Don't have time to read it all right now?
Download your free PDF of "The Complete Guide to Credit Card Processing". Just give us your email and we'll send it to you right away!
Call us at 1(866) 607-4438
chapter
06
credit Card Processing Companies:
We Compare the Industry Leaders
We saw in chapter 5 what to look for in a credit card processing company for your small business. Below, we explore and compare the data among the top companies in the industry for credit card processing. We look at pricing structure, fee transparency, customer service, equipment, multiple sales channel capability & review history of the top credit card processing companies.
How do credit card processors make money?
Credit card processors are a business, first and foremost. They provide a service to the business owner and so it’s understandable that they would be compensated for their time and skills. However, some processors charge fees for what other companies offer for free. Others aren’t transparent and up front about what they charge, leaving a gray area between what you expect to pay and what is actually charged. A fee here or there might not seem like a big deal, but it could cost your more money in the long run.
Different companies have different ways of making their money. Zero-fee, interchange-plus, flat-fee, subscription plus flat fee, and quote based services will all have different methods of making their money. Let’s compare the top credit card companies by their pricing structure.
Let's Get You Started!
Understanding how Credit Card Processing can work for you!
The Complete Guide to Credit Card Processing is an in-depth explanation of how credit card processing works. This guide will help you evaluate and decide on the best merchant account without the false starts and missteps that others have fallen prey to in the past. Download your copy of the world's most-comprehensive guide on credit card processing.
6.1 Pricing Structure
At the end of the day, it’s really all about the numbers. You want the best you can get for the lowest amount - we understand that. In this section, we group the data of the top credit card processing companies by their pricing structure.
But what does all this really mean? How much does it really cost? If you want to see some price comparisons click here to see our article as we look at some examples of the actual cost of transaction and not just what they quote. This can really eat into your bottom line, especially if you process less than 10k/ month.
The rates that we listed below are the companies’ starting transaction rates. These are for in-person card present transactions, there will be different & higher rates for online transactions where you cannot physically see the credit card.
Zero Fee
This type of pricing structure is just what it sounds like - zero-fee for business owners. This means that you will pay no fees to process credit cards. Instead, the fee for using a credit card is passed onto the consumer by offering a cash discount when it’s time to pay. So the customer can pay with cash for a smaller amount, or choose to pay with a credit card for a small fee. Does it seem too good to be true? It’s not! Read this to find out more!
Zero Fee Pricing | Monthly Fee | Starting Transaction Rate |
|---|---|---|
Shift Processing | $0 | 0% |
Interchange Plus
This type of pricing model is becoming more and more popular. In this type of model, the business owner pays a monthly fee (subscription) and then pays a significantly lower processor mark-up above interchange. The cost of interchange will depend heavily upon the card brand and type of transaction. For instance, 2019 VISA CPS retail transaction costs 1.51% + $ 0.10 cents per swipe while MasterCard Credit Consumer interchange rate is 1.58% + $0.10.
Make sure you do the math- If you’re not processing enough credit card sales to offset the monthly fee, then your cost per transaction becomes MUCH higher than just what is quoted in interchange plus.
Here are the top vendors who offer this type of pricing model:
Interchange Plus Pricing | Starting Monthly Fee | Starting Transaction Rate | Example Rates* | ||||
|---|---|---|---|---|---|---|---|
FattMerchant | $99 | interchange plus 0% + $0.10 | 1.51% + $0.20 | ||||
Dharma | $20 | interchange plus 0.25% + |
| ||||
HelCim | $15 | Interchange plus 0.25% + $0.08 |
| ||||
| $10 | Interchange plus 0.20% + $0.10 |
| ||||
| $10 | interchange plus 0.20% + $0.10 | 1.71% + $0.20 | ||||
|
|
|
| ||||
Costco | $10/month** $120/ year** Costco’s executive membership fee |
|
|
*used with Visa 2019 CPS retail interchange
Flat-Fee
A flat fee pricing model is a fee structure that charges the same rate per transaction regardless of the card brand. This type of pricing model is better for lower volume merchants, especially those that process less than 3k/month.
Flat Fee Pricing | Monthly Fee | Starting Transaction Rate | |||
|---|---|---|---|---|---|
Paypal | $0 |
| |||
Stripe | $0 |
| |||
Square | $0 |
| |||
| $0 |
|
Subscription Plus Flat-Fee
A subscription plus flat fee is yet another pricing model available to a business owner. This type of fee structure charges a monthly fee and a flat rate per transaction.
Subscription Plus Flat Fee Pricing | Monthly Fee | Starting Transaction Rate | |||
|---|---|---|---|---|---|
| $25 |
| |||
Clover | $14 |
| |||
Due | Unknown |
|
Quote Based Service & Undisclosed Fees
The companies below have limited information on their websites. We’re not saying that they won’t be upfront about all their fees and terms, but we are suggesting you go in prepared! Their pricing model and rates are undisclosed because they want you to contact one of their sales representatives for “custom rates” that are specific to your business.
