Best Credit Card Processors of 2021

by Josh Biggs in Finance on 12th February 2021

As a small business owner, you want to be able to accept all forms of payment from your customers. In a survey including a random sample of 380 small business customers and 350 small business owners, it was discovered that 38% of the customers of those small businesses were not able to buy something in their physical store because the form of payment the customer was carrying was not accepted.

Best Processors For Small Businesses

PayPal is one of the most-liked processors for businesses, and that makes sense with its easy setup, mobile wallet options in-store and, best of all, there are no monthly fees or contracts. On the downside, it doesn’t support a large volume of transactions.

Another alternative is FattMerchant, which can handle a higher volume of transactions. They offer membership pricing and 0% markup on interchange rates. More details on those fees will be explained later on. 

Payment Cloud is a solution that businesses like because you get next-day funding, a dedicated account manager and it’s easy to set up. 

Other Costs To Consider

Every time you make a transaction, whether as an individual or as a business owner, there is some risk associated with the transaction. The credit card company charges the merchant for the privilege of using their processing company, and the fee is to cover that risk that they take.

Just like with your credit card, if a merchant asks you to present your ID when you are using your credit card in person it increases the security of the transaction. But since you can’t always ask someone for their ID or even be in their presence during the transaction, you can ask for other data that will make the transaction more secure. This data will need to be asked for and input at the time of the transaction. But in exchange for asking for and providing this data, credit card companies reduce the rate that you pay on interchange fees. The more data that you provide, the higher the savings.

The savings are correlated with data levels, which relate to how much data is provided during the transaction. Level one transactions apply to consumer transactions and generally don’t need much more than the customer’s name, the date of the transaction and the customer’s billing ZIP Code. That’s why when you buy gasoline at a gas station you type in your ZIP Code into a keypad. 

Businesses, corporations and governments can benefit from level two or level three processing rates. As you can deduce, level two processing rates help you enjoy some savings, but not as much as level three, which asks for the most data out of all of the levels. 

How much can I save by submitting Level 3 data to processors?

According to Interchange Pros, you can save hundreds or even thousands of dollars on processing fees, which is important to any small business. In fact, they can help you switch over your payment system smoothly so that you can submit: 

  • Customer code
  • Destination postal code
  • Freight amount
  • Invoice number
  • Line item detail of purchase
  • Order number
  • Ship from postal code
  • Transaction amount
  • Transaction date
  • Tax amount
  • Tax ID

The sooner you switch, the sooner you can enjoy bigger savings and having access to more customers. 


Categories: Finance