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Last UpdatedFeb 2023

Top 10 Best Credit Card Processing Companies

Increase your business's sales by accepting credits card payments in-person and online. Use our easy comparison chart to find the right provider for you.

Top 3 Merchant Services
Special Deal
Leaders Merchant Services
Leaders Merchant Services
exceptional
9.8
Save or get $200 guarantee
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Flagship
Flagship
excellent
9.3
Free processing equipment
Visit Site
PAYARC
PAYARC
very good
8.7
Accept payments anywhere
Visit Site
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Our Best Overall Provider

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Our Top Picks for February 2023
Leaders Merchant Services
favicon-LEADERS MERCHANT SERVICES
Leaders Merchant Services
Rates as low as 0.15%
Flagship
favicon-FLAGSHIP
Flagship
Rates starting at 0.35%
PAYARC
favicon-PAYARC
PAYARC
Rates from 1.6%
Our rating system
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The star ratings are based on the overall rating of each brand. Some reviews are provided via third party suppliers. We encourage you to write a review of your experiences with these brands.

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), 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 furnish merchants with credit card processing software and equipment such as a merchant processor, credit card reader and terminal, as well as providing customer service, promotional materials and 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, and because 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 in 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
    Leaders Merchant Services

    Leaders Merchant Services

    • Best forAdditional value-added services, low rates
    • RatesFrom 0.15%
    • Contract Length3 years

    Leaders is one of the best credit card processing services in the industry. It’s been around for 20 years, and its parent company is the reputable Paysafe Group Subsidiary. Leaders gives businesses a lot of reasons to love it, including some