Although cash remains a popular payment method, 80% of consumers prefer card payments over cash (especially in the germ-avoidance world of the COVID-19 pandemic), and consumers on average spend five times more when making non-cash transactions. Even small businesses need a reliable, secure, PCI DSS-compliant way to run credit cards at checkout. But small businesses also have to make payment processing service costs a top priority. Small businesses – especially start-ups – have to be extra careful with financial planning, as there often aren’t “cushions” or cash reserves needed to weather a business slump. A full-scale solution could cost you far more in the long run.
Accepting card payments are a reality of 2022, for better or for worse. The right payment processing solution for small businesses will be able to meet you at “Our First Dollar” and grow along with your business – without crippling you with costs along the way. When evaluating the best payment processing solution for your small business, there are five main factors to assess: costs, security, hardware, scalability, and support.
Table of Contents
- Main Features Small Business Owners Must Assess in a Payment Processing Solution
- Apple Pay
- Authorize.net
- Clover
- Dharma Merchant Services
- PayPal
- QuickBooks Payments
- Shopify
- Square
- Stax
- Stripe
Main Features Small Business Owners Must Assess in a Payment Processing Solution
1. Costs
Payment processing solutions have two forms of costs that must be accounted for in the selection process: initial or subscription costs and costs associated with transactions, including chargebacks. Some subscription costs are a one-time fee, while others are a monthly flat rate, and still others are a certain percentage or amount of an individual transaction. Transaction costs include the price to run a card and more. Payment processing solutions may charge merchants additional fees for hardware (like card readers). When it comes to cost, look for an affordable and, perhaps more importantly, transparent solution, because customers really hate when businesses have to pass on payment processing charges because they misunderstood the platform.
2. Security
No business, of any size, can compromise on security. But for small businesses, ‘security’ includes effective, thorough compliance that is totally hands-off for the business. After all, you have enough to worry about without needing to learn about PCI DSS compliance and other federal and state requirements. Assess a payment processing solution’s fraud prevention measures and chargeback response policy too. The only good solution is one where both merchant and customer feel a sense of trust and confidence.
3. Hardware
Small businesses just starting out may not have yet invested in a point-of-sale (POS) system, the modern version of old-fashioned cash registers. Many POS systems help with more than just processing funds, including features like inventory management, timecards, and report generation. Many of the best payment processing solutions for small businesses will offer dedicated POS hardware and/or card readers either with your subscription or for a small additional fee.
4. Scalability
Scalability means the ability to handle work that continues to increase in amount and/or complexity. A static payment processing solution that might work perfectly for a small business just starting out can seriously hamper that same business five years down the road when it’s matured and expanded. Conversely, small businesses are likely to overpay for a payment processing solution best suited to large businesses, minimizing its return on investment (ROI). Small businesses need to invest in a solution that can meet them where they currently are – and grow (or shrink) along with them over time.
5. Support
Don’t do it alone! The average small business owner is working almost twice as much as the average employee. This much time spent working leaves little time to troubleshoot a payment processing solution that suddenly goes on the fritz. A solution with included support can answer your questions and help fix issues that can lead to lost revenue.
Presented in alphabetical order, here are 10 of the top payment processing solutions for small businesses in 2022.
Apple Pay
Apple’s Apple Pay is an immensely popular contactless payment method among Apple users (iPhone, Apple Watch, etc.).
| Pros: | Cons: |
| Costs | Hardware not included |
| Security | Support |
| Scalability |
Apple Pay can be used for NFC in-store payments and for remote ecommerce. The Apple name carries lots of customer trust no matter where it’s offered. It is a highly secure option, as customers have to use a fingerprint or other personal identification to make a purchase. Apple Pay is simply a type of payment a POS can accept, rather than a dedicated POS itself; thus, small business owners looking to accept Apple Pay must make sure to purchase a POS and/or card-reader that accepts NFC payments. Apple says they charge no additional fees for merchants to accept Apple Pay, and access to support is unclear.
Authorize.net
Authorize.net is Visa’s payment processing solution, accepting payment methods ranging from POS to mobile to phone to eChecks.
| Pros: | Cons: |
| Security | Costs |
| Hardware | |
| Scalability | |
| Support |
Authorize.net can use a cell phone or tablet as a mobile POS (mPOS) system. Support is available to customers 24/7 support, and they have both anti-fraud management and straightforward PCI compliance. Pricing options are transparent, but they can be steep for a small business just starting out at $25 (USD) per month plus a 2.9% + 30¢ transaction fee. However, Authorize.net is able to grow with your business.
