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  5. 6 Cheapest Credit Card Processing: Stick to Your Budget [2023]

6 Cheapest Credit Card Processing: Stick to Your Budget [2023]

Alexandros Melidoniotis Alexandros MelidoniotisFinance Specialist November 18, 2022
November 18, 2022
Credit card processing companies aren’t always transparent about their pricing structure. Admittedly, calculating fees and producing rough estimates can be difficult when there are many variables to consider.

Picture this: You choose a monthly subscription and agree on a transaction rate, but things don’t add up once the invoice arrives. You might notice hidden fees or unknown additional costs, plus surcharges if you go over your limits.

An offer that looks like a steal might cost you more in the long run, especially if you’re not familiar with common CCP practices.

Pricing in the credit card processing industry can be difficult to pin down as processors have found novel and creative ways to hide additional charges behind complicated jargon and fancy terminology. What you see isn’t always what you get, but to help you make better decisions, I’ve done the research for you.

Ultimately, how much you end up paying depends on many factors, including the size of your business, your industry, your total sales volume, typical transaction value, and most common transaction type. I’m here to help you find the cheapest credit card processing company given your unique business needs.

Short on Time? These Are the 3 Cheapest Credit Card Processing in 2023

  1. Stax – The cheapest option overall for most merchants.
  2. Payment Depot – Affordable monthly plans and a low flat transaction fee.
  3. Leaders Merchant ServicesBudget-friendly and negotiable interchange-plus rates.

See 3 More Great Options | Comparison Table | FAQ

What We Look For in the Cheapest Credit Card Processors

When it comes to pricing, each credit card processor is unique – some charge you a monthly fee with zero markups and low transaction fees, while others don’t offer subscriptions but charge more per transaction. Here are the factors I kept in mind when analyzing plans/contracts to determine whether you’re likely to save money.

  • Monthly subscriptions. Monthly subscriptions are often preferred. That’s because, generally speaking, a monthly subscription translates to lower markup/transaction fees. Markup fees vary significantly from company to company, and even a very small difference can end up costing you hundreds of dollars over time.
  • Transaction fees. There’s always a lot of discussion surrounding fees, but most experts agree that interchange-plus models are almost always better than tiered pricing – and flat rate fees are usually the cheapest option.
  • Extra costs. Many merchant service providers charge more for additional services (e.g., PCI-compliance assistance, ACH fees, chargebacks, data processing), but most don’t openly disclose this.
  • Additional services. I’m sometimes pleasantly surprised by merchants that go the extra mile to make their customers’ lives just a little bit easier. Free hardware, software, same-day funding, and other value-added services are all a huge plus.

Stax summary
Stax eliminates markup fees by getting rid of the middleman.
Stax is a huge name in the CCP industry, and it’s easy to see why. Setting up an account is very quick, and its software solution compiles useful data and insights for your business and industry. On top of that, Stax can save you up to 40% on your current processing bill.

Stax’s monthly subscription plans are incredibly competitive, with my research showing that it’s the cheapest option for merchants who process more than $5,000/month. There are three monthly subscription plans to choose from, helping you to find the perfect plan for your budget.

You pay your monthly fee and the standard interchange fees (there’s no avoiding that), plus an additional 8¢ – 15¢ per transaction. The more you process, the more you save with Stax.

Although you won’t have to worry about common additional fees (e.g. compliance fees, cancellation fees, gateway fees), Stax does have a chargeback fee. You should also keep in mind that Stax’s pricing model might not work out as the cheapest option for new or small businesses that process less than $5,000/month.

Features and Benefits

  • POS integrations. If you’ve already got POS hardware, you won’t have to replace them all to start using Stax. This processor works with 90% of all third-party POS devices, including the popular Clover range of hardware.
  • Free terminal. All Stax accounts come with a free terminal, and you can even use its mobile app to process payments on the go. Not having to buy hardware can save you a lot – especially if your budget is already spread thin.
  • No contracts. You won’t have to sign any contracts with Stax. You can also easily cancel your account at any time without paying a fee, provided you give at least 30 days’ notice.
  • Free ecommerce tools. Stax integrates with most ecommerce platforms, but also offers its own developer tools and cart templates.
Read our expert Stax review to see how you can save money on your card processing bill.
Pricing model(s) Subscription-style
Additional fees Chargeback fees
What you’ll get on the cheapest plan Free terminal

E-commerce platform and integrations

Advanced reporting tools
Transaction fees on the cheapest plan 0% + 8¢ (in-person)
Monthly subscription on the cheapest plan $99.00

2. Payment Depot: Best Customer Support

Payment Depot summary
Like Stax, Payment Depot applies a 0% markup on transactions.
As a subsidiary of Stax, Payment Depot offers a similar feature set to its parent company –  but at a lower cost. It features easy onboarding and a user-friendly platform, tons of integrations, e-commerce capabilities, and fantastic phone support.

