Payment processing is an unavoidable part of business life. From brick-and-mortar retailers and online businesses to small business owners taking payments on the road, everyone needs it.
Cash usage has been decreasing for years now, with the pandemic only serving to amplify the trend, sending the demand for digital solutions into overdrive. In-person transactions with contactless and EMV technologies are the favorites, and research says that the digital payment industry will reach $11.55 trillion in 2024. By 2028, it’s predicted to reach $16.62 trillion.
Digital payments already make up the majority of payments in the US. As of 2022, cash only accounts for 18% of payments. Finding the right payment processor is crucial for small businesses as it impacts the customer experience as well as your bottom line.
These days, the options are endless. From full 360-degree payment processors to fintech companies that facilitate transactions while taking all the risk—you can have it all. No matter the setup of your small business, there’s a solution to suit your needs.
Here’s a rundown of the best payment processing companies you need to know of and what they can do to help your business.
The Function of Payment Processors and Credit Card Processing Companies
Merchants new to the world of payment processing may, understandably, be a bit overwhelmed with the technicalities of this sector. Payment processors not only give you a system to accept credit cards or digital payments, but they also take care of the backend process.
Your bank needs to connect with your customer’s bank and the card issuer, also known as the “issuing bank.” Fees need to be distributed to all, and then the money clears and lands in your account. Thankfully, you don’t have to calculate and send these fees off to all the financial institutions involved. Your payment processor, the same as a credit card processing company, does that for you.
Your payment processor is the link that connects software (and sometimes hardware) with bank accounts, card networks, and consumers. This company helps you make this process seamless, convenient, quick, and secure.
Payments could be by traditional credit cards—Mastercard, Visa, Discover, American Express—or through gift cards, eCheck, mobile payments (Apple Pay or Google Pay), and other digital payment types.
All-In-One Digital Payment and Credit Card Processors for Small Businesses
The following payment processing companies are the top-notch one-stop shops for payment processing. Accepting credit card payments and other online payments, they handle all payment solutions and processing fees. All meet PCI compliance.
1. Payment Depot
Payment Depot is best for small businesses that see a high volume of credit and debit card transactions each month. The pricing structure is transparent, with interchange-plus pricing and zero termination fee. They also offer top-notch customer support.
Businesses get a merchant account through Payment Depot that enables payments to be taken online, at a credit card terminal, or via a mobile device. It also integrates with invoicing and bookkeeping solutions like QuickBooks, as well as eCommerce platforms like Shopify, WooCommerce, and 3dcart.
2. Stax
Stax has often ranked as one of the best platforms for small businesses, thanks to its transparent pricing and software. The monthly fee is a flat rate, and instead of marking up a percentage on the interchange fee, it simply charges a per-transaction fee.
Through the platform’s merchant account, users can perform customer-first data analysis to assess sales and overall business performance, including order trends.
3. Square
Square has become a popular option for small businesses still in the startup or early stages of their business. For those with lower volume transactions, Square has low flat rates, and it also offers a free eCommerce app and point-of-sale software.
Square’s software, including its eCommerce API, lets small businesses manage inventory and analyze customer data through its app or desktop software. It also accepts ACH payments via invoices.
4. Clover
Clover is a popular solution for small businesses in retail or restaurants. Its POS system—software and card reader—is one of its selling points as it’s widely available, compatible, and robust. It also offers a virtual terminal for businesses that don’t want hardware.
Clover offers flat-rate pricing with a few plans suited for businesses of different transaction volumes. It integrates with QuickBooks and Xero for finance management and has partnerships with social, eCommerce, and online platforms.
5. TSYS
TSYS offers a comprehensive payment processing solution that covers your POS system, merchant acquiring, and issuer bank processing. Pricing is hard to ascertain. Merchants need to submit a request online to receive a quote.
Features of TSYS include time tracking, reporting, invoicing, online credit card payments, acceptance of digital wallets, and more.
6. Payline Data
Payline Data is a payment processor with solutions for merchants wherever they are—on the go, in-store or online. Plans are based on the business type, the payment system type and are charged monthly with no early termination fees.
Stand-out features on Payline Data are its integration options. It’s an add-on for X-Cart, and its fraud solutions help to minimize chargebacks.
