The Best Merchant Account Services

Merchant services enable businesses to accept electronic payments from customers. A merchant account is a type of bank account that allows you to accept payments from your customers using credit and debit cards. The credit card processing company sets it up for you and assigns you a merchant ID number. Once you start accepting credit card payments, the company holds your funds until settlement, when they are transferred to your business bank account.

Merchant services offer a wide range of benefits to help businesses, especially when it comes to payments, customer experience and improved security. Specific benefits include increased sales, improved customer experience and enhanced security. Here is more about each:

Increased sales

Merchant accounts act as a conduit for businesses that allow you to accept a variety of payment methods, including debit and credit cards. By accepting a wider variety of payment methods, businesses can attract more customers and increase their sales.

Customer experience

Most U.S. consumers now prefer to make their purchases using debit or credit cards. Merchant services also streamline the payment process, making payments easier and more convenient for customers.

Enhanced security

Many merchant service providers offer fraud prevention tools to protect businesses and their customers. In many cases, accepting credit or debit cards is safer than cash.

Data and analytics

Merchant services can provide businesses with data on customer spending habits, which can be used to improve marketing and sales strategies. Many of the options on our list can generate easily-digestible reports to assist with decision-making.

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:

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.

When selecting a merchant services provider, it’s crucial to understand the various pricing models and their implications for your business. Here’s a breakdown of the three most common models:

1. Interchange-Plus Pricing

Considered the most transparent model, it clearly shows the processor’s markup. Fees are calculated based on the interchange rate set by card networks and the processor’s markup.

2. Tiered Pricing

Tiered pricing bundles interchange fees, card-brand fees, and markups into tiers. Transactions are categorized into tiers (qualified, mid-qualified, non-qualified) with varying rates.

3. Flat-Rate Pricing

Flat-rate pricing consists of a single fixed percentage rate per transaction, often with no monthly fees. This structure is Ideal for small businesses with low transaction volumes.

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. 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.

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. Mobile card readers that also accept EMV chip cards, contactless cards and mobile payments cost less than $100.
• Credit card terminals: 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.

Many businesses require POS equipment to process credit cards. Source: Clover

Choosing the right merchant service provider is an important decision for a small business. Here’s a step-by-step guide to help you make the best choice:

1. Assess your business needs

Make sure you have key metrics for your business on hand. Determine your transaction volume and average ticket size. Identify the types of payment methods you want to accept (credit cards, debit cards, mobile payments), and make sure that your current POS system is compatible with the merchant account providers on your research list.
Some providers specialize in servicing certain industries. “Look for a partner familiar with the unique regulatory, compliance and operational challenges of your sector,” said Nicole Carroll, the chief growth officer at Paysafe. “Seasoned providers often have pre-built solutions designed to address common issues, such as improving transaction success rates or enhancing fraud protection.”

2. Research and compare providers

Look for providers that offer the features and payment methods that you need for your business. Understand the pricing models (interchange-plus, tiered, flat-rate) and make sure you know exactly how much the merchant account service will cost you. Consider additional features like fraud prevention, chargeback management and reporting tools. Ensure the provider is PCI DSS compliant to protect customer data, and inquire about their fraud prevention measures.
Scalability is also a crucial factor, according to Carroll. “Look for providers that offer automated payment systems, particularly for subscription models or recurring billing,” she said.

Scott Dylan, founder of NexaTech Ventures, also advises that businesses consider integration with existing systems, which becomes more important as your business scales up.

“When we acquired a high-end furniture company, we ensured our MSA seamlessly integrated with the existing software,” Dylan said. “The time saved on manual entry alone was invaluable.”

3. Evaluate customer support

Assess the provider’s reputation for customer service. Look for 24/7 support options and timely response times. It’s also a good idea to check out user-generated feedback on review sites such as Trustpilot.
“Your provider should understand your long-term vision and be able to support your growth,” added Carroll. “This means going beyond transaction processing to offer insights that enhance customer experience and help you innovate.”

4. Test the software platform

User-friendliness and a shallow learning curve are important when you sign up for business services. Make sure that you avail yourself of any free trials, which allow you to test out the merchant service provider’s software interface. Other companies offer demos that give you a feel for how the software works.

5. Negotiate terms

Some aspects of the merchant account service fee are negotiable. Don’t hesitate to ask for a better deal on fees and contract terms. Be clear about your business needs and expectations, and obtain quotes from multiple providers.
“When we launched a chain of co-working spaces, we encountered confusing fee structures – something we could ill afford during our start-up phase,” said Dylan. “It’s essential to push for a breakdown of every cost involved: setup fees, monthly fees, transaction fees and PCI compliance charges.”

