The Best Merchant Account Services of 2024

Whether you accept credit card payments over the phone, from customers online, or in person, it’s important to be able to accept every payment type, which is why choosing the right merchant services provider is essential. You also want to work with a payment processing company that has transparent pricing, competitive rates and no lengthy contracts. With these qualities in mind, we researched merchant account service providers and payment gateways to help you find the best options for your business.

Check out our recommendations for the best merchant service providers for different business types below. If you process less than $3,000 per month, see our mobile credit card processing reviews. Otherwise, read on to learn more about the features, pricing and contracts you should look for in a merchant account provider for your business.

Why You Should Trust Us

At business.com, we’ve independently evaluated hundreds of business software and services to determine the best products for small businesses. Our expert editorial staff identified the best merchant account services based on firsthand experience, comprehensive research and rigorous testing. Each product was analyzed and rated on a number of factors, including rates, ease of use and features. The business.com team prioritizes accuracy and fairness in all of our assessments. Learn more about our methodology.

Cost is often a top factor when you’re looking for the right merchant account services for your business. If you process a lot of card payments each month, it can be expensive if you go with the wrong provider. There are three types of costs you need to investigate:

1. Processing fees
2. Account fees
3. Equipment costs

Many of the best merchant services and payment gateway providers post pricing on their websites. However, more commonly, you’ll have to speak with a sales representative. During these calls, the rep will ask about the specifics of your business, such as your transaction volume, average ticket size, industry and creditworthiness. If you’re already processing, many reps will ask you to send them a recent statement so they can try to meet or beat your current rates.

Processing Fees

Whether you accept credit card payments online or in person, you pay a small fee for every transaction, which is expressed as a percentage of the sale plus a few cents. However, providers calculate these costs differently, which makes it difficult to compare prices. To make an accurate comparison, you need to know the types of processing fees and pricing models.

Processing fees have three parts: the interchange rate, the card-brand fee and the processor’s markup.

• The interchange rate: This is a non-negotiable cost set by the card brands (American Express, Discover, Mastercard and Visa), and every service provider pays the same amount. Each card brand has its own rate table with different interchange rates based on the type of card (credit or debit, regular or rewards, etc.), your industry, the size of the sales ticket and how the card is accepted (in person or online, using a chip card reader or swiper, etc.).
• The card-brand fee: This is also a non-negotiable fee that the card networks charge; every processing service provider pays the same amount.
• The processor’s markup: This portion of the fee is negotiable.

Recognizing how confusing this is, many processors try to simplify processing rates and how they communicate them to their merchants. Most use one or more of these three pricing models: interchange-plus pricing, tiered pricing and flat-rate pricing.

Interchange-plus pricing: Industry experts favor this pricing model – sometimes called interchange pass-through pricing or cost-plus pricing – because it’s the only pricing model that shows you exactly what the processor’s markup is. This is significant because the markup is the only part of the cost that you can negotiate. As a result, this model has the best pricing for most merchants.

• When you’re quoted this rate, it will look something like this: 0.3% plus $0.15. Remember, this is only the processor’s markup; you still must pay the interchange and assessment fees. For example, if you have a retail business and you accept a rewards Visa card in person using a chip card reader, the interchange fees might be 1.65% plus $0.10. The card association fee for Visa would be an additional 0.15% plus $0.02. Adding up all three costs, the full rate you would pay for this transaction would be 2.1% plus $0.27.

Tiered pricing: Though this is the most common pricing model, industry experts criticize its lack of transparency. Other names for this model include bundled pricing and bucket pricing, because it attempts to bundle interchange fees, card-brand fees and markups, and then segment transactions into tiers, or buckets. These tiers are often sorted into qualified, midqualified and nonqualified, with separate tiers for debit and credit card transactions.

The low teaser rates that many companies advertise are usually qualified debit transactions, which means they apply only to regular debit cards that you accept in person using a card reader. Midqualified transactions are usually rewards cards, and nonqualified transactions are most often business or foreign cards, though some also include premium rewards cards. Most merchant service providers offer three tiers, but some have as few as two or as many as six.

• When you see this rate advertised, it looks something like this: 1.39% plus $0.21. However, this rate is only for debit cards accepted in person, so if you accept a credit card, you’ll pay a different rate, perhaps 1.59% plus $0.21. If it’s a rewards card, it would be downgraded from qualified to midqualified, which might add another 1% to the cost. So, for this example, the rate would be 2.59% plus $0.21.

If you’re quoted tiered rates, it’s important to ask how many tiers there are and which types of cards and acceptance methods apply to each. Make sure you know which types of cards your customers use most so you can judge whether this pricing model is cost-effective for your business. If the majority of your customers use regular debit cards and you accept cards in person, this processing model may be worth considering; otherwise, you should look for a processor that offers one of the other pricing models.

• When you see this rate advertised, it looks something like this: 75%. Using the above scenario with the rewards credit card, this is the processing fee you would pay. It is higher than the other two pricing models’ fee percentages, but there aren’t any other fees for your account, which may make it less expensive overall, depending on how much you process each month and which types of cards your customers prefer. The consistent rate makes it easy for you to calculate exactly how much you’ll pay in processing fees each month.