7. Helcim
Helcim caters to merchants in-store, online, or on the go. They structure their pricing on an interchange-plus model, ensuring clear and straightforward billing without hidden fees.
One of Helcim’s standout features is its all-in-one merchant platform. This platform processes payments and includes tools for managing customer relationships, inventory, and detailed analytics to help businesses understand sales trends and financial health.
8. Chase Merchant Services
Chase Merchant Services is a payment processor owned by Chase Bank. It allows businesses to accept various forms of payment, including credit and debit cards, contactless payments like Apple Pay and Google Pay, and online transactions.
One of the payment processor’s standout features is its integration with Chase banking products, which can benefit businesses that bank with Chase.
eCommerce Payment Gateway Merchant Accounts
eCommerce businesses with lower transaction volumes, such as startups or online pop-ups, may prefer online specialists. These payment processing services are not as comprehensive as those above, but they handle online payment processing and suit some small businesses.
9. PayPal
Although PayPal has now expanded to offer a physical terminal solution, it’s still more of an online option than a competitor for in-store payment processing. It’s best suited for online businesses with low-volume sales. This is where its flat-rate pricing is competitive, but it does get expensive as sales volume increases.
PayPal is a favorite for accepting online payments because it is really easy to integrate into most eCommerce platforms, and there are no monthly minimums or setup fees. The pricing model is simply structured with a monthly plan, plus interchange fees and a per-transaction fee.
10. Stripe
For online businesses, Stripe is the more comprehensive platform offering lots of integrations. While it’s a bit harder to set up, when compared to PayPal, it offers so much more as a platform.
Pricing is structured as a flat rate of 2.9% plus a per-transaction fee of $0.30. There are no monthly fees or monthly minimums. However, it lacks a virtual terminal.
Stripe lets you customize checkout forms to match your brand. You can accept international debit and credit card transactions, activate recurring billing options, and a whole lot more through their marketplace of integrations.
11. Shopify Payments
Shopify Payments is the integrated payment gateway solution within Shopify’s eCommerce platform, designed specifically for online retailers. It streamlines the operation of online stores with a unified platform that handles everything from payment processing to inventory management, all under one roof.
The platform supports many payment methods, including major credit cards, PayPal, Apple Pay, and Google Pay, catering to a diverse, global customer base.
Buy Now Pay Later Merchant Services
Buy Now Pay Later (BNPL) services have become extremely popular in recent years. Consumers get what they want without being out of pocket large sums, while merchants can make large ticket sales more easily.
There’s a lot to love about having BNPL as one of your available payment methods. With adoption up 200% since the pandemic, it’s a payment option your customers will soon expect.
The great thing about BNPL services is that these platforms pay merchants and accept the risk. For example, if a customer doesn’t pay on time, they take care of chasing them down and getting them to pay late fees. Here are the major players in the BNPL space:
12. Afterpay
Afterpay lets consumers buy items when they want and pay the total over six weeks. They have 16 million consumers using their services in the US.
Retailers can set it up at the in-person POS system or online shopping carts. At the same time, consumers can download their mobile app to manage their payments.
13. Klarna
Klarna is a global payment system with a similar setup to Afterpay. Through their mobile app, consumers can avail BNPL services anywhere they like.
Small businesses can offer this service at the online virtual terminal or with a QR code at the in-store point of sale.
14. Affirm
Affirm is a BNPL service provider for eCommerce platforms. It allows users to buy goods now and pay over four interest-free payments. They have 6.2 million users.
Affirm can be connected with online stores to accept the service at the checkout. Consumers can then manage their payments through their mobile devices with the Affirm app.
Innovative Fintech Companies Going Beyond Traditional Credit Card Processing
Every year there are new innovations coming to the world of online payments and processing. Some businesses expand in important niches, and others create brand new solutions that present new worlds of possibility. These are the FinTech innovators to follow:
15. Amazon Pay
Although Amazon has been around forever, it is always developing in the way it supports its merchants. For any merchants that sell almost exclusively with Amazon, this could be a better option than any of those we’ve mentioned above.
Amazon Pay integrates with X-Cart so that merchants can use it as an option on their other websites to keep sales within the Amazon marketplace. Transaction fees start at 1.9% + $0.30, and it’s free to set up.
