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Last Updated: May 2024

The Best Merchant Services of 2024
Take your business to the next level

  • 1) Compare
  • 2) Sign-up
  • 3) Accept Payments
Top 3 Merchant Services
Special Deal
Accept payments anywhere
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Merchant One
Merchant One
Easy payments solution
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Worldwide payment solutions
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Our Best Overall Provider

Our Top Picks for May 2024
Quick and simple setup
Merchant One
Merchant One
Rates starting at 0.29%
Rates from 0.03% + $0.10

Have you ever wondered what's involved in credit card processing? Every credit card transaction involves four parties: The customer making the purchase, the merchant receiving payment for the purchase, the bank the merchant processor uses for credit card processing services (acquiring bank), and the bank that issued the customer's credit card (issuing bank).

How Does Credit Card Processing Work?

Acquiring banks (also called merchant banks) contract with merchants to operate accounts that allow the merchants to accept credit card payments. Acquiring banks deposit funds for credit card purchases into merchants' accounts. They also provide merchants with:

  • Credit card processing software
  • Merchant processors
  • Credit card readers and terminals
  • Customer service
  • Promotional materials
  • Other credit card processing services

Any merchant who wishes to accept credit card payments must have a merchant processor account. A merchant account is an unsecured line of credit that pays a merchant for customer purchases. The payment is actually a loan to the merchant's account from that merchant's acquiring bank. In other words, the acquiring bank loans money to the merchant to cover the cost of customers' credit card transactions.

After a credit card transaction is complete, the merchant will have less money than the original transaction amount because both the issuing bank and the acquiring bank will charge the merchant fees for their services. These fees include a percentage of each transaction, and the higher the transaction amount, the higher the fee. The merchant may also be charged fixed fees for each transaction by the issuing bank and the acquiring bank.

What You Need to Know About Credit Card Processing

If you want to set up a merchant account for credit card processing, you probably wonder about the credit card fees you will be charged. The most important determinant of how high your fees will be is the type of business you are in. Certain businesses are more likely than others to suffer payment disputes and chargebacks, so their transactions are considered riskier by issuing and acquiring banks. Businesses with these riskier transactions are therefore charged higher fees to offset the risk of chargebacks.

Chargebacks are what happens when a customer successfully disputes a credit card fees transaction with your business. The safest transactions, as far as the issuing and acquiring banks are concerned, take place when the cardholder swipes his or her own card in the credit card reader and signs the receipt to pay for goods that are inexpensive and not likely to generate complaints. Restaurants, gas stations, and car rental agencies all fall into this category. Plus, since their chargeback risk is low, they pay less in fees for credit card processing transactions.

The risk of a chargeback is highest when transactions are completed via the Internet or by phone. The risk is even higher if the transactions are expensive, involve shipping, and the business is one that is subject to complaints. The bottom line is that when a merchant applies for credit card processing services, the business the merchant is engaged in figures significantly into the fees that the merchant will be charged.

Who Needs Credit Card Processing Companies?

Any merchant, whether doing business in a physical location like a retail store, a virtual location like an online website, or by phone or mail order needs credit card processing services if they wish to serve all potential customers and remain competitive.

Although you, as a merchant, will pay a certain price for credit card processing services, the bottom line is that you can't really be successful in your business without it. However, due to the variability in pricing for credit card processing services, you can shop around for the best deal. Just be sure that any quotes you receive include all the rates and fees you will be charged.

Our Top 3 Picks

  • 1


    • Best forRestaurants, retailers
    • Rates2.3% - 2.7% + $0.10
    • Contract LengthStarts from 1 year

    Many top credit card processing companies sell Clover’s point-of-sale systems. But did you know that Clover itself offers credit card processing through parent company Fiserv? That’s right. While Clover is primarily known for its POS hardware, it also offers a range of other services including payment processing, gift cards, invoicing and payroll solution, and working capital financing.

    That said, if you’re looking for a payment processor that offers Clover devices, you should compare Clover to the many other payment processing companies that are authorized to resell Clover products. Clover’s flat-rate processing may seem convenient, but it looks less attractive when you consider the hundreds of poor reviews it has received from small business owners that have used its service.

    • Predictable, flat-rate processing
    • Access to all Clover hardware
    • Large app store
    • Poor customer service reputation
    • Monthly fees
  • 2
    Merchant One

    Merchant One

    • Best forBusinesses seeking merchant and payment processing solutions
    • Rates0.29%-1.55% per swiped card transaction
    • Contract Length3 years

    Merchant One is a credit card payment processing company that offers solutions to small and large businesses in various industries. The company partners with Clover to resell its state-of-the-art POS systems, provides its customers with free training on using them, and services the hardware in-house. This ensures a high-quality user experience.

    While Merchant One has excellent reviews on Trustpilot, several complaints indicate issues with customer service, billing, and contract terms. Nevertheless, Merchant One’s dedicated managers will respond to queries and guide you on setting up your account and processing transactions.

    Why we chose Merchant One - We chose Merchant One because it’s able to process both POS and mobile phone credit card payments.

    Our experience - We liked that Merchant One provides a dedicated account manager and offers lower card payment processing fees than some of its rivals.

    • Assigned account managers
    • State-of-the-art technology
    • Tailored solutions for different businesses
    • Free trial unavailable
    • Billing and pricing issues noted