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  5. 6 Best Free Credit Card Processing Companies [2024 Update]

6 Best Free Credit Card Processing Companies [2024 Update]

Ivana Shteriova Ivana ShteriovaFinance Specialist April 03, 2024
April 03, 2024
While free credit card processing sounds too good to be true (and is), there are methods to bypass or lower your processing costs. Some credit card processors will offer ways for you to cut out the credit card processing costs (surcharging) or provide an incentive for your customers to pay in cash (cash discount).

As an economics scholar who researches credit card processing for a living, I often see companies that offer “free” payment processing but will end up overcharging for other features or hide additional fees and conditions in the fine print. Some may even turn out to be scams run by disreputable credit card processing companies.

There are also some limitations to these services that you need to be aware of. For example, if your business is based in Connecticut and Massachusetts, surcharging is illegal. Cash discount, on the other hand, is legal everywhere when implemented correctly, but staying compliant can be tricky.

I’ve done extensive research into this topic and handpicked processors that offer the best support for zero-cost processing. My top recommendation is Leaders Merchant Services’ (LMS) affordable cash discount program. It also offers custom pricing, starting with a low monthly fee for the basics and add-ons available to purchase separately. Its pricing model ensures that you’ll never have to pay for anything other than the features you really need.

Check out LMS or keep reading for more processors with zero-cost processing programs and reasonable transaction rates.

Short on Time? These Are the Best Free Credit Card Processing Companies in 2024

  1. Expert’s Choice
    LMS_Monogram Leaders Merchant Services
    Leaders Merchant Services is a popular choice with our readers
    Affordable credit card processing and great pricing for small, low-risk businesses.
  2. staxx logo Stax Predictable pricing, advanced software tools, and considerable savings if you process more than $8,000/month.
  3. Payementcloudlogo PaymentCloud Surcharging and cash discount programs for high-risk merchants.

What We Look For in the Best Free Credit Card Processors

While doing my research for the best zero-cost payment processors, I focused on the following features:
  • Support for in-person and online transactions. All the processors on my list provide hardware and software that automatically applies a surcharge based on the card type. Some even provide signage to inform your customers of any surcharging or cash discounting programs in place.
  • Fair pricing. I chose credit card processors with reasonable monthly subscriptions that offer the best overall value – and some don’t even charge an extra fee for zero-cost processing. My top recommendations also offer the lowest transaction fees in the industry, with the option to pay them or pass them on to your customers.
  • Flexibility to choose your zero-cost processing program. Some of the processors on my list offer both credit card surcharging and cash discount programs. While surcharging only applies to credit card payments, cash discount programs also allow you to eliminate debit card fees.
  • Free point-of-sale (POS) equipment. In addition to zero-cost processing, all the credit card processors on my list provide you with at least one piece of POS equipment for free.
  • Security and compliance. In addition to being PCI compliant, the payment processors on my list provide various security tools to protect your business and your customers’ data, including tokenization, multi-factor authentication, end-to-end encryption, and advanced fraud detection and prevention.

Leaders Merchant Services (LMS) is one of the best free credit card processors for small businesses with lower credit card volume. While it doesn’t offer surcharging, which could be a deal-breaker if you’re a non-profit, LMS has an excellent cash discount program.

LMS offers one high-quality Clover POS device for free without a contract, along with installation and training. It also lets you use any equipment for three months without processing minimums. After that, you can choose to rent or purchase the POS device, although renting will require a $1000 to $5000 monthly processing minimum depending on the device. LMS will program its equipment to automatically apply the 4% cash discount.

As LMS builds custom plans for everyone, you’ll need to call the company for an exact quote. This method ensures you’ll only pay for what you need. For example, I received a quote for $20/month for a processing volume of $5,000–$12,000/month.

Features and Benefits

  • Meet-or-beat guarantee. If you’re processing elsewhere, LMS can prepare an analysis of what you’re currently paying vs. their offer. If it can’t offer you a better deal, you’ll get a $200 gift card.
  • Flexible business funding options. LMS gives you access to business loan funding and merchant cash advances that, if approved, will be paid back through small deductions on future sales. These options are very helpful for new and small businesses that can’t afford to put up collateral or need funding to cover operating costs.
  • Personal point of contact. You can save time by calling or emailing your dedicated agent directly without having to repeat yourself to a new agent every time you contact support.
  • Powerful payment links. You can brand these payment links with your logo and enrich them with special offers and ads. When sent directly to your customers, you’ll stimulate repeat business and provide access to your social channels and website.
See our full Leaders Merchant Services review for more.

