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By Nicki Escudero Updated on December 15, 2021

Credit Card-Processing Companies Small Business Owners Should Consider

As a small business owner, you need to accept plastic forms of payment to serve your customers. According to a 2018 payment study by Total System Services, 80% of U.S. consumers prefer using debit or credit cards over cash for purchases. Knowing the high demand for these forms of payment, you may be wondering which credit card processors company is best for your small business.

Here’s a list of credit card-processing companies and how they compare as you consider the best fit for your small business.

  • Don’t miss out on accepting noncash payments.

    CNBC reports that about 30% of Americans make zero purchases in cash in an average week. And 1 in 2 Americans carries cash with them less than half of the time they’re out.

What Is a Credit Card-Processing Service?

First, let’s define what credit card-processing companies do. Third-party credit card-processing companies provide equipment and services to small businesses that enable them to run customer credit cards and process payments.

Credit-card processing can take place in person, online or over the phone.

  • In person, a credit card may be swiped using a magnetic stripe, dipped if it has a chip with Europay, Mastercard and Visa (EMV) technology or tapped if it’s a near field communication (NFC)-enabled card. In-person credit card-processing machines can range from desktop processors to smartphone readers, to tablets and mobile processors.
  • Online or via a payment app, credit card information is entered via a payment gateway or virtual terminal and is processed for online purchase.

Once the credit-card processor receives the payment information, the processor communicates with the customer’s bank through the credit card network. The customer’s bank approves or denies the purchase. For example, if someone is trying to pay with a stolen card that has been frozen, the bank will reject the purchase.

Approval is sent back through the payment processor and then is finished processing at the credit card reader or terminal.

To finalize the payment (the transfer of funds from the customer’s bank account to the business bank account), your small business sends batches of approved transactions. Some credit card-processing companies will charge fees per transaction or a percentage of sales.

List of Credit Card-Processing Companies You Should Consider

What It Is

Square, one of the top payment-processing companies, provides a simple, free magstripe reader you can plug into a web-connected device, such as a tablet or smartphone.

There is a flat 2.75% fee per transaction that is swiped, dipped or tapped. For keyed-in transactions, the fee is 3.5% plus 15 cents.

Square also has a point of sale system available for $799, called Square Register. Each transaction on Square Register has a fee of 2.6% plus 10 cents per tap, dip or swipe.


  • Square’s fee setup process is easy. You can set up an account, plug in the device and start accepting payments.
  • For small businesses that need credit-card processing on the go, Square provides an easy solution.
  • Square has no monthly fees or contracts.


  • Square’s in-house telephone support is available from 6 a.m.-6 p.m. PST. If you need help after-hours, you may lose out on credit card sales.
  • Bottom Line


    • Square’s ease of use and simple fee model can save your business time and hassle in training or managing contracts.
    • You can also use Square’s branded applications such as Market and Payroll, which provide analytics, online payment options and more.
    • Any Square service also comes with business-management tools to help with customer-loyalty programs and inventory management.

What It Is

Businesses with a PayPal business account can accept credit-card payments in person via a mobile card reader or through contactless payments. Businesses also can accept online payments via email invoices or by phone with a virtual terminal.

PayPal charges a fee of 2.7% per swipe or 3.5% plus 15 cents for keyed-in sales. Online payments and invoicing have a fee of 2.9% plus 30 cents per transaction. PayPal virtual terminals have a $30 monthly fee.


  • Many online commerce service providers, including Intuit’s QuickBooks, Shopify and WooCommerce, integrate with PayPal.
  • PayPal’s virtual terminal comes with an optional card reader. There’s also a mobile payment app and card reader.
  • PayPal’s web-friendly attributes make it a fit for online commerce businesses.


  • PayPal’s fees may not provide the best financial value for businesses with a high volume of transactions.

