Credit card processing fees are typically charged on a percentage basis of 0.35% to 3.2% on every transaction, depending on whether or not the card was present at the point of purchase. On top of that, there is usually a monthly fee that may range as high as $35-$50 per month.
The cost of credit card processing is influenced by several key factors:
Interchange Fees: Set by credit card networks (like Visa, Mastercard), these fees vary based on card type, transaction size, and industry. Higher-risk transactions generally incur higher fees.
Processor’s Markup: This is the additional cost added by the credit card processor for their services. It can vary greatly between processors, affecting overall costs.
Transaction Type: In-person (card-present) transactions usually have lower fees compared to online (card-not-present) transactions, due to higher fraud risk in the latter.
Payment Card Industry (PCI) Compliance: Adhering to these security standards can incur costs, but non-compliance may lead to higher fees or fines.
Additional Fees: These can include monthly fees, payment gateway fees, statement fees, and others, varying widely among processors.
Credit Card Processing Fees By Company
Starting At 2.7% + 5¢
In-person; 2.9% + 30¢ online.
Monthly Fee: $0.00
Stripe’s credit card processing stands out for its seamless integration and user-friendly interface. Ideal for online businesses, it offers transparent pricing and robust security features. Although it’s more suited for tech-savvy users, its reliability and extensive customization options make it a top choice for e-commerce platforms.
Helcim impresses with its transparent, volume-based pricing and no long-term contracts, making it ideal for small to medium-sized businesses. Its all-in-one platform offers robust features like invoicing and inventory management. While its fees can be higher for low-volume merchants, its customer service and reliability are commendable.
quare’s credit card processing is renowned for its straightforward pricing and ease of use, catering superbly to small businesses and entrepreneurs. Its free mobile card reader and no monthly fees are highlights, although transaction fees can be high for larger volumes. Its versatility and user-friendly interface make it a popular choice.
Stax by Fattmerchant stands out in the credit card processing market for its subscription-based pricing model, eliminating the percentage markup over interchange. This straightforward approach offers significant savings for businesses with high transaction volumes. Stax’s user-friendly platform and excellent customer support further enhance its appeal, making it a top choice for many businesses.
Shopify’s credit card processing is seamlessly integrated into its e-commerce platform, offering convenience and efficiency for online retailers. With competitive rates, transparent pricing, and no hidden fees, it’s an excellent choice for businesses of all sizes. Additionally, its robust security features ensure safe transactions, enhancing customer trust and satisfaction.
Chase for Business credit card processing offers reliable and secure payment solutions, ideal for businesses seeking a trusted financial partner. Its competitive rates, varied terminal options, and integration with Chase banking services make it a comprehensive choice. Exceptional customer support and fraud protection further enhance its appeal to business owners.
PayPal’s credit card processing is renowned for its ease of use and widespread acceptance, making it a popular choice for businesses of all sizes. Its flexibility to handle online, in-person, and mobile payments, combined with competitive fees and strong security measures, ensures a convenient and secure transaction experience for customers.
Tips For Choosing a Credit Card Processing Solution
When choosing a credit card processing solution, it’s important to consider several key factors to ensure that you select a service that meets your business needs effectively. Here is a structured guide:
1. Understanding Your Business Needs
Type of Transactions
In-person (POS systems)
Online (E-commerce platforms)
Mobile (For on-the-go transactions)
Volume of Transactions
Low, medium, or high transaction volume
Industry Specific Needs
Special requirements for different industries (e.g., hospitality, retail)
2. Evaluating Costs and Fees
Percentage per transaction
Flat fee per transaction
Monthly and Annual Fees
Equipment rental fees
3. Considering Security and Compliance
Ensuring the processor is PCI DSS compliant
Data Security Features
Encryption and tokenization of data
Tools for detecting and preventing fraudulent transactions
4. Exploring Integration and Compatibility
Compatibility with Existing Systems
Integration with current POS systems and accounting software
Ease of Integration
User-friendly interface and simple setup process
5. Analyzing Customer Support and Service
24/7 support, business hours support
Phone, email, live chat
Quality of Service
Response time, problem-solving efficiency
6. Checking Reviews and Reputation
Experiences of other businesses
Awards, recognitions, and industry ratings
7. Understanding Contract Terms and Flexibility
Length of Contract
Month-to-month, yearly contracts
Fees and notice periods for contract termination
Ability to adapt to business growth and change in transaction volume
By carefully considering these factors, you can choose a credit card processing solution that not only fits your current business requirements but also adapts to future growth and changes in the market.
Merchant services is another term for the services provided by a credit card processing provider. There is a lot that goes on behind the scenes when a credit card is processed. A relationship is built between the cardholder, merchant, card network, processing company, and banks involved.
The process begins with the cardholder. Once they use the merchant’s processing software to purchase a product or service, the relationship begins.
The merchant’s bank service (acquiring bank) receives the payment request and sends this on to the cardholder’s bank.
The process is reviewed by the credit card network and approvals or denials are issued.
The approval or denial is sent back to the merchant’s bank for the next step.
The merchant’s bank sends this approval or denial back to the merchant for complete processing at the end of the day.
The merchant’s software sends all approvals back to the bank at the end of the day and funds are deposited into the merchant’s account.
