The Cheapest Payment Processing Systems for Online US Businesses in 2023

When operating an online business in the US, one of the most important decisions you'll face is choosing the right payment processing system. The fees associated with processing payments can significantly impact your profitability. In this guide, we'll explore some of the most affordable payment processing options available in the US, including their fees and features. We'll help you make an informed decision to maximize your business's efficiency and profits.

Understanding Payment Processing Fees

Before we dive into the details of the cheapest payment processing systems, it's essential to understand how these fees are structured. Payment processing fees can be categorized into three main parts:

Interchange Fees: Fees charged by credit card networks (Visa, Mastercard, American Express, etc.) to process payments. Transaction Fees: Fees charged by your merchant service provider on top of the interchange fees. Monthly Fees: Fixed monthly fees that cover the costs of maintaining your payment processing infrastructure.

Average credit card processing fees range from 1.5% to 2.9% for swiped credit cards. Keyed-in transactions, commonly used for online sales, can have a higher average processing fee of around 3.5%, to account for the higher risk of fraud.

Top Cheapest Payment Processing Systems for Online US Businesses

Below, we'll explore some of the best payment processing systems that offer affordable fees while still providing robust features for online businesses. These systems cater to a wide range of businesses, from small shops to large enterprises, making them a valuable addition to your online operations.

1. Square

Website Payments: 2.9% $0.30 per transaction E-commerce Fees: 2.85% $0.30 per transaction (starting price) International e-commerce: 2.9% $0.30 per transaction Monthly Fees: $0 (for the $30K tier) Key Features: High transaction limits, easy integration with various platforms, advanced security tools

Square offers a range of solutions, including its classic and e-commerce services. By choosing the right plan, you can significantly reduce your transaction fees while maintaining a high level of service.

2. PayPal

E-commerce Payments: 2.9% $0.30 per transaction (starting price) International e-commerce: 2.9% $0.30 per transaction Monthly Fees: $0 (after $3.95 monthly plan) Key Features: Broad acceptance, easy setup, multiple payment methods

PayPal is known for its broad acceptance and ease of use. While it may not offer the lowest transaction fees, its affordability, especially when combined with a membership plan, makes it a popular choice for online businesses.

3. Stripe

E-commerce Payments: 2.9% $0.30 per transaction (starting price) International e-commerce: 3.9% $0.30 per transaction Monthly Fees: $0 (up to $25K in monthly processing volume) Key Features: Advanced fraud detection, customizability, integration with popular platforms like Shopify and WooCommerce

Stripe has become a favorite among businesses of all sizes, thanks to its robust feature set and ease of integration. Despite its higher transaction fees, its comprehensive fraud protection and customization options make it a worthy investment.

4. Stripe Connect (for Marketplaces and SaaS)

E-commerce Payments: 1 - 2.9% $0.30 per transaction, depending on the plan Monthly Fees: $0 (up to $500K in monthly processing volume) Key Features: Customizable fee schedules, multi-currency support, payouts to hundreds of individual sellers

For businesses operating marketplaces or subscription-as-a-service (SaaS) models, Stripe Connect offers a unique solution. It allows you to charge customized transaction fees and manage payouts efficiently, making it ideal for complex business structures.

Conclusion

Choosing the right payment processing system is crucial for the success of your online business. By selecting an affordable yet feature-rich solution, you can reduce your transaction fees and maximize your profits. Whether you're a small online retailer or a large enterprise with complex payment needs, the payment processing systems mentioned above are excellent choices. Carefully evaluate your specific requirements and budget to find the system that best suits your business needs.

If you have any further questions or need assistance, feel free to reach out to our support team. We're here to help you navigate the world of payment processing and ensure your online business thrives.