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Best Merchant Account Service Providers

Advertiser Disclosure Updated: Mar 16, 2024, 4:58pm

Best Merchant Account Service Providers Of 2024

Dana MirandaCEPF®, Small Business Expert Writer, author of YOU DON'T NEED A BUDGET

Dana Miranda is a Certified Educator in Personal Finance® who's been writing about money management and small business operations for more than a decade. She writes the newsletter Healthy Rich about how capitalism impacts the ways we think, teach and talk about money. She's the author of YOU DON'T NEED A BUDGET (Little, Brown Spark, 2024).

Rob WattsManaging Editor, SMB

With over a decade of editorial experience, Rob Watts breaks down complex topics for small businesses that want to grow and succeed. His work has been featured in outlets such as Keypoint Intelligence, FitSmallBusiness and PCMag.

Dana Miranda,

Dana MirandaCEPF®, Small Business Expert Writer, author of YOU DON'T NEED A BUDGET

Rob Watts

Rob WattsManaging Editor, SMB

CEPF®, Small Business Expert Writer, author of YOU DON'T NEED A BUDGET, Managing Editor, SMB

Cassie Bottorffeditor

Cassie is a deputy editor collaborating with teams around the world while living in the beautiful hills of Kentucky. Focusing on bringing growth to small businesses, she is passionate about economic development and has held positions on the boards of directors of two non-profit organizations seeking to revitalize her former railroad town. Prior to joining the team at Forbes Advisor, Cassie was a content operations manager and copywriting manager.

Reviewed

Cassie Bottorff

Cassie Bottorffeditor

editor

Reviewed

Updated: Mar 16, 2024, 4:58pm

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Payment options continue to expand and customer preferences continue to shift. It’s important to work with a merchant service provider that offers the convenient payment options your customers want, such as credit card processing, mobile payments and contactless payments. To help you find the right solution for your needs, we’ve ranked the best merchant services for small business available today.

Best Of

Show Summary

Featured Partners

Stax

First Month Free

$99 per month, 7 cents to 15 cents per transaction plus interchange rate

Stax

On Stax's Website

Paysafe

SAVE or get a $200 gift card + FREE payment equipment*

Industry-low rates starting at $0.15 batch fee + 0% Cash Discount Plans available

Paysafe

On Paysafe's Website

Payment Depot

$0 Setup & No Cancellation Fees

Customized Interchange+ Pricing - Rates as low as 0.2% - 1.95%

Payment Depot

On Payment Depot's Website

Finix

Save up to 40% on credit card processing

Transparent subscription-based pricing with 0% markup on interchange fees

Finix

On Finix's Website

The Best Merchant Account Service Providers of 2024

Square: Best overall
Stripe: Best for owners of multiple businesses and brands
Stax: Best for avoiding transaction fees
National Processing: Best for low cost
PayPal: Best for e-commerce

Why You Can Trust Forbes Advisor Small Business

The Forbes Advisor Small Business team is committed to bringing you unbiased rankings and information with full editorial independence. We use product data, strategic methodologies and expert insights to inform all of our content and guide you in making the best decisions for your business journey.

We reviewed 17 merchant services using a weighted methodology to help you find the top five merchant service providers for small businesses. Sixteen different factors contributed to our ratings, including if the merchant offers a transparent pricing structure, a well-laid-out reporting dashboard, contactless payments, invoicing and quick deposits. We also checked third-party customer review sites and gave our own expert review of each service. All ratings are determined solely by our editorial team.

Best Overall Merchant Service

Square

Monthly fees

Free mobile credit card reader

Yes

Mobile, POS, online and e-commerce transactions

Yes

Via partner site

Yes

Editor's Take

Square’s services are a fit for the broadest range of businesses, so it’s no surprise the platform has climbed to the top of the industry since first providing its services for small businesses in 2009.

With a Square account, you’ll get access to the hardware and software you need to accept in-person payments on mobile, online through Square Checkout and through integrations with services such as WooCommerce and at retail locations with sleek point-of-sale (POS) equipment you can buy upfront or lease through monthly payments.