Payment Depot’s monthly subscription plans are very competitive, too. Choosing the right plan for your business is the only thing you really have to worry about. With no markup fees and a low flat fee of a few cents per transaction, Payment Depot could save you a lot in processing costs each month.

My research has shown that Payment Depot is an excellent option for merchants who process at least $10,000/month, especially those in the restaurant and healthcare industries. The Starter plan is only $59.00 and is probably the best choice if you’re looking to scale your business.

Features and Benefits

  • Next-day deposits. While most payment processors charge an extra fee for next-day payouts, Payment Depot includes this option as standard. Given that the average payout time is between 1-3 business days, you’ll benefit from having a regular cash flow for no extra cost.
  • Free hardware. Every account includes a free Dejavoo Z11 terminal, which is EMV-enabled and can accept contactless and digital wallet payments. You can also negotiate multiple free terminals.
  • Fraud control. You can easily view and dispute chargebacks from your account dashboard. There’s also a 24/7 risk monitoring team that gives updates on the latest fraud tactics and offers actionable advice.
  • Impeccable customer support. Many processors’ support services are underwhelming, with unresponsive phone lines and long queues. Payment Depot is an exception. Technical support is available 24/7, and our testers found its representatives to be knowledgeable, friendly, and understanding.
Our expert Payment Depot review has more pricing information
Pricing model(s) Subscription-style
Additional fees Chargeback fees
What you’ll get on the cheapest plan
  • Free terminal(s)
  • Next-day deposits
  • Access to Stax’s e-commerce tools
  • Risk monitoring
  • Easy chargeback disputes
Transaction fees on the cheapest plan 0% + 8¢ (in-person)
Monthly subscription on the cheapest plan $59.00

Leaders Merchant Services summary
Leaders Merchant Services offers a feature-rich merchant account – perfect for growing your business.
Leaders Merchant Services (LMS) has been evolving continuously over the past few years. Its high approval rate, easy setup, and wide range of features make LMS an excellent choice for setting up credit card processing as painlessly as possible, whatever your industry.

Although LMS isn’t very transparent when it comes to pricing, my research has shown that contracts with LMS tend to be highly competitive – especially if you’re already processing payments with another provider. That’s because LMS’ representatives will always do their best to beat your current rates.

If you sign up with LMS, expect to pay an average flat monthly fee of about $9.00. Keeping LMS’s high approval rate in mind, this seems like a great deal for high-risk merchants who would normally have to pay a premium.  With a low, the average transaction fee of Around 2% + 0¢ for swiped card transactions, LMS is a budget-friendly choice for low-volume businesses.

Features and Benefits

  • Customized plans. Not only can you negotiate your rates, but you can also add on other value-added services like gift and loyalty cards, subscription tools, online menus, and more. These will come with additional costs, but you can be sure that you’re only paying for the tools you need to use.
  • No equipment leases. LMS sells its wide array of stands and terminals to customers outright, which is better for your bottom line overall. You could also get your equipment for free if you sign a long-term contract.
  • High approval and quick onboarding. You can submit your application and be ready to receive payments within 24 hours.
  • Merchant cash advance program. Quick access to cash flow is invaluable to businesses looking to grow as fast as possible. You’ll slowly pay the sum back (+ interest) via a higher markup on your credit card transactions.
Learn more by heading over to our expert Leaders Merchant Services review.

Pricing model(s) Tiered pricing and interchange-plus
Additional fees
  • PCI compliance fee
  • PCI non-compliance fee
  • Early cancellation fee
  • Authorize.net fee (for online payments)
  • Chargeback fee
What you’ll get on the cheapest plan
  • Free terminal
  • Powerful e-commerce tools
  • Advance funding options
  • Excellent phone support
Transaction fees on the cheapest plan Around 2% + 0¢
Monthly subscription on the cheapest plan $9.00

Flagship Merchant Services summary
Flagship’s same-day funding program is invaluable to many merchants
Flagship Merchant Services is a popular processor with SMBs and larger businesses alike. It offers both POS and e-commerce payment solutions and one of the easiest and quickest onboarding processes on the market.