Here are more tools that you should consider as you look for a merchant processor for your small business:

• 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.
• POS integration: Real-time data synchronization between the POS and merchant service ensures accurate transaction processing and inventory management. Look for POS systems with built-in merchant services capabilities or those that offer easy integration with third-party providers.
• Payment gateways: Prioritize payment gateways with robust security features to protect sensitive customer data. Ensure the payment gateway is compatible with your e-commerce platform or website. If you sell internationally, choose a gateway that supports multiple currencies and payment methods.
• Loyalty programs: Utilize loyalty programs to build stronger relationships with customers and provide personalized offers.
• 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.

Square offers some inexpensive processing tools, including this mobile reader. Source: Square. 

• 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.

“A case in point was a travel agency we revitalized, which experienced frequent downtime with its previous [merchant service account],” Dylan said. “Switching to a provider that guaranteed 24/7 support was a game-changer.”

Sekure

Sekure operates as a merchant account broker, giving you the power to choose from multiple payment methods and tailor a plan that aligns perfectly with your budget and transaction volume. We appreciate Sekure’s guidance in navigating the merchant account landscape and finding a reliable provider that delivers personalized service.

Chase Payment Solutions

As a major bank and credit card issuer, we like that Chase boasts unparalleled insight into consumer spending habits. Businesses utilizing Chase Payment Solutions can leverage this vast data trove to effectively target potential customers. With this data, you can gain insights into demographics, spending patterns, and purchasing behavior to reach the right customers with the right message.This unique feature sets Chase apart and makes them our pick for businesses seeking data-driven insights.

Stripe

Online businesses will love Stripe’s user-friendly platform and seamless integration with popular e-commerce platforms like Shopify and Magento. Setting up online payments is a breeze, and the ability to customize our store and utilize robust security features makes Stripe a compelling choice. We like that you can easily connect Stripe with your existing e-commerce platform for a smooth checkout experience for your customers.

National Processing

National Processing stands out with its competitive interchange-plus rates and a rate-lock guarantee, ensuring our rates won’t increase during the contract. They also offer to match or beat competitor rates, demonstrating their commitment to affordability. We like that you can lock in your rates at the time of signup, providing peace of mind and predictability for your budgeting.

Flagship Merchant Services

Flagship Merchant Services offers month-to-month contracts with no cancellation fees, making them our pick for flexibility. This allows you to easily adjust your merchant account services as your business needs evolve. We appreciate that you can avoid long-term commitments and enjoy the freedom to adjust your services as needed without penalty. You can also exit your contract at any time without incurring additional charges, providing peace of mind and flexibility.

Finix

Finix is a game-changer for businesses experiencing rapid growth. Unlike one-size-fits-all solutions, Finix allows you to completely customize the payment experience. We love that you can build a system that perfectly aligns with our unique needs and seamlessly integrate it with existing tools. Finix is built to handle our growth and adapt alongside expanding business, allowing you to add new features and expand your payment capabilities as your business scales.

Finix’s open API allows you to build custom integrations. Source: Finix

Selecting the best merchant account services requires a deep dive. Our team of financial pros and business operations specialists meticulously analyzed an initial pool of 102 providers. After a rigorous narrowing process during which we looked at a number of factors, including the rates, how easy the service was to use, how long it took for money to be transferred into bank accounts and the available support options, among others, we identified 33 contenders for further scrutiny.

These contenders were then assessed across 24 key criteria reflecting business owners’ priorities when choosing merchant account services. Using these criteria, we selected the six best picks.

We grouped our criteria into categories that were weighted based on the factors most important to business owners when choosing a merchant account service. We used the following to measure each service provider and select our best picks

• Rates: (30%): Cost-effectiveness is paramount. We compared processing rates, transaction fees, and monthly account fees to pinpoint the most budget-friendly options.
• Features (25%): We evaluated essential functionalities like recurring billing and reporting alongside advanced features like mobile app integration and compatibility with third-party business applications.
• Ease of Use and Acceptance (25%): We leveraged demos and free trials to assess the user interface of each platform, ensuring an intuitive and hassle-free experience for you and your staff.  We also delved into user feedback and explored the merchant accounts’ acceptance rates for various business types.
• Customer Service: (20%): Ensuring ongoing support is crucial. We evaluated the range of customer service options offered by each provider, including phone support availability across plans and the quality of self-service resources.

Through this comprehensive evaluation, we not only identified trustworthy merchant account services, but also determined how each platform best serves specific business needs. Our analysis considered processors that excel in certain areas or cater to particular company types, reflected in the “Best For” categories on this page. This ensures you can easily find the merchant account service that perfectly aligns with your unique business goals.

To learn more about our methodology, see our full editorial process.