The Best Credit Card Processing Services of 2018

What Is a Credit Card Processing Service?

Millions of consumers use credit cards to buy goods and services because using cards is such a simple process. However, accepting credit cards is not as simple a process—a fact to which many small business owners can attest.The credit card processing industry has historically made it difficult for small business merchants to navigate the whole process. It’s hard to know what they’re getting into, and they soon find themselves dealing with surprise fees, unfair contracts, and a lack of transparency they were not expecting. Small business owners who have never accepted credit cards before can be bamboozled this way by aggressive salespeople, often getting talked into paying exorbitant fees for services that turn out to be unnecessary.

Luckily for merchants, fair-minded processors are emerging that tout transparency, fair fees, and good customer service. This is true especially for online “e-tailers,” but also for small brick-and-mortar operations. There are Point-of-Sale (POS) System startups, such as Square, and subscription services such as Helcim, and even retailers such as Sam’s Club are getting involved.

Whether you need payment processing on the street or online, accepting credit cards and processing payments are still complicated, though. This is due to the sheer number of moving parts inherent in this aspect of merchant services and mobile payment processing. It’s also due to all of the various entities involved. Since rates and contracts vary by customer, it’s difficult to make a direct comparison between these providers.

In this roundup, we researched some of the most popular credit card processors on the market, and consulted with experts in the field at CardFellow and FreedomPay to determine how to choose a provider. We also interviewed the 10 processors featured here—Cayan, CreditCardProcessing.com, Flagship Merchant Services, Intuit QuickBooks Payments, National Bankcard, Payline Data, Payment Depot, Sam’s Club Merchant Services, Square Point of Sale, and Editors’ Choice Helcim—to get demonstrations and clarify details about their fees and features. Finally, we looked at user reviews and ratings from the Better Business Bureau (BBB) to get a sense of customer service and reliability.

Startup Costs, Fees, and Equipment

In the payments industry, there is a sort of pyramid of providers. At the top are the credit card companies, which charge flat interchange fees to big processors such as First Data, Flagship, Global Payments, and Vantiv. These entities clear the credit card payments and, while some take individual customers, each works with intermediary services, including Independent Sales Organizations (ISOs), which must register with a bank. Most of the services featured in this roundup are ISOs, including Cayan, National Bankcard, Sam’s Club Merchant Services, and others.

Square Point of Sale and Intuit Quickbooks Payments are merchant services aggregators. Rather than providing you with a merchant account, these merchant services set you up with a sub-account under its master merchant account.

At the bottom of the pyramid are the business owners, who have to contend with two or three sets of fees: interchange fees from the credit card company and transaction fees from the processor and intermediary. There are a few different pricing structures available, and which one you choose depends on the number of transactions you clear each month, the sum of the credit card payments you receive, and the average amount of each transaction. A merchant who sells 10 pianos per month for $20K a pop has different needs than a coffee shop that accepts hundreds of swipes worth $10 each.