As with most processors that don’t openly disclose their fees, I don’t recommend Flagship to new merchants or merchants that process less than $5,000/month. If that’s the case, you might want to look into credit card processors that offer more transparent pricing plans.

I was quoted a monthly fee of just $7.95. Other merchants might pay a bit more (for example, if their business is considered high-risk), but even then, monthly fees don’t generally exceed $15. Flagship also offers two pricing models: tiered and interchange-plus, so you’ll be able to negotiate a great deal for your business.

Features and Benefits

  • Room for bargaining. Like LMS, Flagship attempts to meet or beat your current processing rates, even offering a $200 gift card if it’s unable to do so.
  • Various hardware solutions. Flagship sells and leases plenty of modern equipment (Clover and Verifone, among others), and you can even get a free credit card terminal if you sign a long-term contract.
  • Same-day funding. With most processors, your money takes a few days to reach your bank account. For a small fee, you can sign up for Flagship’s same-day funding program and access your earnings as quickly as possible.
  • iAccess Business Management portal. Flagship offers access to an advanced business reporting tool that provides income and expense statements, as well as daily, weekly, and monthly sales summaries.
Read our expert Flagship Merchant Services review to learn more.

Pricing model Tiered pricing and interchange-plus
Additional fees
  • PCI compliance fee
  • PCI non-compliance fee
  • $25 minimum monthly processing fee
  • Payment gateway fee
  • Chargeback fee
What you’ll get on the cheapest plan
  • Free terminal
  • iAccess software
  • Same-day funding option
  • Dedicated account manager
Transaction fees on the cheapest plan 1.58% + 19¢ (in person)
Monthly subscription on the cheapest plan $7.95

Luminous Payments summary
With Luminous Payments, flexibility is the first word that comes to mind
Luminous Payments is relatively new to the CCP industry, but it gets quite a few things right. It’s an excellent choice for small brick-and-mortar businesses that want to process payments cheaply and efficiently.

Although it’s not as feature-packed as the other options on this list, Luminous Payments more than makes up for it with its easy set-up and five affordable pricing optionscash discount, flat rate, tiered, interchange-plus, and custom pricing. WIth so many options available, chances are good you’ll find a plan that offers excellent value for your business.

Having said that, if you run a larger business with a high volume of monthly transactions, you’ll most likely save more with a processor like Stax that charges a higher monthly subscription fee in exchange for lower transaction fees.

Features and Benefits

  • Easy onboarding. Whether you call Luminous Payments directly or decide to fill out the short form on its website, a representative will be in touch with you very quickly. Once you sign the application, you’ll likely get approved within 24 hours.
  • Advanced hardware solutions. When you sign up with Luminous, you’ll receive a free B250 Bluetooth reader. There’s also a wide range of modern Clover stands and terminals available at a great price.
  • Guaranteed Savings Program. Luminous Payments promises to give you $1,000 if they can’t save you money on processing costs. This is a powerful bargaining tool, especially if your current rates are already decent.
  • NMI gateway for online transactions. Luminous’ integration with the NMI gateway opens up a whole new world of e-commerce capabilities. You can easily set up virtual terminals and add shopping carts to your website for only $6/month.
Check out our expert Luminous Payments review for more details.

Pricing model
  • Tiered
  • Interchange-plus
  • Cash discount
  • Flat rate
  • Custom
Additional fees Chargeback fees
What you’ll get on the cheapest plan
  • Free B250 Bluetooth reader
  • Advanced security features
  • Guaranteed Savings Program
  • Next-day funding
Transaction fees on the cheapest plan 1.59% + 5¢
Monthly subscription on the cheapest plan $10.00

6. CreditCardProcessing.com: Best for High Volume Sales

CreditCardProcessing.com summary
CreditCardProcessing.com’s High Volume plan is highly competitive and comes with several perks
CreditCardProcessing.com is another subscription-style processor – so you’ll save money if you process a high volume of low-value transactions. For example, if you process more than five thousand $5 payments in a given month, you’d pay slightly less with CreditCardProcessing.com than you would with Stax.

That said, CreditCardProcessing.com’s more affordable plans have relatively high transaction fees. If your business handles fewer high-value transactions, or doesn’t have the budget for the High Volume plan Stax would likely charge you less overall. CreditCardProcessing.com’s software solutions aren’t as advanced as Stax’s, either.

