This article is part of a larger series on Payments.
Credit card processing is a necessity for every business, especially as more customers prefer to order online or purchase in-store using contactless payments. The fees associated with processing credit cards can be a large expense for your business. However, choosing the cheapest credit card processing company based on your sales volume and how you accept card payments can significantly cut costs.
Based on our evaluation of 26 data points and our rate calculations, the cheapest credit card processing providers for small businesses are:
- Helcim: Cheapest overall credit card processing
- Payment Depot: Cheapest option with no percentage markups
- Square: Best value for individuals, new businesses, and seasonal operations
- Stripe: Cheapest online payment processing alternative
- PayPal: Best value for occasional sales
- Stax (Formerly Fattmerchant): Best value for high-volume and credit surcharging
- Dharma Merchant Services: Best for pricing transparency and support
Cheapest Credit Card Processing Companies Compared
Card-present Transaction Fee
Online Transaction Fee
Interchange plus 0.1%–0.3% + 5–8 cents
Interchange plus 0.2%–0.5% + 10 –25 cents
Interchange plus 8 cents
Interchange plus 15 cents
Payment service provider
2.6% + 10 cents
2.9% + 30 cents
Payment service provider
2.7% + 5 cents
2.9% + 30 cents
Payment service provider
2.29% + 9 cents (through Zettle)
2.59% + 49 cents–3.49% + 49 cents
Interchange plus 8 cents
Interchange plus 15 cents
Interchange plus 0.15% + 8 cents
Interchange plus 0.2% + 11 cents
In this guide, we prioritized finding the cheapest rates for established businesses, which means many of these options have monthly fees and/or stricter applications in exchange for low transaction fees. If you’re a new business or low-volume seller, consider a free merchant account with no monthly fees.
Calculate the Lowest Rates for Your Business
Find out how much you would pay in monthly merchant payment processing fees with our recommended providers:
Note: The totals generated by the calculator are estimates. The exact rates you pay can vary depending on the type of card your customer pays with. Other factors will impact your exact rates, including if a payment is keyed instead of swiped, chargebacks, software add-ons, or if you negotiate a custom rate with your processor.
Helcim: Cheapest Credit Card Processing Company
Helcim, a Canadian company that expanded into the United States in 2013, is a traditional merchant account that offers low-cost interchange-plus pricing for established small businesses. It processes billions in transactions annually for merchants in more than 800 industries.
Overall, it offers great value for established businesses with a free POS system, hosted payment pages, online store, virtual terminal, invoicing software, recurring billing and subscription management, and customer portal. Helcim rivals Square with the amount of free software it offers.
Since Our Last Update:
In 2021, Helcim dropped its $20 monthly fee, while Payment Depot increased its minimum monthly fee from $49 to $59. Historically, Payment Depot has been our most recommended provider for cheapest credit card processing, but these changes resulted in Helcim being our new top pick.
Helcim also launched an all-new free POS system and offered ACH and electronic funds transfer (EFT) payment processing to all merchants, which is one of the most affordable ways to accept payments online.
How Helcim Compares
There are a few things that make Helcim unique. It charges no monthly fee—Payment Depot, Stax, and Dharma all offer interchange-plus pricing but with a monthly fee—and is the only payment processor on this list that applies lower transaction fees automatically as your monthly processing volume increases. Most processors, including Square, Payment Depot, Stripe, and Dharma, will offer volume discounts, but you need to apply for and negotiate the special rates.
In our evaluation, Helcim earned a 4.41 out of 5, with high marks for pricing, features, and expert score. However, a two-business-day average deposit speed and somewhat limited customer support hours (9 a.m. to 9 p.m. Eastern time Monday to Friday and 11 a.m. to 7 p.m. Eastern time Saturday and Sunday) prevented it from earning a perfect score. If you need faster deposits, consider Stax and Square, which offer next-day deposits or same-day/instant deposits for a fee.