Merchant Account Fees

In addition to the processing rates for each transaction, you’ll pay account maintenance fees if you’re working with a full-service merchant account provider or payment gateway service. These typically use the interchange-plus or tiered pricing models. Generally, providers that use the flat-rate processing model don’t charge account maintenance fees.

When you ask about account fees, most sales reps will tell you about the monthly fee, but there are a lot of complaints online about surprise fees on credit card processing statements. For this reason, it’s important to read the full contract (application, terms of service and program guide) to ensure you’re aware of every fee.

Here are some of the fees most merchant services providers charge. For a detailed list of fees to look for as you read processing contracts, see our guide to credit card processing fees.

• Monthly fee: Most merchant service companies charge a monthly fee, sometimes called a statement fee, that covers the cost of preparing your monthly billing statement and providing customer support. This fee usually ranges from $5 to $15. Some providers may charge more if they roll other regular account fees into this charge.
• Gateway fee: A payment gateway is necessary if you intend to accept credit cards online. Small business owners with an online shop need a gateway because it encrypts and securely transmits credit card data from your website to the processor. Pricing varies; some processors charge a monthly fee of around $10 for this service, some charge a per-transaction fee ranging from $0.10 to $0.25, and some charge both.
• PCI compliance fee: If you work with a standard processor that gives you your own merchant account, you’re required to be PCI-compliant. That designation means you adhere to the Payment Card Industry (PCI) Data Security Standard, which was developed to help merchants prevent data theft and fraud. Most processors that charge this fee offer to help you complete the annual questionnaire that is required to demonstrate your compliance. Your rep may call or email to remind you to take the assessment each year, or the processor may note it on your statement. On average, this fee is $99 annually.
• PCI noncompliance fee: Even if the processor doesn’t require you to pay an annual PCI compliance fee, it may charge you a monthly noncompliance fee if you fail to establish compliance by filling out the annual questionnaire. You can easily avoid this fee by staying up to date with your PCI responsibilities. This fee can be very high, ranging from $20 to $60 per month, as it is meant to discourage you from letting your PCI compliance lapse.
• Chargeback fee: If a customer disputes a charge and requests their money back, the processor charges you this fee. Chargeback fees are usually $15 to $25. Chargebacks are more common when you accept credit cards online versus in person, because typical reasons for chargebacks include delivery failures, technical errors, fraud and customer dissatisfaction. Another common cause of chargebacks is if your store name is different from the name on your merchant account and your customer doesn’t recognize your merchant name on their credit card statement.

Some processors charge application and setup fees for your merchant account, a payment gateway setup fee to connect the payment gateway with your website, and an early termination fee if you want to close your account before the contract’s term expires. The best providers don’t charge these fees, though, so you should ask them to waive these fees if they’re included in your quote or look for a provider that doesn’t tack them on.

Processing Equipment Costs

If you accept credit cards in person, you need to purchase a card reader or terminal. Here are the three most popular options:

• Mobile card readers: This is the cheapest option, as many providers give you a free swiper when you sign up for an account. If you want to purchase a mobile card reader that also accepts EMV chip cards, contactless cards and mobile payments, these cost less than $100.
• Credit card terminals: This is the midrange option. These devices cost $150 to $600, depending on whether you choose a countertop or wireless unit. They have built-in keypads and receipt printers, and all new models can accept both chip cards and contactless payments.
• POS systems: This may be the most expensive option, but cost will depend on the type of system you choose. Tablet POS systems are often the least expensive, and they work with mobile card readers.

The most important thing to know about processing hardware is to avoid leasing it, because you can’t cancel a leasing contract and, in most cases, you’ll pay much more over the long term than if you purchase it outright. It’s enough of a problem that the Federal Trade Commission cautions against it, noting that businesses that lease may pay thousands of dollars for equipment that costs just a few hundred dollars.

Whether you work with a merchant services provider, a payment gateway provider or a credit card processing company that provides you with both a merchant account and a payment gateway, the company you choose should be up to date with industry standards and allow you to accept all major cards (American Express, Discover, Mastercard and Visa). Here are more qualities you should consider as you look for a merchant processor for your small business:

