc.). Then list the technology you need to process sales and manage your business: an in-store POS, an online store, mobile card readers, invoice tracking, or a combination of all. With that information as your starting point and the merchant account provider details we covered above, you’re set to make an informed decision.

However, if you’re launching a new venture or have sales volumes under $20k/month, you really can’t go wrong with Square. Its all-in-one simplicity, low flat-rates, and free POS business management tools make it practically unbeatable for most small business needs.

Visit Square

How do you process credit and debit card payments for your in-store, online, mobile, or service business? We’d love to hear your merchant account provider experiences and insights in the comments below.