6 Cheapest Credit Card Processing for Small Business for 2021

 It can be overwhelming to try and choose a company for the best credit card processing for small businesses. With all doing more or less the same thing, and they all have both glowing testimonials and terrible complaints. Who can you trust if you are supposed to choose?

6 Cheapest Credit Card Processing for Small Business for 2020

The issuance of credit cards is vital to any retail sector. Eighty percent of consumers use cards for everyday purchases and spend up to 83 percent more than cash-paying shoppers.

We determined the cheapest credit card processing solutions by comparing monthly and transaction fees, and contract terms.

Cheapest Credit Card Processing for Small Business


Stripe is a payment processing system that creates custom online checkouts. They are unique because it is designed to handle subscriptions, recurring fees, and storing card data in addition to traditional e-commerce.

Stripe’s robust online features, zero startup or monthly fees, and competitive processing rates also make it a great choice for small online retailers.

Stripe Pricing

Stripe has a pay-as-you-go plan that is perfect for small online sellers. There is no application process, startup fee, or monthly fee.

Just choose the Stripe checkout solution that is best for your business model, integrate with your e-commerce platform or website, and pay a flat-rate fee for whatever transactions you do the process.

Stripe does not have the cheapest credit card processing rates, but its rates are the same as Square and PayPal for online transactions.

Stripe Credit Card Processing Costs

Their credit card processing costs include:

  • Online payments: 2.9% + 30 cents per transaction
  • Stripe Billing (recurring payments): free for first $1 million, after $1 million 0.4% per transaction

Stripe Hardware Costs

They have an online solution, so no hardware costs are necessary.

Other Stripe Fees

Stripe has a number of other solutions available for startup e-commerce companies including:

  • Programmable point-of-sale: starting at $59
  • Stripe Atlas for forming an LLC or C corporation: $500
  • Premium custom support plan: starting at $1,000


Payline is a merchant services provider that specializes in working with virtual terminal payments and high-risk businesses.

Many merchant service providers shy away from working with high-risk businesses such as online coaching programs, nutraceutical companies, travel companies, vape retailers, etc.

But Payline has affordable rates specifically for this category of businesses.

Payline Pricing

Payline offers two primary plans: Payline Start for swiped credit card payments and Payline Connect for online payments.

Both of these are interchange-plus plans that pass along the direct interchange rate with a small, flat percentage and cents fee.

They are not the most affordable option on our list, but it is an excellent choice if you are a high-volume seller that falls under the high-risk category.

Payline Credit Card Processing Costs

Payline card processing costs include:

  • Swiped payments: interchange-plus 0.2% + 10 cents/transaction
  • Online payments: interchange-plus 0.3% + 20 cents/transaction

Payline Hardware Costs

Payline hardware costs include:

  • $298 for an Ingenico countertop terminal that is swipe/dip/tap capable
  • $43 for a mobile reader that works with Payline’s free mobile app
  • More specific pricing available for other solutions on an individual quote basis

Other Payline Costs

Other Payline costs include:

  • $10 monthly fee for Payline Start (in-person payments)
  • $10 monthly fee for Payline Connect (online payments)
  • Also $10 monthly fee for payment gateway
  • No long-term contract


Dharma is a traditional merchant services provider that specializes in working with independent businesses and offers solutions for accepting online and offline payments.

They offer extremely low interchange-plus pricing which is the cheapest credit card processing solution on our list for businesses processing more than $10,000 per month with averages of transactions above $20.

Dharma Pricing

Dharma offers extremely competitive interchange-plus pricing, which, according to our math, is the cheapest option for businesses that process over $10,000 per month and have a higher average sale or basket size.

PayPal and Square are the most affordable options for startup businesses, and businesses with average transactions below $20, like cafes, but Dharma is the most affordable for businesses with higher sales volumes and higher prices, such as established boutiques and brick and mortar businesses.

Dharma Credit Card Processing Costs

Dharma credit card processing costs include:

Dharma Credit Card Processing Costs

  • In-store credit card processing: 15% + 7 cents/transaction plus interchange
  • Online credit card processing: 0.20% + 10 cents/transaction plus interchange

Dharma Hardware Costs

Dharma hardware costs include:

  • Verifone terminal: $179
  • First-Data terminal: $269
  • Poynt: $599

Other Dharma Fees

Other fees associated with Dharma include:

  • $20 monthly fee
  • $0 annual or PCI compliance fee


Fattmerchant has a subscription model where businesses pay a higher monthly fee, but very low transaction fees. They charge a monthly fee per sales channel (in-store, online, mobile, etc), so it’s an affordable solution for established businesses selling via a single sales channel.

