The Best Payment Processing Services for Small Businesses

These days, every small business needs to take credit cards if they want to stay relevant and competitive. According to a study reported by the New York Post, just 41% of Americans claim to carry cash with them when they go out, and no more than $25 at any one time. The same study also found that 28% of all purchases are now made by credit card.

As a small business owner, you need to have a card processor if you want to maximize sales and keep your customers happy. However, choosing the best payment processing service can be overwhelming, especially if it’s your first time starting a business. There are many different processing companies to choose from, and each will have benefits and drawbacks depending on your area of business.

“Far too many business owners take the path of least resistance and use their bank’s credit card processing service. But banks charge high credit card processing fees and rarely offer the best deals”, Kwame A. Michel, accountant specializing in small business.

Card processing solutions

Before you choose a card processing solution, you must consider the needs of your small business. You should ask yourself questions like: What are the unique requirements of my business? Do I expect to perform multiple transactions at the same time? Do I need a hand-held point of sale with a card processor synced up?

If you’re launching a startup for the first time, and you’re not sure what the volume of your transactions will be or which payment processing method will be most suitable, it’s best to choose a provider that offers no early exit fee or a trial period. That way, you can easily switch if you find the solution doesn’t meet your needs. Flexibility is integral to the growth and expansion of your small business so keep this in mind.

The best card processors for businesses who need support

If you’re looking for full-service support, solutions like Cayan Merchant Services are ideal. This solution has an excellent reputation for its customer service offering, providing prompt support and handy guides to help you use your card processor. Cayan also offers interchange-plus pricing, month-to-month contracts, no early termination fee, no account set-up fees and no application fees. For small businesses, they are an all-around good choice.

The best card processors for small retailers

If you expect to make a lot of micro-transactions (small transactions of $10 or less), then PayPal is perhaps the most cost-effective option for you. This solution also offers some of the most comprehensive services around, is remarkably easy to set up and use and businesses can have their online credit card processing up and running almost immediately. There are no contracts, no termination fees, and merchant funds are available immediately. The pricing structure is also transparent, and there are no hidden fees or add-ons.

The best card processors for restaurants and cafes

Square is one of the most popular credit card solutions for users in the restaurant and cafe segments. It’s easy to use, and you can access your funds the same day, which is a major pull for most business owners. You can also integrate your payment terminal with a Square POS (point-of-sale system), and you get a free magstripe card reader as a first-time user. What’s more, Bluetooth payment terminals are only $49.

Square is one of the more cost-effective options on the market, and it doesn’t lock customers into a long-term contract, so you can always try the solution before you commit. There are zero monthly fees, no statement fees and no minimum payments. What’s more, Square offers the most advanced mobile processing solution available without a monthly fee, and it comes with a vast selection of features.

According to Merchant Maverick, however, Square also has its downsides:

“High-risk businesses should avoid Square at all costs because Square is incredibly risk-averse and will shut down your account and hold your money if you are high-risk.”

Best credit card processors for high-risk merchants

A “high risk” merchant is any business that presents a high risk of fraud to the credit card processor. While this is usually due to the nature of the company itself, it can also occur if the owner has bad personal credit or the business caters to customers that present a higher risk of fraud. While high-risk companies may get approved by other providers, they won’t get as good a deal as a low-risk merchant would receive. They may also pay higher processing rates and get stuck with long-term contracts and termination fees.

One solution is to go with a high-risk vendor like Durango Merchant Services. Durango doesn’t tie you into expensive contracts when it comes to processing equipment. Instead, they offer a variety of card terminals for sale on their website. Unfortunately, their solutions are Windows-only, and they don’t currently offer any POS systems.

Best credit card processor for small to mid-sized businesses

Creditcardprocessing.com is a good choice for small to mid-sized businesses, defined as companies that take between $2,500 and $75,000 monthly. This solution offers low total processing costs and customized solutions. What’s more, new customers can get started without putting money down, and they get a number of free extras when they join. Creditcardprocessing.com also offers tiered pricing with a variety of flexible options, and there are no termination fees.

Conclusion: which is the right credit card processor for you?

All card processors are different, and the right choice for your business will depend on your unique requirements. However, there are some fundamental qualities to look out for if you want to strike a good deal at a fair price. These include cost, transparency, flexibility of terms, fund availability, ease of use and equipment leasing terms.

Online reviews can offer valuable insight into the success rates of each solution, but don’t let your decision hinge entirely on customer opinion. With any product or solution, there will be both glowing testimonials and negative feedback. The key is not to get tied into a long or expensive contract so you can keep your options open as your business grows.

Timothy Kelly

Timothy Kelly

Chief Editor at SmallbizStar
Tim has been a writer for over 20 years covering financial markets and small business.

In addition to writing about the financial markets, Mr. Kelly writes extensively about digital marketing and SEO.

Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art.

Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York.

Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine.

Contact Tim tim.kelly@smallbizstar.com
Timothy Kelly

Timothy Kelly

Tim has been a writer for over 20 years covering financial markets and small business. In addition to writing about the financial markets, Mr. Kelly writes extensively about digital marketing and SEO. Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art. Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York. Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine. Contact Tim tim.kelly@smallbizstar.com