Five Great Merchant Account Providers for Small Businesses

If you’re a small business that takes in more than $10k/month of credit card or debit card payments, then signing up with a merchant account provider might save you some money in card processing costs. (If you take under $10k/month, we recommend you look at a third-party processor first.) In this article, we profile five great merchant account providers and summarize their charges. Once you find 2 or 3 providers you like, you can call them for a more precise quote before making a final decision.

Before starting this website, we worked for about two years as a payments processing freelance writer. The merchant account providers below are the ones that we know have a great reputation for giving a fair price while providing great customer service. We recommend them enthusiastically and without reservation.

But first, let’s talk about the biggest payment processors in the business and why you shouldn’t sign up with them. We’ll also quickly go over some jargon before getting to the profiles of our five merchant account providers.

What are Direct Processors and Why You Won’t Get a Good Deal with Them

Common sense tells you that, if you cut out the middleman and buy directly from the source, you should save some money on your costs. But most people don’t realize that big manufacturers and wholesalers don’t necessarily want to work with very small businesses. Instead, they prefer to sell a large number to just a few, and let others deal with the hard work of signing up customers one-by-one and providing customer service.

This is true in the payment processing industry. The very big processors—called direct processors or acquirors (acquirors as in acquiring banks because a lot of the direct processors are banks)—tend to sell their services through independent sales offices (ISOs). There might even be several layers of ISOs before you get to one that works directly with small businesses.

The ISOs often provide better customer support as well as better tech support for their merchants. They also tend to be more flexible in many aspects of doing business.

For example, with many direct processors, they’ll require you to sign a multi-year contract that can be difficult to terminate early. But ISOs of the same direct processors have the flexibility to offer month-to-month pricing plans.

Working with direct processors also does not necessarily mean you get a better price. Smaller businesses often can get a better deal with ISOs. The ISOs get wholesale pricing and then often sell lower than direct processors.

Some of the bigger direct processors include:

• FIS
• Fiserv
• Elavon (subsidiary of US Bankcorp)
• Global Payments
• Chase Payment Systems (subsidiary of JP Morgan Chase)

The merchant account providers we highlight in this article are almost all ISOs.

Watch Out for Assessment Fees

When you’re dealing with merchant account providers, you need to watch out for assessment fees on your credit card statement.

Assessment fees are what the card networks and the issuing banks periodically charge for network, security, or operational items. Third-party processors tend to absorb these costs but raise their per-transaction charges. Some merchant account providers—especially those that use the interchange plus pricing model—typically pass these fees down to you without a markup.

However, we understand that some unscrupulous merchant account providers make up certain assessment fees and make you pay for those too.

Each card network has its own assessment fees. For a flavor of what they look like, here’s a list from the website of one of the merchant account providers we profile below.

What is a Payment Gateway and Why You Might Need One

In order to take payments online, you’ll need a piece of software called payment gateway. The gateway is the software version of a credit card reader. You can type in a transaction from the gateway (called keyed transaction). You can also connect the gateway to the shopping cart of an online store to take and transmit payment information to your payment processor.

If you work with a third-party processor to take payments, you usually won’t need to worry about payment gateways. They offer their own gateways. But if you work with a merchant account provider, you’ll need to think about (and pay for) a payment gateway if the merchant account provider doesn’t give you one for free.

Some merchant account providers offer free virtual terminals. Virtual terminals work like payment gateways, but often have less functionality. Some virtual terminals are integrated into the popular WordPress plugin WooCommerce or the eCommerce platform Magento. So, if you use these, you can connect your online store to a shopping cart without a full payment gateway.

The Final Cost of Interchange Plus Pricing Can Vary

In our intro article for this series on payment processors and pricing models, we explained why we think interchange plus pricing is the best model. That’s why all the merchant account providers in this article all offer a variation of interchange plus pricing.

But, before you sign up with a processor that offers interchange plus pricing, you need to be aware that your monthly processing costs can vary quite a bit from month to month. This is because Visa, Mastercard, American Express, and Discover all have different interchange prices. Not only that, each type of card—a regular card, a rewards card, a corporate card, etc.—all have a different per-transaction interchange price.

