Connect with us


Compare the Best Payment Processors: Which One Is Right for Your Small Business?

kokou adzo



Push Cart and a White Paperbag

Ever feel overwhelmed trying to figure out which is the best payment processors for your small business? Between interchange-plus pricing, tiered rates, monthly fees, and contract terms, comparing options can be confusing and frustrating. However, finding an affordable and trustworthy processor is crucial to your success. Don’t worry, we’ve done the research for you and broken down some of the top contenders. Keep reading to find the payment partner that will support your business for the long haul. The right fit is out there, you just have to know what to look for.

Understanding Payment Processor Pricing Models

As a small business owner, understanding how payment processors determine their fees is key to getting the best deal. The two most common pricing models are interchange-plus pricing and tiered pricing.

Interchange-Plus Pricing

With interchange-plus pricing, you pay the actual interchange fee set by card networks like Visa and Mastercard, plus a small markup from the processor. This model is very transparent since you know exactly what the processor is charging above cost.

Tiered Pricing

Tiered pricing groups transactions into different “tiers” based on factors like card type. The processor charges a fixed rate for each tier. This model can be confusing since you don’t know the exact fees for each transaction. Tiered pricing is more profitable for processors, so the fees tend to be higher. However, some small businesses find the predictability of set rates appealing. Traditional processors like Chase Paymentech and First Data often use tiered pricing.

In the end, you need to evaluate your business’s needs and transaction volumes to determine which model is most cost-effective. Don’t be afraid to negotiate with processors for the best deal. Saving even a small percentage on fees can add up to big savings each year. With some research, you can find an ethical payment processor with fair and reasonable rates for your small business.

Flat-Rate Pricing: What to Look for in the Best Payment Processors

When choosing the best payment processor for your small business, flat-rate pricing is an attractive option. With a flat rate, you pay one fixed fee for each transaction, no matter the payment method. Some top processors offer flat-rate plans, but you’ll want to compare to find the best deal.

Look for Transparent Pricing

The best flat-rate processors are upfront about their fees. Look for companies that clearly list prices on their website so you know exactly what you’re paying for credit card, debit card, and ACH bank transfer transactions. Hidden fees or surprise rate hikes down the road are a big red flag.

Consider Average Transaction Size

A rate works best if your average sale amount is over $10-$15. If most of your transactions are just a few dollars, a percentage-based plan may save you money. Do the math to determine your potential costs under different pricing models.

Check for Additional Fees

Some flat-rate processors charge extra for address verification, chargebacks, or reporting. Make sure you understand all potential fees before signing up. The most transparent processors will have no hidden costs.

Look for Competitive Rates

While a flat rate is convenient, you still want a good deal. Compare rates across top processors to find a plan that suits your needs and budget. Plans that charge around $0.10-$0.30 per transaction are typically considered competitive for most small businesses.

With the right plan and processor, flat-rate pricing can be an easy, affordable option for your small business. Do your research, and understand the costs, and you’ll be well on your way to accepting payments with confidence.

Interchange-Plus Pricing: When It’s the Right Fit for Your Business

Interchange-plus pricing is ideal if you have a mid-size business with steady, consistent transactions. With interchange-plus, you pay a small markup fee (usually less than 1%) over the actual interchange rate for each transaction. This means lower overall fees since the processor isn’t padding costs to account for risk and unpredictability.

  • Predictable pricing. Since interchange rates are set by the card brands (Visa, Mastercard, etc.), you know exactly what the underlying costs are for each transaction. The markup fee from your processor will remain the same. This makes budgeting and forecasting straightforward.
  • Potential cost savings. If you have a loyal customer base and low chargeback rates, interchange-plus can often save you money versus tiered pricing. The markup fee is typically lower, and you aren’t subsidizing riskier merchants.
  • Simple statements. Interchange-plus statements clearly show the interchange categories, rates, and markup for each transaction. There are no bundled tiers or misleading labels. You see exactly what you’re paying for each type of card and transaction.
  • Negotiable terms. With interchange-plus, you can often negotiate the markup percentage, monthly fees, and contract terms with your processor. Look for a processor with competitive, transparent interchange-plus plans and reasonable early termination fees in case you want to switch providers down the road.

Interchange-plus may not be the best option if your business is just starting, has erratic sales, or expects a high percentage of chargebacks and non-qualified surcharges. In these cases, you might get better rates with a tiered pricing model, at least initially. However, for many established small businesses, interchange-plus pricing provides fair, predictable, and cost-effective payment processing.

Tiered Pricing: Pros and Cons for Small Businesses

Tiered pricing models charge different rates based on the volume of transactions or sales you process. For small businesses, tiered pricing has some advantages and disadvantages to consider.


The biggest benefit of tiered pricing for small businesses is the opportunity to save money. As your business grows and you process more payments, your fees typically decrease. This can help reduce costs and increase profits over time. Tiered pricing also provides transparency upfront about what you’ll pay at different volume levels.


However, tiered pricing may not always be the most budget-friendly option, especially when you’re first starting out. If you only process a small number of payments, the fees can seem high. Some providers require you to pay a monthly minimum fee regardless of your volume. Make sure you understand all the fees, rates, and minimums before signing a contract.

Tiered pricing can also be complicated to compare across different providers. Each company structures its tiers and rates differently, so you have to evaluate them carefully based on your anticipated payment volume to determine the best overall value. Some key things to consider include:

  • The fees and rates are charged at each tier level. Lower tiers should have competitive rates for small businesses.
  • The payment volume required to achieve each tier. The tiers should progress at reasonable intervals for growing businesses.
  • Any monthly minimum fees. Look for low or no monthly minimums, especially at lower tiers.
  • Additional per-transaction fees. Some companies charge additional fees for certain payment methods like American Express in addition to their tiered rates.
  • Contract terms. Make sure any contracts don’t lock you into high rates for too long as your business grows. Shorter, month-to-month terms are ideal.

Comparing tiered pricing models can feel complicated, but by evaluating the pros, cons, and key fees for your business, you can find an option that suits your current and future needs. The ideal tiered model should provide affordable rates to get started with room for your payments to scale as your company expands.

Comparing the Best Payment Processors: Finding the Best Deal for Your Small Business

Comparing transparent pricing models across different payment processors can help you find the best deal for your small business. Several factors determine how much a processor will charge you:

Transaction fees

The fees are charged for each transaction, like debit/credit cards, e-checks, or mobile wallets. Typically a percentage of the transaction total plus a fixed fee per transaction. Look for processors with competitive rates for the types of payments you accept.

Monthly fees

Some processors charge monthly subscription or statement fees in addition to per-transaction fees. Make sure any monthly fees are reasonable for the features and services offered. Smaller businesses will want to avoid high monthly minimums.

Payment methods

The types of payments a processor accepts – like Visa, Mastercard, American Express and Discover cards, PayPal, Apple Pay, and bank transfers – also impact their fees. More options may mean higher fees overall. Choose a processor that accepts the specific payment methods right for your business.

Contract terms

Some processors require long-term contracts (2-5 years) to get the best rates. Month-to-month or annual contracts offer more flexibility. Consider how long you want to commit to a processor and how easy it is to cancel a contract if needed.

Features and services

Value-added features like virtual terminals, payment gateways, reporting tools, or point-of-sale integration may affect the overall cost. Make sure any additional fees for features you need are reasonable. Some services are included for free.

Comparing quotes from a few of the best payment processors based on these factors will help you determine which provider offers the best value and most affordable solution for your small business. Finding a processor with transparent pricing that meets your needs will make it easy to budget for the total cost of payment processing and ensure the best deal for your bottom line.


That covers the basics of the best payment processors and their pricing models. Now you have the information you need to determine which provider is the best fit for your small business needs and budget.

The choice ultimately comes down to what factors are most important to you – low fees, simplicity, top-notch security, or great customer service. Evaluate your priorities and see which processor aligns best. Don’t get bogged down in all the details, just focus on the big picture. Keep things simple. The last thing you want is to get stuck paying higher fees than necessary.

Do a quick cost-benefit analysis for your business and go with what makes sense. You really can’t go wrong with any of these reputable companies, so choose a processor that you can stick with for the long haul as your business grows. The most important thing is that you can now accept payments and get your business up and running.

Kudos to you for making it this far – you should feel proud of yourself! The open road awaits, so start processing those payments and go build your empire. You’ve got this!


Kokou Adzo is the editor and author of He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top of the month

Copyright © 2023 STARTUP INFO - Privacy Policy - Terms and Conditions - Sitemap - Advisor


We are a global Innovative startup's magazine & competitions host. 12,000+ startups from 58 countries already took part in our competitions. STARTUP.INFO is the first collaborative magazine (write for us or submit a guest post) dedicated to the promotion of startups with more than 400 000+ unique visitors per month. Our objective : Make startup companies known to the global business ecosystem, journalists, investors and early adopters. Thousands of startups already were funded after pitching on

Get in touch : Email : contact(a) - Phone: +33 7 69 49 25 08 - Address : 2 rue de la bourse 75002 Paris, France