Square’s processing rate varies depending on the type of transaction:

Swipe, chip or tap transaction: 2.6% + 10 cents
Online transaction: 2.9% + 30 cents
Keyed transaction: 3.5% + 15 cents

You’ll pay no fees for refunds (chargebacks), and you’ll get your processing fee back for reversed transactions. You can usually get money within 36 hours after a transaction, but Square offers options to access funds immediately.

Learn more: Read our full Square review.

Who should use it:

Square is designed for small businesses that are just getting started. Its modern and easy-to-use equipment and online checkout features make it simple for you to get set up and start selling without a lot of complicated steps.

Pros & Cons

No monthly fee
Easy to get started
No chargeback fees
Mobile card reader available for free

Customer service could be better

Best for Owners of Multiple Businesses/Brands

Stripe

Monthly fees

Mobile, POS, online and e-commerce transactions

Yes

On Stripe's Website

Yes

Editor's Take

Stripe is one of the most cost-effective merchant services with a wide range of payment processing options.

It’s one of the major players in online payment processing, and it’s automatically built into some major site builders, including Squarespace, Kajabi and Shopify. You can also use Stripe Terminal to accept in-person credit card payments, and Stripe integrations or invoicing to receive ACH payments.

Stripe charges these transactions fees, depending on how information is gathered:

Keyed and online transactions: 2.9% plus 30 cents (plus 1% for international cards and currency conversion)
In-person, swiped or chipped transactions: 2.7% plus 5 cents (plus 1% for international cards and currency conversion)
ACH direct debit: 0.8%

You’ll also pay 0.4% as a chargeback protection fee. You’ll pay $59 for the basic contactless card reader or $249 for the handheld mini POS.

Stripe is a convenient option if you run multiple online businesses or brands because you can operate them all from one merchant account with separate reporting.

Payouts come at a scheduled interval or as soon as two business days after a transaction, depending on the settings you choose.

Stripe customer support is available through live chat and phone 24/7.

Learn more: Read our full Stripe review.

Who should use it:

Stripe’s affordable equipment and no monthly fees make this platform ideal for small businesses, whether you’re an e-commerce store, online educator or brick-and-mortar shop.

Pros & Cons

No monthly fee
Chargeback protection
24/7 customer service online or by phone
ACH payments supported

Small learning curve for business owners not used to online payment processors
Up to 14-day wait for first payout

Best for Avoiding Transaction Fees

Stax

Monthly fees

Yes

Mobile, POS, online and e-commerce transactions

Yes

On Stax's Website

Yes

Editor's Take

Stax, formerly Fattmerchant, offers a streamlined, month-to-month merchant account service. Instead of paying fees per transaction, you can choose among three monthly subscription tiers and get the first $500,000 per year processed at no extra cost. Monthly prices are:

Growth: For $99 per month, get ACH processing, free surcharging, a “lite” version of dashboards and analytics and quick payment and backup processing features.
Pro: For $139 per month, add accounting reconciliation, invoicing, website-hosted payment links, mobile payments, the ability to store customer credit card information and API integrations.
Ultimate: For $199 per month, add automatic updates for stored card information, recurring invoices, scheduled payments, advanced dashboards and analytics, one-click shopping cart setup and data exports.

Businesses that process more than $500,000 annually can talk with a Stax sales rep for custom monthly pricing.

You can also add on more features with à la carte pricing, including a one-click shopping cart, QuickBooks sync, terminal protection, custom branding, same-day funding and digital gift cards. With a subscription, you can get a free terminal or card reader.

Learn more: Read our full Stax review.

Who should use it:

Stax is best suited for businesses doing a high volume of transactions each month. The monthly flat-fee pricing can save you a ton compared with competitors that charge transaction fees.

Pros & Cons

Monthly flat-rate pricing
Same-day funding
Free terminal or card reader
QuickBooks integration
Add-ons make plans customizable

Pricing tiers and add-ons make subscriptions complex
Monthly subscription is relatively pricey if you have a low volume of transactions

Best for Low Cost

National Processing

Monthly fees

Yes

Mobile, POS, online and e-commerce transactions

Yes

On National Processing's Website

Yes

Editor's Take

National Processing is one of the more complex payment processors on this list. It offers credit card processing, ACH transfers and e-check payments. It serves a range of industries, including high-risk merchants.

