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- Choose a credit card processor carefully to protect your profits from high fees and slow deposits.
- Expect to pay between 1.5% and 3.5% in fees for each transaction, depending on your industry, payment method, and sales volume.
- Compare pricing models like flat-rate (simple), interchange-plus (transparent), subscription (high-volume), and tiered (often costly).
- Start accepting payments by selecting a processor, applying for a merchant account, setting up your system, and running a test transaction.
Finding the best credit card processing for small business is a crucial strategy for protecting your profits in 2025.
High fees and slow deposit times directly impact your cash flow, making the right choice essential for your financial health.
This isn't a minor issue: a Federal Reserve study revealed that 80% of U.S. small businesses face challenges with payment systems.
This guide will help you compare pricing models and select a processor that boosts your bottom line.
Understanding credit card processing costs
Before you can lower your payment expenses, it’s crucial to know what you're paying for.
How much are typical processing fees?
On average, small businesses can expect to pay between 1.5% and 3.5% per transaction. However, this range can vary significantly depending on the processor and your specific business profile.
These fees cover costs from card networks like Visa and Mastercard, plus the processor's service charge.
A breakdown of processing fees shows that manually entered transactions often cost more than swiped ones.
Key factors that influence your rates
Several variables determine the exact processing rates you'll receive.
Understanding them is the first step toward securing the best credit card processing for small business.
- Your industry type plays a big role, as businesses in higher-risk sectors often face higher fees.
- The way you accept payments matters; online and keyed-in transactions are typically more expensive than in-person NFC or chip payments.
- Your average transaction size and total monthly processing volume can also impact your rates.
- The type of card your customer uses, such as a debit, standard credit, or premium rewards card, will have different associated costs.
Comparing credit card processing pricing models
Choosing the right pricing structure is one of the most effective ways to control your costs.
Each model offers different benefits, so the best one for you depends on your sales volume and business needs.
Flat-rate pricing
This model combines all processing costs into a single, predictable percentage and a fixed per-transaction fee.
You pay the same rate for every card type and payment method.
It’s ideal for new businesses or those with lower monthly sales due to its simplicity — while you get predictable monthly statements, it can become more expensive as your sales volume grows.
For reference, JIM applies a flat 1.99 % fee per sale and releases the funds to your account immediately, all from a phone — no extra hardware or hidden charges.
Interchange-plus pricing
With this transparent model, you pay the direct cost of the interchange fee set by card networks (like Visa and Mastercard) plus a fixed markup from your processor.
This structure is often the most cost-effective for established businesses with consistent sales volume.
The main advantage is transparency, but monthly costs can fluctuate more than with a flat-rate plan.
Subscription-based pricing
Also known as membership pricing, this model involves a fixed monthly fee in exchange for a very small, fixed per-transaction cost over the base interchange rate.
This can be the cheapest option for high-volume businesses, as the low transaction markup can lead to significant savings — however, the monthly subscription fee is charged regardless of your sales activity.
Tiered pricing
Tiered plans group transactions into different categories, such as "qualified," "mid-qualified," and "non-qualified." Each tier has a different processing rate.
This model is often less transparent and can be costly, as processors have discretion over which tier a transaction falls into.
We generally advise businesses to be cautious with this model.
How to start accepting credit card payments
Getting set up to accept credit cards is a straightforward process.
Follow these four steps to get your system up and running smoothly.
Choose the right processor for your business
Use the criteria in this guide to compare your options. Analyze the pricing models, security features, and integration capabilities to find a processor that aligns with your sales volume and business needs.
Apply for your merchant account
A merchant account is a specialized bank account that holds funds from your card sales before they are transferred to you.
Processors will typically ask for your business license, tax ID number (EIN), and banking details during the application.
Set up your payment systems and hardware
If you sell in person, this involves connecting your new card reader or POS terminal.
For e-commerce businesses, you'll need to integrate the processor’s payment gateway into your website.
JIM skips the hardware step entirely: just install the app, enter the sale amount, and you’re ready for contactless taps right on your phone.
Test your system before going live
Before you process a customer's payment, run a small test transaction on your own credit card. This confirms that the entire system works correctly and that funds are successfully deposited into your bank account.
In JIM’s case, the test is as simple as “Enter, Tap, Get Paid” and the money appears in seconds — so you can validate the flow in under a minute.
Make your payment processing simple and profitable
Choosing a processor is complex.
Confusing pricing models and slow deposits can erode profits, a common challenge for small businesses trying to manage their cash flow effectively.
JIM removes the guesswork with a single 1.99% flat rate.
Forget monthly fees or hardware costs — your funds are available instantly after every sale, directly improving your financial control.
This transparency simplifies operations and boosts your bottom line. Calculate your potential savings with JIM's flat-rate pricing.
Frequently Asked Questions
Which payment processor is best for small business?
The best processor depends entirely on your business's needs. A new company might prefer the simplicity of a flat-rate plan, while a high-volume business could save money with an interchange-plus model. Evaluate providers based on your sales channels, monthly volume, and required features like software integrations and security to find your ideal fit.
Which credit card processing is cheapest for small business?
The cheapest processing isn't a one-size-fits-all answer. For businesses with low or unpredictable sales, flat-rate pricing is often most cost-effective. For those with higher volume, an interchange-plus or subscription model typically offers lower overall costs. Always compare the effective rate after all fees are included to determine the true cost.
What is the best credit card machine for small business?
The best credit card machine is reliable, secure, and fits your sales environment. It should accept EMV chip cards and contactless payments. A countertop POS is great for retail, while a mobile reader is perfect for on-the-go sales. Prioritize hardware that is easy for both your staff and customers to use.
Can I accept credit cards without a registered business?
Yes, in many cases, you can. Sole proprietors and freelancers can typically apply for payment processing using their Social Security Number (SSN) instead of an Employer Identification Number (EIN). However, requirements vary by provider, so it is essential to confirm the processor’s policy for individual applicants before signing up.