The merchant’s bank sends a payment request to the cardholder’s bank for repayment.
This process sounds complicated, but the approvals and payments happen quickly. For each credit card processed, the processing provider charges a percentage of the sale.
Low-Volume Versus High-Volume Processing
Each business differs in the number of sales each day. Some merchant services work better with high-volume processing and some work well with low-volume. Be realistic about your daily sales when deciding on a credit card processing provider.
If your business does low-volume sales, look for a provider that offers lower processing fees or pay-as-you-go options. Remember that your business is charged a fee for each payment processed, so you want to plan accordingly.
Security is an important factor when dealing with people’s financial information. Make sure you research each processing provider’s security history so you pick a company that will keep your customer’s information secure.
Your business security is another important factor. Check for fraud detection services with each platform to ensure you’re not coming up against excessive charge-back fees for fraudulent purchases.
Understanding Merchant Fees
Merchant fees involved with a credit card processing provider will differ based on many factors. When choosing a provider, it’s important to understand these factors and the effect they have on your business’ options. When comparing prices, there are some questions you want to keep in mind.
What Fees are Involved?
There are some fees involved with any processing rates. These include authorization fees, discount fees, basis points, and chargeback fees. There are some factors that influence these fees.
The credit card network
Card present versus card not present
Your merchant category.
Card type (credit versus debit cards)
Each of these factors is considered when fees are processed. There are other fees to consider though.
Many processing providers require a monthly fee to keep your merchant services active. These fees can range from $5 to $40 per month depending on the services you access.
Monthly minimums can also affect your fees for processing services. Many providers require a monthly minimum on the fees paid for services. If you don’t reach these monthly minimums, the provider will charge you for the difference.
Each provider requires these minimums based on different fees involved, so keep this in mind when comparing prices. Make sure providers that require minimums are upfront about the fees that will count towards your minimum requirements.
Watch out for inflated fees as well. Make sure you choose a merchant service with a good reputation. Some providers may trick businesses with hidden or inflated fees that raise prices considerably.
How Much Will the Necessary Equipment Cost?
The cost of merchant processor equipment varies widely, depending on the type and features. Basic credit card terminals can range from $30 to $300, while advanced Point of Sale (POS) systems may cost between $500 and $1,500 or more. Some providers offer leasing options or include equipment as part of their service package. Additional costs for accessories, software, or enhanced security features should also be considered. Prices are influenced by brand, technology, and functionality.
What is the Contract and Cancellation or Termination Policy?
Most providers require a contract for the services they provide. Make sure you understand and keep up with the contract policy. Knowing your contract terms will help you renegotiate when it’s time to renew a contract.
Some providers offer a pay-as-you-go option, but this option can increase monthly charges. Do your research on contracts and fees required. These fees also include the provider’s cancellation policy.
Ideally, you’ll find the perfect credit card processing provider for your business and not have to worry about terminating your service. Many things can happen though that might require you to cancel your service.
Make sure you understand the provider’s cancellation policy before making a final decision. Some services allow a no penalty termination. Some require a penalty fee if you cancel your service before the contract is complete.
What Features are Offered?
Just because a provider is cheaper doesn’t mean it’s your best option. Keep in mind that more features will increase the price of the service provided. Compare the features offered to your business needs when planning your purchase.
Are you an online store, a brick-and-mortar, or both? These questions will affect whether you need online payment options or in-store.
Look for payment deposit options as well. What are the fees associated with depositing funds into your account? How often will finds get deposited?
Also, pay attention to security features. Do they offer any type of fraud insurance or security? Is the provider security compliant?
Understand the risk involved for your business in security breaches so you can choose the best option. Extra security measures may cost more but could save you money down the line.
What Customer Support and Reports Does the Merchant Service Provider Offer?
Setting up your credit card processing systems can prove tricky at first. You should check out the ease of set up as well as the customer support offered for getting started. Also, check the provider’s availability for questions or maintenance issues.
Check on the credit card processing provider’s transaction reporting policy as well. What information will they provide in their transaction reports? You want as much information as possible.
Look at how they break down their monthly fees so you know what you’re spending money on each month. Also, make sure they provide full reports on the authorized purchases for each month.
Another consideration here is how the processing provider’s transaction reports integrate with your financial software. Look for options that work with your current software so bookkeeping is easier.
Know how often you’ll receive reports as well. Will you get daily or monthly reports? This will help you know how to track your payments and funds received for easier financial tracking.
Credit Card Processing Sample Costs
Below are a few examples of prices for credit card processors which will give you an idea of how much you will pay for your purchase.
$85 to $210 Minimum Cost of EMV Upgrades
Interchange Plus Markup range is between 16% -0.26%
Per transaction fees cost about $0.11
Swiped Debit Card Rates average 2%
3.5% average for swiped credit cards
Choosing the Right Merchant Services for Your Business
While important for your business’s success, comparing credit card processor prices is a time-consuming endeavor. There are many options available and many factors to consider.
If you’re overwhelmed with the different options available there is an option to make the process easier. Contact us for a custom quote so you can find the right merchant services option for your business.
Find Credit Card Processors Near You and Compare Up To Five Money Saving Quotes
People That Viewed This Page Also Found These Pages Helpful: