Small business credit card processing: How to choose and which to use

People favor credit cards for a variety of reasons, whether they’re dreaming of a tropical vacation booked with points or don’t like the hassle of carrying cash. Credit cards are so widespread that 82% of adults in the United States had at least one in 2022, according to the U.S. Government Accountability Office. Small business owners who accept credit cards can tap into this huge demographic and make payments much more convenient for their customers.

To easily accept these payments, you need a reliable credit card processor that’s suitable for small businesses. You want a combination of reasonable fees, invoicing features, and a variety of supported payment types. Compare five of the best credit card processors for small businesses to find the best option for you.

The benefits of offering credit card processing

Credit card processing is near-non-negotiable today, since it’s so much more convenient to pay by card. Many clients already have their credit card information saved to their mobile device and web browser. With autofill features, they can make payments in just a few clicks. It also simplifies your bookkeeping and reduces the amount of cash that employees have to handle, reducing the risk of theft. 

What to look for in your credit card processor

The easiest way to take credit card payments as a small business is to use a third-party payment processor. Otherwise, you’ll need to set up your own merchant account and payment gateway, which is typically time- and cost-prohibitive for small businesses. 

Here’s what to consider when choosing a payment processor as a small business owner: 

• Payment processing fees: Transaction fees vary by processor, and you’ll need to decide which fee structure makes sense for your budget and business model. 
• Pricing structures: For more flexibility, look for processors that support one-time payments, recurring billing, or installments. 
• Integrations: Your payment processor should integrate with the business management tools you’re already using. 
• Security and PCI compliance: Processors that offer encryption, fraud protection, and chargeback disputes protect you and your clients. 
• Contract terms: Some processors offer month-to-month contracts, while others require long-term commitments, sometimes with early termination penalties.

Understanding credit card processing fees

Credit card processing fees are charges you incur every time you accept a credit card payment. These are three of the most common types of fee structures 

Flat rate 

In a flat-rate structure, your fees stay the same across all payments. For example, HoneyBook’s fee is a flat rate of 2.9% + $0.25 for credit card payments with Visa or Mastercard. 

Interchange plus 

With this structure, you pay the interchange rate to your customer’s bank. You also pay a markup fee from your payment processor. For example, you might have to pay a 1.71% + $0.09 interchange rate and a 0.29% + $0.10 markup fee. For a $100 purchase, that would be:

Tiered 

A tiered fee structure separates transactions into different tiers, and you’ll pay both a transaction fee and a processing fee based on the tier your transaction is in. For instance, you might pay 2.01% + $0.09 for transactions with standard credit cards, 2.89% +$0.09 for transactions with rewards cards, and 3.89% + $0.10 for transactions with premium rewards cards. This structure can be unpredictable because processors often don’t share how they categorize transactions, which can lead to higher-than-expected processing costs. 

5 best credit card processing platforms for small businesses

1. HoneyBook

HoneyBook is a complete client management platform with a built-in payment processor. In addition to invoicing and payment features, HoneyBook includes automations for time-consuming tasks like sending out welcome emails to new clients. 

What’s included: HoneyBook lets you create professional, branded invoices in minutes, then send them directly to clients for online payment. You can also set up automated reminders to prevent late payments. 

HoneyBook also handles lead forms, scheduling, project tracking, client portals, proposal templates, and digital contracts. 

Payment types and transaction fees: HoneyBook accepts credit cards, debit cards, ACH bank transfer, Apple Pay, and Google Pay. And the platform’s flat-rate transaction fees start at 2.9% + $0.25 for card payments. If you accept tap-to-pay via an in-store point-of-sale (POS) system, fees start at 2.7% + $0.10. 

Pros:

• You can manage payments, proposals, contracts, and scheduling all in one platform.
• It lets you send invoices and payment reminders automatically to save time. 
• HoneyBook accepts many payment methods, with the ability to set up payment plans and accept tips.

Cons:

• The HoneyBook mobile app doesn’t have all the features available in the desktop app, like the ability to create lead forms. 
• HoneyBook isn’t suitable for enterprise-level businesses or e-commerce brands selling physical products, since it doesn't have inventory tracking or enterprise-level data reporting. 

Try HoneyBook for simpler credit card payments.

Accept credit cards, set up automatic payment reminders, and get paid faster — all in one place.

Try HoneyBook Payments

2. Square

Square is a popular credit card processing platform for businesses that need to accept payments in-person and online. 

What’s included: In addition to payment processing, Square also offers POS software for businesses like retail stores or restaurants, plus card readers and other hardware for payments. The company also provides simplified invoice templates and recurring billing options. You can opt for add-on features for email and SMS marketing, loyalty programs, payroll, and employee scheduling. 