16. BitPay
Dealing in the crypto market, Bitpay helps businesses to accept cryptocurrency, specifically Bitcoin. BitPay is used by thousands of businesses. As a platform that is able to manage tax payments for businesses using cryptocurrency, BitPay is quite a unique solution.
This ability to be able to accept cryptocurrency and still be tax compliant will probably tempt a lot of businesses on board as consumer crypto use increases.
Through the BitPay system, merchants can accept Bitcoin payments online, in person, or even via email. Consumers can also use the platform to manage their Bitcoin and make purchases.
17. Verifi
Verifi is a Visa solution fighting online fraud and chargebacks with payment protection solutions for eCommerce businesses.
Through its secure payment gateway, Verifi acts as a middle step to confirm identity and, as a result, reduce the fees of payment processing. It also reduces chargebacks.
18. SecurePay
SecurePay is a free online payment solution that focuses on making payments extremely secure. Through tools like SecureBill, FraudGuard, Secure Frame, Secure IVR, and others, SecurePay is picking up favor with online businesses.
Through its merchant account, businesses have access to all of its security tools, as well as online payments, reporting capabilities, and integrations. It’s also an add-on for X-Cart allowing merchants to set up preauthorization, 3D Secure, and FraudGuard.
The Best Payment Processing Solution for Your Business
When deciding the best payment processing company for your business needs, you must consider longevity, growth, and far-reaching services. If you’re planning to grow your business, and scale the way you accept payments and interact with customers, you need a payment provider that can grow with you.
Payment Depot streamlines your credit card transactions by equipping you with the latest payment technologies and terminals. Plus, with Payment Depot, you won’t encounter hidden fees thanks to our transparent, interchange plus pricing model, ensuring you always know what you’re being charged. Contact us to get started today.
Quick FAQs about Payment Processing Companies
Q: What is the significance of payment processing in businesses?
Payment processing is a crucial aspect of businesses as it facilitates transactions between customers and businesses. It impacts the customer experience and the company’s bottom line.
Q: Why is choosing the right payment processor important for small businesses?
Choosing the right payment processor is crucial for small businesses as it directly affects the customer experience and their bottom line. The right processor provides seamless, convenient, quick, and secure transactions, ensuring customer satisfaction and business growth.
Q: How has the digital payment industry evolved since the pandemic?
The digital payment industry has seen a significant rise in demand since the pandemic, with a projected increase of 40% in just two years, reaching $6.6 trillion in 2021. Contactless and EMV technologies have become the favorites in this industry.
Q: What are the various methods of digital payments?
Digital payments can be made through traditional credit cards (Mastercard, Visa, Discover, American Express), gift cards, eCheck, mobile payments (Apple Pay or Google Pay), and other digital payment types.
Q: What is the role of a payment processor?
A payment processor connects software with bank accounts, card networks, and consumers to facilitate transactions. They also handle backend processes such as connecting your bank with your customer’s bank, distributing fees, and ensuring the money clears and lands in your account.
Q: How do Buy Now Pay Later (BNPL) services function?
BNPL services allow consumers to purchase items and pay the total over a specified period. These platforms pay merchants upfront and accept the risk of late or defaulted payments from customers. They have gained popularity recently, with adoption up by 200% since the pandemic.
Q: What are some top payment processing companies to consider?
Some of the top payment processing companies include Payment Depot, Stax by Fattmerchant, Square, Clover, TSYS, Payline Data, PayPal, Stripe, Afterpay, Klarna, Affirm, Amazon Pay, BitPay, Verifi, and SecurePay.
Q: What are the benefits of using Fintech innovators like BitPay and Verifi?
BitPay allows businesses to accept cryptocurrency and remain tax compliant, offering a unique solution as consumer use of crypto increases. On the other hand, Verifi provides payment protection solutions to combat online fraud and chargebacks, reducing processing fees and chargebacks.
Q: How can SecurePay benefit online businesses?
SecurePay offers a free online payment solution focusing on making payments extremely secure. It provides access to various security tools, online payments, reporting capabilities, and integrations through its merchant account, gaining favor with online businesses.