Free credit card processing program Cash discount (custom pricing)
  • One free device
  • 3 Clover devices (Clover Station POS, Clover Flex, Clover Mini), First Data FD150 and First Data FD150 Terminal, RP10 Pin Pad, and Magtek Mini-MICR check reader available to purchase
Supported payment methods Credit and debit cards, ACH, bank transfers, digital wallets
Transaction fees on cheapest plan ~2% + 0¢
Monthly fee on cheapest plan $9.00

2. Stax: Best for High-Volume Businesses Interested in Surcharging

Stax offers surcharging through its subsidiary CardX, which is an automated surcharging platform. You can give customers the option to use ACH, debit, or gift cards to avoid the 3.5% surcharge. The service is free with Stax’s monthly membership.

As a leader in surcharging programs, CardX offers 100% compliant technology, hardware, and signage. It will even supply and ship you receipt paper for free. When a debit card is used, Stax’s automated technology will detect the card type and won’t apply the surcharge fee. It will also show the surcharge as a separate item on the receipt or invoice, so there are no surprises for your customers.

If you’re an established business processing $8,000+/month, Stax can save you up to 40% over traditional options. It has the industry’s lowest transaction fees and many nice-to-have features, like a one-click shopping cart integration, digital invoicing, and recurring payments included in its monthly fee. But unless you have a high processing volume, Stax can be pretty expensive due to its higher monthly fee compared to my other top recommendations.

Features and Benefits

  • Free payment management software. As a Stax customer, you can use its sophisticated payment software on multiple devices at no extra cost. It allows you to manage invoices, accounting, and reviews, and gives you access to performance analytics from one centralized place.
  • Free mobile app. Stax’s mobile app enables you to turn any handheld device into a POS system. It can save you a lot on equipment, as you can use your mobile devices to process payments. It also allows you to access in-depth business insights and manage your business on the go.
  • Free equipment of choice. Stax lets you choose between a SwipeSimple, Dejavoo, or Pax terminal, depending on what suits your needs.
  • Invoicing tools included in the monthly rate. If you offer regular services, you can set up recurring payments to automatically collect money. You can also send branded payment links, enabling customers to complete transactions in seconds. Text2Pay is a unique feature that allows your customers to pay by responding to your texts.
Read our expert Stax review for more information.

Free credit card processing program Surcharging (included in monthly subscription)
  • Free Dejavoo terminal
  • 8 Dejavoo terminals, 4 Clover devices (Clover Flex LTE or WI-FI, Mini LTE, Station Solo, Station Duo, and SwipeSimple B250 mobile reader available to purchase
Supported payment methods Credit/debit cards, many digital wallets, ACH, and bank transfers
Transaction fees on cheapest plan 0% + 10¢ (in-person)
Monthly fee on cheapest plan $99.00
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3. PAYARC: Flexible Cash Discount Programs

PAYARC offers flexible cash discount programs, allowing you to select what works best for your needs. If you want to save on monthly fees, you can use PAYARC’s free cash discount option to apply a 4% discount for cash transactions. The premium plans allow you to offer a 2.5% to 3.5% discount to customers who pay using cash.

PAYARC is one of the rare processors that offer both membership-based and flat-rate payment models. Starting at 0% + 15¢ (in-person & online), the membership-based plans have some of the lowest transaction fees in the industry and offer big savings for high-volume businesses. The more you process, the less your per-transaction fees will be.

If you process international transactions, PAYARC is a great option due to its integrations with international payment gateways. Through Planet Payments Gateway, which supports 150 currencies, you can incorporate dynamic currency conversion for in-person and online payments. This can help reduce chargebacks for unrecognized payments.

Features and Benefits

  • Free recurring billing. You can improve your cash flow with subscription-based selling at no additional cost.
  • Advanced chargeback management. Chargebacks are hard on any business, even more so if your budget is tight. PAYARC goes above and beyond to help you prevent, reduce and manage chargebacks. The processor will even create a personalized chargeback mitigation plan for you at no extra cost.
  • Reduced rates for non-profits. PAYARC is one of the few processors that provides its services at wholesale rates to registered non-profit organizations. The reduced rates apply to accepting online and in-person donations.
  • Free terminal with some plans. Depending on the plan and your negotiation skills, you can get a PAX A920 terminal for free. It’s a portable device with a long-lasting battery, making it convenient to take payments remotely.
Check out our in-depth PAYARC review for more details.

Free credit card processing program Cash discount (no extra fee)
  • Free device with some plans
  • 3 Pax terminal models (E500, E700, E800), portable Pax E920, 2 Dejavoo terminal models (Z6 and Z8) and Dejavoo Z1 mobile POS available to purchase
Supported payment methods Credit cards, debit cards, digital wallets (Apple Pay and Google Pay), ACH
Transaction fees on cheapest plan 2.5% - 4% (customer pays)
Monthly fee on cheapest plan $0

4. PaymentCloud: Best for High-Risk Businesses Looking for Free Credit Card Processing

PaymentCloud is the best credit card processor for high-risk merchants. It has a 98% approval rate across most industries, meaning that your chances of getting approved are high – even if you’ve had trouble finding a payment processor in the past. In some cases, you can receive approval within 24 hours.