Helcim also lost points because it has somewhat of a strict application process. It has a long list of prohibited business types, including dropshipping, travel, lead generation, certain events or event planning, and those operating arcade games. It can offer such low rates by minimizing risk, which means it can be picky about the businesses it works with.
To use Helcim for in-person payments, users can request the Helcim card reader after signing up for a merchant account. This 2-in-1 mobile card reader comes with a screen and a PIN pad plus a dock for countertop setup. Priced at $109, it is the second most expensive mobile card reader in our roundup. Dharma’s mobile card reader is priced at $149.
Chip & PIN
Interac Debit & PIN
Tap & Go
Read our Helcim review for more information on pricing and features.
Payment Depot: Cheapest Option With No Percentage Markup
Payment Depot offers wholesale credit card processing prices for small businesses by using a subscription pricing model. It’s a traditional merchant account, meaning businesses can expect secure and stable processing. Many traditional merchant accounts come with different fees or subscription requirements for online, in-store, and virtual terminal payments; with Payment Depot, everything is covered under one subscription and a single transaction fee.
Like Helcim, Payment Depot also doesn’t charge setup or cancellation fees. Every account comes with a free payment gateway and free reprogramming of any existing equipment. Some plans include free mobile readers, terminals, and PIN pads.
Since Our Last Update:
Recently Stax (formerly Fattmerchant) acquired Payment Depot and has made considerable changes to its pricing strategy. Subscription fees have gone from $79–$199, down to as low as $49, and eventually readjusted to $59–$99 per month. Interchange-plus pricing rates now match that of Stax. A Payment Depot representative also confirmed that it no longer imposes a chargeback fee, which provides a significant improvement in our evaluation.
How Payment Depot Compares
With providers compared side-by-side, Payment Depot’s combination of monthly and transaction fees come out as one of the cheapest options for established businesses, only rivaled by Helcim. While it still charges a monthly fee, it is lower than that of Stax yet higher than Dharma Merchant Services. Also, most interchange-plus processors, including Helcim and Dharma, charge a percentage markup on each transaction in addition to a flat fee. Payment Depot does not. This model allows for more predictability and is especially affordable for businesses with larger average order sizes.
Although Payment Depot received a high score in our evaluation, a 4.39 out of 5, a lack of native card-on-file features for stored payments, and a one- to two-day deposit time prevented it from earning a perfect score. For card-on-file and recurring billing payments, consider Helcim, which offers software for this with no monthly fee.
Payment Depot has an application and approval process. It does not work with high-risk businesses and, because of its higher monthly fee, it is best for established businesses processing at least $10,000 monthly.
Payment Depot Hardware
While it does not have its own proprietary hardware, Payment Depot is compatible with a variety of hardware options. It supports mobile card readers, smart terminals, POS, and standard payment terminals.
Payment Depot also offers free Dejavoo terminals to qualifying customers. Contact Payment Depot for pricing.
Authorize.net BBPOS Chipper 2x and SwipeSimple B250
Clover Flex, Poynt, and Vital Plus
Clover Mini LTE, Clover Station POS, Clover Station Pro, and Vital Select
Dejavoo Z11 Terminal, First Data FD150, Ingenico Desk 3500, Ingenico Desk 5000, PAX A80, and SwipeSimple Terminal
Read our Payment Depot review for more information on pricing and features.
Square: Lowest Fees for Individuals & New Businesses
Square is a cloud-based credit card processing and business management software provider with competitive pay-as-you-go processing fees and free top-rated POS software. These features make it not just one of the cheapest credit card processors but also one of the best merchant processing services providers in the industry today.
Like most aggregated merchant account service providers, it’s easy to set up an account with Square. There is no approval process, which means you can start accepting payments as soon as you get access to your account. Its zero monthly fees bundled with a variety of payment processing as well as POS features led Square to rank among our list of leading POS software systems, top mobile card readers, and most recommended multichannel POS systems to name a few.
This flexibility and value are ideal for individuals, occasional sellers, and new businesses on a budget.
How Square Compares
In our evaluation, Square earned a 4.38 out of 5. We gave Square high marks because of instant signup with no application process, no long-term contracts, and no monthly, cancellation, and chargeback fees.