When contacting them as a business owner for a quote, be cautious and wise, knowing you will likely be quoted a lower rate than what you pay currently but not the lowest that you could get. If you’re researching your options to save the most money while still getting quality support - you’re unlikely to get the best rate with companies that do not publish their fees and are hesitant about answering your fee-related questions.
You may come across the terms “tiered pricing” & “qualified/unqualified cards.” Tiered pricing is a conventional processing model and has been around for years. . It’s also a clever way for a credit card processor to hide fees and make more money. Visa, Mastercard, American Express and Discover have not issued any statements about what makes a card qualified & unqualified, this is just something the processing companies have made up. They will charge more per transaction for an “unqualified card.”
Quote Based Service | Monthly Fee | Starting Transaction Rate | |||
|---|---|---|---|---|---|
Sam's Club | Unknown |
| |||
Flagship | Unknown |
| |||
FiserV (formerly First Data) | Unknown |
| |||
| Unknown |
| |||
TSYS | Unknown | Undisclosed | |||
BluePay | Unknown | Undisclosed |
Want to save this entire guide for later?
6.2 Fee Transparency
The next item we reviewed the industry leaders is on their fee transparency. We want you to know exactly what you’re getting into before you sign on the dotted line. The last thing you want when you think you’re getting a great deal is to be nickeled and dimed by fees. You want to do business with a company that is honest & up front about their fees and processes. Feel free to use our checklist when you’re getting a quote or talking with a sales representative.
It’s important to know exactly what you’re getting into and never sign a long term contract. It could cost you thousands to terminate a contract, not to mention you may have to pay for any equipment that you thought was “free.” There are lots of fees than may be hidden - check out articles here & here to learn more about hidden fees and ways that credit card processing companies make money from these.
As you may have guessed, there are very few on this list that use the “undisclosed” pricing model, although some do boast about no hidden fees.
Quote Based Service | Fee transparency (No Hidden Fees) | No Contracts / no early termination fee |
| ||
|---|---|---|---|---|---|
| |||||
Clover | Cell | ||||
| Cell | ||||
| Cell | Cell | |||
TSYS | Cell | Cell | |||
BluePay | Cell | Cell | Cell | ||
| Cell | Cell | Cell | ||
Flagship | Cell | Cell | Cell | ||
| Cell | ||||
| Cell | Cell | Cell | ||
| Cell | Cell | Cell | ||
FattMerchant | |||||
| |||||
| Cell | Cell | |||
| Cell | ||||
| Cell | ||||
Costco | Cell | Cell | Cell | ||
| |||||
Stripe | Cell | ||||
Square | |||||
PayAnywhere | Cell | Cell | Cell |
6.3 Customer Service
We wanted to not just evaluate these companies on whether or not they had customer service available, because all companies have some form of customer service. We wanted to evaluate the industry based on what makes great customer service. We wanted to know if customer service was based in the United States, if there was a dedicated account representative for each client, and if there was 24/7 live support available, not just an online question & answer forum.
This is also where it is important to do your research on company reviews. The bigger the company, the more complaints they tend to have. It just goes with being a bigger company and serving more people - it can get a little messy.
| U.S. Based |
|
| ||||
|---|---|---|---|---|---|---|---|
| |||||||
Clover | Cell | Cell | |||||
| Cell | Cell | Cell | ||||
| Cell | Cell | Cell | ||||
TSYS | Cell | Cell | Cell | ||||
BluePay | Cell | Cell | Cell | ||||
| Cell | Cell | Cell | ||||
Flagship | Cell | Cell | Cell | ||||
| Cell | Cell | Cell | ||||
| Cell | Cell | Cell | ||||
| Cell | Cell | Cell | ||||
FattMerchant | Cell | ||||||
| Cell | Cell | |||||
| Cell | Cell | |||||
| Cell | Cell | |||||
| Cell | Cell | |||||
Costco | Cell | ||||||
| Cell | Cell | |||||
Stripe | Cell | Cell | |||||
Square | Cell | Cell | Cell | ||||
PayAnywhere | Cell | Cell | Cell |
6.4 Multiple Sales Channel Options
If you’re already selling on multiple sales channels, looking to expand or just trying to plan for the future, it’s important to know if your prospective credit card processor is able to support you in a variety of ways. Let’s say you want to do a pop-up event and need to process credit cards on the go - does your credit card processor have a solution for you? Or say you want to start accepting online orders or invoicing - what are your options?
