Whether you’re running a physical brick-and-mortar operation, an online-only business or a combination of both, it’s become a necessity to accept different methods of payments for your products or services, including digital payments.

As the number of payment methods grows, so has the merchant services industry, which generally is any service a business uses to accept and process payments. 

“As any small business owner will tell you, the way you accept and process payments is a crucial part of your day-to-day operations,” writes Maddie Shepherd in a blog for Fundera, an online marketplace for small business financing.

Payment Processing

There are companies that will bundle merchant services, but payment processing companies can also be separate from a point of sale system.

A payment processing company provides your business the ability to accept credit cards and other similar payments from your customers and process those payments. 

Then it handles the behind-the-scenes processes that take place after your customer provides their card information, whether in-person or online.

“So, whether your customer swipes their credit card or manually inputs their card information, the ensuing processes—like encrypting their information, routing the information to their own bank, and back to your business’s bank—are what payment processing generally entails—and therefore, is what is managed by payment processing companies,” Shepherd explains.

Digital Payments

The digital payments field is becoming a crowded one, again to accommodate the growing need.

So, if you’re running an e-commerce business, you have a variety of options when it comes to accepting and processing payments online.

The industry standards like PayPal and Square continue to be on the recommended lists when it comes to digital payments. They’re included on Fundera’s top recommendations for 
e-commerce businesses, along with Veem, Authorize.net, Stripe, QuickBooks Payments, Clover, and Payment Depot.

As far as bundled merchant services companies, Square was labeled as the Best Overall provider for small businesses by FitSmallBusiness. 

“Square is an all-in-one merchant services provider,” Meaghan Brophy says in a blog about the site’s top 10 list of merchant services providers. 

“That means Square can process in-store, mobile payments, online, virtual terminal, and even invoice payments. Square is the simplest merchant account provider with which to get started, and one of the most affordable for small businesses with average transaction below $20.”

The blog said Square was best for small businesses with low average transactions that want flat-rate processing.

FitSmallBusiness picked PayPal as the recommended merchant account provider for businesses that primarily sell online and want to accept PayPal payments. 

“Adding PayPal as a payment option can increase online store conversions and reduce cart abandonment because shoppers don’t need to type in payment or shipping information,” writes Brophy. “PayPal also has competitive, flat-rate transaction fees.”

Payment Depot is a merchant service provider with a membership pricing model that provides payment processing at extremely competitive rates for businesses that process more than $20,000 per month.

“These high-volume businesses, particularly medical, healthcare, and business-to-business (B2B) businesses can save money by using Payment Depot,” the FitSmallBusiness blog says.

What Fits Your Business

“Payment processing can look very different in practice,” writes Shepherd in the Fundera blog.

When looking for the best option for your small business, you’ll want to not only compare costs but consider how you’re accepting payments and what kind of payments you accept, as well as how your business operates.

The blog calls Authorize.Net as the best payment processor for small businesses that specifically need online payment services. It’s a payment gateway provider.

“With Authorize.Net you’ll be able to offer your customers a number of payment options, including credit and debit cards, e-checks, and digital payments, all within your website or ecommerce platform,” Shepherd writes.

The blog says Stripe is best for tech-savvy online businesses that want a customized solution, and Clover for Businesses that want a POS-payment processing bundle with separate, fully functional devices.