Most US small businesses handle credit card processing through a flat-rate provider. In 2026 Square charges 2.6% plus 15 cents in person and 3.3% plus 30 cents online, Stripe charges 2.9% plus 30 cents online, and PayPal Checkout charges 3.49% plus 49 cents. Choose based on where you actually sell, not on the headline percentage.
Key takeaways on credit card processing
- Credit and debit cards account for two-thirds of all US consumer payments, so not taking cards costs real revenue.
- Every flat-rate provider charges a percentage plus a fixed fee. The fixed fee is what makes small tickets expensive.
- On a $100 sale, the same provider can cost you 16 to 67 percent more online than in person, depending on which one you pick.
- Square and PayPal are the easiest starting points. Stripe suits developers and subscriptions. Shopify Payments only makes sense if you are already on Shopify.
- Interchange-plus merchant accounts beat flat rates once your monthly card volume is substantial, but they add paperwork.
Why credit card processing matters more than it used to
The Federal Reserve’s 2026 Diary of Consumer Payment Choice, based on data collected in October 2025, found that US consumers made an average of 47 payments per month: 16 with a credit card, 15 with a debit card, and six with cash. Cards now carry two-thirds of all consumer payments. Cash is still the third most-used instrument, but it is no longer the default.
That gap is the whole argument. If you only take cash and checks, you are not losing every customer, you are losing the ones who reach for a card by reflex, which is most of them. Pricing has also become predictable enough that the old objection, that processing fees are opaque, no longer holds for businesses under a few hundred thousand dollars a year.
What the payment stack actually is
Four pieces sit between a customer’s card and your bank account, and most small business owners buy all four from one company without ever seeing the seams. Square, Stripe, PayPal, and Shopify all bundle them. Knowing the parts matters when something breaks, when you want to switch, or when a salesperson quotes you a rate for only one of them.
The processor. This is the company that moves the money and takes the percentage. Square, Stripe, PayPal, and Shopify Payments are all processors in the sense that matters to you, though technically they are payment facilitators sitting on top of a bank sponsor. The practical difference is that they onboard you in minutes instead of weeks.
The gateway. The gateway is the software that securely passes card details from your checkout page to the processor. If you use Square or Stripe, the gateway is included and invisible. You only pay for a standalone gateway when you use a traditional merchant account that does not bundle one, and that is where surprise monthly fees usually hide.
The card reader or terminal. For in-person sales you need hardware. Square sells its Reader for contactless and chip at $59, the Square Terminal at $299, the Square Stand at $149, and the second-generation Square Register at $899, according to Square’s hardware page. A reader is a one-time cost, so it rarely changes which provider you should pick.
The online checkout. Something has to collect the order. That can be a payment link, an invoice, a booking page, or a product page on your website. This is the part owners underestimate, because a processor account with nowhere to send customers generates exactly zero revenue.
What credit card processing really costs in 2026
Credit card processing for small business is nearly always flat-rate priced, and it takes the same shape: a percentage of the sale plus a fixed fee in cents. Square’s in-person rate is 2.6% plus 15 cents. Stripe’s online rate is 2.9% plus 30 cents. PayPal Checkout is 3.49% plus 49 cents. The percentages look close. The fixed fees and the in-person versus online split are where the money actually moves.
| Provider | In person | Online | Monthly fee |
|---|---|---|---|
| Square (Free plan) | 2.6% + 15¢ | 3.3% + 30¢ | $0 |
| Stripe (standard) | 2.7% + 5¢ | 2.9% + 30¢ | $0 |
| PayPal | 2.29% + $0.09 | 3.49% + $0.49 (Checkout) | $0 |
| Shopify Payments (Basic) | 2.6% + 10¢ | 2.9% + 30¢ | $29 plan fee |
| Helcim (interchange plus) | Interchange + 0.40% + 8¢ | Interchange + 0.50% + 25¢ | $0 |
Here is the arithmetic on a $100 sale, which you can check line by line. In person on Square’s Free plan, 2.6% of $100 is $2.60, plus the 15 cent fixed fee, so the sale costs $2.75 and you keep $97.25. The same $100 sold online through Square costs 3.3% ($3.30) plus 30 cents, so $3.60. Stripe online charges 2.9% ($2.90) plus 30 cents, so $3.20. PayPal Checkout charges 3.49% ($3.49) plus 49 cents, so $3.98. That is a spread of $1.60 between the cheapest and most expensive way to take the same hundred dollars.
Why the fixed fee matters more than the percentage
On a $100 sale the fixed fee is noise. On an $8 coffee it is most of the bill. Square in person on an $8 sale costs 2.6% of $8, which is 21 cents, plus 15 cents, so 36 cents. That is 4.5 percent of the sale, not 2.6 percent. PayPal’s card present rate of 2.29% plus 9 cents on the same $8 comes to 27 cents, or 3.4 percent.
