Article
Best Merchant Services for Small Business in 2025
Compare the top merchant services and payment processors of 2025. Our experts analyzed leading providers to find the best options for accepting credit cards, processing payments, and managing transactions.
Choosing the right merchant services provider can save your business thousands of dollars annually while providing the tools you need to accept payments seamlessly. Whether you sell online, in-person, or both, today’s top payment processors offer competitive rates and powerful features.
Our team analyzed the leading merchant services providers, comparing transaction fees, contract terms, feature sets, and user satisfaction. Here are the 4 best merchant services for small businesses in 2025.
Quick Comparison
| Provider | Best For | Online Rate | Rating |
|---|---|---|---|
| 1. Square | Best Overall for Small Business | 2.9% + $0.30 | ★4.7/5 |
| 2. Stripe | Best for Online Businesses | 2.9% + $0.30 | ★4.6/5 |
| 3. PayPal | Best for Brand Recognition | 3.49% + $0.49 | ★4.4/5 |
| 4. Payment Depot | Best for High-Volume Merchants | 0.2-1.95% + Interchange | ★4.5/5 |
Our Top Picks in Detail
Square
Square offers the best overall value for small businesses with its transparent flat-rate pricing, no contracts, and comprehensive payment ecosystem. The free plan and easy setup make it ideal for startups, while custom pricing accommodates growing businesses processing over $250,000 annually.
Pros
- ✓No long-term contracts or cancellation fees
- ✓Transparent flat-rate pricing with no hidden fees
- ✓Free plan available with robust features
- ✓Integrated ecosystem with payroll, invoicing, and online store
- ✓Custom pricing for businesses over $250K annually
Cons
- ✗Higher rates for high-volume merchants (2.6% vs competitors at 1.8%)
- ✗Risk of unexpected account holds or terminations
- ✗Customer support concerns reported by some users
Stripe
Stripe is the leading payment processor for online businesses and developers, offering powerful API capabilities, global payment support, and subscription billing tools. Its transparent pricing and ease of integration make it perfect for ecommerce platforms and SaaS companies.
Pros
- ✓Powerful API for custom payment integrations
- ✓Transparent pricing with no monthly fees or hidden charges
- ✓Supports global payments in 135+ currencies
- ✓Excellent for subscription billing at scale
- ✓Negotiable rates for high-volume merchants
Cons
- ✗Higher flat-rate pricing for smaller businesses
- ✗7-14 day fund holding period for new merchants
- ✗Limited phone support compared to competitors
PayPal
PayPal is the most established online payment platform, offering instant fund access, global brand recognition, and robust security. While fees are higher than competitors, the trust factor and familiar checkout experience can increase conversion rates, especially for businesses processing under $10,000 monthly.
Pros
- ✓Most recognized and trusted payment brand globally
- ✓Instant access to funds in PayPal balance
- ✓Real-time payment processing with instant confirmation
- ✓No monthly fees for basic accounts
- ✓Advanced fraud monitoring and 256-bit SSL encryption
Cons
- ✗Highest transaction fees among major processors
- ✗BNPL fees increased to 4.99% + $0.49 in 2025
- ✗International and currency conversion fees add up
Payment Depot
Payment Depot specializes in membership-style interchange-plus pricing that can save high-volume merchants significant money. While not suitable for low-volume businesses, merchants processing $20,000+ monthly can see substantial savings compared to flat-rate processors.
Pros
- ✓Interchange-plus pricing saves money for high-volume businesses
- ✓No setup fees or cancellation penalties
- ✓Transparent billing without hidden charges
- ✓90-day, 100% money-back guarantee
- ✓One business-day merchant account approval
Cons
- ✗Requires $8,000+ monthly volume to be cost-effective
- ✗$10 monthly PCI compliance fee ($120/year)
- ✗No support for international payments or high-risk businesses
How We Evaluate Merchant Services
Our expert team uses a comprehensive methodology to test and compare merchant services providers. Here’s what we evaluate:
Processing Fees and Pricing Models
We analyze the complete cost structure including:
- Card-present rates: In-person transaction fees for chip, swipe, and contactless
- Card-not-present rates: Online, mobile, and keyed transaction fees
- Flat-rate vs. interchange-plus: Understanding which pricing model saves you money
- Volume discounts: Negotiated rates for high-volume merchants
- Hidden fees: Monthly minimums, PCI compliance, chargebacks, and batch fees
Payment Methods and Flexibility
We test support for modern payment types:
- Major credit and debit cards (Visa, Mastercard, Amex, Discover)
- Digital wallets (Apple Pay, Google Pay, Samsung Pay)
- Buy-now-pay-later services (Afterpay, Klarna, Affirm)
- ACH transfers and bank payments
- International and multi-currency support
Integration and Compatibility
We evaluate how well providers work with existing systems:
- Ecommerce platforms: Shopify, WooCommerce, BigCommerce, Magento
- Accounting software: QuickBooks, Xero, FreshBooks
- Shopping carts: Custom integrations and hosted checkout pages
- API capabilities: Developer-friendly tools for custom implementations
Contract Terms and Flexibility
We examine the commitment requirements:
- Contract length and early termination fees
- Month-to-month vs. long-term agreements
- Processor switching flexibility
- Money-back guarantees and trial periods
Security and Compliance
We verify security measures and compliance standards:
- PCI DSS compliance and certification
- Fraud detection and prevention tools
- Chargeback management and protection
- Data encryption and tokenization
Frequently Asked Questions
What are merchant services?
Merchant services are the technologies and services that enable businesses to accept and process electronic payments, including credit cards, debit cards, and digital wallets. A merchant services provider handles the secure transfer of funds from your customer’s bank to your business account.
How much do merchant services cost?
Costs vary based on your business volume and the pricing model. Flat-rate processors like Square charge 2.6-2.9% + $0.10-$0.30 per transaction with no monthly fees. Interchange-plus providers like Payment Depot charge interchange rates (1.5-2.5%) plus a small markup, but may require monthly fees.
What’s the difference between flat-rate and interchange-plus pricing?
Flat-rate pricing charges the same percentage for all transactions (e.g., 2.9% + $0.30), making it simple but potentially more expensive. Interchange-plus pricing charges the actual interchange rate set by card networks plus a fixed markup, which can save money for high-volume businesses but requires understanding variable costs.
Do I need a merchant account or a payment service provider?
Payment service providers (PSPs) like Square, Stripe, and PayPal are easier to set up and require no credit checks, but charge higher fees. Traditional merchant accounts offer lower rates for high-volume businesses but require applications, credit checks, and may have monthly minimums.
Can I negotiate merchant services fees?
Yes, especially if you process high volumes. Providers like Stripe, Square, and Payment Depot offer custom pricing for businesses processing $250,000+ annually. Even smaller businesses can sometimes negotiate rates by comparing multiple providers and asking for price matches.
How long does it take to receive funds?
Timing varies by provider. Square and PayPal offer instant transfers for a 1-1.5% fee, while standard transfers take 1-2 business days. Stripe holds funds for 7-14 days for new merchants. Payment Depot typically processes within 2 business days. Always clarify the funding schedule before choosing a provider.
What happens if I get chargebacks?
Chargebacks occur when customers dispute transactions. Most providers charge $15-$20 per chargeback, and excessive chargebacks can lead to account termination or higher rates. Look for providers offering chargeback protection and dispute management tools to minimize risk.