Saving on Transactions - The Cheapest Credit Card Processors Reviewed
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Saving on Transactions - The Cheapest Credit Card Processors Reviewed
Saving on Transactions: The Cheapest Credit Card Processors Reviewed
When it comes to processing credit cards, less expensive doesn't always mean better.
That being said, there is some value in cutting down on transaction costs, right?
There is, however, a way to get good rates and the best products and services from your merchant account provider at the same time.
Okay, first we'll talk about the cheapest credit card processing companies. Then we'll talk about what you need to know before choosing one.
Our Best Picks for the Cheapest Credit Card Processing Companies
- Easy Pay Direct
Easy Pay Direct is a reliable choice for businesses looking for a budget-friendly credit card processing solution without compromising on efficiency.
One of its strongest selling points is its transparent pricing structure, which eliminates unexpected fees and simplifies cost management.
The setup process is notably straightforward, designed to minimize hassle and get you started with minimal delay.
Easy Pay Direct offers a range of payment options, including online, mobile, and in-person processing, making it versatile enough to accommodate various business needs.
Its user interface is intuitive, which helps streamline transaction management and reduces the learning curve for new users. The platform also provides solid customer support, ensuring that you have access to assistance whenever you need it.
However, while Easy Pay Direct excels in affordability and ease of use, it may lack some of the advanced features and customization options found in more premium solutions.
Additionally, although customer service is generally helpful, response times can occasionally be slower than desired.
Pros:
Transparent pricing with no hidden fees
Quick and easy setup process
Comprehensive support for different payment methods
Intuitive user interface
Cons:
Limited advanced features compared to higher-end processors
Variable customer service response times
- Helcim
Helcim is a standout in the realm of cost-effective credit card processing, offering a compelling blend of competitive rates and a comprehensive feature set.
It distinguishes itself with a pricing model that is transparent and straightforward, devoid of hidden fees or long-term commitments. This makes it an attractive option for businesses that value cost predictability and flexibility.
Helcim provides a robust suite of features, including invoicing, recurring billing, and seamless integration with various e-commerce platforms, catering to a wide range of business needs.
Its user interface is designed to be user-friendly, facilitating easy management of transactions and reports.
The customer support team is highly regarded for its responsiveness and effectiveness, contributing to an overall positive user experience. However, businesses looking for specialized hardware for in-person transactions may find Helcim’s offerings somewhat limited.
Additionally, while the core features are strong, more advanced functionalities are typically available only through higher-tier plans.
Pros:
Competitive rates with clear pricing structure
No long-term contracts or hidden fees
Extensive features including invoicing and recurring billing
Excellent customer support
Cons:
Limited advanced features in lower-tier plans
Fewer hardware options for in-person transactions
- Dharma Merchant Services
Dharma Merchant Services shines as an ethical and transparent credit card processing solution, making it a great choice for small businesses and nonprofits.
Its pricing model is clear-cut, with no hidden fees, which aligns with its commitment to straightforward and honest business practices.
Dharma offers a range of customizable options and integrates well with various sales channels, providing flexibility that caters to diverse business operations.
The platform is known for its strong customer service, which is an essential factor for many users who appreciate attentive and effective support.
Additionally, Dharma's dedication to ethical practices can be particularly appealing to businesses that prioritize corporate social responsibility.
On the downside, Dharma's feature set may be less comprehensive for larger businesses or those with complex processing needs.
While it excels in ethical considerations and customer support, it may not offer the breadth of advanced features or integrations available with some competitors.
Pros:
Transparent pricing with no hidden fees
Focus on ethical business practices
Excellent customer service
Flexible and customizable options
Cons:
Limited advanced features for larger businesses
Fewer integration options compared to some competitors
Each of these processors offers unique advantages, making them strong contenders in the market for budget-conscious businesses.
What is Credit Card Processing?
As a business owner, you accept payments from your customers in exchange for goods and services.
Expanding your payment options can attract more customers and boost your business. To accept credit cards, you'll need a way to process these payments.
Credit card processing involves transferring the customer's funds from their credit card (or bank account, for debit card transactions) into your business bank account.
This process requires a payment processor to handle the various steps involved.
Here’s a breakdown of the key stages from when a customer pays to when you receive the funds:
Step 1: Payment and Authorization
When a customer makes a purchase and provides their credit card details, these details are sent to the acquiring bank.
The acquiring bank, which facilitates transactions for the merchant, then forwards the information to the issuing bank—the bank that issued the customer's credit card.
The issuing bank performs a verification process, checking for available funds and validating the account's status.
Based on this verification, the issuing bank either approves or declines the transaction, sending a response back through the acquiring bank to the merchant.
Step 2: Payment Authentication
Once the transaction information reaches the issuing bank, it undergoes a thorough check to ensure its validity. The issuing bank verifies critical details such as the Address Verification System (AVS) and the Card Verification Value (CVV).
These checks help confirm that the card is being used by the rightful owner and that the transaction is legitimate. If all the information matches and is verified, the issuing bank approves the payment.
At this point, the funds are earmarked or held in the cardholder’s account, awaiting the next steps in the transaction process.
Step 3: Batching and Settlement
At the end of the business day, the merchant compiles all the approved transactions into a batch and sends this batch to their acquiring bank.
The acquiring bank processes the batch, releasing the funds from the issuing banks and deducting any transaction fees that apply.
This process ensures that the funds are appropriately transferred from the cardholders' accounts to the merchant’s account.
The batching and settlement process consolidates multiple transactions, streamlining the transfer of funds and the deduction of fees.
Step 4: Merchant Receives Funds
Once the acquiring bank has processed the batch and settled the transactions, it deposits the funds into the merchant’s business bank account.
This deposit makes the funds available for the merchant to use, completing the payment cycle.
The time it takes for the funds to be accessible can vary depending on the acquiring bank's policies and the merchant's agreement with the bank, but typically, it is a prompt process.
The merchant can then use these funds for operational expenses, reinvestment, or other business needs.
Merchant Account Providers vs. Payment Processors: What’s the Difference?
To process payments, you need a merchant account, which is distinct from a business bank account.
A merchant account is held by your acquiring bank and temporarily holds the funds before transferring them to your business bank account.
The company that provides you with a merchant account is known as a merchant account provider.
Some companies offer both merchant accounts and payment processing services, while others specialize in one or the other.
The Appeal of Affordable Payment Processing Companies
Running a business involves various expenses, making cost-saving opportunities valuable.
Some payment processing companies charge exorbitant rates, and without proper knowledge, you might fall for their marketing tactics.
Understanding different pricing plans can help you avoid unnecessary costs.
Exploring Different Pricing Plans
Payment processing isn’t one-size-fits-all. Here are the common pricing plans:
Flat-Rate Pricing
Flat-rate pricing involves a single rate for all transactions, though the rate can vary based on how the payment information is entered.
Swiped transactions usually have a lower rate than manually keyed-in transactions, reflecting the lower risk of card-present transactions.
While straightforward, flat-rate pricing might not always be transparent and could be costly in the long run.
Tiered Pricing
Tiered pricing categorizes transactions into three tiers: non-qualified, mid-qualified, and qualified.
Qualified transactions, such as card-present and debit card transactions, get the lowest rates due to their lower risk.
Non-qualified transactions, like card-not-present and reward card transactions, incur higher rates. This model can lack transparency and might not be the most cost-effective option.
Interchange-Plus Pricing
Interchange-plus pricing is often favored for its transparency. Interchange fees, set by maj