Bonus features like free invoicing software and online store, online checkout tools, virtual terminal, and POS software also contributed to Square’s high score. No other solution on this list offers such a wide array of free software and business solutions with no application or monthly fee required.
Limited customer service hours and account stability issues prevented Square from earning a perfect score. Growing and established businesses wanting to save with interchange-plus pricing and a more stable merchant account should consider Payment Depot, Stax by Fattmerchant, and Helcim.
Square offers a range of proprietary mobile credit card readers and POS systems to fit any type of business. Price starts at $10 and you also get a free magnetic stripe reader upon sign up.
Square Card Readers
Square Reader for Magstripe
Square Reader for Contactless and Chip
First free, additional $10
Accepts payments via magstripe (swiped), available in jack or lightning connector
Bluetooth reader that accepts EMV (chip), and NFC (Apple Pay, Google Pay) payments
Square POS Systems
Square Stand for Contactless and Chip
$169 or $16 per month for 12 months
$299 or $27 per month for 12 months
$799 or $39 per month for 24 months
$149 or $14 per month for 12 months
All-in-one credit card machine with POS, card reader, and receipt printer
Stand-alone mobile POS that can take orders, accept card payments and issue receipts.
Full POS with touch-screen monitor, detachable customer-facing display, and credit card machine
All-in-one credit card machine with POS, and built-in card reader
Stripe: Cheapest Online Payments
It is extremely popular because of its developer-friendly platform, which supports more than 135 currencies and payment methods, and it can be used to create just about any kind of online checkout. Unlike Stax, which charges a monthly fee for software solutions like invoicing and recurring payments, Stripe offers free open-source solutions and charges a per-transaction fee.
Every free Stripe account includes a reporting dashboard, simplified PCI compliance, 24/7 support, 3D secure identity authentication, automatic updates to expired customer cards on file, and free payouts in two business days. Plus, Stripe includes customer management, reporting, and basic product management.
How Stripe Compares
In our evaluation, it earned a 3.98 out of 5. It received high marks for its pay-as-you-go billing, robust online support, and free developer tools. Additional fees for recurring and invoice billing and the fact that users need technical skills or developers on staff to make the most of the platform prevented Stripe from earning a higher score. If you need an online payment solution that’s easier to implement and manage, consider Square or Helcim.
Another thing to note about Stripe is that, like Square, it is a payment service provider. Signing up with Stripe is fast and easy, but you won’t get a dedicated merchant account. It’s an aggregate processor, so there is the potential for frozen or suspended accounts.
Also, Stripe will place a reserve on your account and/or delay your payout time if it thinks you may not have enough funds in your Stripe account to cover future disputes or refunds. Reserves are a fairly common industry practice, especially for high-risk merchants or any business that has a lot of chargebacks. However, Stripe has many complaints about the lack of communication around reserves and difficulties in reaching support.
For a dedicated and more stable online processor, consider a merchant account like Helcim and Payment Depot.
Stripe offers mobile hardware options. The Stripe Reader M2 and BBPOS Chipper are both compatible with iOS and Android devices and can process swipe, dip, and tap payments. Or, you can opt for a BBPOS WisePOS card reader if you prefer to accept payments connected to a desktop or mobile web.
Read our Stripe review for more information on pricing and features.
PayPal: Cheapest for Occasional Payments
PayPal has online solutions for businesses and a mobile app, PayPal Zettle, for accepting credit cards in-store or on the go. Through both these channels, PayPal offers some of the cheapest credit card processing for occasional sales, especially those with an average transaction below $20 accepting most payments in-person through card-present or QR code methods. It also offers discounted online payment processing for nonprofits.
As an online payment processor, PayPal does not fall short of integrations and developer tools to help streamline any checkout process. And with its free, pay-as-you-go subscription and popular trustworthy security seal, it’s no surprise that you will find PayPal in many of our recommendations, such as subscription billing, mobile payments, and international payment processing. However, its unpredictable fund reserve policies mean it is ideal for occasional sellers.