Clover
Clover is a popular solution for small businesses due to its low barrier to entry.
| Pros: | Cons: |
| Security | Costs |
| Hardware | |
| Scalability | |
| Support |
Clover is designed for specific verticals (like dining) to be used as a traditional POS system. After purchasing Clover, a cell phone or tablet with the Clover Go card reader can begin processing payments via chip, swipe, or tap-to-pay, in addition to ecommerce offerings.
Pricing information is available by vertical (retail shops, personal services, etc.). Though costs are somewhat higher than average because you’re purchasing both hardware and software, it is a great solution for small businesses that haven’t yet invested in POS equipment or software. Clover’s security and support are both at or above industry standards.
Dharma Merchant Services
Dharma Merchant Services has been acknowledged as a strong choice for small businesses in the nonprofit sector, offering lower interchange and transaction fees.
| Pros: | Cons: |
| Security | Costs |
| Hardware | |
| Scalability | |
| Support |
Dharma Merchant Services offers dedicated rates for small businesses. Although the rate is on the low side, a key selling point is the ability to pass processing fees onto customers – which may seem like a good idea, but which customers tend to resent. Dharma Merchant Services offer four terminals (card readers) for an additional fee of $269 to $369 USD, and they also support Clover POS systems. 24/7 support is available to customers. And as an added bonus, Dharma Merchant Services is a certified “B Corp,” meaning they have passed and continue to meet rigorous standards for social and environmental performance.
PayPal
PayPal is one of the popular and respected platforms for payment processing.
| Pros: | Cons: |
| Security | Costs |
| Hardware | Support |
| Scalability |
PayPal has a good reputation for fraud prevention and security and can grow with your company. Their online support pages are extensive, but the ability to speak to a human appears to be limited to business hours. For small businesses in the market for a POS system, PayPal Zettle puts the PayPal name on your in-person transactions. Costs may be prohibitive for those small businesses just getting started: fees are around 3%, but PayPal is transparent about their fees and pricing so you can make an informed decision.
QuickBooks Payments
QuickBooks Payments by Intuit integrates seamlessly into the highly popular QuickBooks bookkeeping software, making it a secure, unified solution for small businesses.
| Pros: | Cons: |
| Costs | Support |
| Security | |
| Hardware | |
| Scalability |
QuickBooks Payments has a range of rates: While they don’t charge monthly or setup fees, their charges are high compared to competitors. The GoPayment app and QuickBooks Card Reader take NFC and chip card payments, allowing merchants to avoid the steepest transaction cost (keyed payments) – and the reader has a unique look and display that could be a draw to customers. Their online help articles are extensive, but a live support option isn’t clearly available.
Shopify
Founded as an ecommerce company, Shopify is also a full-service POS solution trusted by over a million businesses globally.
| Pros: | Cons: |
| Security | Costs |
| Hardware | Support |
| Scalability |
While the monthly costs for Shopify are around industry average, there is an additional cost for the Shopify POS and hardware, with Lite adding card processing fees and Pro adding an additional $89 USD per month per location. The first stop for those seeking support is the collection of online articles; it’s unclear whether live support is available to customers. Shopify covers all six PCI categories for security.
Square
Square is designed to be a full-service POS that serves everyone from the smallest start-up to the largest enterprises.
| Pros: | Cons: |
| Costs | |
| Security | |
| Hardware | |
| Scalability | |
| Support |
A wide variety of Square POS hardware fits different verticals and business sizes, and flexible pricing packages are available, letting you choose whether to accept in-person payments at POS systems, remote payments for ecommerce, invoicing, and phone purchases, all with transparent pricing. Because of this flexibility, Square is highly scalable. They also have prioritized tight security including ISO 27001 certification.
Stax
Stax is a complete POS/payment-processing service with small business-specific pricing available.
| Pros: | Cons: |
| Security | Costs |
| Hardware | |
| Scalability | |
| Support |
Although their pricing is higher compared to competitors, all charges are included in the flat rate, rather than on a per-transaction basis. Stax offers a variety of terminal options to meet business needs. Stax has U.S.-based support and a great reputation for security. Stax offers payments ranging from in-person to mobile to ecommerce and almost everything in between. Because they offer solutions for small businesses, large businesses, and SaaS platforms, Stax can grow alongside your business.
Stripe
Most popular for ecommerce, Stripe is also capable of online invoicing and POS payments.
| Pros: | Cons: |
| Security | Costs |
| Hardware | |
| Scalability | |
| Support |
Even though they are transparent about their costs, Stripe’s pricing varies widely by payment type, which can be overwhelming for a small business looking for a simple solution. Stripe Terminal is available at additional cost for businesses looking to use Stripe for their POS, and merchant support is easily accessible. Stripe prioritizes security, including using machine learning to detect fraud.