Best Online Credit Card Processing in 2020

Best Online Credit Card Processing in 2020

Good online credit card processing can be hard to come by, and getting information on pricing is sometimes difficult. To help small business owners with the process, we researched dozens of options to help find the best online payment processors. Below are our picks:

Best For Startups: Stripe

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Stripe is one of the easiest credit card processors to work with for both websites and for in-app purchases. Their API is famously easy to work with, and provides a good framework that many developers praise. Whether you're building a site with Ruby, Python, PHP, Java or other languages, Stripe provides good support. On top of this, Stripe also provides some of the lowest pricing available for low-volume businesses, making it perfect for companies that are just starting out.

Monthly FeePer-swipe feeMonthly minimum
None2.9% + $0.30None

One notable shortcoming of Stripe is that it is more prone to account and fund freezes than processors that set you up with a merchant account. Stripe is a processing aggregator. That helps keep overhead costs low, and for them to get you up and running within hours. However, to keep up with this volume, companies like Stripe tend to have more aggressive anti-fraud departments. That means they will generally flag more purchases. Coupled with the fact that Stripe has no phone-support available, this can create problems for large businesses that may need immediate assistance with their account.

  • Good for: Web-based credit card processing and in-App purchases
  • Bad for: Companies that want both online and offline credit card processing handled through one company

Best Online Credit Card Processing For High Volume: Payment Depot

Payment Depot is a wholesale credit card processor that is much more affordable than other options for businesses processing a large volume of sales on the internet. Instead of the traditional percentage-based markup you get with other processors, Payment Depot charges a flat fee between $0.05 and $0.25 per transaction. That's very favorable for websites transacting over $3,000 per month, or those making over 300 sales per month.

MembershipMonthly FeePer-transaction feeProcessing Limit
"Basic"$29Interchange + $0.25$20,000
"Most Popular"$49Interchange + $0.15$40,000
"Best Value"$69Interchange + $0.10$100,000
"Premier"$99Interchange + $0.05Unlimited

In most cases, you should sign up for either the basic membership premier membership. The other two plans typically only serve a specific niche. With the premier membership, one thing to note is that you get access to a dedicated account representative. This can be especially useful for mid-to-large sized business owners who need round-the-clock service in case something goes wrong. For example, if your payment account is frozen, you'll want someone to quickly bring it back online. For even a mid-sized ecommerce site, waiting a few days can mean a substantial loss in revenue.

We modeled the price you'd pay with one of Payment Depot's 4 memberships against Stripe to see what would give you the most affordable online credit card processing. The table below is a summary of our results for different monthly transaction volumes and different monthly transaction numbers.

Payment Depot vs Stripe: Which Is Better?

Monthly Sales Volume
# of Transactions
$1,000StripeStripeStripePayment Depot (Most Popular)Payment Depot (Premier)
$2,000StripeStripeStripePayment Depot (Most Popular)Payment Depot (Premier)
$2,500StripePayment Depot (Basic)Payment Depot (Basic)Payment Depot (Most Popular)Payment Depot (Premier)
$3,000+Payment Depot (Basic)Payment Depot (Basic)Payment Depot (Basic)Payment Depot (Most Popular)Payment Depot (Premier)
  • Good for: Ecommerce sites processing over $3,000 per month or 300 transactions per month
  • Bad for: Companies with no developer resources

Best Low-Tech Solution: PayPal

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PayPal is one of the most popular online credit card processors. What makes it one of the best is its low and simple pricing, recognizable brand-name, and how easy it is to set up. That last part is especially key for website owners who want to set everything up themselves, but lack the necessary developer skills to use more advanced solutions like Stripe.

PlanMonthly FeePer-transaction feeAPI Access?
RegularNone2.9% + 0.30No
PayPal Payments Pro$302.9% + 0.30Yes

To use PayPal for business, you need to sign up for a business account, which comes with no monthly fee. From there, you can set up payment buttons that you can then embed into your website. Whenever a customer clicks a button, they are taken to PayPal's website to complete the transaction. If you want to use PayPal like Stripe, which means build a custom checkout directly into your website, you will need to pay $30 per month for PayPal Payments Pro. We generally recommend against this service, since you can get it at no extra monthly cost if using Stripe or even Square.

  • Good for: Companies that don't want to code a checkout into their own website
  • Bad for: Firms that want to keep customers on their own site throughout the entire checkout process

Best Online Credit Card Processing for Nonprofits: CDGcommerce

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CDGcommerce is one of our favorite credit card processors for nonprofits, on or off the web. Unlike most other processors, they specialize in working with charities and nonprofits and will work with your company to work out a pricing plan that works for you.

