Best Credit Card Processing Companies for Small Businesses
February 21, 2025 | Last Updated on: February 21, 2025
By Russ Shumaker
When it comes to running a business, cash may be king, but plastic dominates most transactions. And because of this, having a seamless payment solution for your small business is not just a convenience but a necessity for your business operations.
To get the most out of a credit processing solution, you’ll need to look out for a service whose offering is in line with your business operations. In this article, we will explore what credit card processing entails and look at some of the best credit card processing companies for small businesses.
In this article, we cover:
- What is Credit Card Processing?
- Does My Business Need Credit Card Processing?
- Best Credit Card Processing Companies for Small Businesses
What is Credit Card Processing?
Credit card processing is essentially the mechanism that allows businesses to accept credit and debit card payments from customers.
It involves a series of steps that begin when a customer swipes, dips, or taps their card at the point of sale (POS) terminal, or enters their card information online.
The information is then transmitted securely to the payment processor, which verifies the details with the card-issuing bank to ensure the transaction is legitimate and that the customer has sufficient funds.
Once verified, the payment is authorized, and the funds are transferred from the customer's account to the merchant's account.
Does My Business Need Credit Card Processing?
You might be wondering if credit card processing is necessary for your small business. The answer is a resounding yes for almost every industry.
Today, consumers expect the convenience of paying with their cards. And if you do not offer this option, you risk losing potential customers to competitors who provide a more versatile payment experience.
Moreover, credit card processing enhances the professionalism of your business. It signals to customers that you're a legitimate and trustworthy operation, capable of handling secure transactions.
Accepting credit cards can also boost your average transaction value. Studies show that customers are more likely to spend up to 83% more when using credit cards compared to cash. So, not only does credit card processing improve your customer service, but it can also increase your revenue.
Best Credit Card Processing Companies for Small Businesses
Since we've established the importance of credit card processing for small businesses, let's explore some of the best credit card processing companies in the market.
Square
Square is a game-changer for small businesses. The company offers a variety of hardware options, from simple card readers to fully equipped point-of-sale systems.
What makes Square stand out is its straightforward pricing model, with no monthly fees or hidden costs. This is particularly beneficial for small businesses with fluctuating transaction volumes.
Stripe
Is your business online? Does it cater to an international audience? If you answered yes to both questions, then Stripe might be a good option for you.
With support for over 135 currencies and various payment methods, Stripe enables businesses to reach a global audience. Its pricing structure is based on a per-transaction fee, with no monthly fees or setup costs, which makes it an attractive option for small businesses.
PayPal
PayPal is a household name in online payments and has served both small and big businesses for several years. With PayPal, you can accept payments on your website, in person with a card reader, or through invoicing.
PayPal also offers advanced fraud protection, dispute resolution services, and smooth integration with popular e-commerce platforms like Shopify and WooCommerce.
Authorize.Net
If security is your top concern, authorize.net is a reliable choice. This company is a reliable credit card processing solution that accepts payments online or in person. Authorize.net offers flexible pricing plans with competitive rates and no setup fees.
Additionally, authorize.net provides advanced security features like tokenization and PCI compliance to protect your customers' sensitive payment information. Keep in mind that it is particularly suitable for businesses with a high volume of online transactions.
Clover
Clover is a comprehensive point-of-sale system that combines hardware and software to provide an all-in-one credit card processing solution.
It's particularly well-suited for businesses with physical storefronts, such as retail shops and restaurants. Clover offers various hardware options, including countertop and mobile card readers, as well as a full POS system.
Embrace a Growth Mindset
Because credit cards and credit card processing companies charge fees, some small business owners choose to either not accept credit cards, or charge customers an additional fee to pay with card versus cash. It’s important to remember though, that cost cutting strategies are not growth strategies. In the long run, your customers want a seamless experience where they can pay with their method of choice and don’t have to worry about extra charges, or whether they brought enough cash. Typically, it’s better to accept credit cards without hassle or extra fees, and then find other ways to increase your profit margin.
If you want to learn more about financial growth for your small business, read more articles on our Business Finance Blog and explore business financing solutions that can help your business thrive.
FAQs
Which processor is best for small business?
For business users, an Intel Core i5 or i7 processor is ideal, especially for multitasking or running demanding software for video editing and complex calculations. However, the latest Intel i9 processor is the best choice for professional power users requiring top-tier performance.
What is the average credit card processing fee for a small business?
Small businesses' average credit card processing fee is between 1.5% and 3.5% of each transaction. However, the fee varies according to factors like card network, transaction volume, payment processor, and processing method.
How to choose a credit card processing company?
You can select a credit card processing company by considering their customer service, investigating transparency, and deciding between merchant account or third party. You can also research mobile, POS, and online features.
What states don't allow credit card surcharges in 2024?
Visa recognizes that surcharging is prohibited in Connecticut, Maine, Massachusetts, Oklahoma, and Puerto Rico. Additionally, Colorado, Minnesota, New Jersey, and New York have specific regulations governing surcharging.
Is it illegal to charge a credit card processing fee?
No, charging a fee is not considered in many states of the US. However, there are some exceptions and restrictions, such as surcharging practices, state laws, federal laws, and local laws.