So, if one month many of your customers paid with reward cards and the next month they paid with regular credit cards, your processing cost will be different for these two months.

Now that we’ve briefly introduced some concepts and vocabulary, let’s take a look at our pick of five great merchant account providers. They appear in no particular order of preference.

Helcim Offers No Fuss Interchange Plus Rates

Helcim has a great reputation as a merchant account provider. You don’t have to sign a long term contract to start processing with Helcim.

Helcim’s Processing Rates

Helcim uses the interchange plus pricing model. This means they add their own standard charge to the interchange rate from the credit card networks.

Helcim’s margin for in person processing starts at 0.30% + $0.08 if you process $0-$25,000 per month. The margin goes down as you process more, until it reaches 0.10% + $0.05 if you process $5,000,000+ per month.

For keyed and online transactions, Helcim’s margin starts at 0.50% + $0.25 for those who process $0-25,000 per month. The margin goes down to 0.25% + $0.10 per transaction for those who process $5,000,000 per month.

Helcim seems to include assessment fees as a part of the interchange fee. So, they pass the assessment fees directly to you, without adding a Helcim fee on top.

To give you an idea of what their overall rate looks like, Helcim took a weighted average of how often each card is used for all the card networks and got:

• Average In person: 1.92% + $0.08
• Average Keyed and Online: 2.38% + $0.25
• Average PIN Debit: 0.91% + $0.08

There are additional fees for international transactions.

You can find the complete listing of Helcim’s pricing here. You’ll also find on this page links to the interchange rates of Visa, Mastercard, American Express, Discover, and PIN debit.

Chargebacks and Refunds

Helcim’s chargeback fee is $15. But if you win the dispute, they return this fee back to you.

They do not mention whether you get anything back if you process a return.

ACH, eChecks, and Wire Transfers

Helcim can help you with ACH processing. They charge:

• 0.50% + $0.25 per transaction

For returned or rejected transfer, Helcim’s fee is $5.

Helcim does not appear to be able to help you with eChecks or wire transfers.

Software and Processing Equipment

Helcim’s card reader costs $109 and a printer costs $79.

You can sync the reader and printer to Helcim’s point of sale (POS) software, which comes free with your account. The software has multiple functionalities, including sales analytics, inventory tracking, email receipts, and a few others. You can install the software on any computer, tablet, and smartphone. Here’s Helcim’s hardware offerings page, for more information.

Your Helcim account comes with a virtual terminal for taking keyed payments. You also have a special page that you can link to from your online store to take online payments. In addition, Helcim has a proprietary, hosted webstore building platform for building an online store from scratch. But Helcim does not disclose if you have to pay extra to get this. So, if you’re interested in building an online store and using Helcim as your processor, be sure to ask about the store builder pricing.

Payment Depot Uses a Membership Model

Payment Depot provides payment processing under a membership model. There is no long term contract to sign. You pay a monthly fee, and you’re only charged the interchange fee for the cards you process.

Payment Depot used to be an independent company. But another payment processor named Fattmerchant recently bought Payment Depot (as far as we can tell, the deal closed in late February 2022). Fattmerchant is now rebranded as Stax, so now you see Payment Depot by Stax on the Payment Depot website.

For this article, we profile Payment Depot instead of Stax because Stax’s starter tier is comparable to Payment Depot’s highest Growth tier. Because we focus our advice for starter or very small businesses, Payment Depot seems to be the more appropriate brand to profile here.

Payment Depot Processing Fees

Payment Depot offers three subscription tiers. These are:

• Starter: $59/month for up to $125k/year
• Starter Plus: $79/month for up to $250k/year
• Growth: $99/month for up to $500k/year

Payment Depot also offers custom rates for businesses that process $500,000 or more per year. You’ll have to contact them for the rates.

If your business grows quickly, then you’d be upgraded to the next tier for the next month.

Payment Depot’s website doesn’t mention how they handle assessment fees. However, looking at how much they charge per tier, it would make sense if they simply pass these fees down to you at cost.