  • Bottom Line

    • PayPal has established a solid niche in web transactions. Accepting online payments is quick and easy with PayPal.
    • PayPal also provides online shopping cart integration and “buy now” buttons for web pages.
    • With more than 20 years in business, PayPal has the brand recognition that can increase trust in the online shopping experience.

What It Is

Fattmerchant is a subscription-based credit card-processing company. Businesses are charged a flat monthly fee and a fixed per-transaction fee.

Businesses sign a month-to-month contract with Fattmerchant. The contract has no cancellation penalties.

Fees depend on the plan. For example, with a $99/month standard plan for transactions totaling less than $500,000 a year, each transaction is charged a fee of $0.08 for countertop, mobile and third-party integration.


  • There are no batch fees, monthly minimum fees, charge statement fees, PCI compliance fees or monthly minimum fees.
  • Fattmerchant services include free business tools and a free analytics dashboard.
  • Fattmerchant provides 24/7 technical support for any subscription.


  • Businesses that process smaller amounts of transactions may be better off with a credit card company with a different pricing model.

  • Bottom Line

    • Fattmerchant makes processing credit cards a simple, transparent process. Businesses save more as they grow.
    • Fattmerchant subscribers receive web-based software for actions like inventory management, billing, invoicing, transaction management and financial reports.
    • Businesses that anticipate high growth can benefit from Fattmerchant’s model.

What It Is

Payline provides point of sale, mobile and online commerce credit-card processing. Pricing is based on an interchange-plus model, including month-to-month billing, no early termination fees and no long-term contracts.

Payline charges 0.2% plus $0.10 per transaction for swiping in person, as well as a $10 per month fee.

For card-not-present payments, the fee is 0.3% plus $0.20 per transaction, plus a $20 per month fee.


  • Payline provides 24/7 customer support via email and phone.
  • Payline has a transparent pricing model, making it easy for businesses to determine the value of Payline’s services.
  • Secure PCI compliance is free and is included with every plan.


  • Businesses have to purchase the Payline equipment they want to use.
  • Depending on sales volume, Payline rates may not provide value.
  • Bottom Line

    • Payline provides customizable payment solutions. Prospective customers can schedule a call with a Payline representative, talk about their unique business needs and get tailored credit card-processing recommendations.
    • With a variety of plans, including online commerce and virtual terminal plans, businesses can choose the features they want now and scale as they grow.

Woman paying at cashier register with a credit card. 

Choosing the Best Credit Card-Processing Company for Your Business

There are dozens of credit card-processing companies to choose from. If you can, schedule consultations with the ones you’re considering for your business. Create your own comparison chart of the pros and cons to get a clearer view of the value these providers can deliver.

Some features to consider include:

  • Up time and reliability: If most of your sales are via plastic, think about how much you’d lose every minute credit card transactions aren’t working. Inquire about what the up time percentage of a credit card-processing company is. Be wary of companies that guarantee 100% up time. The closer you can get to 99%, the better, though. Ask about recovery processes, too, so you can understand the plan the credit card-processing company has in place in case of downtime.
  • Customer support: As mentioned, not all credit card-processing companies offer live, 24/7 support. Seriously consider how valuable this feature is to your business. If you’re only open during the time customer support is, then 24/7 support may not be a must-have for you.
  • Credit card transaction variety: You could speed up credit-card processing in person with more processing options for your customers, such as NFC mobile transactions. The customer taps, and payment goes through. You should also consider a merchant with online commerce capabilities. Even if you’re not selling online now, you may want the option in the future.
  • Transparent and fair rates: Some credit card companies have a reputation for ripping off customers. They might add in extra fees, not be up-front about what they’re charging or try to confuse the business owner they’re selling to. Ask about all payment structures that are offered. You might want to work with an accountant to go over the ones you’re considering to make sure they work for your sales structure.
Nicki Escudero is a writer with a focus on small business. She enjoys sharing tips that help business owners launch and grow their companies. Nicki has more than 17 years of experience in the journalism field.
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