Flip it the other way and the percentage takes over. On a $2,000 invoice paid online through Stripe, 2.9% is $58 and the 30 cent fee is a rounding error, so your effective rate is 2.92 percent. If your average ticket is small, hunt for the lowest fixed fee. If it is large, hunt for the lowest percentage. Most owners do the opposite of whichever one applies to them.
Credit card processing options, honestly compared
Five options cover almost every US small business: Square, Stripe, PayPal, Shopify Payments, and a traditional interchange-plus merchant account. None of them is the answer for everyone. The right one depends on whether your sales happen at a counter, on a website, on an invoice, or on a recurring subscription.
Square: the default for in-person and mixed businesses
Square is the easiest place to start if you sell face to face. Its published US rates are 2.6% plus 15 cents for tap, dip, or swipe on the Free plan, 3.3% plus 30 cents online and for invoices, and 3.5% plus 15 cents for manually keyed or card-on-file payments. Square states plainly that with Square Free “there are no monthly subscription costs” and you only pay processing fees when you take a payment.
Paid tiers buy down the rate. Square Plus drops in-person to 2.5% plus 15 cents and Square Premium to 2.4% plus 15 cents, with both Plus and Premium at 2.9% plus 30 cents online rather than 3.3%.
Best for: retail, food, salons, trades, and anyone whose sales are mostly in person. Watch out for: the online rate, which is the highest of the mainstream flat-rate options on the free tier.
Stripe: the default for online, subscriptions, and anything custom
Stripe’s US standard pricing is 2.9% plus 30 cents per successful online card charge, and 2.7% plus 5 cents in person through Stripe Terminal. Stripe adds 1.5% for international cards and a further 1% when currency conversion is required, and charges $15.00 for each dispute you receive. Bank transfers are much cheaper: ACH Direct Debit runs 0.8% capped at $5.00 per transaction, which is worth knowing if you invoice for large amounts.
Stripe states it “does not charge setup fees, monthly fees, or any other hidden fees like closure fees.” The catch is not price, it is that Stripe assumes someone will do a little setup work, whether that is a developer, a plugin, or a hosted payment link.
Best for: online sales, recurring billing, marketplaces, and any business with a developer nearby. Watch out for: that $15 dispute fee and the 1.5% international surcharge if you sell abroad.
PayPal: highest online rate, but customers already trust it
PayPal’s US merchant fees, last updated 15 July 2026, put PayPal Checkout at 3.49% plus 49 cents, standard credit and debit card payments at 2.99% plus 49 cents, and card present or QR code transactions at 2.29% plus 9 cents. Pay Later transactions run 4.99% plus 49 cents. The chargeback fee is $20.00, and micropayments are billed at 4.99% plus 9 cents.
That 3.49% headline is the most expensive online rate here, and it is also the one many customers actively look for at checkout. The usual sensible move is to run PayPal alongside a cheaper card processor rather than instead of one, so you pay the premium only on the customers who genuinely want PayPal.
Best for: a second checkout button, invoicing, and small in-person operations using QR codes. Watch out for: the 3.49% Checkout rate and the $20 chargeback fee.
Shopify Payments: only if you are already on Shopify
Shopify bundles processing into its plans. US pricing is $29 a month for Basic, $89 for Grow, and $359 for Advanced. Shopify Payments card rates are 2.9% plus 30 cents online on Basic, 2.7% plus 30 cents on Grow, and 2.5% plus 30 cents on Advanced. In person the rates are 2.6% plus 10 cents, 2.5% plus 10 cents, and 2.4% plus 10 cents respectively, with POS Pro adding $89 a month per location.
The important number is the penalty for not using Shopify Payments. Shopify charges 2% on Basic, 1% on Grow, and 0.6% on Advanced when you use a third-party payment provider, on top of whatever that provider charges. That fee is designed to keep you inside the ecosystem, and it works.
Best for: businesses already running a Shopify store. Watch out for: the third-party transaction fee, and the plan cost, which is a real monthly expense the others do not have. If you are weighing whether you need a full store at all, our guide to how to open a store covers the decision.
A traditional merchant account: cheaper at volume, more admin
Flat-rate providers bundle interchange, network fees, and their own margin into one number. An interchange-plus merchant account unbundles them, so you pay the card networks’ actual interchange plus a small stated margin. Helcim publishes its US margin as interchange plus 0.40% and 8 cents in person, and interchange plus 0.50% and 25 cents online or keyed, for merchants processing $0 to $50,000 a month, with $0 monthly fees, $0 statement fees, and $0 PCI fees.
Interchange itself is set by Visa and Mastercard, not by the processor, and it varies by card type. Debit is the cheap end. The Federal Reserve reported that in 2024 the average debit card interchange fee was $0.23 per transaction for covered issuers and $0.51 for exempt issuers, averaging $0.34 across all debit transactions on an average transaction value of $46.32. Rewards credit cards cost considerably more, which is why a debit-heavy business saves more on interchange-plus than a business whose customers all carry travel cards.