Businesses that rely on steady cash flow or have frequent changes in the types and amount of transactions they are processing might be better suited with a traditional merchant account like Helcim.
How PayPal Compares
Overall, PayPal offers very competitive pricing and is among the easiest solutions to accept payments online. Online payments are usually very expensive, but these are some of the lowest rates we have seen from a reliable processor outside of traditional merchant accounts, making PayPal a great option for organizations wanting to add “Donate Now” buttons to their websites.
In our evaluation, PayPal earned a 3.85 out of 5. Having no contract or cancellation fees, it earned high marks with flexible hardware and payment options―including QR payments, pay-as-you-go pricing, and customer-friendly One Touch checkouts.
Limited support hours, processing limits, account stability issues, and monthly fee requirements for features like virtual terminal and ACH processing prevented it from getting perfect marks. While it regularly updates pricing and policies (the most recent being in June 2022), it was PayPal’s increase of certain rates back in August 2021, that contributed to a lower score.
If you need a more stable solution, or one with a free virtual terminal, consider trying Payment Depot or Helcim. Square also offers free software tools and is suitable for small sellers.
PayPal now offers PayPal Zettle in the US—instead of PayPal Here—for in-person payment processing. It comes with POS software and a set of hardware solutions, which includes a mobile card reader. Like Helcim, the Zettle Reader 2 is a PIN pad-enabled card reader but is offered at a lower price point since the dock is optional. You can also get your first card reader at a discounted rate of $29 instead of the original $79.
To learn more, read our full PayPal Business review.
Stax (Formerly Fattmerchant): Best Value for High-volume & Credit Surcharging
Stax (formerly Fattmerchant) is a subscription-model merchant services provider used by more than 12,000 businesses. It is similar to Payment Depot but with a slightly different pricing structure and software. While Stax does have a higher monthly subscription fee, users get better deposit speed options, advanced recurring payment and billing tools, and the first mobile card reader for free.
We highly recommend Stax for high-volume businesses. Its wholesale transaction fees, affordable ACH bank transfer payments, and user-friendly invoicing tools and virtual terminal makes it the best value when processing steady high-volume sales. Professional services, in particular, will find the most use in Stax’ invoicing, stored payments, and text-to-pay features.
In the News:
In November 2021, Stax acquired CardX, a surcharging platform to enable Stax merchants to pass along credit card transaction fees to customers. If surcharging is enabled, customers can choose to do fee-free cash or debit card payments. Although surcharging is not legal in all states, Stax has state-level compliance. Learn more about credit surcharging.
How Stax Compares
Stax earned a 3.84 out of 5 in our evaluation. Apart from Helcim and Dharma, it’s the only other merchant service that offers all of the payment types we looked at, including ACH, card-on-file recurring billing, and level 2 and level 3 processing at no extra cost—all of which can have a positive impact on a business’s bottom line. Stax’s $25 chargeback fee and high monthly fees prevented it from earning a perfect score. More recent complaints around Stax customer support also prevented the company from earning a higher score.
Another factor to consider is that while Stax has excellent payments software, much of it is locked behind a higher monthly fee, including payment links and recurring billing. If you need online payment and billing tools for no monthly fee, consider Helcim or Square. Payment Depot also makes all of its features available regardless of subscription plan.
If you want interchange-plus processing with a lower monthly fee and responsive support, consider Payment Depot and Dharma Merchant Services.
Like Stripe, Stax supports several mobile hardware options, such as mobile card readers and smart and traditional terminals. It provides you with a free SwipeSimple card reader when you sign up for a monthly plan, and eligible customers can receive a free Dejavoo countertop terminal.
Contact Stax for more information.
For more information on pricing and features, read our full Stax review.
Dharma Merchant Services: Best for Transparency & Support
Dharma Merchant Services is a small independent merchant services provider that specializes in working with independent businesses and offers solutions for accepting online and offline payments. It accepts low-risk businesses processing more than $10,000 monthly. Dharma offers extremely low-cost interchange-plus pricing, particularly for storefront and restaurant payments. In addition to being one of the cheapest, it’s one of the best credit card processors for restaurants.