Fattmerchant Pricing

Fattmerchant uses a unique subscription pricing model where businesses pay either $99 or $199 per month, depending on whether you process less or more than $500,000 annually.

Then businesses pay direct interchange rates plus 8 cents or 6 cents per transaction.

We recommend that you process at least $10,000/month, ideally $20,000/month before choosing Fattmerchant. If you meet that threshold, the rates are very competitive.

Fattmerchant Credit Card Processing Costs

Fattmerchant credit card processing costs include:

  • In-store credit card payments: Direct cost interchange fees plus 8 cents (if processing under $500,000/annually) or 6 cents (if processing over $500,000/annually).
  • Shopping cart payments: Direct cost interchange-plus 15 cents or 12 cents per transaction
  • Mobile payments: Direct cost interchange-plus 15 cents or 12 cents per transaction

Fattmerchant Hardware Costs

Fattmerchant offers several different hardware solutions, all prices provided on a quoted basis. Hardware options include:

  • Verifone Engage terminal
  • Verifone Carbon POS
  • Fattmerchant’s proprietary Dejavoo terminal
  • Chipper BT mobile card reader
  • Chipper 2X BT mobile card reader

Other Fattmerchant Costs

  • $99 monthly subscription fee for each solution (in-store payments, shopping cart payments, virtual terminal, etc.)
  • $0 annual fees

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Square is a cloud-based payment processing and business management software provider. They have competitive flat-rate processing costs and a robust free mobile POS app that is ideal for mobile or brick and mortar businesses with an average transaction below $20, such as cafes, food trucks, coffee shops, and especially startups.

Square Pricing

Square has competitive processing rates for small businesses, as Square’s rates for swiped payments is just 0.05% higher than PayPal’s rates. However, Square offers an overall better value, with a free POS system, business management tools, and a card reader.

They also offer a ton of extra features like loyalty programs, email marketing, and payroll, but at a fee. They also offers solutions for accepting credit cards online at competitive rates.

Square Credit Card Processing Costs

Square processing costs include:

  • Swiped card payments: 2.75%
  • Keyed in payments: 3.5% + 15 cents
  • Online payments: 2.9% + 30 cents
  • Invoice payments: 2.9% + 30 cents

Square Hardware Costs

  • Swipe card reader: free for new Square accounts ($10 for additional)
  • Chip card reader: $35
  • Chip and tap card reader: $49
  • Terminal: $399 or $37 per month for 12 months
  • Square iPad stand for contactless and chip: $199 or $18 per month for 12 months
  • Square Register: $999 or $49 per month for 24 months

Other Square Fees

Other Square fees include:

  • Monthly fee: $0
  • Annual or PCI compliance fees: $0
  • Square POS: $0
  • Employee management: $5 per month per employee
  • Square Retail: $60 per month
  • Payroll: From $5 per month
  • Marketing: From $15 per month
  • Loyalty: $45 per month
  • Square Restaurant: $60 per month

Note: Square has recently changed its flat-rate fee of 2.75% to 2.6% + 10 cents per transaction. We will update the pricing and our ranking of providers in the next update of this article.


PayPal has a mobile payment solution for accepting credit cards in-store or on the go called PayPal Here. Through this app, PayPal offers the cheapest credit card processing for small businesses for card-present payments with an average transaction below $20, such as cafes and coffee shops.

PayPal Pricing

PayPal has the best processing rates on our list for businesses with an average sale below $20. Businesses that meet that criteria can save hundreds of dollars per month by choosing PayPal. PayPal has competitive pricing for online payments.

Although the card readers are not free, the prices are very competitive, especially for PayPal’s chip card reader.

PayPal Processing Costs

PayPal card processing fees include:

  • Swiped card payments: 2.7%
  • Keyed in payments: 3.5% + 15 cents
  • Online payments: 2.9% + 30 cents
  • Invoice payments: 2.9% + 30 cents

PayPal Hardware Costs

PayPal hardware costs include:

  • Swipe card reader: $14.99
  • Chip card reader: $24.99
  • Chip and tap card reader: $59.99

Other PayPal Fees

  • Monthly fee: $0
  • Annual or PCI compliance fees: $0

When it comes to getting the best rate for credit card processing, it depends on your sales volume and your ability to negotiate. But whatever you do, don’t sit there idly and pay a higher rate out of laziness.

Get on the phone and demand a lower rate! After all, you can’t save money unless you ask.

We hope this article has been helpful to you. Please share it with anyone who you think will appreciate the information!

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