You’ll apply for a merchant account according to your industry and pay a monthly flat rate of $9.95 plus a per-transaction fee that varies by industry, but is generally lower than more modern competitors’:

Restaurant: 0.14% plus 7 cents
Retail: 0.18% plus 10 cents
eCommerce: 0.29% plus 15 cents
Non-Profit: 0.12% plus 6 cents

You can also sign up for additional payment options with their own monthly and transaction costs:

Cash discount processing: $39.95 per month; no transaction fee (customers pay interchange cost)
ACH processing: $15 per month; 0 to 1.5% + 48 cents per transaction

Or you can sign up with a subscription plan for a higher monthly fee to reduce your per-transaction cost:

Subscription: $59 per month; 9 cents per transaction
Subscription Plus: $199 per month; 5 cents per transaction

You’ll have to sign a contract to use National Processing, and you’re subject to an early termination fee if you switch providers before the contract expires (unless your business closes or you go to a competitor with pricing National Processing can’t beat).

Who should use it:

National Processing is a fit for small businesses that want to work with a traditional, low-feature payment processor in exchange for significant savings on fees.

Pros & Cons

Free hardware available with subscription
Low monthly and transaction fees

Contract with an early termination fee
Basic options compared to competitors

Best for E-Commerce

PayPal

Monthly fees

Mobile, POS, online and e-commerce transactions

Yes

Read Forbes' Review

Yes

Editor's Take

Since 1998, PayPal has steadily consolidated its position as the premier online payment processor, though it may not be keeping pace with the UX advances of later competitors.

PayPal integrates with major e-commerce platforms, including WooCommerce, Adobe Commerce, BigCommerce and Wix, as well as tons of invoicing platforms such as QuickBooks and Harvest.

PayPal fees are in line with its competitors, but quite a bit higher than more traditional merchant account providers. You’ll pay a percentage plus a fixed fee per transaction that varies by regional currency. For payments received in USD, fees are:

Commercial transactions online and in-store: 3.49% plus 49 cents
Pay with PayPal online: 2.89% plus 49 cents
In-person payments: 2.29% plus 9 cents

PayPal offers a simple and affordable swipe, chip or contactless card reader for counter or handheld use to receive in-person payments to your account. It’ll cost you $29 for the first one and $79 per additional reader. Or you can use the PayPal Zettle POS mobile app for free.

Most merchants won’t pay a monthly service fee to accept payments via PayPal, but you add on features for additional monthly fees if your business has more complex payment needs.

PayPal’s hefty transaction fees and growing complexity are making the well-known platform less and less popular with merchants, especially small businesses that just need basic payment processing at a low cost. What keeps it among the top providers is largely its ubiquity—customers are familiar with and trust the platform because it’s been around for so long.

Learn more: Read our full PayPal review.

Who should use it:

PayPal is popular with small e-commerce businesses and online service providers who don’t mind paying its high fees in exchange for a well-known platform.

Pros & Cons

Easy to set up and use
Well-known and popular with online shoppers
Auto-integrated with tons of online business services

High transaction fees
Increasingly complex platform

Forbes Advisor Ratings

Company	Forbes Advisor Rating	Best For	Monthly fee	Mobile, POS, online and e-commerce transactions	Learn More CTA text	Learn more CTA below text
Square	4.7	Best Overall Merchant Service	No	Yes	Learn More	Via partner site
Stripe	4.4	Best for Owners of Multiple Businesses/Brands	No	Yes	Learn More	On Stripe's Website
Stax	4.4	Best for Avoiding Transaction Fees	Yes	Yes	Learn More	On Stax's Website
National Processing	4.3	Best for Low Cost	Yes	Yes	Learn More	Read Forbes' Review
PayPal	3.6	Best for E-Commerce	No	Yes	Learn More	Read Forbes' Review

What Is a Merchant Service?