PaymentCloud offers cash discounting and in-person surcharging. For the former, you can offer a 4% discount for cash payments, while the latter allows you to pass the 4% fee to customers who pay via credit card. Its POS systems are pre-programmed to automatically handle both cash discounts and surcharges.

You’ll also receive additional free security features to help your business stay compliant and avoid fraud and chargebacks. In addition to tokenization and point-to-point encryption, you’ll also receive real-time fraud alerts and the ability to set custom thresholds and filters. PaymentCloud will even prepare a personalized action plan to help you prevent fraudulent activities.

Features and Benefits

  • No PCI compliance fee. Most processors charge between $70 and $120/year for PCI compliance. At PaymentCloud, this fee is included in the already reasonable monthly subscription rate.
  • Paysley integration. This integration allows you to create custom payment links and QR codes that customers can use to pay within seconds. There are also tipping features for the food service industry and donation pages for charities.
  • Free terminal with a two-year contract. You get one free PayAnywhere 2-in-1 reader that allows you to process EMV and magstripe cards. (If you terminate your contract early, you’ll have to return the complimentary device.)
  • Personal account manager. PaymentCloud will assign you an account manager from day one. Your account manager will provide personalized guidance throughout the setup process and help you with any issues that might arise.
Check out our expert PaymentCloud review for more details.

Free credit card processing program Surcharging for in-person transactions only and cash discount (no extra fee)
  • Free PayAnywhere credit card reader
  • A selection of hardware available to purchase
Supported payment methods Credit/debit cards, ACH, MOTO, digital wallets, including PayPal, e-checks, bank transfers, cryptocurrency
Transaction fees on cheapest plan Around 2.1% + 15¢
Monthly fee on cheapest plan $14.00

5. Flagship Merchant Services: Best Free Processing for Cost-Conscious Small Businesses

If you’re just starting out or are a small business with bad credit, Flagship will likely take you under its wing. The company has a fast and hassle-free vetting process, meaning you might get your merchant account set up the same day you apply. You can use Flagship on flexible, month-to-month contracts with no early cancellation fees.

Flagship offers custom pricing for every business, meaning you’d have to call for a quote. It offers both surcharging and cash discounts with a transaction fee of 3.85% for both, with room to negotiate a slightly lower fee. On $5,000–$12,000 volume per month, expect to pay $20 in monthly subscription fees, which includes its zero-cost credit card processing programs.

While additional e-commerce features come at an additional fee, Flagship does offer a low monthly fee with affordable pricing models. This ensures you won’t end up paying for things you won’t need or use. Keep in mind fees can quickly pile up if you need to add more features as your business evolves.

Features and Benefits

  • Free premium-quality POS. Flagship is one of the rare credit card processors that offers expensive POS equipment, like a Clover Mini terminal, for free. A free EMV-certified terminal is also an option. Any equipment that you get from Flagship will be automatically programmed to add surcharges and deduct cash discounts.
  • iAccess software. Flagship’s management software allows you to create invoices, set up recurring payments, track performance, and manage your entire business from a single dashboard.
  • Dedicated account manager. Flagship sets you up with an agent right from the start. You can reach your account manager directly without getting stuck in customer service loops.
  • Fast payouts. Flagship will release your funds within 48 hours as standard. Same-day funding is also available as an add-on.
For more info, see our in-depth Flagship Merchant Services review.

Free credit card processing program Surcharging and cash discount (custom pricing)
  • Free Verifone VX 520 or Clover Mini terminal
  • 4 Clover models (Clover Station, Mini, Go and Flex), iPayment MobilePay mobile reader available to purchase
Supported payment methods Credit/debit cards, digital wallets, ACH, bank transfers
Transaction fees on cheapest plan 1.58% + 19¢ (in person)
Monthly fee on cheapest plan $7.95

6. ProMerchant: Best Zero-Cost Processing for Retail and Restaurants

ProMerchant has a zero-cost processing plan specifically designed for retail and restaurants. The processing fee that the customer pays is around 4%, though there’s room for negotiation if you want a lower rate. The only drawback is that if you’re not a retail or restaurant business, you won’t be able to participate in this program – which I find a little odd considering that such programs are widely available for most industries.

If you’re a new business, consider ProMerchant’s impressive range of hardware. It offers four different models (one per merchant) for free, with no upfront, setup, or ongoing rental costs. You can choose from a free PayAnywhere, PAX A920, Ingenico Desk 3500, or Verifone VX520 terminal, depending on your industry and needs. Plenty of other models are available to purchase.

