Best Payment Providers For Small Online Businesses

The field of digital transactions enables the vital function of payment to be actualized by small businesses and sole proprietor entrepreneurs. Working at the checkpoint of commerce, this field encompasses point-of-sale (POS) systems, aggregate payment processors, merchant services, and other fundamentals of business support.

Business support

What To Look For In Payment Providers

Customer support - Preferably personal rather than automated.
Feature set - This will be different for different tiers of business.
User-friendly - Should have a frictionless interface for handling transactions.
Most affordable fee structure - Not as much concern as one would think since this field is already competitive.

Needs are going to be individual. There are many variables from one business to another, such as volume, frequency of transactions, whether they’re doing business internationally, tax and business laws the company has to adhere to, and so on. This list is likely to not apply to everyone, but one of these will be the best answer for the majority of needs.

Payment Providers


Paypal barely needs an introduction. It has become the “bank of the Internet,” dominating eCommerce so thoroughly that it’s almost mandatory to accommodate it. PayPal has proven itself with online business, however, offering competitively low flat-rate fees for card payments, and some of the lowest online transaction fees. It is the payment service of choice for online entrepreneurs, sole proprietors, virtual assistants, and the smallest online retailers. PayPal also has the association of tech visionaries Peter Thiel and Elon Musk, giving it a progressive technology vision.
Where PayPal falls behind is when the scale increases beyond small transactions and online business. They do have physical hardware POS including chip & swipe card readers, but their fees rise as volume and scale rises.


Square has emerged as the biggest competitor to PayPal as of late, launching in 2010. As a merchant services aggregator and mobile payment company, they have expanded to in-store POS, mobile payments, virtual terminals, and invoicing. They offer flat-rate credit card pricing with no monthly fees. Their fees on hardware and in-store retail transactions are competitive and streamlined. They also boast easy set-up, free apps, and no monthly, setup, or cancellation fees.

Like PayPal, Square does not scale well with larger businesses. There are some omissions to Square’s services, such as e-check payments. A few reviews have mentioned that Square cuts corners on customer service and incident resolution.


Dharma is a traditional merchant services provider, as the next step up from PayPal and Square. At a $10K monthly minimum requirement, a business wouldn’t want Dharma until it was guaranteed that volume, and then only up to around $20K per month. Dharma has the lowest fees in its tier, especially for in-store transactions. They offer perks such as free next-day deposits.

Dharma occupies a niche almost too narrow to find. Their hardware is pricy when it comes to POS. They charge a $25 closure fee. And their minimum requirement shuts out start-ups and sole proprietors, plus accounts have to be kept separate for online and in-store sales.


Fattmerchant is an interim merchant service provider for mid-sized businesses, ideal for volumes higher than $10K per month. They charge a monthly fee, but then after that fees for in-store or virtual transaction are flat rates in the penny range. Fattmerchant has an attractive service and support plan for larger businesses which haven’t broken the $50K per month barrier.

Fattmerchant will not be attractive to small proprietors and start-ups. Their monthly fee is daunting enough that most retailers will stick with one of the smaller payment providers until their volume grows to make the monthly fee worth it.


Helcim is a comprehensive merchant services provider that’s aimed at the medium-sized business. They are best for companies needing to handle more than $20K per month in transactions, requiring an established business that’s outgrown smaller transaction options. Their hardware and POS systems are mid-range priced. They boast 24/7 customer service and support.

Helcim’s fees aren’t exactly the most transparent on the market, with sliding scales depending on volume and type of transaction. Helcim requires separate accounts for online and in-person sales.

Payment Depot

Rapidly leaving the range of small business, Payment Depot goes straight for the flat monthly fees. They are focused on the retailer with $20K+ volume per month. All their fees are virtually flat with hardly any percentages. Most of their hardware is free, and their customer support is rated top-notch out of all the small business retail merchant services.

Payment Depot’s fee structure shuts out any business running lower than $20K in sales, due to the flat fees.

Honorable mentions:

There are a few other options to consider for those with different concerns than fees and business tiers. These side cases are worth a look:

  • QuickBooks Payments – Integrated with QuickBooks software.
  • PaymentCloud – Specializes in risked niche markets, such as cannabis retail in legal states.
  • TSYS – Total System Services is a credit card processor, merchant acquirer and bank credit card issuer, for when businesses want to cut out middle-men.
  • Chase Merchant Services – When a business just needs to deal with a bank directly and be done with it. Chase is the one major bank reaching down to smaller retailers with small-scale business plans.

As mentioned, there are many more payment providers than could be listed in a practical article, and many more that have unique and custom plans to suit different business sizes and needs. Extensive research and comparison with competing businesses is recommended.

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