Traditionally, a merchant account is a type of business bank account that connects with a payment processor, credit card issuer and your bank to let you receive electronic payments such as credit and debit cards. The merchant account receives money from credit card companies so that it’s available to you immediately, instead of after the customer pays their credit card bill.

However, modern payment service providers combine the functions of merchant accounts with payment processing, so many small businesses don’t have to worry about setting up this type of account separate from signing up for a payment processor. You’ll get a merchant account and payment processing when you sign up with payment service providers, such as any of those listed above.

How Does a Merchant Service Work?

When a customer swipes their credit card or debit card to pay for a transaction, the card processor sends those transaction details to your merchant account. Your merchant account provider will then confirm sufficient funds with the customer’s card issuer. Once funds are confirmed, your merchant account provider will front your business the funds for that transaction.

How To Choose the Best Merchant Service Provider

No two businesses are alike, and therefore it’s important to find the merchant account that best meets your unique needs.

Essential Features

Payment service providers compete on a lot of features you might not think to look for when choosing which platform to use. As you review options, consider which of these aspects matter most to your business:

Do you need an app and hardware that’s easy for anyone to use, or do you and your team prefer to navigate a more complex system with richer features?
Will you get by with a mobile app?
Do you need a robust point-of-sale system? Or will a simple card reader do?

If you run an in-person business, look for a provider that offers the hardware you need at a price that makes sense for you.

Pricing Models

Pricing structure is the biggest factor you want to look out for when shopping for a vendor. Typically vendors will use one of three models: flat-rate pricing, interchange pricing or tiered pricing.

Flat-Rate Pricing. This is the simplest and most commonly used pricing model by mobile credit card processors. For every credit card or debit card transaction, you are charged a fixed percentage of that transaction. If your business has low sales volume or small-ticket items, this might be the most beneficial pricing structure for you.
Interchange-Plus Pricing. This model consists of two components: an “interchange” and a “plus.” The interchange is a processing rate set by the credit card company. The second rate is the markup set by the credit card processor itself as the profit. For example, a typical interchange-plus pricing structure looks like 2.2% plus $0.22 per transaction. This model is considered the fairest pricing structure because of its transparency, but it will make your statements difficult to read.
Tiered Pricing. This model breaks down transactions into three categories: qualified, mid-qualified and non-qualified transactions. Not surprisingly, qualified transactions receive the best rates while non-qualified transactions receive the least advantageous rates. Unfortunately, this model is the most common pricing model available. While it will make your monthly statements easy to comprehend, the transaction fee will likely be higher than you were expecting as the provider will advertise the lowest possible rate and most transactions will not actually qualify.

Merchant Account Fees

The fees associated with a merchant account vary by provider. Make sure to read the contract carefully to assess what fees your business will likely accrue.

A setup fee will be the first fee you are likely to encounter. It is a one-time fee typically required to set up the new merchant account. Your merchant account might also charge a monthly fee (sometimes referred to as a statement fee) for the preparation of your monthly statement, a gateway fee for remote or online transactions, a monthly minimum fee for accounts that fall below a monthly minimum, an annual fee for maintaining the account and a customer service fee for merchant support.

These additional fees can increase your cost-per-transaction to well over 3%, so make sure to factor them into the overall cost of a vendor when shopping for merchant accounts.

Scalability

Consider where you see your business going in the next year, five years or ten years. Will the system you set up now be able to grow with you? Will it be easy to switch if it can’t? Does it make sense to sign up for a more costly system now to save headaches in the future?

Featured Partners

Stax

First Month Free

$99 per month, 7 cents to 15 cents per transaction plus interchange rate

Stax

On Stax's Website

Paysafe

SAVE or get a $200 gift card + FREE payment equipment*

Industry-low rates starting at $0.15 batch fee + 0% Cash Discount Plans available

Paysafe

On Paysafe's Website

Payment Depot

$0 Setup & No Cancellation Fees

Customized Interchange+ Pricing - Rates as low as 0.2% - 1.95%

Payment Depot

On Payment Depot's Website

Finix

Save up to 40% on credit card processing

Transparent subscription-based pricing with 0% markup on interchange fees

Finix

On Finix's Website

Methodology

To choose the payment processors that are the best fit for small business merchants, we selected seventeen providers and analyzed their pricing and fee transparency, essential and advanced features, customer support, reviews and recognition from customers and third-party reviewers and looked at the provider’s offerings. The five best-rated services made our final list.