ProMerchant is also one of the rare processors that caters to phone/mail order businesses. Its free Payments Hub virtual terminal allows you to process payments via phone, mail, email, and fax.

Features and Benefits

  • High approval rates. A business with no credit or poor credit score is a red flag for many processors, but not for ProMerchant. It will likely offer you a merchant account regardless of your credit score.
  • Fast and easy setup. You can start processing in-person credit card payments within 72 hours of contacting ProMerchant. It usually approves new accounts within 2 to 24 hours and will ship your equipment overnight to speed up the process. For online payment processing, you can expect a 48-hour turnaround.
  • Next-day payouts. Next-day funding – a benefit that most processors charge extra for – is standard at ProMerchant. You’ll receive next-day funding for all transactions processed by 8:30 pm EST.
  • PCI compliance fees included. You can save up to $120/year in PCI compliance fees as a ProMerchant customer as these fees are automatically included in your monthly account fee.
Read our detailed ProMerchant review for more information.

Free credit card processing programs Zero-cost processing plan for restaurants and retail (custom pricing on monthly fee)
  • Free PayAnywhere, PAX A920, Ingenico Desk 3500, or Verifone VX520 terminal
  • 50+ devices available to purchase, including 3 Clover devices (Clover Station, Mini, and Flex)
Supported payment methods Debit and credit cards, PayPal, Google Pay, Apple Pay, Visa Click to Pay, and ACH
Transaction fees on cheapest plan Custom
Monthly fee on cheapest plan $7.95

Start Saving With Free Credit Card Processing Today

Free credit card processing doesn’t mean that you won’t ever have to pay to process payments, but my recommendations can definitely lower your overall credit card processing fees.

If you’re a low-risk, budget-conscious small business, LMS’s excellent cash discount program and affordable rates are your best bet. Plus, it offers a variety of instant funding options, including cash advances and fast business loans. It’s a great option if you’re just starting and could use the cash to sort out some priorities.

PAYARC’s flexible cash discount programs offer something for every business. You can use its free cash discount program to apply a 4% discount to cash transactions or upgrade to a premium plan for a lower discount. It also integrates with reliable international gateways, making it the best option if you sell internationally.

PaymentCloud’s zero-cost processing programs cover in-person surcharging and cash discounts, allowing you to select what works best for your needs. It also offers the most reasonable rates for high-risk merchants.

Here’s a bite-size comparison table that will show you which of the zero-cost credit card processors is best for your business.
Best Feature Best For Monthly fee on cheapest plan Transaction fees on cheapest plan
Leaders Merchant Services Low-priced cash discount program and rates for all the essentials Low-risk businesses with low credit card processing volume $9.00 ~2% + 0¢
PAYARC A free cash discount program and robust support for international transactions Both high- and low-volume businesses and online businesses that sell internationally $0 2.5% - 4% (customer pays)
Payment Cloud Surcharging and cash discount programs at no extra cost and reasonable rates for high-risk merchants Businesses looking for a processor with solutions developed specifically for high-risk sectors $14.00 Around 2.1% + 15¢
Flagship Merchant Services Affordable zero-cost processing programs and high approval rate New businesses with no credit history or businesses with bad credit $7.95 1.58% + 19¢ (in person)
ProMerchant Zero-cost processing plan for retail and restaurants Retail and restaurants looking to save on credit card processing fees $7.95 Custom
Stax Comprehensive surcharging capabilities and unique subscription-based payment model Established businesses that process more than $8,000/month in credit card payments $99.00 0% + 10¢ (in-person)


Is there a way to avoid credit card processing fees?

Zero-cost credit card processing programs like surcharging and cash discounting allow you to pass processing fees onto your customers. You’ll still need to pay other fees like monthly account fees, PCI compliance fees, equipment fees, and fees associated with extra services and features.

What is the difference between surcharging and cash discounting?

When a credit card is used to pay, surcharging allows you to pass the processing fee to the customer, while cash discounting means that customers paying in cash receive a small discount. Some processors like PaymentCloud will offer both so you can choose the right plan for your industry.

Which is the best free credit card processing provider?

Leaders Merchant Services is the best free credit card processing company. It offers a cash discount program and essential features for a low monthly fee, and its hardware is programmed to apply the discount automatically so you can start processing right away.

What is zero-cost credit card processing?

Zero-cost credit card processing is accomplished through surcharging or cash discounting. The first allows you to pass the transaction fees to customers who pay with credit cards, while the second allows you to give discounts for cash payments, typically around 4%. ProMerchant offers comprehensive zero-cost processing for restaurants and retail.

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