It’s important to note that there will be different rates to process credit card transactions when the credit card is not present. Called a keyed-in transaction or card-not-present, these type of transactions will have higher transaction fees due to higher fraud risk since you cannot physically see the card.
|
| Mobile Processing | eCommerce Processing | |||
|---|---|---|---|---|---|---|
| ||||||
Clover | ||||||
| ||||||
| Cell | Cell | ||||
TSYS | Cell | Cell | ||||
BluePay | ||||||
| Cell | Cell | ||||
Flagship | Cell | Cell | ||||
| ||||||
| ||||||
| ||||||
FattMerchant | ||||||
| ||||||
| ||||||
| ||||||
| ||||||
Costco | ||||||
| ||||||
Stripe | Cell | Cell | ||||
Square | ||||||
PayAnywhere |
6.5 Equipment compatible with various POS Systems
Every business will use software to process their credit card transactions. Some systems, like Clover & Square, will only let you use Clover software with their equipment. This is great if you always want to stick with Clover, but let’s say you’re needing to switch processors. You will then have to purchase all new equipment since Clover’s are proprietary.
But let’s say you need a different software that better meets your needs, you will want credit card readers and equipment that don’t work with just ONE software program. Equipment can be a big upfront cost, so please make sure you get equipment that can be used with a variety of point of sale software systems. You can’t just buy a credit card reader off of Amazon, plug it in and hope it works. Make sure it will work for both you and your processor.
|
| |||
|---|---|---|---|---|
| ||||
Clover | Cell | |||
| ||||
| ||||
TSYS | Cell | |||
BluePay | Cell | |||
| Cell | |||
Flagship | Cell | |||
| ||||
| Cell | |||
| Cell | |||
FattMerchant | Cell | |||
| ||||
| Cell | |||
| ||||
| ||||
Costco | Cell | |||
| Cell | |||
Stripe | Cell | |||
Square | Cell | |||
PayAnywhere | Cell |
6.6 Review History
Below, you’ll find general reviews that we’ve found from a web search. Make sure to do your own research to read specific complaints and decide if the common complaints those that you’re willing to deal with.
|
| |||
|---|---|---|---|---|
| Good customer service and quick to respond | |||
Clover | expensive to start, poor customer service, have to use proprietary POS & Hardware | |||
| Reviews are mixed- including difficult customer service and unclear on fees | |||
| for online businesses | |||
TSYS | reviews report lots of fees, equipment leasing & 3 year contract that auto renews | |||
BluePay | very few positive reviews | |||
| 3rd party for Clover Go and First Data. Reviews include tiered pricing and poor customer service | |||
Flagship | Fees are unclear and hard to figure out, fees for processing and tiered pricing are not disclosed | |||
| Reviews are very positive, fees are transparent and good customer service | |||
| good for high volume sales - will use clover for small businesses | |||
| Frustration over customer service seems to be the biggest complaint | |||
FattMerchant | Overall has positive reviews, great customer services & transparent pricing. | |||
| Reviews are generally positive- great customer service & transparent pricing | |||
| Uses Clover Go for their processing equipment and POS, all the same issues from using Clover will be here too | |||
| Reviews are better for established businesses, high risk businesses, reviews are mixed when it comes to fee transparency and customer service | |||
| Reviews are generally positive- reviews of great customer service and upfront about fees | |||
Costco | 3rd party of Elavon- reports that customer service is very poor after you sign the contract | |||
| No offline component available, limited expansion capabilities, hard to get ahold of customer service, unclear as to why fees are held | |||
Stripe | More suited for ecommerce businesses | |||
Square | will not service high risk accounts, complaints about customer service | |||
PayAnywhere | Customer Service & tech support complaints |
6.7 Conclusion
As you can see, there is no shortage of credit card processing companies. Your starting point will really be determined by your business type & monthly volume of transactions. In chapter 5, we gave you a checklist you can use to evaluate a processor while you’re interviewing them. Didn’t get it? Click here!
After you determine your starting point, the next steps will be to determine which company provides the features you need at a price you can afford. The last thing you want is to be drowning in fees and stuck in a contract that will cost you LOTS of money to break. So think - which features are the most important to you? Or what frustrations do you currently have that you’d like to resolve?
In our final chapter, we will analyze our data by business type, using the criteria above and general reviews. So if you are a pop-up vendor, online business, high risk business, and others not mentioned here - read on to chapter 7 to find out which companies might just be perfect for you!
Chapter 1
How to Avoid Credit Card Processing Fees
Chapter 2
Online Credit Card Processing: No Storefront, No Problem, right?
Chapter 3
Accepting Mobile Credit Card Processing Payments on the Go
Chapter 4
High Risk Merchant Account: Can I accept domestic payments with no reserves?
Chapter 5
Choosing the Credit Card Processing for Small Business That’s Right for You
Chapter 6
Credit Card Processing Companies: We Compare the Industry Leaders
Chapter 7
The Best Credit Card Processing: Find a Partner that will Lower Your Rates
Follow us
company
Statistics
Features
resources
how it works
Equipment
Copyright 2024 | Shift Processing | All Rights Reserved | Indianapolis Web Design by Fusion Creative