In our experience, to save the most money with subscription pricing, your monthly processing volume has to hover near the upper ranges of each subscription tier. This is one reason why we recommend you start with a third-party processor to get some data on how much you process per month and whether your business is cyclical. Once you have this data, you’ll have a better idea on whether a membership model or internet plus model can save you the most money.

Chargeback and Refund Fees

We couldn’t find any mention of chargeback or refund fees on the Payment Depot website. So, if you’re interested in processing payments with Payment Depot, be sure to contact a salesperson and ask about chargeback and refund fees.

ACH, eChecks, and Wire Transfers

Payment Depot does not seem to offer ACH, eChecks, or wire transfer services to its subscribers.

Software and Processing Equipment

Payment Depot offers a variety of processing hardware. Some of the hardware come with POS software that can help you manage inventory and show sales trends and perform other analytics. A virtual terminal is available as well.

On its home page, Payment Depot claims they offer free equipment. But, on their equipment page, they do not disclose which equipment is free and which requires additional payment. In fact, they do not disclose equipment pricing at all.

So, if you’re interested in working with Payment Depot, be sure to ask them about equipment pricing before you make a decision.

National Processing Offers a Hybrid Pricing Model

National Processing offers hybrid subscription + per transaction pricing plans. If you process $200k or more per month, you can sign up for plans that require a larger subscription payment but have a very small per transaction fee.

We summarize National Processing’s fees below. For the full list, see this page on their website.

National Processing’s Processing Fees

National Processing breaks their pricing down by industry. However, the base subscription plan all seem to cost $9.95/month. For most industries, there seems to be an in-person pricing and an online pricing.

It’s not clear from National Processing’s website, but our prior experience is that, if you run a physical store but also want an online store, then you’d have to pay for both the retail plan and the e-commerce plan. This would bring your monthly subscription cost to $9.95 (for retail) + $9.95 (for e-commerce) = $19.90 (total). Plus you’ll have to pay the per transaction fees. So, before you sign up with National Processing, be sure to ask to get this clarified.

National Processing’s hybrid payment processing fees are:

• Restaurant: $9.95/month and 0.14% + $0.07 per transaction
• Retail: $9.95/month and 0.18% + $0.10 per transaction
• eCommerce: $9.95/month and 0.29% + $0.15 per transaction
• Non-profit: $9.95/month and 0.12% + $0.06 per transaction

National Processing also offers a membership plan. The two membership tiers cost:

• Subscription: $59/month and 0% + $0.09 per transaction
• Subscription Plus: $199/month and 0% + $0.05 per transaction

Chargebacks and Refunds

We couldn’t find National Processing’s chargeback and refund fees. So, if you’re interested in working with National Processing, be sure to ask how much they charge and whether you get the fee back if you win the dispute.

ACH, eChecks, and Wire Transfers

National Processing can help you with ACH transfers. The charges are similar to credit and debit card charges—i.e. there’s a subscription component and a per transaction component.

• ACH Processing: $15/month and 0-1.50% + $0.48 per transaction

Rates can vary depending on transaction size. There’s a $25 setup fee.

Software and Processing Equipment

With each plan, you get a free Simple Swipe mobile reader that can take contactless transactions. With the Subscription Plus plan, you also get a free Simple Swipe Terminal, which you can get a free upgrade every 2 years. You can also buy additional equipment, including POS systems that come with software that can track inventory and perform analysis of your sales data.

There’s a virtual terminal that comes with the Simple Swipe equipment. You can take keyed payments through the virtual terminal. National Processing also offers its own gateway and the Authorize.net gateway. Authorize.net has its own pricing for the gateway. It’s not clear whether National Processing’s gateway is free or fee-based.

You can find National Processing’s hardware offerings under the Solutions tab on its website. (There are several pages of hardware, so it’s difficult to link to them all.)

Here’s more info on National Processing’s gateway and virtual terminal offerings. Unfortunately, they do not list pricing for them. So, if you’re interested in signing up with National Processing, be sure to get a price for the equipment you’re interested in.

Chase Payment Solutions is a Direct Processor with a Great Reputation and Fair Pricing

Earlier in this article, we said that it’s not a good idea to work with a direct processor. But Chase Payment Solutions is an exception. They have a reputation for fair pricing and good customer service. That’s why we profile them here.