Payment types and transaction fees: Square accepts any U.S.-issued and most internationally issued credit cards, plus mobile wallets like Apple Pay and Google Pay. And customers can pay in installments using Afterpay. 

Square’s transaction fees for those with a free plan start at 3.3% + $0.30 for online payments and 2.6% + $0.15 for in-person payments. Plus and Premium users get lower transaction fees with a monthly subscription, starting at 2.4% + $0.15 for in-person and 2.9% + $0.30 for online. 

Pros:

• You can choose a free plan where you’ll only pay transaction fees.
• It offers POS software and hardware for in-person businesses. 

Cons:

• Square’s per-transaction fees vary significantly by transaction type, which can make budgeting difficult. 
• It has fewer customization options, which can be limiting as your business grows if you’d prefer a highly customized checkout experience and specialized reporting. 

3. PayPal

While peer-to-peer payments made PayPal famous, today the platform offers a variety of small business payment services. 

What’s included: PayPal has customizable invoices with flexible payment options. Other features include a POS system with card readers and terminals, an e-commerce checkout platform, direct payment links, and payment reporting options. 

Payment types and transaction fees: PayPal accepts Visa, Mastercard, Discover, Diners Club, and American Express; mobile wallets like Google and Apple Pay; and ACH transfers. PayPal’s flat-rate processing fees start at 2.29% + $0.09 per transaction for credit and debit cards.

Pros:

• A business account doesn’t require a monthly subscription, and you just pay a fee when you receive a payment for goods or services. 
• You can create your own custom payment link, even without a website. 

Cons:

• PayPal’s transaction fees can add up quickly for high-volume businesses. 
• PayPal’s AI-powered anti-fraud features may sometimes mistakenly freeze accounts for transactions that weren’t really fraud.

4. Stripe

Stripe is a popular credit card processing company for online or in-person transactions. 

What’s included: The platform offers extensive customization options, like an invoicing add-on that helps you create and send digital invoices, with automated payment collection. Stripe also offers payment links, customizable subscriptions, and in-person payment terminals. 

Payment types and transaction fees: Stripe accepts major credit cards like Visa and Mastercard, ACH transfers, mobile payments like Apple Pay, and buy-now-pay-later platforms. Its standard processing fee is 2.9% + $0.30 per transaction. And the platform offers custom pricing models for high-volume businesses. 

Pros:

• Customization abilities and complex features can suit your business as it grows. 
• Because it’s a managed payment option, Stripe handles disputes for you (for a fee). 
• It works well for global businesses, thanks to extensive international payment options. 

Cons:

• If you want custom payment integration, you’ll need to program it yourself. 
• You incur a $15 fee each time you receive a dispute.

5. Helcim

Helcim is a payment processor designed specifically for small businesses. 

What’s included: With Helcim, you can create simple digital invoices with options for recurring or partial payments. The platform offers a free POS software with hardware available for purchase, customizable e-commerce sites, and basic inventory management features. Its Fee Saver tool passes processing fees onto your clients so that you’re not responsible.

Payment types and transaction fees: Helcim has an interchange plus pricing model. It combines a bank interchange fee with a flat transaction rate fee starting at 0.15% + $0.06 for in-person or 0.15% + $0.15 for online transactions. Pricing varies based on the card used, how the payment is processed, and your monthly transaction volume. 

Helcim accepts major credit cards and debit cards like Visa and American Express, ACH transfers, mobile payments like Google Pay, and international payment options.

Pros:

• It has no monthly or cancellation fees. 
• The interchange plus pricing model can save businesses money as they scale, with volume discounts. 
• Some U.S. and Canada-based users are eligible for next-day deposits. 

Cons:

• The fee structure primarily benefits high-volume businesses, and may not work well if you have few transactions each month. 
• Since interchange fees fluctuate, Helcim’s advertised rates aren’t guaranteed.

Using a business platform with integrated payment processing

The best platform for small business CC processing will have straightforward pricing and an intuitive dashboard designed for smaller teams. To choose an option that suits your business, look at each platform’s fee structure, accepted payment methods, and invoicing capabilities. 

HoneyBook is a full-on business management platform designed for small business owners, with features beyond a built-in payment processor. It’s everything you need to manage the entire client lifecycle. Send invoices built for payment by card, Google Pay or Apple Pay; give clients the ability to set up a flexible payment plan; and use HoneyBook Finance to manage your funds. 

Try HoneyBook free today to immediately offer your clients an easier payment experience.

Get paid faster

Use HoneyBook to simplify your payment process—no more chasing payments.

Get started