Type of TransactionMonthly FeePer-transaction fee
Qualified$101.95% + $0.30
Non-qualified$102.95% + $0.30

While we generally advise against tiered pricing, CDGcommerce offers a fairly transparent version of it that will likely benefit most websites. You pay 1.95% + $0.30 per qualified transaction and 2.95% + $0.30 for non-qualified transactions. That includes international, corporate cards and premium cards. Unless a majority of your donations and purchases come from those cards, CDGcommerce's pricing will cut costs over other processors listed on this page. One caveat to keep in mind, however, is that unlike many other online credit card processors CDGcommerce will charge a $10 monthly fee.

  • Good for: Nonprofits that want dedicated customer service
  • Bad for: Charities and nonprofits looking for fixed pricing

Best Credit Card Processing for Both Online and Offline Use: Square

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Square provides businesses with good solutions for handling payments online as well as in a store. Most of the other processors on our list excel at handling payments through a website, but are lackluster offline. For example, Stripe doesn't provide you with any offline solutions at all. Square is the ideal choice for someone who wants to use the same credit card processor for their website and brick and mortar location.

Type of ProcessingMonthly FeePer-transaction feeMonthly minimum
OnlineNone2.9% + $0.30None
OfflineNone2.75% (swiped)None

Square is primarily a mobile processor, and provides a multitude of solutions for that purpose. You can get lightweight readers that work with iOS and Android devices. For online credit card processing, Square offers a free API for those who want to build a checkout on their own. Like Stripe's API, you do not have to pay any additional fee for access to it, making it a very affordable option.

  • Good for: Businesses that need both online and offline processing and want quick set-up
  • Bad for: Firms processing over $3,000 per month

Online Credit Card Processing Fees

Online credit card processing generally costs significantly more than processing offline payments. Companies that rely on fixed pricing generally charge around 2.9% + $0.30 per transaction. If you opt for interchange-plus pricing, you are paying the so-called “keyed-in” rate, which is usually much higher than when swiped at a physical location. As always, interchange rates vary from card-to-card. For example, swiping a rewards Visa credit card comes with an interchange of 2.3%. Online, that same transaction costs 2.7%. The processor markups also tend to be twice as high.

Credit card fees for online charges are generally higher due to the higher likelihood of fraud. When someone steals or counterfeits a credit card, they are more likely to try and use that card online rather than in a store. This is so-called ‘card-not-present’ fraud and it has been on the raise in recent years. Whenever chargebacks occur as a result of fraud, the networks and processors often deal with the cost which is why they increase prices to cope with a part of their loses.

We estimated the monthly cost of processing online transactions with the top companies we highlighted above. As you can see, there is little variation in terms of cost in the given example. When faced with a tie, your best bet will be to opt for the processor that provides you with the best set of features for managing your ecommerce site.

A graph showing the difference in online credit card processing fees among five top processors.

How to Accept Payments Online Without a Merchant Account

To accept credit card payments online without a merchant account, you need to sign up with a payment aggregator like Square, PayPal or Stripe. These services will work without you without a merchant ID and will quickly get your website’s processing up and running. In contrast, other providers will typically do some underwriting to determine the legitimacy of your business. The process can take up to a week in some extreme cases.

The major disadvantage of not having a merchant account is the fact that your funds are more likely to be frozen. For example, in the case of Square, some users have reported a single transaction being flagged as potentially fraudulent led to them being locked out of their funds for close to a week. If you are processing very few transactions each month, something like this is less likely to happen. However, it’s an important consideration to make.

Summary of Best Online Credit Card Processing Options

To wrap up, here are our recommendations for online credit card processing in 2017. As always, we recommend business owners shop around and try different options.

ProcessorBest Online Processing For...Processing FeeMonthly Fee
StripeStartups2.9% + $0.30None
Payment DepotHigh VolumeInterchange + $0.05 - $0.25$29 - $99
PayPalLow-Tech2.9% + $0.30None/$30
CDGcommerceNonprofits1.95%/2.95% + $0.30$10
SquareOnline & Offline Combo2.9% + $0.30None

Joe Resendiz

Joe Resendiz is a former investment banking analyst for Goldman Sachs, where he covered public sector and infrastructure financing. During his time on Wall Street, Joe worked closely with the debt capital markets team, which allowed him to gain unique insights into the credit market. Joe is currently a research analyst who covers credit cards and the payments industry. He earned a bachelor’s degree from the University of Texas at Austin, where he majored in finance.