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If you have a small business that accepts electronic payments, you need a merchant account. Learn about merchant account services, credit card processing, and how to find the best merchant service provider for your small business.
The Best Merchant Account Service: Our Top Pick
We chose Square as the best merchant account provider because it’s a great place to start for small or new businesses. They offer aggregated merchant accounts, which make it incredibly easy to get started.
Our Top Picks
Best for Small or New Business
All-In-One Business Banking
Best for QuickBooks Users
Simple Payment Processing
Best for Physical Stores
Digital.com dives deep into every topic it covers to offer trusted and reliable recommendations for the best business tools. See how we review merchant account services.
Tips From an Expert
Merchant account services are banking services that allow you to process payments via electronic methods.
That includes credit cards, debit cards, and mobile payments. On top of that, merchant services cover the software you use and the hardware you need to facilitate electronic transactions. And a merchant services provider (MSP) is the company that makes all of this possible.
Credit card processing involves three stages: authorization, settlement, and funding. Think of an MSP as a facilitator between your bank account, the credit card companies, and the customer’s bank that issued the card. They enable you to accept electronic payments securely.
The Top Merchant Account Services This Year
Best for Small or New Businesses
Features
- Quick new merchant accounts
- Basic online store builder
- Built-in reporting & analytics
#1 Top Pick for 2023
Square makes it as easy as it can be to get a new merchant account, even if you’ve never processed online payments before.
Transaction Fees
Varies
Free Hardware
Yes
Accept Payments
Online, in-store, mobile
Application Process
Easy
Read More
Popular with small business owners, Square is known for its online and in-person payment system.
Square integrates with a variety of e-commerce platforms including Shopify and BigCommerce. Unlike some providers, Square doesn’t charge monthly or setup fees.
Square charges 2.6% + $0.10 per transaction, though users with paid plans pay lower fees. Square provides reporting and analytics features, basic payroll functionality, and lines of credit.
All-In-One Business Banking
Features
- Business savings & checking accounts
- Corporate credit and debit cards
- As fast as same-day deposits
Transaction Fees
Varies
Free Hardware
No. $49.50+
Accept Payments
Online, in-store, mobile
Application Process
Moderate
Read More
Chase for Business offers payment solutions that allow you to accept online, in-store, or on-the-go. Chase supports payments using all major debit and credit cards and provides you with online dashboards to manage your account.
The pricing model begins at 2.60% + $0.10 flat rate charge per transaction. There are alternative options for those who handle a high volume of transactions.
Best for QuickBooks Users
Features
- Invoices, key in terminal, recurring payments
- Plugs right into QuickBooks Accounting
- As fast as next-day deposits
Transaction Fees
Varies
Free Hardware
No
Accept Payments
Online, in-store, mobile
Application Process
Moderate
Read More
Already using QuickBooks? Consider QuickBooks from Intuit Merchant Services.
You can accept credit cards, debit cards, and bank transfers. For qualifying accounts, the company also offers next-day deposits.
You can also use QuickBooks to send invoices, key in your customers’ credit and debit cards, accept recurring payments, or take advantage of the on-the-go card reader.
There are no monthly or setup fees, with per-transaction rates starting at 2.4% + $0.25 for swiped transactions. QuickBooks offers volume discounts.
Simple Payment Processing Solution
Features
- Send and receive invoices
- Custom ecommerce checkouts
- Get paid from 200+ different countries
Transaction Fees
Varies
Free Hardware
Yes
Accept Payments
Online, in-store, mobile
Application Process
Easy
Read More
PayPal offers you more than just the ability to send and receive money online. PayPal’s services for merchants include:
- In-person payments.
- Sending and collecting invoices.
- Setting up custom checkout processes for your e-commerce store.
- Collecting payments from customers in more than 200 countries.
- Access to shipping integration and other merchant lending services.
PayPal’s fees vary based on the services you are using but begin at 2.99% + $0.49 per transaction for online payments and invoicing.
Best for Physical Stores
Features
- Dispute and chargeback tools
- Create custom financial reports
- 24/7 human customer support
Transaction Fees
Varies
Free Hardware
No
Accept Payments
Online, in-store, mobile
Application Process
Moderate
Read More
American Express Merchant Services comes with easy reporting and dispute resolution in case of chargebacks. For physical stores, packages offer complimentary signs and supplies including stickers and logos.
