Small Business Website Design

A Brief History of Online Payment Processing

Historically, in order to process payments your business needed to apply for a merchant account. This was essentially a line of credit that a bank was willing to establish for your business. Just like applying for a credit card, your business submitted paperwork and went through a full underwriting process. Modern payment processors, like the ones on our list, no longer require a separate merchant account. While some continue to have an application process, it’s less stringent than before. This makes the process of opening an account much easier, especially for new businesses. Instead of assessing risk upfront using applications, modern payment processors assess risk though ongoing monitoring using computer algorithms.

Modern Security and Risk Assessment

Each payment processor on our list offers best-in-class security for both your business and your customers. Payment information is directly transmitted to the processor; your business is never in possession of the customers credit card number. This makes it easy to comply with the credit card industries PCI Compliance security guidelines.

Our Top 5 Payment Processors for Small Business

Below is our top 5 picks for small business payment processors. Overall, each company provides a similar set of features and transaction rates. The minor differences between them, like ease of signup, level of support and software interfaces, will likely be the determining factors in your decision.

Stripe’s modern payments platform, launched in 2010, makes it easy to start accepting credit card payments. The account signup process is near-instant and does not require underwriting. Their well designed account dashboard makes it easy to track payments and create reports. Phone support is not available but their support documentation is top notch and you can chat or email with a support agent.

  • Transaction fees: 2.9% plus $0.30 per charge
  • International fees: 3.9% plus $0.30 per charge
  • Setup/monthly fees: none
  • Chargeback cost: $15
  • Deposit speed: 2 business days (first transfer is 7 to 10 business days)

Who is Stripe Best Suited For?

Stripe’s simplicity is great for small businesses who have minimal experience accepting payments online. From signup to managing payments, every software interface is easy to navigate and clearly laid out. If you’re comfortable communicating with support via chat or email, Stripe is a great choice for your small business.

Braintree by PayPal

Braintree, founded in 2007 and acquired by PayPal in 2013, is considered the first modern payments platform. The account application process takes around two days and requires underwriting. Phone support is provided to help you through the signup process along with any issue you may come across later on. While PayPal operates Braintree independently, there are integrations allowing you to manage both credit card and PayPal payments within a single software interface.

  • Transaction fees: 2.9% plus $0.30 per charge
  • International fees: 3.9% plus $0.30 per charge
  • Setup/monthly fees: none
  • Chargeback cost: $15
  • Deposit speed: 2 to 3 business days, 3 to 5 for American Express transactions.

Who is Braintree by PayPal Best Suited For?

Braintree is perfect for small businesses who are looking for great support and don’t mind an extended sign up process. If your customers regularly pay using PayPal, the integrations between the two services are helpful in keeping track of all your transactions. Their software is great for power users as well, allowing you to run detailed search queries and analytics.

PayPal – PayPal Express Checkout

PayPal is by far the most well known name on our list. Established in 1998, PayPal has been offering various payment services to small businesses, most popularly through eBay. In 2015, PayPal was officially spun off from eBay and is now an independent payments company. For the purpose of our comparison, we’ll be specifically discussing their Express Checkout service, which is the ability for a customer to pay using a PayPal account. If you are interested in accepting credit cards via PayPal, we recommend considering their newer Braintree platform discussed in the previous section.

PayPal Express Checkout allows a PayPal user to pay for services or products using a virtual wallet in lieu of a credit card. Funds are deducted from the customers wallet and transmitted to your business’ wallet. Some customers will prefer using PayPal over a credit card for security or convenience reasons. Since no credit card information is shared with your business, it’s considered a more secure option for customers. PayPal Express Checkout can be used in conjunction with any other credit card processor on our list, but it integrates the best with Braintree by PayPal.

  • Transaction fees: 2.9% plus $0.30 per charge
  • International fees: 4.4% plus fixed fee depending on currency
  • Setup/monthly fees: none
  • Chargeback cost: $20
  • Deposit speed: 3 to 5 business days

Who is PayPal Express Checkout Best Suited For?

Almost every small business will benefit from using PayPal Express Checkout in conjunction with another credit card processor. Giving your customers a choice between using PayPal and credit cards has the potential to increase sales. While a majority of small businesses who use PayPal Express Checkout do so without issue, keep in mind PayPal’s real customer is not your business; it’s the purchaser. In the event of a payment dispute, PayPal almost always sides with the purchaser and will potentially freeze funds in your wallet until the dispute is resolved.

Square is a payments company founded in 2009 by Jack Dorsey, a co-founder of the popular social media platform Twitter. Square originally started as a mobile payments solution, allowing businesses to accept credit card payments via a mobile phone attachment. They have since expanded to offering cash register, payroll software, scheduling software, and online payment services. Square’s signup is near-instant and does not require underwriting. Their software interfaces are modern and easy to use and comes with great support documentation.

  • Transaction fees: 2.9% plus $0.30 per charge
  • International fees: n/a – no support
  • Setup/monthly fees: none
  • Chargeback cost: $0 (yes, that’s right!)
  • Deposit speed: 1 to 2 business days, with an option for immediate deposits for 1% more

Who is Square Best Suited For?

If your business is mobile or is in need of a physical payment solution as well as an online payments platform, Square is a great choice. If you are already using Square, using their online payments platform requires almost zero effort to get up and running. If you don’t already have an account, sign up is simple and with $250 of chargeback protection per month, Square helps reduce your risk in accepting credit cards.

Founded in 1996 and acquired by Visa in 2010, Authorize.Net is the most popular online payment processor. While newer platforms have challenged their status in recent years, Authorize.Net has made efforts to modernize their platform and offer a compelling set of features. The account application process takes around two days and requires underwriting. They offer integration with many third-party cash register systems, perfect for already established brick and mortars who want to integrate their payment systems.

  • Transaction fees: 2.9% plus $0.30 per charge
  • International fees: 4.4% plus $0.30 per charge
  • Setup/monthly fees: $49 setup fee, $25/monthly fee
  • Chargeback cost: $25
  • Deposit speed: 2 to 4 business days

Who is Authorize.Net Best Suited For?

If your business has complex payment processing needs, both online or brick and mortar, Authorize.Net has a large portfolio of solutions. They allow integrations with third-party merchant accounts who can often offer better transaction rates. Authorize.Net is best suited for established small businesses who have experience with payment processing and are looking to negotiate discounted rates.

What’s The Bottom Line?

The best payment processor for your company is highly dependent on your situation. Stripe, Braintree and Square are all great solutions if your business is new to accepting credit card payments. Braintree is a smart choice if you’re planning on using PayPal Express Checkout as well. Authorize.Net is perfect for experienced businesses and has the potential to work with your existing merchant account. Square is a great option if your business needs to accept credit cards in person as well as online.

Cemah has extensive experience using all five platforms and we’re confident one of them will be a great fit for your eCommerce business. If you’re an existing Cemah client and need help making a decision, please reach out to your account representative. If you are not already a client and have questions, feel free to leave a comment or email us at