That’s not to say CreditCardProcessing doesn’t have its perks. If you sign up for a monthly subscription, you won’t have to pay any markup fees. You’ll only have to pay a flat transaction fee, the value of which will depend on your plan. This fee ranges from $0.30 per transaction on the Starter plan, right down to $0.05 on the High Volume plan.

Features and Benefits

  • Free portable Pax A920 POS terminal. Unlike the free terminals offered by other processors, the Pax A920 terminal can take all forms of contactless payments, comes with a high capacity battery, and offers analytics through the PAXSTORE app.
  • One of the highest approval rates. With CreditardProcessing.com, you could be handling all kinds of payments within 24 hours of submitting your application, whatever your industry.
  • Complementary training. CreditCardProcessing.com provides free training to help you set up your hardware and navigate the iAccess Business Management software.
  • Safety and security. CreditCardProcessing.com adheres to all PCI compliance regulations and comes with data breach protection, insuring all merchants for up to $100,000.
Our CreditCardProcessing.com review has more information.

Pricing model Subscription-style
Additional fees Chargeback fees
What you’ll get on the cheapest plan
  • Free portable Pax terminal
  • iAccess software
  • Complementary training
  • $100,000 data breach insurance
Transaction fees on the cheapest plan 0% + 30¢ (Starter)
Monthly subscription on the cheapest plan $15.00

The Cheapest Credit Card Processors in Focus

Choosing the cheapest credit card processing company isn’t just about finding the one with the lowest processing rates. Your business’s industry, size, and needs – as well as the processor’s monthly subscription fees and wider set of features – should also inform your choice.

If you’re new to CCP and are looking for a processor that offers transparent pricing, advanced reporting, and e-commerce integrations, Stax’s 0% markup plans will probably serve you best.

If you run a medium-sized business and value excellent customer support, you should consider signing up with Payment Depot.

Looking for a cheap, reliable, and flexible solution to handling payments? I recommend that you negotiate with LMS to get the right pricing plan for your business.

Here’s a comparison table with a quick recap of my top picks:
Best Feature Best For Monthly fee on cheapest plan Transaction fees on cheapest plan
Stax No markup fees Businesses looking for an all-in-one processing solution $99.00 0% + 8¢ (in-person)
Payment Depot Excellent customer support Medium- to high-volume businesses $59.00 0% + 8¢ (in-person)
Leaders Merchant Services Bargaining power when negotiating fees Merchants looking to switch provider $9.00 Around 2% + 0¢
Flagship Merchant Services Same-day funding Medium- to high-volume merchants that need access to cash flow $7.95 1.58% + 19¢ (in person)
Luminous Payments Five different pricing options Small businesses that need stability $10.00 1.59% + 5¢
CreditCardProcessing.com Lowest flat rate transaction fee Businesses that handle many small payments $15.00 0% + 30¢ (Starter)

FAQ

What is the cheapest credit card processing company?

The answer to this question is not straightforward because it depends on several factors. You’ll have to evaluate which processor saves you the most money based on your business model, the features you need, and more. Most high-volume businesses will save quite a bit by opting for Stax’s 0% markup plans. On the other hand, smaller businesses might be able to find a cheaper deal among Luminous Payments’ various pricing plans.

What is a reasonable processing fee?

Markup fees usually fall somewhere between 1.5% and 4.5%. On top of that, most credit card processing companies add an extra flat fee to every transaction, which usually ranges from 20¢ to 50¢. All of our top 10 credit card processors in 2023 offer rates within this range. Keep in mind that these are very rough numbers, and different types of transactions (e.g., in-person, online, and card-not-present) often come with adjusted costs.

How do I avoid payment processing fees?

If you want to process credit card payments, you won’t be able to avoid payment processing fees entirely. However, if your goal is to pay as little in fees as possible, you might want to pass your transaction costs on to your customers, which you can do with Stax’s surcharge feature or by using Luminous Payments‘ cash discount program.

Why are credit card processing fees so high?

If your business falls into one of the high-risk categories (e.g., gambling, tobacco or e-cigarettes devices, pharmaceuticals), your quoted markup rates will be higher than usual – often closer to 4% – 5% instead of the typical 2% – 3%. However, Leaders Merchant Services boasts a 96% approval rate with no inflated rates, which makes it a great option for any type of business.

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