The payment processing industry is infamous for opaque pricing structures and hidden fees. However, Dharma’s founder created the business with a mantra of “commerce with compassion,” emphasizing pricing transparency, honest practices, and fair pricing. Based on my experience interacting with the company, along with feedback from businesses and other payment industry professionals, Dharma lives up to its mission.
How Dharma Compares
There is no question that Dharma Merchant Services offers some of the lowest rates for growing businesses, and even lower for nonprofits. In addition to fair pricing and transparency―every single fee is listed directly on Dharma’s website―Dharma is also an eco-friendly company and, to date, has donated more than $750,000 to nonprofits.
Dharma scored a 3.69 out of 5 in our evaluation. It earned high marks for accepting every payment type we looked for, including card-on-file and level 2 and level 3 processing. Of all the credit card processing companies on our list that offer interchange-plus pricing, Dharma also has the lowest monthly fee, with the exception of Helcim, which has no monthly fee.
However, Dharma does charge a $49 account closure fee and a $25 chargeback fee. Next-day funding is also only available for storefront businesses. These limitations prevented Dharma from scoring higher.
If you need a solution with lower chargeback fees and faster deposit times, consider Payment Depot or Square.
Dharma’s range of hardware also includes mobile card readers, payment terminals, and POS. It can be programmed into Clover hardware devices while the mobile hardware supports direct MX Merchant gateway and mobile app integrations. Mobile card reader cost starts at $149—the most expensive on our list.
Read our complete Dharma Merchant Services review for more information.
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Did you know?
Most of our picks for the cheapest credit card processing companies are also featured on our list of the best merchant services.
How We Evaluated the Cheapest Credit Card Processing Companies
The cheapest credit card processing for your business will vary depending on your sales volume, average order value, and the type of transactions you process. To find the cheapest overall options, we considered dozens of processors before evaluating 15 in detail. We only considered payment processors that offer flat-rate or interchange-plus pricing (the most transparent and usually the lowest cost) and excluded any that offer tiered rates as they can be deceiving.
From there, we looked at transaction fees, percentage markups, monthly fees, startup fees, chargeback fees, hardware pricing, and more—see my full evaluation criteria below. Based on this evaluation, Helcim is the cheapest credit card processor for most small businesses. It’s the only one on our list to offer low interchange-plus pricing with no monthly fee. Plus, Helcim offers a full suite of software tools most companies charge extra to use, and there is no chargeback fee for disputes settled in your favor.
Click through the tabs below for the full evaluation criteria:
35% of Overall Score
Helcim performed the best here while PayPal came in last because of its recently increased fees.
25% of Overall Score
Processors with either no or month-to-month contracts earned the most points, along with those offering $0 cancellation fees and affordable card readers. Any provider that requires a long-term contract or long-term hardware leases was penalized. Traditional merchant accounts earned points over aggregate processors because of the greater stability they offer with fewer holds and reserves. Finally, options with no minimum requirements or application/setup fees earned bonus points.
Square earned the highest score in this category thanks to its lack of contract and monthly requirements. Dharma received the lowest score as it’s the only one on this list to charge an account closure fee.
20% of Overall Score
Square earned the highest score here, closely followed by Helcim. They both offer lots of free business tools. However, Stax, Payment Depot, Dharma, and Stripe earned top scores for customer support. Stax and PayPal received the lowest overall scores in this section.
20% of Overall Score
The biggest factor considered here is pricing transparency. We looked at sample statements and contracts where possible, along with reviews from other business owners to make sure our top choices aren’t riddled with extra or surprise fees. Additionally, we considered account stability and general ease of use, along with reviews and reputation for each processor. Finally, we considered how well each processor works with other popular small business software like POS systems, shopping carts, and accounting software.
Helcim, Dharma, Square, and PayPal were all tied for first place, with Payment Depot a very close second.