Chase ties its payment processing services to its banking services. To process payments through Chase, you’d first have to open a Chase Business Complete Banking account. The account has a service fee of $15/month, but if you keep a minimum daily balance of $2,000 or take in $2,000/month in payment processing transactions, Chase waives the fee.

To sign up for payment processing, simply enable it from your online banking page. You don’t have to sign a long-term contract.

Chase’s Payment Processing Rates

Chase prices its payment processing fees much like third-party processors price theirs. The rates are:

• In person: 2.6% + $0.10 per transaction
• Keyed: 3.5% + $0.10 per transaction
• Online: 2.9% + $0.25 per transaction

You can find Chase’s online and keyed pricing here.

Chargebacks and Refunds

Chase is a little unclear on how much it charges on chargebacks. According to this page, Chase charges $25-$100 per chargeback. The exact price depends on how frequently your business has chargeback claims filed against you.

For refunds, if you refund the transaction in full, Chase will return the transaction fees in full. If you refund the transaction in part, Chase will not return the transaction fees. This is disclosed in the Additional Banking Services and Fees portion of the Chase Deposit Account Agreement.

ACH, eChecks, and Wire Transfers

As a full service bank, Chase naturally can perform ACH, eChecks, and wire transfer services. However, they only offer ACH and wire transfer services to its business bank customers. You can process eChecks through the Authorize.net payment gateway, which will be discussed below.

For ACH transfers, Chase offers the following:

• ACH Credit/Push: $2.50 per item for the first 10 transactions. Additional payments $0.15 each.
• ACH Debit/Pull: $25/month for 25 collections. Additional collections $0.25 each.
• Same Day ACH Credit/Push: 1% of transaction amount or $25/transaction, whichever is less.
• Return Fee: $2.50 per instance.

To sign up for ACH Debit/Pull, Chase also requires that you:

• Have been in business for at least 2 years
• Your bank account with Chase is at least 6 months old

For wire transfers, Chase charges between $0-$15 per incoming transfer and $0-50 for outgoing transfers. With certain business checking accounts, Chase waives incoming transfer fees. With outgoing transfers, the fee depends on whether it’s a domestic or international transfer, whether an international transfer is in US or foreign currency, and whether the transfer is made by you online or with the help of a Chase banker. See the Additional Banking Services and Fees portion of the Chase Deposit Account Agreement for complete details.

Software and Processing Equipment

Chase offers two pieces of equipment for payment processing. They offer a contactless card reader for taking swipe, dip, or contactless payments for $49.95. They also offer a smart terminal for $399.

To take online payments, you will need to pay for a third-party payment gateway. Chase recommends two on their website: Authorize.net and BigCommerce.

Authorize.net is one of the leading payment gateways on the market. Authorize.net charges a $25/month fee for using the gateway. In addition, they charge $0.10 per transaction and a daily batch fee of $0.10 (This is where they bundle up the day’s payments and send them to your processor all together.) For more information, here’s Chase’s webpage on Authorize.net and here’s Authorize.net’s pricing page.

BigCommerce works more like Shopify than a pure payment gateway. So, you pay a platform fee, and you can build a website using BigCommerce’s proprietary website builder. BigCommerce will host your online store on their servers.

BigCommerce also has additional analytics software to help you understand your sales trends. And BigCommerce has integrated Chase into its software, so you can easily pick and link Chase’s payment services to your BigCommerce account. You can find Chase’s BigCommerce pricing here. We compared the pricing to the ones on BigCommerce’s website, and they’re the same. So, you do not get a discount by being a Chase customer.

Dharma Merchant Services has a Reputation for Being Honest and Fair

Dharma has a reputation for being honest and fair. And, while offering discounts for non-profits are popular these days, Dharma has had discounted non-profit pricing for a long time.

Dharma’s Processing Fees

Dharma uses a blended fee arrangement, even though on their website, they say they charge interchange plus rates. You don’t have to sign a long-term contract with Dharma, but, each month, you have to pay a base fee and then, for each transaction, you pay an interchange plus rate.

