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The Best Merchant Services of 2017

We have reviewed this category for 8 years. In the last year, we spent over 1250 hours testing and reviewing, and we considered 34 services.

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The Best Merchant Services of 2017
Our Ranking Merchant Services
1 Payment Depot
2 Helcim
3 Payline
4 National Bankcard
5 Dharma Merchant Services
6 Flagship Merchant Services
7 CreditCard Processing.com
8 Cayan
9 TransFirst
10 FreeAuthNet
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Merchant Services Review

Why Do You Need Merchant Services?

The top performers in our review are Payment Depot, the Gold Award winner; Helcim, the Silver Award winner; and Payline, the Bronze Award winner. Here’s more on choosing a merchant account service that meets your small business's needs, along with detail on how we arrived at our ranking of services.

A merchant account service is part of the complex data processing procedure that occurs when a customer pays with a credit or debit card in an exchange of goods. This system creates a secure connection between the processor, the credit card network, the card-issuing bank and your business's bank account. The customer's information travels through this secure network, and after the card is debited for the transaction, funds are deposited into your bank account.

Merchant service is an elaborate process with multiple parties involved. As a result, it can be a confusing, complicated process wrought with merchant account fees. Due to the complexity of the system, many of the best merchant services tailor their pricing to fit your specific business. To do this, they consider things such as your company's creditworthiness, processing volume, average ticket size and whether you process transactions in person or online.

Even though the process is complex, merchant card services are a business necessity. Customers assume they will be able to use a card to pay for goods just as they would use cash. Therefore, it is essential to choose a merchant service provider that is transparent and provides your small business upstanding service at a reasonable price.

It is important to weigh your options when choosing a merchant service provider for your small business. If you need a more simple solution, look into our Mobile Credit Card Processing reviews, or if you need a comprehensive point-of-sale system that works with a merchant service system, check out our POS Systems reviews. If you would like to further research the complex world of merchant services, check out the articles on our website.

Advances in the Merchant Account Services Industry

In recent years, the merchant account industry has undergone substantial changes. Many companies in the industry have moved toward a more transparent pricing model, apparent in the rising number of companies posting prices on their company websites and offering the preferred interchange-plus pricing model.

In general, the industry has enhanced security and reduced the risk of fraud by adopting EMV technology. Effective October 2015, it is further enforcing this shift by transitioning the responsibility of security breaches to merchants who are non-EMV-compliant. Merchant account services are keeping up with technological advances by adopting near-field communication equipment that supports mobile-wallet payment, such as Android Pay, Apply Pay and Samsung Pay.

The merchant account service you choose should be up to date with everything discussed above and accept all major cards, including Discover and American Express. The service needs to offer 24/7 customer service that is readily accessible, so you can resolve issues no matter when you call.

Credit Card Processing: What We Evaluated; What We Found

We sought merchant account services that offer month-to-month services with no long-term contract obligation or extended cancellation terms. We looked for services that charged affordable amounts without any hidden fees. When choosing a merchant service, it is important that the company accept all major cards, EMV chips and mobile wallets.

We thoroughly researched the merchant account providers' websites for information about fees, processing costs and terms. Additionally, we contacted company representatives by phone and email as potential customers, at various times on various days, to fully evaluate each service's offerings. Key differentiators emerged such as transparent and consistent pricing, fees and terms listed on the website and accessibility of different pricing options.

Pricing Transparency & Consistency
In our testing, companies that posted information about terms, pricing and fees on their websites were the most successful. Though more companies are starting to share this pricing information upfront, it is still extremely rare. Even rarer than transparent pricing information is clear information about fees. Roughly one-third of the services in our reviews do not list any pricing or term information on their websites, and about half list no fees.

We evaluated merchant payment services on how open the representatives we spoke with were with important information. We considered how complete and consistent the information provided was. Services that dependably provided comprehensive and unchanging information, both online and through phone and email contact, were awarded the highest scores.

Pricing Options
Industry experts recommend the interchange-plus pricing model as the most beneficial pricing structure available. In our research, we found that about half of the services we reviewed recommend this model. The majority of the merchant account service representatives we spoke with provided tiered pricing information and only provided information on interchange-plus pricing upon request, though some services were hesitant to fulfill this request.

Some of the service agents noted that the interchange-plus pricing provided would only be an option for established merchants; therefore, you must operate for a certain number of months with a tiered-pricing model before you would be a candidate for an interchange-plus plan. Other agents we spoke with advised our testers against the interchange-plus pricing model, cautioning that is beneficial solely for vendors who make large transactions. This cautious advice directly contradicts expert information we encountered in our research.

Merchant Account Costs & Fees
Cost is the top factor when deciding which merchant service provider is best for your business. Most companies offer one or more of three separate pricing models: interchange-plus pricing, tiered pricing and flat-rate pricing.

Interchange-Plus Pricing
This pricing model, sometimes called interchange-pass-through pricing or cost-plus pricing, is composed of three parts: the interchange rate, the card-brand fee and the merchant account service's mark up. The first two fees, the interchange rate and card-brand fee, are inflexible rates established by the card issuer, i.e. MasterCard and Visa. Each merchant service provider adds a percentage markup as well as a per-transaction fee to these standard fees. The markup percentage is usually the only flexible piece of these transaction costs.

Various factors control what markup you are charged. These include your transaction volume, average ticket size, industry and overall transaction history. The lowest rate we found was Helcim's 0.18%, while many services charged the highest rate of 0.50%. Companies on our lineup on average charged $0.10 per transaction, with the lowest fee being $0.08 and the highest $0.25 per transaction.

The rates found in this article and throughout our site are rates that were directly quoted to us during our testing and may vary from those on the company's website or rates that you are quoted.

Tiered Pricing
Though this is the most commonly used pricing model, it is most criticized by industry experts who find that it lacks transparency. Another name for this model is bundle or bucket pricing because it attempts to combine interchange rates, card-brand fees and markups into one price and then segment transactions into tiers. Frequently these tiers are sorted as qualified, mid-qualified and non-qualified. Mid-qualified cards are usually rewards cards and non-qualified are most often business or foreign cards. Most merchant services offer three tiers, though some may have as little as two while others have up to six tiers.

Flat-Rate Pricing
Most merchant services that use this simple pricing model charge one fixed percentage rate per transaction. Conversely, some services charge a per-transaction fee in addition to the fixed percentage rate. This method is especially popular with mobile merchant service providers. Most merchant services we reviewed do not offer this pricing model, so we did not take it into account when ranking these services.

Additional Fees
Processing costs are only one portion of the fees you can expect to pay for merchant services as most processors also charge fees. These include monthly fees, monthly minimums and PCI-compliance fees. If you process online, your online merchant services provider also charges you online processing fees for use of a payment gateway. Some of these fees are one-time payments while others are recurring. You should carefully read your service provider's application and its terms of service to obtain specifics about fees that apply to you as well as which fees could be waived.

Our Verdict & Recommendations

The best companies in our review provide transparent pricing options without hidden fees and openly offer information about costs, fees and terms of service. The best merchant services have reliable customer service options that provide candid information about which costs to expect for your account.

Additionally, the best merchant account services should be fully compliant with current payment systems, like mobile wallets, and accept all major cards. They should not lock you into lengthy contracts but instead allow you to pay on a month-to-month basis. In our research, Payment Depot, Helcim and Payline rose above the competition for their transparent pricing structures and low rates.

If you would rather do business with a larger merchant service provider that offers service to small businesses, options include Chase Paymentech, Elavon, Transfirst and TSYS. In our research, The Transaction Group stood out as a good option for merchants that need a high-risk merchant account.

No matter what company you choose for your merchant account provider, it is vital to choose one that works with your small business and provides transparent service throughout the process so that you are ensured to get the best rates available in your industry.

Disclaimer: The pricing listed in this article, in the matrix and in our reviews is reflective of the date this review was last updated. Pricing reflects our testing scenario; the pricing you receive may differ due to processing volume and average ticket size, among other factors.