Pricing

For pricing, the most important aspect we looked for was a transparent fee structure, such as for keyed transactions; swipe, chip or tap transactions; and online transactions. We also looked at other fees, such as subscription discounts, ACH processing and international payments. If the provider offered online quotes, that also weighed into our scoring, which accounted for 20% or the final score.

General Features

The general features that we considered essential for a merchant account service provider to have include a reporting dashboard, invoicing, data exports, contactless payments and integrations with third-party software. General features accounted for 20% of our weighted scoring.

Advanced Features

Some advanced features we looked for include offering fast deposits, Payment Card Industry (PCI) compliance, a variety of customer support options, such as live chat, blog, phone and/or a knowledge base, and even more detailed invoicing options. We weighted advanced features at 25% of our total score.

Third-party Reviews

How others viewed each merchant account service provider also played a part in our rankings. We turned to third-party review sites, including the Better Business Bureau (BBB), Trustpilot and Capterra, and looked at what real users had to say about each service and how they scored them. Those who scored higher (4 and higher on a 5 scale) did significantly better in this category. These reviews accounted for 20% of the total score.

Expert Analysis

Finally, our experts took everything discussed above into consideration, looking specifically at a provider’s popularity and any stand-out functionality it offered, to come up with our own analysis. These final criteria make up 15% of the total score.

Frequently Asked Questions (FAQs)

What is the best merchant service for a small business?

While you should take careful considerations of the unique needs of your business, our research puts Square and Stripe at the forefront of the merchant account services industry. Neither option requires a monthly fee, and both offer a wide variety of services that make them appealing to business owners.

Can I accept credit cards without a merchant account?

You can accept credit card payments and debit card payments in-store and online without a merchant account by using a payment service provider, such as PayPal, Stripe or Square. These modern payment processors have merchant account functions built in, so you don’t have to open a separate merchant account with a bank.

How do I avoid merchant fees?

You can accept payments from customers without merchant fees by accepting cash or using a merchant service provider that offers no-fee credit card processing (cash discounts). With a no-fee account, customers cover your transaction fees, and you offer an in-store “cash discount,” so their final total is less if they pay in cash.

How do I receive money from my merchant account?

When a customer swipes their card or enters their information online, the charge goes to the card issuer for approval. Once it’s approved, the issuer puts money in your merchant account, and the money can be transferred manually or automatically to your business bank account. Payouts can be instant (usually with a fee), take one to two business days or happen on a set schedule, such as monthly or weekly.

What if my business doesn't qualify for a merchant account?

You might have trouble getting or keeping a merchant account if your business is considered a high-risk merchant, usually because you’re in an industry that incurs many chargebacks or cancellations or has a high failure rate for new businesses. In this case, look for merchant account services targeted at high-risk merchants. They usually charge higher fees than the providers in this list, but they make it possible for high-risk merchants to continue to do business.

What is the difference between a merchant service provider and a payment gateway?

While they perform similar functions, a merchant account and a payment gateway are two distinct things. A merchant account refers to the bank account that facilitates transactions to your business. A payment gateway is essentially the technology that processes the card transactions for your business. You can check out our guide to the best payment gateways on the market for more information.

How much do merchant services cost?

Typical monthly and transaction fees vary depending on your industry and the types of transactions you need to accept. Automated clearing house (ACH) payments—for memberships or service providers—usually are lowest at under 1% per transaction. Online transactions tend to fall around 2% to 3.5% plus 30 cents to 50 cents. In-person payments can be cheaper, depending on your service provider, and they’re usually higher for restaurants than retail businesses.

Next Up In Business

Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.

Dana Miranda

CEPF®, Small Business Expert Writer, author of YOU DON'T NEED A BUDGET

Rob Watts

Managing Editor, SMB

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