Best for: established businesses with steady monthly card volume and someone willing to read a statement. Watch out for: providers who quote “interchange plus” and then add gateway, statement, PCI, and monthly minimum fees on top. Ask for the full fee schedule in writing before signing anything.
How to choose a credit card processing provider
Work through four questions in order and the answer usually falls out. Nobody needs to model this on a spreadsheet, because the difference between the reasonable options on a typical small business’s volume is measured in tens of dollars a month, not thousands.
Where do most of your sales happen? Mostly at a counter or on site, start with Square. Mostly online, start with Stripe. Roughly half and half, Square handles both acceptably and keeps you on one dashboard.
What is your average ticket? Under about $15, weight your decision toward the lowest fixed fee. Over about $200, weight it toward the lowest percentage, and look hard at whether ACH bank transfer works for you instead of cards.
Do you bill repeat customers? If you invoice or run subscriptions, Stripe’s recurring billing and Square Invoices both handle it. If you are still sending invoices manually, our guide on how to make an invoice is the place to start before you automate anything.
Are you doing more than roughly $25,000 a month on cards? That is the rough point where getting an interchange-plus quote becomes worth an afternoon. Below it, the savings rarely justify the paperwork.
You still need somewhere for the payment to happen
A processor account is a way to get paid, not a way to get a sale. Online card payments need a destination: a product page, a booking form, a payment link, or an invoice. The Federal Reserve’s finding that cards carry two-thirds of consumer payments only helps you if customers can find you and click something.
For most service businesses, that destination is a simple website with a booking or enquiry page and a payment link, not a full ecommerce store. Building one is cheaper than owners expect, and our breakdown of how much a website costs in 2026 lays out the real numbers. If you would rather not build it yourself, UENI builds the site for you for a $79 one-time setup fee and $24.99 per month, typically live within seven days, with a domain, a matching business email, and an SSL certificate included. Either way, get the page live before you spend an evening comparing processing rates that differ by 30 cents on a $100 sale.
One practical note on hardware: buy the cheap reader first. A $59 Square Reader will tell you within a month whether your customers actually tap, and whether you need a $299 Terminal. Plenty of businesses buy the expensive countertop unit and then discover they take four card payments a week.
Frequently asked questions about credit card processing
How do I start accepting credit card payments for my small business?
Open an account with a flat-rate provider such as Square, Stripe, or PayPal, verify your business details, and connect a bank account. For in-person sales, buy a card reader such as Square’s $59 Reader for contactless and chip. For online sales, add a payment link, invoice, or checkout page to your website.
What is the cheapest way to accept credit card payments?
It depends on where you sell. For in-person sales, PayPal’s card present rate of 2.29% plus 9 cents is the lowest flat rate here. For online sales, Stripe and Shopify Payments Basic both charge 2.9% plus 30 cents. Above roughly $25,000 a month, an interchange-plus account usually beats all of them.
Do I need a merchant account to accept card payments?
No. Square, Stripe, PayPal, and Shopify Payments are payment facilitators, so they onboard you under their own master merchant account and you can take payments the same day. A dedicated merchant account gives you interchange-plus pricing and better rates at volume, but it involves underwriting and more paperwork.
How much does it cost to accept a $100 payment?
In person on Square’s free plan it costs $2.75, being 2.6% ($2.60) plus 15 cents. Online through Stripe it costs $3.20, being 2.9% ($2.90) plus 30 cents. Through PayPal Checkout it costs $3.98, being 3.49% ($3.49) plus 49 cents. All rates retrieved from the providers on 9 August 2026.
Can I accept payments online without a website?
Yes, using payment links, invoices, or QR codes from Square, Stripe, or PayPal. It works, but it limits you, because customers who find you through search or social have nowhere to learn what you sell before paying. A simple site or booking page usually converts better. Our guide on whether you need a website covers the trade-off.
Are debit cards cheaper to accept than credit cards?
Under flat-rate pricing, no, because Square, Stripe, and PayPal charge the same rate for both. Under interchange-plus pricing, yes. The Federal Reserve reported the 2024 average debit interchange fee at $0.34 per transaction across all debit transactions, well below typical rewards credit card interchange.
Need somewhere to send those payments?
A processor account is only half the job. UENI builds your website, domain, and business email for you and hands it over ready to take enquiries and orders. See how the done-for-you website service works.
Sources
- Square: Payment processing fees
- Square Support: What are Square’s fees?
- Square: Point of sale hardware pricing
- Stripe: US pricing
- PayPal: Merchant fees, last updated 15 July 2026
- Shopify: Plan pricing
- Shopify: POS pricing
- Helcim: Interchange-plus pricing
- Federal Reserve Financial Services: 2026 Findings from the Diary of Consumer Payment Choice
- Federal Reserve: Average debit card interchange fee by payment card network