On its website, Dharma breaks its services down to different industries. But they really just have a few rates, which they charge across comparable industries.

In general, Dharma’s rates are:

• In person: $25/month plus interchange + 0.15% + $0.08
• Online and keyed: $25/month plus interchange + 0.20% + $0.11

Non-profits get a reduced rate:

• In person: $20/month plus interchange + 0.10% + $0.08
• Online and keyed: $20/month plus interchange + 0.10% + $0.11

High-volume merchants also get a reduced rate:

• In person: $20/month plus interchange + 0.10% + $0.08
• Online and keyed: $20/month plus interchange + 0.10% + $0.11
• High-volume is defined as:
  • Processing more than $100k/month OR
  • Have over 5,000 transactions/month OR
  • Restaurants with an average ticket price of $25 or less

Note, for American Express, Dharma charges a slightly higher fee.

When you get an assessment fee, Dharma passes them down to you at cost.

Refunds and Chargebacks

Dharma’s chargeback fee is $25 per claim.

If you void a transaction—i.e. cancel the charge almost right after the card is dipped, tapped, or swiped—the charge is typically $0.10. With a refund, you won’t get your original transaction fees back. Other than this explanation on their website, Dharma doesn’t mention any related fees. So, if you’re interested in Dharma as your processor, be sure to ask the salesperson about refund fees when you talk to them.

ACH, eChecks, and Wire Transfers

Dharma can’t help you with eChecks or wire transfers, but it can help you with ACH transactions.

The ACH transactions feature is included in Dharma’s proprietary gateway called MX Merchant.

• ACH on MX Merchant costs: $20/month plus $0.24 per transaction.

However, MX Merchant can’t integrate shopping carts, which are needed for online eCommerce transactions. So, if you have an online store, you’ll need another gateway. Dharma recommends Authorize.net.

Authorize.net costs $10/month. Each transaction that runs through the software will be charged $0.05/transaction. This is in addition to the online processing fees you pay to Dharma.

• ACH on Authorize.net costs: $10/month plus 0.75% of the total volume.

Whether MX Merchant or Authorize.net saves you more money probably depends on the size and number of ACH transactions you have per month. For a detailed comparison of MX Mearchant vs. Authorize.net features and costs, see this chart from Dharma.

Software and Processing Equipment

Dharma sells an entire range of hardware. The hardware can be divided into terminals and POS systems.

The terminals are basically handheld devices that you can use to take dip, swipe, or tap card payments. They often have a built in PIN pad and some have built in printers. Dharma prices the terminals from $269-$369. For more information, see this page.

The POS systems are bigger systems that often include a card reader, a display, a scanner, a printer, and a cash drawer. The POS systems also often come with software that not only process card payments but can help you manage inventory and analyze sales data too. Dharma sells the Clover POS system, which has the clean, minimalist look like some of Square’s POS systems. The least expensive POS system starts at $599 and goes up to $1,999. For more information, see this page.

There are Many More Good Merchant Account Providers We Haven’t Covered

There are, of course, many other good merchant account providers in addition to the five we profile here. We limit the profiles to five because we don’t think small businesses have the time to read overly long articles. So, if you come across a merchant account provider that seems pretty good, come back to this article and do a pricing and services comparison before you make a final decision.  

We didn’t focus on customer support in this article. That’s because the five merchant account providers profiled above generally have a good reputation for customer service and resolving complaints. This is important because if you’re in the middle of checking out a customer and your credit card equipment suddenly stops working, you’ll want good tech support to get things fixed fast. For other merchant account providers that we haven’t profiled that you’re interested in doing business with, we recommend checking their Better Business Bureau page to see how they deal with customer complaints.

Lastly, if you’re a high risk business, most merchant account providers won’t work with you. Instead, you’ll need high-risk processors. We’ll profile five in our next article.

The credit card processing business can be complicated. If you have additional questions about how they work or how they charge you, ping us on Facebook, Twitter, LinkedIn, or Alignable. We’ll do our best to answer them for you.

Interested in starting and running a small business? Here’s the beginning of our step-by-step guide: What to do right after getting that great business idea.