How to Calculate Processing Fees
This is the general formula we use to calculate credit card processing fees:
(% Processing fee x Monthly sales volume) + ($ Processing fee x Number of monthly transactions) + Any monthly or other fees = Total monthly payment processing costs
If you need to accept cards in-store and online, you may need to do two calculations as many processors have different rates for card-present and card-not-present transactions.
For interchange-plus pricing, we used the current interchange rate for Visa Credit swiped retail payments in our calculations.
Ways to Lower Credit Card Processing Fees
For many businesses, credit card processing fees are a huge recurring expense. To some degree, they are unavoidable and only increase in volume as your business grows. However, there are a few things you can do to reduce your fees.
Incentivize Cash Payments
The first step to lowering your card processing rates is to encourage customers to pay in cash. Essentially, businesses can offset processing fees by building them into their regular prices and offering a discount for shoppers paying in cash. However, look closely at the laws in your particular state and local area. In many places, cash discounts are legal but credit surcharges are often not.
A common example of this is pricing at gas stations. If you walk inside and pay cash, the per-gallon price is lower than if you pay with a card at the pump.
Learn more: Read our how-to guide on zero-cost processing.
Accept ACH Payments
After cash, ACH and e-check payments are usually the cheapest payment method to accept. This option is ideal for businesses that use recurring payments like subscriptions or charge via invoice. Stax does not charge extra fees for ACH processing except for its monthly plan. For smaller businesses, Square offers free invoicing with ACH payments options. Square ACH processing fees are 1% per transaction with a $1 minimum. Alternatively, QuickBooks also has an ACH invoicing option that charges 1% per ACH transaction, which is practical if you are already using the accounting software.
Learn more: Read about ACH processing and the other most affordable ways to accept payments online.
Apply for B2B Rates
B2B businesses can qualify for even lower processing rates known as Level 2 or Level 3 processing. These rates are not available to most small businesses, especially business-to-consumer (B2C) businesses. However, if you are a business-to-business (B2B) company processing large volumes, check with a merchant account provider like Dharma Merchant Services.
Shop Around for Quotes
Once your business grows to a place where you are consistently processing more than $20,000 per month, you can likely negotiate lower rates with different processors. Shop around and request quotes actively to see if you could be saving several hundred dollars per month by switching credit card processing companies.
Implement a Surcharge
At least on the surface, the most straightforward way to lower credit card processing fees is to pass them along to customers. This option is becoming increasingly popular, and there are more payment processors offering this service, including Stax.
However, surcharging is not legal in every state (although cash discounting is). Adding on extra fees to every transaction does not create a positive customer experience, which is crucial for retention and long-term business success.
Learn more: See if credit card surcharging is right for your business.
Lower Your Chargeback Rates
When your business faces a chargeback, if the dispute is not resolved in your favor, your business could be out the transaction fee from the initial purchase, the cost of the product or service itself, and potentially another transaction fee for the reimbursement. So, chargebacks are costly even as a one-off occurrence.
However, if your chargeback rates are above 1% of your total transactions, your processor might impose higher transaction fees and reserve requirements. A high chargeback rate could also cause your business to be labeled “high risk” which also results in higher processing fees.
Learn more: Tips for preventing chargebacks, which is key for keeping transaction fees low.
Opt for Card-present Payments
As you saw with the rates listed in this guide, card-not-present transactions like ecommerce, keyed-in, invoicing, card-on-file, and payments made over the phone come with higher processing fees. This is because these types of payments have a higher risk for card networks and issuing banks as they are more susceptible to chargebacks and fraud.
Whenever possible, opt for card-present transactions like swipe, chip, and NFC payments. Because the customer is physically present there is less risk involved, and therefore the interchange fees and processor markups are lower.
Learn more: Interchange fees and factors that influence them.
In general, credit card processing and payment processing are necessary functions of any business, but they come at an expense. Many different payment processing companies advertise the lowest rates, and many of them have completely different fee structures. Finding the cheapest credit card processing is tricky but can save your business hundreds, if not thousands, of dollars every month.