You also get access to 24/7 customer support.
How Do You Get a Merchant Processing Account?
Follow these steps to start accepting credit card payments.
Step 1: Get your website ready
Most institutions require your website to meet minimum guidelines. For example, Visa sets the following criteria for merchant websites:
- A comprehensive description of goods and services for sale.
- Detailed customer service contact information.
- An overview of your refund and cancellation policy.
- Delivery policy, specifically any restrictions.
- Your location.
On top of those basic requirements, your website should include information regarding when your customer’s card is charged and the security used to protect your customer’s financial data.
Step 2: Gather the relevant documentation
For most applications, you’ll need to provide an Employee Identification Number or Social Security number if you’re a sole proprietor. Other requirements include a business license.
You may also need to attach processing statements, such as the volume of transactions and refunds.
Step 3: Submit your application
Depending on the provider, you might be able to apply online within minutes.
A merchant services provider will screen your application, checking issues like your credit and past financial issues, like judgments. It’s best to disclose any financial challenges during your application.
A merchant services provider will evaluate your risk during the application. After all, a merchant services provider takes on a lot of liability. If you have a high volume of chargeback history, you may be assessed as a high-risk merchant.
Other factors in underwriting include the industry you’re in and your company’s longevity.
Step 4: Set up your merchant account services
Once you’re approved, you could be set up within a few days. In this phase, you’ll get the technologies you need to process credit card payments. This will range from payment gateways to credit card readers, depending on the services you need.
Compare Merchant Account Providers
Merchant Service
Best Features
Pricing
Best for Small or New Businesses
- Quick new merchant accounts
- Basic online store builder
- Built-in reporting & analytics
Variable transaction fees
- Business savings & checking accounts
- Corporate credit and debit cards
- As fast as same-day deposits
Variable transaction fees
Best for QuickBooks Users
- Invoices, key in terminal, recurring payments
- Plugs right into QuickBooks Accounting
- As fast as next-day deposits
Variable transaction fees
- Send and receive invoices
- Custom ecommerce checkouts
- Get paid from 200+ different countries
Variable transaction fees
Best for Physical Stores
- Dispute and chargeback tools
- Create custom financial reports
- 24/7 human customer support
Variable transaction fees
What You Need to Know
What are merchant services?
Merchant services are a category of financial services for businesses. This term is frequently used for the processes and technology required to accept online and in-person debit or credit card payments, including from RFID (or “chip”) cards. It includes the use of security technologies like encryption and entails the payment of fees by the merchant for the processing of these transactions.
Merchant services can also refer to the selling (and using) point-of-sale (POS) terminals and equipment and related gift card or customer loyalty programs. The term is also used in conjunction with the processing of food stamps and other forms of Electronic Benefit Transfer (EBT).
What is a merchant account?
A merchant account is a bank account that enables you to accept electronic payments from debit and credit cards. Funds from card transactions are deposited into the merchant bank account first. Those funds are then transferred to your business’s bank account on a daily or weekly basis.
What is a high-risk merchant?
Merchants are classified as “low-risk” (normal risk) or “high-risk” based on several factors. For example, if you have an average monthly sales volume of over $20,000 and your average card transaction is over $500, you could be labeled high-risk. If you have a lot of chargebacks or sell to high-risk countries, that could also get you classified as high-risk.
Other factors that could get you labeled high-risk include whether you accept multiple currencies, sell seasonal products, or offer recurring subscription products.
What if my business doesn’t qualify for a merchant account?
You may not qualify for all merchant service providers if you own a business classified as a high-risk merchant. However, some MSPs cater to high-risk merchants. You can look for a vendor specializing in high-risk merchant accounts and set up your account with them.
How can I avoid merchant fees?
You can avoid merchant fees by opting for an MSP that doesn’t charge any credit card processing fees. Many MSPs offer no-fee credit card processing in the form of cash discounts.
How We Review Merchant Account Service Providers
When evaluating merchant services, we look closely at:
Learn more about our review methodology.