• Pricing: The best service providers are transparent about pricing, either by clearly posting their rates, fees and processing hardware costs on their websites, or by making it easy to get a quote from a company representative. Look for a merchant account service that offers interchange-plus pricing and doesn’t charge setup fees, cancellation fees or nonstandard fees, like quarterly technology fees or semiannual postage and handling fees.
• Contracts: Choose a service provider that offers month-to-month or pay-as-you-go terms so you can cancel without penalty if you find a better deal elsewhere. Standard payment processing contracts have three-year terms and charge hefty early termination fees; some even have liquidated damages clauses.
• Scalability: As your business expands, you may want to accept credit cards online in addition to in-store and on the go, so look for a company that offers multiple ways to accept payments. You should also be able to add registers, or even locations, to your account.
• Security: The credit card processing company providing your payment gateway and merchant account should comply with the PCI Data Security Standard. It should also help you become PCI-compliant.
• Processing hardware: The services provider should offer card readers or terminals that are EMV- and NFC-capable so you can securely accept chip cards, contactless cards and mobile payments such as Apple Pay and Google Pay. It should also allow you to purchase the hardware upfront so you can avoid bad leasing contracts and the headaches that come with them.
• Integrations: If you have a website or use other business software – such as an e-commerce platform, a top POS system, highly rated customer relationship management software or accounting software – you’ll want a merchant account or payment gateway that integrates with those platforms so you can easily sync data instead of manually downloading and uploading it between systems.
• Payouts: It’s important to consider how and when you receive your money after a sale. Most service providers offer next-day funding, taking one or two days to deposit your money into your business bank account, and some can do it even faster, offering same-day or instant funding for a fee. Some providers give you the option of having your money loaded onto a business debit card.
• Customer support: The company’s customer service team should be readily accessible. The best providers offer 24/7 customer service so you can resolve issues no matter when you call.
• Other benefits or service limitations: If there are certain features you need – for example, a virtual terminal so you can accept payments using a computer with internet access – make sure to look for them before selecting a processor. Also consider whether there are certain limitations, such as monthly processing limits or vendors that support only one acceptance method.

The best merchant account contracts have month-to-month terms with no early termination fees. However, the standard merchant account contract has a three-year term that automatically renews for an additional one or two years. If the processing service provider you want to work with has a lengthy contract, ask the sales rep if they can give you month-to-month terms. They want your business, and many are willing to negotiate.

With a standard merchant account contract, you have a very short window at the end of the term, usually 30 days, in which to cancel your account without penalty if you don’t wish to renew. Most providers require you to submit a cancellation request in writing.

If you miss this window or decide to close your account early, the company may charge you an early termination fee, which is usually a few hundred dollars. Some contracts also have liquidated damages clauses, which can make it very expensive to get out of your contract.

No matter which service provider you choose, it’s important to read the entire contract (the application, the terms of service and the program guide) before you sign anything or give the company your bank account information and Social Security number. Be aware of all the fees listed in the contract, as you will be expected to pay them even if they weren’t disclosed by a sales rep. If the sales rep offers to reduce or waive the term length or certain fees, get that in writing by amending the contract or receiving a written waiver.

Our first step in choosing the best merchant services and payment gateway companies was to compile a list of providers. We considered credit card processing companies that small business owners told us they liked, companies that asked us to consider them, those we were already familiar with and those we found on well-known websites. This list of more than 100 payment processing providers included large banks and industry leaders, as well as small companies and those new to the industry.

We then researched the companies on our list by studying the information and resources on their websites and began narrowing our list based on the criteria in the section below. We selected 10 merchant account providers and payment gateway services as our best picks: Stax, Square, Payment Depot, National Processing, Clover, ProMerchant, Merchant One, Flagship Merchant Services, Chase Merchant Services and Paysafe.

We expect businesses, especially small businesses, to pay close attention to the fees merchant services providers are charging them. Over the last few years, the use of digital payments has increased dramatically. The use of cash was already declining, but the pandemic accelerated this process.

In 2023, Visa and Mastercard increased interchange fees after several years of pandemic-induced delays. Large merchants are impacted most by these fee increases, although some small businesses with low volume or small transactions may actually see lower fees. Visa and Mastercard are planning to raise these fees again in 2024.

Improving the customer experience will continue to be a priority in 2024 for those in the payment industry. Giving consumers the ability to pay when, where and how they want will be merchant services providers’ focus in the coming year. The pandemic has shown that consumers now want many options regarding how and when they pay for goods and services. It will be up to those in the payment industry to deliver these choices.

“It’s not enough anymore to just offer payment solutions that are tailored to consumers; now, payments need to be taken right to them,” said Michel Léger, executive vice president of global sales and marketing at Ingenico, in a statement.

An Ekata survey of more than 7,000 consumers throughout North America and Europe revealed that 92% expect a secure, fast and frictionless payment experience, while more than 70% believe that online shopping account creation should be instantaneous.

To support those desires, mobile payments will continue to be paramount for merchant services providers. Finding better ways to support mobile shopping, mobile wallets and mobile checkouts will be a top priority for payment providers this year.

Data security and fraud prevention will remain a top concern for the payments industry over the coming years. According to the Ekata report, over 60% of consumers feel that businesses accessing their personal data are responsible for fraud prevention. Small businesses are benefiting from the strides made in artificial intelligence (AI) to bolster their security measures. Merchant accounts now utilize AI algorithms to analyze transaction data, recognize patterns, and swiftly identify potential fraudulent activities in real time.

In addition to accepting mobile payments, you should focus on finding ways to let your customers pay with mobile wallets and contactless cards that use near-field communication (NFC) technology in 2024. This technology has grown rapidly in popularity, and we expect it to continue.